patrick.net

The fatal weakness of the Republican Party is that Republicans want to eliminate Social Security and Medicare.

You say that as if the Democrats will allow i...

We're screwed!!!

I never thought of it that way. Wow, that opens up pandora's box.

The Republicans are becoming crazy. And I say that as a Republican.

Having a black president brought out the right wing nutjobs: the Birthers, Palin, Bachmann, Rick Perry, etc. Mitt Romney is the only sane one. (and maybe Ron Paul, but I don't think his radical libertarian ideas are very realistic).

Here's the thing...it's not like Obama is some far-left "socialist" on economic issues. On gay marriage and abortion he could be considered far-left, but I think that's about it.

As far as the health debate, why shouldn't people have to buy insurance if they are going to get "free" heath care in the ER? Not that I'm a big fan of a government mandate to buy a private product. But once we as a society say that ERs MUST treat people regardless of ability to pay, than how can we not mandate that everyone buy insurance to pay for those possible ER visits?

wthrfrk80 says

(and maybe Ron Paul, but I don't think his radical libertarian ideas are very realistic).

Ron Paul isn't even very libertarian. He is further right socially than the mainstream Republican party. He is slightly further left economically than the mainstream Democratic party. Mike Gravel and Dennis Kucinich are more libertarian than Ron Paul, although their social positions are quite different:

http://www.politicalcompass.org/uselection2008

wthrfrk80 says

Here's the thing...it's not like Obama is some far-left "socialist" on economic issues. On gay marriage and abortion he could be considered far-left, but I think that's about it.

Oh and he wants to frivolously spend other peoples money, whether it is effective or not. And fuck due diligence, and lets give anything "Green industry" related a 500 million dollar check, and not cover the tax payer in the event said company fails.

Yep, Obama has his head screwed on tight, a little to tight to the left.

Why are you so constantly fixated on the stupid (it was stupid) but totally insignificant solyndra crap. It's a very small scale political scam. Lots of them go on all the time. There are ever so slightly bigger issues than this.

wthrfrk80 says

On gay marriage and abortion he could be considered far-left

non-conservative is not "far-left".

http://www.gallup.com/poll/147662/first-time-majority-americans-favor-legal-gay-marriage.aspx

http://www.gallup.com/poll/147734/americans-split-along-pro-choice-pro-life-lines.aspx

wthrfrk80 says

if they are going to get "free" heath care in the ER?

people don't get free health care via the ER. This is a myth.

Their life-threatening situations may be stabilized, but this is far from "free care".

"Millions of elderly people depend on Social Security and Medicare for their survival."

And this is why the Republicans will keep current beneficiaries in the program and then torpedo it behind them.

They know you can't take on AARP head-on.

Bellingham Bob says

people don't get free health care via the ER. This is a myth.

Their life-threatening situations may be stabilized, but this is far from "free care".

Agreed, that's why you have people who make nonsense statements like "these days people go to the ER for a bad cough." It's not true. They can't really do much for you other than write you a scrip for cough medicine (codeine-containing or otherwise).

If you have a problem with you after you get stabilized by the ER, you generally get checked in to hospital services, which are expensive, but this has nothing to do with ER costs.

Maybe I am mistaken about the ER situation.

At any rate, I can't understand the radical dislike for Obama, at least on economic issues. He hasn't done anything very radical in that sphere...no big tax increases (or cuts), no new "draconian" regulations for the financial sector (which I think we desparately need, particularly the Glass-Stegall concept of separating risky investment banking from regular commercial banking), and no big environmental regulations. If I'm not mistaken, Obama supports natural gas drilling/fracking...not exactly far-left environmentalism.

The "tea party" seems mainly upset over tax and spending (i.e. economic) issues and not social issues. At least that's what their signs usually say. And yet Obama hasn't been all that "liberal" on economic issues, as far as I can tell. Warren Buffet still pays a lower tax rate than his secretary.

Some of anger may be racially motivated, but then again there wasn't much anger when Colin Powell and Condaleeza Rice were given high positions in the Bush administration.

