Jan 3, 2011

Republican Senator Threatens Government Debt Default Unless Social Security Cut

Senator Lindsay Graham was asked on Meet the Press if he was going to vote for an increase in the federal debt ceiling. That will be needed around April of this year. His response was that "to not raise the debt ceiling could be a default of the United States on bond and treasury obligations" but he also said that "I will not vote for the debt ceiling increase until I see a plan in place that will deal with our long term debt obligations starting with Social Security, a real bipartisan effort to make sure that Social Security stays solvent, adjusting the age, looking at means tests for benefits."

16 comments:

Anonymous said...

So please, anyone, offer suggestions as to countering the push to destroy Social Security. What factual argument can be made? What counter suggestions? Is AARP going to run with this ball? This stuff is starting to get scary.

Don Levit said...

Well, Social Security needs to be reformed, for its present path is unsustainable.
It is very important that Social Security remains economically viable due to the importance it has to the percentage of retirement income senios have accrued.
With that in mind, the first step is to stop the borrowing between the Treasury and the Social Security trust funds.
The dollars can't be in 2 places at one time.
Instead of the borrowing, the surplus dollars could be invested in annuities that vary with the S&P index.
If the index goes down, your account remains the same. If it goes up the next year, you capturte a part of the gain.
In addition, you are guaranteed a 3% return. That is a much more solid store of wealth than what we have now, which is simply numbers that allow withdrawals from the Treasury, just like we pay for battleships - out of current revenues and debt.
Don Levit

Anonymous said...

Er, um, excuse me, Don, but who is providing these annuities? Where do I find them, please? What company is about to put them on the market for the government to purchase? Or are we back to talking about the government "providing" the annuities...in which case, we are right back to where we are now, dear chap.

Don Levit said...

No, we are not talking about the government purchasing the annuities, which are being sold by a host of insurers.
The FICA surplus dollars paid by each taxpayer would go directly to the insurer of their choice, instead of being loaned to the Treasury to pay current expenses and (artificially) lower the deficit.
Don Levit

Anonymous said...

SSA DIB needs a minimum age, say 50. Too much fraud by dishonest claimants, attorneys, and doctors.

Anonymous said...

The retirement age needs to be adjusted according to the longer life spans we are enjoying, say to 70.

There needs to be a means test for retirement benefits.

Those making under $50K should not have to pay in. There should be NO cap on earnings subject to SS.

Disability adjudication should have a serious investigatory process.

gps said...

Keep updating your blog with valuable infomation. Thank you for the post.

Anonymous said...

I don't think SSA Disability should have an age limit. There are plenty of children and adults under the age of 50 who need that support. SSA already has rules in place that make it significantly more difficult for a younger person under age 50 to receive disability.

Also, the retirement age for SSA Retirement does not need to be raised that significantly, if at all. The reason the average life span has increased is because the wealthy are living longer. The average worker is still living the same number of years. I prefer to go with the suggestion of eliminating the cap on paying into the SSA system.

Anonymous said...

An age limit is not feasible. What do you do with a thirty year old with a catastrophic injury. One of the best things recently has been mandatory health care under the health care reform act. Most people get sick or injured lose their jobs and then their health insurance. By the time they get disability and medicare, they are in such bad shape, they can never return to work. With the proper health care at the start and some retraining, they could return to the workforce. Most of my clients with physical illnesses want to return to work and could do so with a minimal amount of retraining at the local junior college while they are on disability.

Anonymous said...

So, Don, you are really talking about privatizing the system. Finally, out of the closet you come! Good for you; the air outside closets is almost always fresher.

As for your "idea," I take it you have a secret stash of cash to pay current beneficiaries. How nice for you. Too bad Uncle Sam doesn't have such a stash.

Anonymous said...

On the same Meet The Press show the genius said we need permanent military bases in Afghanistan.

We spend more than any country in the world on the military. We have bases all over the world, and he wants to build more, but I guess that has no affect on the debt and deficit.

Anonymous said...

Mr hall, you spelled security wrong in the title of your post.

Social security regulations need adjusting,the grids should be abolished. The focus of the program should be the affect of the impaiment not a person age(50+). The current model is wasteful.

The commissioner should advocate to redefine disability to incorporate people who work while meeting the"special condition"provision therefore encouraging a beneficiary return to the workforce without fear of loosing their safety net. Therefore reducing the disability payout and still protecting the disabled.

Don Levit said...

Anonymous:
You are right.
Uncle Sam does not have the cash.
That's why private citizens need to step up!
Don Levit

Anonymous said...

Sure, Don, private citizens should always step up--and make sure that their part of the three-legged stool is sturdy through savings. This is especially important as the second leg, pensions, are going the way of the Do-Do bird.

But we're talking about the public policy of how you provide social insurance, the third leg of the retirement stool. Or at least that's what I am talking about.

Don Levit said...

Well fine, anonymous.
I've provided my suggestion of privatization.
Something has to be done in order to stop the Treasury from borrowing the surplus, don't you think?
Are you suggesting we simply continue on the same path?
Don Levit

Anonymous said...

But of course I am, for no other reason than there really isn't another course to follow. If we could turn the clock back to 1935, we could devise the sort of privatized system you seem like. But it ain't possible (at least not yet), and there simply isn't the money around today to fund both the current system and the transition to some sort of privatized one. Assuming, of course, that a "privatized" one was desirable; that, IMHO, is open to considerable question.