Here Comes Insanity -- Reality Has Been Shelved
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2019-09-12 08:55 by Karl Denninger
in Federal Government , 203 references Ignore this thread
Here Comes Insanity -- Reality Has Been Shelved
[Comments enabled]

Well look what we have here...

A significant expansion of Social Security currently under consideration by House Democrats would extend the program’s solvency and expand benefits by raising payroll taxes on high-income earners.

If passed, the bill — the Social Security 2100 Act — introduced by Rep. John Larson, D-Conn., would make the program solvent for at least 75 years by beginning to gradually raise payroll taxes in 2020, according to the chief actuary of the Social Security Administration. Under current law, Social Security is expected to expire by 2035.

That's a lie.  It will run out of the ability to pay 100% of benefits from tax receipts and its stack of already-owned Treasuries, but it will not "expire."  Congress can with a single sentence bill stop that by allowing it to run a cash deficit (that is, for said deficit to impact the budget deficit directly) and make no other changes.  This sort of "reporting" is part of the big lie the political establishment runs on this topic on a literal daily basis.

Currently, all employees and employers pay a 6.2 percent payroll tax on wages capped out at $132,900 — but Larson’s bill would immediately impose a tax on wages above $400,000. He then goes a step further, proposing eventually raising that tax rate to 7.4 percent by 2043. Right now, an employee earning $50,000 per year would pay $3,100 in a payroll tax. That would climb to $3,125 in 2020 and peak at 3,700 in 2047 under Larson’s proposal.

This bill has zero chance of becoming law.

Why?

Because it would immediately and permanently de-couple Social Security and Medicare in the political scamfest screamer world.

As I have repeatedly pointed out Social Security, while it is running a cash deficit, is fixable.  Indeed, isn't it amazing that the fixes in this bill are pretty-much inline with my article on this a few months ago?  The shift in this bill is close enough to my calculations that it's very likely it would be completely and permanently effective in resolving the question of Social Security's solvency.

This leaves Medicare and Medicaid, which cannot be fixed by any means other than destroying the medical monopolists.  All of them. That, in turn means accepting a deep recession or even Depression in this country as it would force the firing of all of those in that industry who never provide a single second of care to a single person; they are the means and method of the extortion forced upon all Americans in the form of differential billing and other similar schemes, all of which should have led to felony criminal indictments a long time ago.

If you fix Social Security then you can no longer wave it around as a political foil by falsely -- and intentionally so -- conflating it with Medicare and using that conflation to scare Granny.  Losing that lie, in other words, is far more important than resolving any of the fiscal issues facing our nation and government.

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User Info Here Comes Insanity -- Reality Has Been Shelved in forum [Market-Ticker]
Acebarefoot
Posts: 709
Incept: 2009-05-20

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Quote:
If you fix Social Security then you can no longer wave it around as a political foil by falsely -- and intentionally so -- conflating it with Medicare and using that conflation to scare Granny. Losing that lie, in other words, is far more important than resolving any of the fiscal issues facing our nation and government.


EXACTLY!!!!! It's too valuable of a political tool to fix and take off of the table. Not happening, imo.
Alosix
Posts: 1178
Incept: 2009-03-31

Behind enemy lines..
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Grumble.. last year the 'tax cuts' resulted in a pretty significant increase in our dinky tax liability.

Upping that cap to 400k would be a significant increase to a bunch of us 40 something senior programmers in most markets.

So tired of paying for this ****...

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"Software Development is one of those jobs, like picking lettuce, or cleaning toilets, that Americans just refuse to do." : STCM
Asimov
Posts: 111897
Incept: 2007-08-26

East Tennessee
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Alosix: Stop. You don't *NEED* to contribute to it. Move somewhere it's cheap to live and live cheaply.

A family of 4 can live quite comfortably for 10 years on that one year's 400k salary here.

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It's justifiably immoral to deal morally with an immoral entity.

Festina lente.
Veeger
Posts: 66
Incept: 2013-02-13

Washington state
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Alosix, I 'think' that the $400k is where taxes are again collected after the current cap at $132,900. So if you're between the cap and the $400k, you're not taxed more UNTIL either the cap gets raised (which it does regularly if not annually) or the tax RATE goes up to the higher rate.

Ultimately, the article is not clear (don't get me started on the writing 'skills' of journos these days....sheesh)
Ckaminski
Posts: 5533
Incept: 2011-04-08

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My guess is theyre conveniently ignoring the cap goes away.

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