A Republican president could propose the EXACT same poliicies as Obama and there would be ZERO outrage from the Tea Party. Where were all the protests when Romney was governor and he implemented RomneyCare? Where were the protests when Bush enacted the bailouts? There were none.

wthrfrk80 says

Some of anger may be racially motivated, but then again there wasn't much anger when Colin Powell and Condaleeza Rice were given high positions in the Bush administration.

IMO any racial anger is directed at "Obama's going to pay my mortgage!" -- ie looking at people who support Obama, not at Obama per se.

http://www.youtube.com/watch?v=P36x8rTb3jI#t=10s

People with their act together can harbor a fear that Big Gov is going to take their wealth and "spread it around", in Obama's words.

So I can see how Obama's plan to raise taxes back on those in the top bracket can create a lot of opposition. People making $300,000+ are making a good living but 39.6% income taxes are pretty tough, that's 6% more than currently, so for a $350,000 income that's a $9000 hit.

The "tea party" seems mainly upset over tax and spending (i.e. economic) issues and not social issues

The Tea Party was hijacked by the social conservative element.

Perry's support is strongest among Tea Partiers.

http://www.huffingtonpost.com/2011/08/30/rick-perry-polls_n_942432.html

HousingWatcher says

Where were the protests when Bush enacted the bailouts? There were none.

Actually the Tea Party got started in 2008 as "Fed UP!" etc.

http://market-ticker.org/akcs-www?singlepost=2137602

It was hijacked by the main Republican establishment in 2009.

"People making $300,000+ are making a good living but 39.6% income taxes are pretty tough, that's 6% more than currently, so for a $350,000 income that's a $9000 hit."

That's why we need more tax brackets. Someone making $251,000 and someone making $25 million should NOT be in the same bracket. Rep. Schakowsky has introduced a bill to make tax increases more fair, witht he following new brackets:

•$1-10 million: 45%
•$10-20 million: 46%
•$20-100 million: 47%
•$100 million to $1 billion: 48%
•$1 billion and over: 49%

The bill would also tax capital gains and dividend income as ordinary income for those taxpayers with income over $1 million. If enacted in 2011, the Fairness in Taxation Act would raise more than $78 billion.

http://schakowsky.house.gov/index.php?option=com_content&view=article&id=2877&catid=22

GOP is LOL about all that.

The reason we have so few tax brackets is to keep the independently wealthy protected by the upper middle class.

But it's sad how little that change will fix our problems.

$80B used to be a lot of money. . .

Bellingham Bob says

So I can see how Obama's plan to raise taxes back on those in the top bracket can create a lot of opposition. People making $300,000+ are making a good living but 39.6% income taxes are pretty tough, that's 6% more than currently, so for a $350,000 income that's a $9000 hit.

I don't think that's quite right. In 1992, we had two brackets, a 28% and a 31%, and Clinton added two higher brackets at 36% and 39.6% (which is 10% higher = 36 + 3.6). For MFJ, Clinton's top two brackets were $140K+ at 36% and $250K+ at 39.6%. Through indexing for inflation, this is now a $212K+ bracket and a $379K+ bracket, but now with the rates at 33% and 35% because of the tax cuts under Bush -- generally a 3% across the board cut for the 28% and higher brackets, with a 4.6% cut for the top bracket.

My impression is that Obama wants to send the $250K bracket (basically the $212K inflation adjusted bracket + a little bit) back to 36% and the higher bracket ($379K + a little bit) to 39.6%, so we're talking about either 3% or 4.6% for the respective groups.

For single filers, the Clinton brackets were at $115K for 36% and also $250K for 39.6%. Inflation adjusted, these are at $174K and $379K respectively. So this would be adjusting the $174K threshold upward to $200K, and presumably setting the same threshold for the 39.6% bracket.

That's in addition to any other suggestions. Back in Clinton's day itemized deductions phased out at some income level. Bush's tax cuts first reduced the phase-out by 1/3, then 2/3, then got rid of the phase-out completely, so now everyone gets their full itemized deduction. One of Obama's suggestions is to limit itemized deductions to 28% even if you're in a higher bracket, and it's not that horrible an idea and is more generous than what we had before Bush.

Historical rates available at: http://www.unclefed.com/IRS-Forms/taxtables/index.html

HousingWatcher says

That's why we need more tax brackets.

