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PFor decades, social security experts have been struggling to cope with the looming fiscal crisis looming on the horizon. After the failure of George W. Bush's proposal to privatize the retirement insurance program and save it on its own, Republicans have gradually stopped being content to repair their Ponzi-type structure. instead expanding their concerns about deficit spending.
Then Donald Trump won the presidency after promising not to touch a penny of spending. Now we are heading towards the crisis.
Social security will become insolvent by 2035 and the Republicans do not seem to care about it.
But the Democrats, on the contrary, want to turn the terrible situation into a disaster. They propose not only to expand the program, but also to transform it from a pension insurance scheme to an honest socialism. Elizabeth Warren has a plan for this, and you'd do well to think that her solution to the insolvency of social security is to turn it into a mass wealth transfer.
The current calculation that drives the acceleration of social security to insolvency is simple: its expenses exceed the revenues of the payroll tax. Social security has always been structured as a Ponzi scheme, a generational wealth transfer that pays off people who pay social security contributions into the system with retirement benefits many years later. Payment per beneficiary varies, roughly, according to average earnings over 35 years, which means that in theory, social security is proportionately proportional to ensure that those who pay more in the system receive slightly more in return for retirement. This has always been a form of retirement insurance, not an investment for retirement, and certainly not a way to reduce income inequality significantly.
So, if politicians refuse to buy back the millennial and gradually abandon the program, there are three general ways to improve, but not solve, the solvency problem: increase revenues with new or higher payroll costs , postpone retirement age or reduce retirement payments. Some plans, such as the non-partisan Committee for a Responsible Federal Budget, which is viable, combine a number of austerity methods, so that the impact on taxpayers is moderate.
Elizabeth Warren chases them out of the water.
His plan would increase benefits by $ 200 a month, give credit to "informal caregivers" who would not have potentially contributed a penny to the system and thus blow up the principle of proportionality of the program, and fund it all with a new payroll of 14.8%. the tax on workers earning more than $ 250,000 and a 14.8% tax on investment income for the 2% of the richest employees.
Two things: First, Warren's solution for a program that bleeds money is to increase spending and to say that simply taxing the rich will make it solvent. And more importantly, she assumes that she can punish an investment without reducing her tax base. False and false.
Social security is not a social protection program, or at least never has been. There is a reason why older people refuse the idea of ending the program and why the only way to eliminate it would be to force the millennials to redeem themselves: the current beneficiaries of social security have gone through their lives to pay for the system. The government owes them their money literally.
Warren's program would destroy this calculation, turning social security into another means of punishing wealth and job creators in the United States. By for the course, I guess.
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