Fiscal cliff - could be worse

russ_watters

You misunderstand: Repubs promise not to make changes for CURRENT SENIORS. Dems want to make no changes at all.

russ_watters

The decisions that created the 'cliff' were all made in the past 4 years, but the motive behind them is mostly debt reduction, a problem decades old.

Still, IIRC, by the time Obama leaves office, he'll have most of the debt too.

russ_watters

He solicited a pledge from most Republicans that they will never raise taxes and he publicizes it loudly.

Bobbywhy

Will you please say what does "IIRC" mean? Thank you.

Cheers,
Bobbywhy

russ_watters

If I remember correctly

Jimmy Snyder

How about TBD? Has anyone determined what that's going to mean yet?

Bobbywhy

Thank you for the translation. That answer could have been found had I only searched for it here: http://www.netlingo.com/acronyms.php

I did, however, search our PF Rules and found this:
“General Posting Guidelines
All posts must be in English. Posts in other languages will be deleted. Pay reasonable attention to written English communication standards. This includes the use of proper grammatical structure, punctuation, capitalization, and spelling. SMS messaging shorthand ("text-message-speak"), such as using "u" for "you", and "plz" for "please", is not acceptable.”

The SMS messaging shorthand described above as “not acceptable” in our PF rules is discussed in detail here: http://en.wikipedia.org/wiki/SMS_language

Cheers,
Bobbywhy

russ_watters

What I meant was "if I remember the latest projections correctly...."

When Obama entered office, it was $6.3 Trillion and today it is $11.4 Trillion.
http://www.treasurydirect.gov/NP/NPGateway

Here's an August 2012 CBO projection that it will pass $12.6 Trillion in 2015: http://www.cbo.gov/sites/default/fil...to_Outlook.pdf

Of course, such projections tend to be overly optimistic: http://mercatus.org/publication/proj...nue-accelerate

The main source of optimism in the CBO's projection is it is based on current law. In other words, it assumes the fiscal cliff happens. If it doesn't, we'll probably have that doubling point reached next year.

And this does not, of course, include the big elephant in the room: underfunded entitlements such as Social Security and Medicare.

BobG

No, that's still to be determined.

Alfi

At this point ... 50 trillion doesn't mean anything.

CAC1001

Even for future retirees though, I don't see how we can really cut people's benefits by a sizeable amount.

Jimmy Snyder

I don't think a cut in benefits is on the table. What I heard was that for those 54 and younger, the age at which they can take benefits would rise. In my opinion, SS faces a demographic problem and only a demographic solution will work.

russ_watters

Since the money to pay them does not exist, I don't see how we can keep the benefits the same without a massive tax increase. Something has to change.

CAC1001

Right, that's why I proposed something like removing the cap on the payroll tax and turning the program into a straight up form of welfare program.

russ_watters

Welfare for everyone except the top 5%? That's a lot of welfare. Sounds risky to me.

CAC1001

Well the way I'm thinking is that the program would pretty much function the same as it does now, but that would be one way to shore it up a lot more. It would be turned into a form of welfare program though because if the cap on incomes taxed is removed or increased at least, the benefits would need to be capped.

russ_watters

I have several problems with that:
1. Calling it a "welfare" program when for 90+% of people it is not means-tested doesn't seem accurate to me.
2. Having the program work differently for 5-10%% of population doesn't seem fair to me.
3. I don't think there is enough money to be gotten that way to "fix" the program under the typical goal of maintaining the current benefit structure.
4. People tend to view maintaining the benefits output as "fixing" the program, but I look at the input to output ratio and view the program as already badly broken. If the ratio for me is going to be something like 1/5 what it was for people who retired a generation ago, or what a reasonable private retirement account could achieve, then my standard of living today is being lowered by this program.