This quiet effort to embed the chained CPI is a fight Trump does not want to have, certainly in an election year. But it is one we will bring to him.
For me, it’s best to not trust any politician… which is why (for what it’s worth) Dem candidates should publicly pledge, loud and clear, that – if elected – they would expeditiously work to rollback any Trump/GOP destructive changes made to SS.
Wait, I thought Social Security was actually a dastardly ruse aimed at tricking Sovereign Citizens into giving up their, um, sovereignty I guess… Or was that Income Tax? I forget.
it might have been easier to attack, had the last president not proposed doing the same thing. and he was (supposed to be) a Democrat! man, this century sure does suck…
That’s fair, however, it’s also politically useful in our society to frame it as an account we all pay into because that perception creates pressure for politicians to make sure it stays funded (which prevents the situation you describe next, where we simply vote to cancel contributions to it). Hence talk of lockboxes etc. The financial system depends on everyone believing in it. If everyone starts believing social security is a con, guess what - it will turn out to have been one because politicians will channel contributions elsewhere, we become cynical about it, and eventually other politicians will kill it off. If a majority of us insist on believing that it is a real account that means something, and vote that way, guess what - it will continue.
and that money could be stretched a long long way for people at the lower end if we had single payer health care, invested in public transportation, helped keep housing affordable, and expanded food benefits.
Our situation in the US is actually quite worse than that. A couple years ago, I tried to learn how the CPI was calculated. To my horror, I learned that the government constantly changes the mix of goods and services that are used to calculate the CPI. This means that when the government publishes a graph that shows inflation changing over time, the graph is a lie. There is no “line” connecting the dots. None of the dots are related to each other. In effect, the government decides on a CPI, then it finds a mix of goods that creates that CPI. Then it calculates the CPI, using that mix of goods and publishes it’s “findings”.
This was not always the case. Historically, there has been 2 major changes in the way the CPI is calculated: One in 1980; Another in 1990. Economist Walter J. Williams tries to project the discrepancy between published CPI and reality at the ShadowStats site: Alternate Inflation Charts
There is some controversy over Williams conclusions: Shadowstats.com - Wikipedia but the differences are dramatic enough that many adults can tell who is more accurate. Remember the rule of 72: Rule of 72 - Wikipedia
If the CPI is really hovering around 3%, then it takes 24 years for costs to double. If it is hovering around 10%, then prices double every 7.2 years. Yesterday, I went into my local grocery store and saw that they were selling cans of black beans at 8 for $10 ($1.25 each). Those same cans cost about 60 cents ten years ago. So, MY observed CPI for food is running close to 10%. My observed CPI for health care and medicine is running closer to 15%.
Of course, everybody’s purchases a different mix of goods. And some goods are genuinely deflationary. But, being able to purchase a cheap Raspberry PI doesn’t really make up for an inability to buy food or sleep indoors.
I am a bit confused why you do argue in this direction.
Comparing a part of a social contract to a (fraudulent, no less) investment scheme is not what I would expect from you, knowing your history of messured arguments on this BBS. I think you err here.
Very roughly and shortend, I would argue that investment of the money pays current gouvernment nvestment (as a credit), and future pay-out of pensions is paying the credit back. That’s part of the general idea. Works more like usual bank loan. Money doesn’t flow directly from workers to pensioners.
So know we know why Iran War was such a big talking point last week. Got the keep the cover up covered.
I wonder which one of his advisers thought this one up? Any of the originals from the campaign other than his family still advising him?
Anyone who thinks it’s just Trump that’s the problem and not his entire party is a fool.
They all have to go. The GOP has been dragging the nation downhill for decades (with too complicity and enabling from Democrats). With Trump, without Trump, it’s going to continue.