We used to have many many many more brackets. It's not a bad idea, and it would make sense to bring back some higher brackets. California recently did this by adding a 1% surcharge if you have income above $1M.

Here are the rate brackets for 1950, 1960, 1970, and 1980:

http://www.stanford.edu/class/polisci120a/immigration/Federal%20Tax%20Brackets.pdf

Reducing the number of brackets, as Reagan did is not really "simplification". It's only reducing simplification for people who are bad at simple math. It's easy to read the tax table if you make below $100K, and many people do computerized returns these days anyway.

When tax policy wonks talk about simplification, what they're really talking about is reducing the numbers of exemptions, credits, and other general rules that make us deviate from the stated rates. Usually this means broadening the tax base, since we're really talking about tax preferences.

The problem with SS/MM is not the Ponzi nature (which is also pointed out by Krugman and Samnuelson, btw) but that they are massive embezzlement schemes.

All social systems that take care of the elderly (forcibly or voluntarily) have to be somewhat "Ponzi" simply because the whole premise is that the elderly are not able to take care of themselves through selling their own services at advanced age. Someone, many someones, have to take care of the elderly when the latter become too frail to take care of themselves. The only real choice is between whether the people get a choice in how they'd save for retirement and who would manage the funds for them, competitively vs. monopolisticly, including competition among charitable organizations for donor funds.

The real problem with SS/MM is massive embezzlement. When they are set up, and whenever they are reformed, the net cash-flow== zero time horizon is pushed out a few decades . . . which demographically means at the time of the founding / reform, there is a huge positive cash flow. That huge positive cash flow is immediately spent in general fund, the largest component of which is always war making.

It is no co-incidence that the presidents who set up or reformed SS/MM also gained the the biggest war chests of the 20th century: FDR, LBJ, and Reagan.

If comparable retirement funds had been managed competitively instead of by the government monopoly, such systematic embezzlement would have long been exposed before being kept in place for 70+ years, and retirees would have placed money elsewhere with more honest competitors.

People are prone to fall for "insider scams": just like in the Madoff case, many investors knew Madoff had to be crooked in order to have that kind of alleged returns, except they thought Madoff was scamming other traders in the market place in the market making process for the benefit of his fund clients.

Citizens in the British Empire, German Empire, Soviet Empire, and recently in the US all thought having their government grabbing some remote resource-rich corner of the world would be beneficial to themselves. Reality always turned out otherwise: just as oil became much much more expensive after having marines standing over the well head in Iraq than letting the Iraqis pump the oil themselves and sell it to us.

Gun-run ("government") schemes depend on people's false hopes of getting something for nothing (through the use of violence and coercion). Ultimately, the joke/mark is usually on the adherents themselves.

Bellingham Bob says

People with their act together can harbor a fear that Big Gov is going to take their wealth and "spread it around", in Obama's words.

So I can see how Obama's plan to raise taxes back on those in the top bracket can create a lot of opposition. People making $300,000+ are making a good living but 39.6% income taxes are pretty tough, that's 6% more than currently, so for a $350,000 income that's a $9000 hit.

That, and the fact that many people are starting to realize that taking $9000 out of Bellingham to a different "Washington" (DC), and spend that money on some fancy weapon to blow up mud huts in Afghanistan (then build a fancier mud hut there) is not going to benefit people in Belingham, Washington.

The family in Bellingham making $350k a year has to spend the money somehow, or save the money. If they spend it, it's jobs in Bellingham; if they save it, someone else in Bellingham would be able to borrow it to start a business and create jobs that serve people in Bellingham . . . not the nonsense political machination that takes place on the other side of the continent and upset people all around the world.

The problem with SS is that it was never originally intended to be used as a retirement plan. It was set up by FDR to help elderly people out during the great depression as it was those people that would be the least likely to find work. WPA jobs tended to be manual labor..sure there was some art but all the roads, bridges etc required labor

FDR got the idea for SS from Bismark. ALL major western concepts of social security, unemployment insurance, pensions, worksmans comp etc all came from him. But when he was in power the life expectancy was only 45...

When SS came out in the USA it was only 64...

These were programs to be used as incentives to live longer..well it worked. No one ever thought that people would be on these programs for decades.

