AEIdeas

The public policy blog of the American Enterprise Institute

Subscribe to the blog

Discussion: (9 comments)

  1. Robert puharic

    We COULD cut back on the 10 year 310 billion tax cut welfare check conservatives just gave to corporate interests. After all, the middle class is tapped out due to supply side socialism.

    1. No. The middle class has been hurt 100% because of government meddling. Tax cuts always mean more money invested back into the economy – even Barack Obama admitted this a year or two back when he announced some business tax breaks.

  2. Ironically enough, the article at RealClear understates the problem. None of these people are using actual accounting standards. The writer’s point here is that the Democrats manage to use a lower standard than he does.

    Social Security makes it more expensive to produce goods here, so it incents offshoring US jobs. It incents older Americans to retire earlier. It distorts the savings picture in this country.

    The writer should mention the EITC which is a refundable tax credit where the general fund subsidizes the high cost of Social Security taxes.

  3. The federal government has become a parody of what it was supposed to be as described in the Constitution.

    Instead of protecting our freedoms, our shores, our contracts, etc., the new federal government takes money from people and gives it to other people.

    Last I read, 66% of all government spending, that is, mandatory spending goes to:
    – Net interest (6%, and let’s not even think about what is going to happen when interest rates go from very low to something higher – depressing).

    – Welfare and other entitlements (16%)

    – Medicare, medicaid and other health (22%)

    -Social security (22%)

    Take it from one, give to the other. The federal government’s main job has gone from that specified in the Constitution to a transfer agency, a taker and giver of wealth.

    1. Interest is considerably higher than that. 6% is likely just debt held by the public. The full interest cost was more than $400 billion.

      1. Robert puharic

        That’s true. Supply side socialism for the rich, engineered by the right wing, is one of the biggest welfare programs in history.

        And look at what it’s done to the economy.

  4. Vic Volpe

    You are emphasizing the wrong point — it is not whether it adds to the deficit but rather does it add to the debt (national debt); and, it doesn’t.

    If the Social Security Trust Fund runs a deficit in any year by collecting less in payroll taxes than it will pay out in benefits, that deficit will be made up by paying out of the reserves, currently at $2.7 Trillion. If there were no reserves, the benefits would have to be cut. There could never be left standing (accounting wise) a deficit in the Trust Fund.

    Any deficit in Social Security has never resulted in the Fed Govt having to go into the credit markets to issue new debt instruments. And that is the difference between a deficit in Social Security and a deficit in the operating budget.

    1. Vic, You are denying the existence of one of the most basic elements of economics, opportunity cost. Once the govt raises a dollar of payroll tax it cannot be raised in any other form. Every dollar raised as a payroll tax could have been used to control the debt. Given that we have collected roughly 15 trillion in payroll taxes for Social Security alone – it is entirely responsible for the debt – if you accept the concept of opportunity cost.

      Fix Social Security Now
      FixSSNow.Org

      1. Vic Volpe

        Opportunity costs run the gamut — you are all over the lot on just picking on Social Security, considering its derrivative benefits to society.

        If you think Social Security contributes to the debt, take the Trust Fund (and the Highway Trust Fund) out of the Unified Budget and put it in the ‘locked box’. Fuind your operational budget deficits on their own accord.

Comments are closed.

Sort By:

Refine Content:

Scholar

Additional Keywords:

Refine Results

or to save searches.

Open
Refine Content