> How severe? A sustainable U.S. debt trajectory would entail elimination of nearly all defense spending or almost all non-defense discretionary outlays, he estimated.
Reminder that infrastructure is ~3% of the budget, the military is ~13%. Almost all of the rest are benefits, either health or money, for old people or various poverty reduction schemes. Or debt.
Social Security was made when there were ~130:1 worker:retiree ratio, now its closer to 3:1 and getting worse. The budget is largely an exercise in transferring money from the younger to the older. Unlike when SS started and the older generations were the poorest, right now they are the richest, so its an exercise in making the richest generations a bit richer at the expense of the current working generations.
Since debt is now a large part of the US budget, this represents the retiree generation (again, the richest generation!) borrowing from even farther in the future to give themselves more money.
There is no solution that doesn't confront this. The old are eating the young at an accelerated pace. People will say things like "But seniors are on a fixed income" as if that didn't represent most people, more or less, or justify the sheer scale of the wealth transfer.
The most realistic solution is that we would have to stop all kinds of benefits to already-rich people and make it solely and exclusively on poverty reduction for the retirees that are in fact poor.
No, solution is to go back to a tax structure we and in the 1950s, were the very rich and corporations paid real taxes.
Starting with Reagan, taxes cuts corporations and the rich has been the main driver of the debt. And I will add to that, falling wages for the middle and lower classes based upon inflation.
Rather than reading this opinion piece, you can learn more about the “debt crisis” by just studying this chart which shows what percentage of the federal budget goes toward paying off the debt:
The situation is similar to what it was in the late 1980s, and it can mostly likely be managed with the same level of spending restraints we saw in response to that.
Austerity for military pork and welfare for the rich first, because there is critical underinvestment in economic and social infrastructure. Cutting healthcare and welfare the poor isn't going to solve anything except increase net costs and drive regional rural hospitals into insolvency. To the former, curtailment in an un-DOGE, organized, and evidenced-based manner would be appropriate.
I got interested enough in the national debt to do some research: is there a single-issue NGO that's working on the national debt? With a platform that you could imagine a Democrat or a Republican supporting?
I found the Concord Coalition [0], and their sister organization Concord Action [1].
I haven't done enough research to endorse them, but I'm just saying: they exist and this is their issue.
lets do austerity for the wealthy first. we give them money hand over fist, in fact we've never met a problem we didn't try to solve by giving the rich more money. we currently fund R&D for three private space programs, from which we buy the technologies we paid the development costs for. Lets get down to 0 publicly-funded privately-owned space programs before we start picking which grandmothers we need to starve out
The result of “fiscal restraint” amounts to acceptance of premature death for millions. Likely acceptable to a country that has accepted excess COVID deaths and support for genocides in West Asia, East & Central Africa, and South America. I only hope that boomers turn to anarchist resistance and disruption.
The healthcare portions of the debt seem unsolvable but I don't know why we think Social Security is that complicated to fix.
1. Define very clearly what SS is. We need to be clear that it's an agreement between the working class and the retired class that says "if you are too old to work and you can't afford to live, we will take care of you"
2. Get rid of the SS tax cap. You don't pay any SS tax above 180k ish, which seems silly. Get rid of the cap and let every earned dollar participate in the program. It doesn't feel like that hard of a sell.
3. You don't get SS payments if you already have enough income. See #1, the agreement. We are agreeing to take care of you if you need it. Many, many retired persons do not need their SS income. Even if you paid SS tax your entire life, see #1. It is not an agreement that you will receive the money you put in later in your life.
Those aren't popular ideas but they are simple and easy to understand for everyone.
I was interested to hear Trump mention Australia's retirement system the other day (amongst the endless stream of what he normally talks about, it really stood out).
In Australia you have a universal Age Pension which is a backstop against extreme hardship set at the equivalent of US$20.5k, but your rate of Age Pension reduces linearly with income levels between US$9k and US$44k.
Similarly, the rate of Age Pension reduces linearly with asset levels between US$213k and US$474k, but you don't count your own home in that.
