# Fiscal cliff - could be worse

by Astronuc
Tags: cliff, fiscal, worse
Mentor
P: 22,287
 Quote by Alfi I'm lost here. ... what? Who is this lobbyist Norquist? I don't understand why this person has any say in anything.
He solicited a pledge from most Republicans that they will never raise taxes and he publicizes it loudly.
PF Gold
P: 1,894
 Quote by 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.
Will you please say what does "IIRC" mean? Thank you.

Cheers,
Bobbywhy
 Mentor P: 22,287 If I remember correctly
 P: 2,179 How about TBD? Has anyone determined what that's going to mean yet?
PF Gold
P: 1,894
 Quote by russ_watters If I remember correctly
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
Mentor
P: 22,287
 Quote by Jimmy Snyder How about TBD? Has anyone determined what that's going to mean yet?
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.
HW Helper
P: 2,280
 Quote by Jimmy Snyder How about TBD? Has anyone determined what that's going to mean yet?
No, that's still to be determined.
 P: 151 At this point ... 50 trillion doesn't mean anything.
P: 18
 Quote by russ_watters You misunderstand: Repubs promise not to make changes for CURRENT SENIORS. Dems want to make no changes at all.
Even for future retirees though, I don't see how we can really cut people's benefits by a sizeable amount.
P: 2,179
 Quote by CAC1001 Even for future retirees though, I don't see how we can really cut people's benefits by a sizeable amount.
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.
Mentor
P: 22,287
 Quote by CAC1001 Even for future retirees though, I don't see how we can really cut people's benefits by a sizeable amount.
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.
P: 18
 Quote by 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.
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.
 Mentor P: 22,287 Welfare for everyone except the top 5%? That's a lot of welfare. Sounds risky to me.
 P: 18 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.
 Mentor P: 22,287 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.
P: 18
 Quote by 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.
We could means-test it.

 2. Having the program work differently for 5-10%% of population doesn't seem fair to me.
If it's supposed to be a "receive what you paid in" type of program, then no it wouldn't be fair, that is why the amount of income that is subject to the payrol tax is capped. Raising the cap and capping the benefits isn't so much to make it "fair," just to make it where we have a form of old-age social insurance program if you will, that provides people who need it with a minimum form of income in old age. I am all for private retirement accounts, however sometimes those can have a blowup, for example people who saved and invested prudently for years, then lost it all in the crash, or fell for one of the Bernie Madoffs of the world, and so forth.

 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.
Yes, I don't myself know how much revenue raising the cap would bring in.

 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.
When you say "ratio," do you mean the amount of people paying into it for each beneficiary today versus decades ago?
HW Helper
P: 2,280
 Quote by 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.
This is true. 65 was a pretty high age to retire during the era when Social Security started. You retired because you were too old to work.

But the idea of retirement has also changed as people's lives get longer. Retiring while you're still in good enough condition to enjoy it seems pretty attractive - hence the resistance to raising retirement age for Social Security.

Nobody's owed an early retirement, though, which is what retirement at 65 has become.

If a person wants to quit working even though they're perfectly capable of working, then let them pay for their life of leisure themselves.
P: 570
 Quote by BobG This is true. 65 was a pretty high age to retire during the era when Social Security started. You retired because you were too old to work. But the idea of retirement has also changed as people's lives get longer. Retiring while you're still in good enough condition to enjoy it seems pretty attractive - hence the resistance to raising retirement age for Social Security. Nobody's owed an early retirement, though, which is what retirement at 65 has become. If a person wants to quit working even though they're perfectly capable of working, then let them pay for their life of leisure themselves.
The age was raised decades ago. I get nothing until age 67.

I think the "resistance" is that I was forced to pay into it on that basis. They spent all the SS surplus, and don't want to pay it back.

Many companies force retirement at age 65.

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