The question about the trust fund is not so much whether it has been depleted, but whether it existed in the first place. Back in the 80s politicians and accountants realized the demographic problem with Social Security: later generations are having fewer children than the boomers. Inexorably, this (and longer lifespans) mean that in the future, there will be fewer workers paying in per retiree. The politicians tried to get ahead of the problem by raising SS taxes higher than needed to pay benefits to contemporary retirees. The difference was put into the “trust fund.” So what does that mean? There isn’t a big warehouse full of depends, golf clubs, and Cumadin. Or of dollar bills. Or even negotiable treasury bills. There is a filing cabinet full of non-negotiable laser-printed sheets of paper saying “The Treasury owes Social Security XX Trillion.” And that amount is not added to the “debt owed to the public” column on the US Government’s balance sheet, so the government does not have to go to Wall Street and borrow it by issuing normal Treasury securities.*
So for more than a generation the government has been borrowing from the SS Trust Fund instead of borrowing from the public and paying the interest from regular tax revenues. Effectively, the middle class (SS payroll taxes) has lent trillions to the middle class and the wealthy (income and capital gain taxes). And as with the RE crisis, where many were happy to get crazy suicide mortgages and then less happy at having to pay them off, the wealthy were perfectly happy to use the trust fund to justify tax cuts, but now that it is time to pay that money back, they are doing everything that they can to not have to fund the payouts from the Treasury to SS.
The prospect of the depletion of the trust fund is the shiny object that the magician points to, because it is paying money back into the trust fund that the wealthy want to prevent. They want you to focus on the disappearance of the Trust fund when the trick is, it was never really there in the first place.
My point, which I realize I didn’t make because I am always arguing the most wake-up-sheeple of everything instead of saying what I mean, is that I agreed with with @speedracer on this:
If we don’t admit that it’s a social program rather than a retirement investment, then we have to admit it’s an illegal and fraudulent investment, which is exactly what detractors of social security are arguing right now (hence it seeming out of character for me to argue this since it’s what the alt-right would say).
I just feel like the people who believe in social programs cower under the idea that social programs can’t be sold to the general public. So instead there’s a lie that it’s an investment and this lie is “helpful” or “useful” or “makes the politics better”. Everyone is so convinced that we can’t tell the electorate (that is, ourselves, but we exclude ourselves) the truth because they aren’t up to making decisions for themselves.
Social programs that help people not die in poverty are good things. If America is a place that would vote for the elderly to die in poverty (or won’t vote to stop it) when there is enough of everything to go around, then noble lies aren’t going to fix that.
As I sort of mentioned in this rambling post made after a recent pub visit, economic policy based on shitty theory can’t be effective, whether its aims are noble or not. It’s like playing Mario Kart with the wrong controllers – you can make stuff happen, but you can’t choose what will happen, and the nature of the game means you’re far more likely to lose than to win.
Hitching real-world decisions to synthetic constructs like CPI is an open invitation for this. The argument given for switching to this different, even more abstract construct is that it would work out cheaper; but just saying that out loud ought to ring alarm bells, regardless of your politics (and as I understand it it’s an Obama-administration idea). If you find yourself implementing policy change by changing the definition of reality, then you obviously don’t have any faith in your supposed picture of reality, so why are you using it.
I’m sure the statisticians who came up with the new metric were acting in good faith, and there are plenty of reasons to try to measure this stuff. But the very fact that this work is ongoing tells us it’s not a suitable basis for life-and-death decisions.
The level of benefits should be based on whether they are enough: whether they are preventing evictions / bankruptcies / etc. Except, benefit-cutting politicians would then have to put an explicit number on how many dead kids each dollar saved is worth. So instead we use dubious theories about how much should be enough, and if you can’t live as frugally as the people in the made-up story, that’s your fault for being such a scumbag. But this euphemism doesn’t really fool anyone, and it makes it hard for anyone to improve the situation even if they want to, because the available levers don’t actually work.
The main difference in CPI and chained-CPI is how consistent the items in the “basket” are. The chained-CPI, which the GOP want to use for SSI, claims that to live you just need to buy the cheapest stuff, so for fruit it will use whatever fruit is cheapest that month instead of a consistent set of produce. Regular CPI, which is currently being used for SSI, should be based a consistent set of items.
Also statistics are done by category, and some sectors (especially healthcare) have higher inflation rates. It depends greatly on where you live as well, so inevitably some people see higher inflation than others.
A proposal to switch benefits to better reflect the cost of maintaining a consistent quality of life (factoring in actual expenditures likely for that person) makes sense, but the point of the proposal is purely to rationalize paying the smallest benefits possible. Sense has nothing to do with it
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