The private retirement savings system is similar to the 401(k) and Roth 401(k) except the employer doesn't typically do a match, they are just legally obligated to pay 12% of your salary. You can then contribute an extra US$20k as an income tax reduction or pretty much however much you want after-tax.
Inside the superannuation system, the gains are only taxed at 15%.
In general, it's a pretty perfect system that just leans a little too far towards being a rich person's wealth preservation tool, but overall it enables self-sufficiency while also preventing real poverty in old age.
15 comments
[ 0.24 ms ] story [ 39.1 ms ] threadBad headline. No biscuits.
Reminder that infrastructure is ~3% of the budget, the military is ~13%. Almost all of the rest are benefits, either health or money, for old people or various poverty reduction schemes. Or debt.
Social Security was made when there were ~130:1 worker:retiree ratio, now its closer to 3:1 and getting worse. The budget is largely an exercise in transferring money from the younger to the older. Unlike when SS started and the older generations were the poorest, right now they are the richest, so its an exercise in making the richest generations a bit richer at the expense of the current working generations.
Since debt is now a large part of the US budget, this represents the retiree generation (again, the richest generation!) borrowing from even farther in the future to give themselves more money.
There is no solution that doesn't confront this. The old are eating the young at an accelerated pace. People will say things like "But seniors are on a fixed income" as if that didn't represent most people, more or less, or justify the sheer scale of the wealth transfer.
The most realistic solution is that we would have to stop all kinds of benefits to already-rich people and make it solely and exclusively on poverty reduction for the retirees that are in fact poor.
Starting with Reagan, taxes cuts corporations and the rich has been the main driver of the debt. And I will add to that, falling wages for the middle and lower classes based upon inflation.
https://fred.stlouisfed.org/series/FYOIGDA188S
The situation is similar to what it was in the late 1980s, and it can mostly likely be managed with the same level of spending restraints we saw in response to that.
I found the Concord Coalition [0], and their sister organization Concord Action [1].
I haven't done enough research to endorse them, but I'm just saying: they exist and this is their issue.
[0]: https://concordcoalition.org
[1]: https://concordaction.org/
The result of “fiscal restraint” amounts to acceptance of premature death for millions. Likely acceptable to a country that has accepted excess COVID deaths and support for genocides in West Asia, East & Central Africa, and South America. I only hope that boomers turn to anarchist resistance and disruption.
1. Define very clearly what SS is. We need to be clear that it's an agreement between the working class and the retired class that says "if you are too old to work and you can't afford to live, we will take care of you"
2. Get rid of the SS tax cap. You don't pay any SS tax above 180k ish, which seems silly. Get rid of the cap and let every earned dollar participate in the program. It doesn't feel like that hard of a sell.
3. You don't get SS payments if you already have enough income. See #1, the agreement. We are agreeing to take care of you if you need it. Many, many retired persons do not need their SS income. Even if you paid SS tax your entire life, see #1. It is not an agreement that you will receive the money you put in later in your life.
Those aren't popular ideas but they are simple and easy to understand for everyone.
In Australia you have a universal Age Pension which is a backstop against extreme hardship set at the equivalent of US$20.5k, but your rate of Age Pension reduces linearly with income levels between US$9k and US$44k.
Similarly, the rate of Age Pension reduces linearly with asset levels between US$213k and US$474k, but you don't count your own home in that.
The private retirement savings system is similar to the 401(k) and Roth 401(k) except the employer doesn't typically do a match, they are just legally obligated to pay 12% of your salary. You can then contribute an extra US$20k as an income tax reduction or pretty much however much you want after-tax.
Inside the superannuation system, the gains are only taxed at 15%.
In general, it's a pretty perfect system that just leans a little too far towards being a rich person's wealth preservation tool, but overall it enables self-sufficiency while also preventing real poverty in old age.
How about reversing the Trump Tax cuts or clawing back the tax holiday for bringing back profits hidden overseas.