SS is doing OK but medicare is extreamly expensive going forward. The amount of money estimated to treat the baby boomers frankly does not exist. You could even go back during the housing boom and sell all houses in the country combined and that still would not be enough to pay for this.

I think one reform they could try isn't raising ages or cutting coverage (at least at the start) but you cut from the end. If someone is 100+ years old at what point can it be said that the government should continue the care? If 1/3rd of someones life is being on a system..What if we said at age 100 no more coverage..it just ends.Then in another 10 or so years we lower it to 95 and repeat that to make it a 20 year program.

As for racial anger at obama some question if he really is black. The producer of the boondocks tv show made a argument that there are difference between black and African American. If you grew up with the legacy of Jim Crow and segregation and/or had relatives that were slaves then you are black. If you didn't then you are African American. Hawaii did not have segregation. Obama did not really have the same experiences. That would be like saying that someone from China coming to the USA today can feel sympathy for the Chinese laborers that came over in the 1880's. It just does not fit.

A fair amount of people thought Obama would pull us out of Iraq and Afghanistan, end the war on drugs, close camp x ray etc. He's done none of those. I can't think of that much specifically of what he said he'd do or imply what he was going to do that he actually did. The magic is over even with younger people. Go to any college campus now vs 2008. In 2008 it was like Jesus came back. Today it is like people after having New Coke!

Bellingham Bob says

"Millions of elderly people depend on Social Security and Medicare for their survival."

And this is why the Republicans will keep current beneficiaries in the program and then torpedo it behind them.

They know you can't take on AARP head-on.

“Nessuna soluzione . . . nessun problema!„

The government seems to be taking on AARP head-on anyway: understanding inflation by changing basket and making outrageous hedonic adjustments. At some point, the BLS may well consider a can of cat food the equivalent of a can of tuna because the two have comparable dry protein content.

mdovell says

It was set up by FDR to help elderly people out during the great depression as it was those people that would be the least likely to find work. WPA jobs tended to be manual labor..sure there was some art but all the roads, bridges etc required labor

Good point. Another reason was that FDR's core policy was massive devaluation of the dollar to save the banks. The elderly retiree who surrendered his $20 gold piece on FDR's executive order only to find out less than a year later that the the $20 paper money he received in return could only buy 40% less would be mightily peeved! SS was introduced to put a lid on grandpas/grandmas grabbing their shotguns.

BTW, good point on the state-sponsored elderly pension being a Bismarckian idea. Bismarck of course came up with that set of policies in order to preserve German Junker class feudal privileges in an era of rising middle class. The policies literally undermined what the newly emerging middle class could do for themselves and made them dependent on their former feudal overlords/governments.

Bellingham Bob says

LOL. The problem with the $3T+ big gov spends is that it's not at all wasted as you say. Every dollar is going somewhere, or close to it.

Rural Washington gets its share. Shit, East of the Cascades would still be wilderness if it wasn't for the Federal Government -- Grand Coulee Dam, Hanford, Boeing, Larson AFB, Federal irrigation works . . .

That's the same logic as Stalin used for his white elephant projects: where would the soviet carmaking factories be if not for his leadership? LOL. Just because the feds did it doesn't mean that men with profit motives wouldn't have done some thing better! In fact, the very profit motive that is lacking when the government does it is what leads to net destruction of jobs: the tax money that has to be collected to pay for those jobs cost more than the job payouts . . . hence net destruction of jobs. The difference between a valuable dam vs. a pyramid is in profitability; i.e. people in the market place derive more value out of the dam than out of the pyramid. The lack of profit calculation makes government investment uneconomic.

No, it's jobs in China.

Not true at all. Products from China take up less than 1% of average household spending. Even for retail products made in China, the bulk of the price tag is actually paying for retail employees in the US, store rent in the US and the US corporations doing the marketing. For the $350k/yr family, the China per centage take is probably much lower than even the average, as they can afford higher priced American labor in pursuit of higher quality of goods/service.

In fact, a solid argument can be made that the government impoverishing the American people is the main driving force behind outsourcing: Americans have to buy cheaper substitutes from overseas after the government bid away domestic resources and labor to run the bureaucratic and warmongering political machines.

LOL, you have some quaint 1920s-era understanding of the money supply.

Then you proceed to regurgitate mid-19th century Marxist critique instead. LOL.

I consider myself a capitalist but I understand that little investment in this country is true capitalism any more. ~80% of it is naked rent-seeking, trying to chisel that last dime out of the working class somehow.

You do realize that in order to have an economic rent (i.e. return better than average opportunity cost), one has to have either:
(1) innovation that has not been copied by other capitalists yet
(2) government enforced market privilege / monopoly.

Presumably you are not against the first form . . . whom do you blame for the second form of rent seeking?

mdovell pulls numerous turds out of ass and crafts

is that it was never originally intended to be used as a retirement plan.

"No greater tragedy exists in modern civilization than the aged, worn-out worker who after a life of ceaseless effort and useful productivity must look forward for his declining years to a poorhouse. A modern social consciousness demands a more humane and efficient arrangement." -- FDR, February 28, 1929

mdovell says

But when he was in power the life expectancy was only 45...

When SS came out in the USA it was only 64...

"it should be noted that there were already 7.8 million Americans age 65 or older in 1935 (cf. Table 2), so there was a large and growing population of people who could receive Social Security. Indeed, the actuarial estimates used by the Committee on Economic Security (CES) in designing the Social Security program projected that there would be 8.3 million Americans age 65 or older by 1940 (when monthly benefits started). So Social Security was not designed in such a way that few people would collect the benefits."

http://www.ssa.gov/history/lifeexpect.html

mdovell says

No one ever thought that people would be on these programs for decades.

Christ. That's wrong for back in the 1930s and the mild rise in longevity since then has been accounted for by higher contribution levels, though we may need to raise levels more since higher-paid people live forever now

mdovell says

The amount of money estimated to treat the baby boomers frankly does not exist.

This is true, but largely because care in this country costs 2X what it does in other countries.

mdovell says

A fair amount of people thought Obama would pull us out of Iraq and Afghanistan, end the war on drugs, close camp x ray etc. He's done none of those.

He's pulled us out of Iraq, he never promised to leave Afghanistan so that is neither here nor there, he never promised to end the war on drugs.

Not closing Guantanamo is a fair cop, but he needed support from Congress to do that (to bring the imprisoned stateside).

Plus the mistake of taking hundreds of people is hard to back out. Releasing just one who turns out to do more terrorist stuff would give clowns like Shrek juicy political ammunition. And there are a lot of clowns like Shrek in this country.

The detainees don't vote so they're fucked. People unhappy about this are more than welcome to pout about it or even not vote if they are so moved.

Good luck with that.

The most interesting politician in the world.

Bellingham Bob says

"No greater tragedy exists in modern civilization than the aged, worn-out worker who after a life of ceaseless effort and useful productivity must look forward for his declining years to a poorhouse. A modern social consciousness demands a more humane and efficient arrangement." -- FDR, February 28, 1929

The average SS payout is just over $1000/mo, or roughly $12k-14k per year. That's still very poor living in a country where per capita GDP is around $60k. FDR's "arrangement" is neither humane nor efficient: "the arrangement" actually steal from the retirement fund in a way that would have landed any private sector fund manager in jail if they run their funds in similar fashion.

The fundamental problem is government monopoly enforced at gun point, at the expense of the well being and financial security of the elderly. The real cost of government managing social security is not reflected in the Madoff-like periodical statement, but the missing $2+ Trillion that is replaced by a worthless piece of paper called non-marketable "special" treasury IOU; it's "special" in the sense that it's not marketable; i.e. worthless.

"The German Empire was also the first modern nation to set up worker's comp too, I believe."

Why didn't you mention Hitler? You know you wanted to.

HousingWatcher says

"The German Empire was also the first modern nation to set up worker's comp too, I believe."

Why didn't you mention Hitler? You know you wanted to.

Soft-core fascism in the 2nd Reich laid the cultural and intellectual ground work for the hard-core fascism of the 3rd Rech. BTW, the real failings of the soviet system was not the socialist utopian ideals per se but the hard core fascist society that resulted from their inevitable economic failure under the bureaucracy.

they don't want to get rid of it. they want to restructure how it pays doctors. This nation can't sustain it the way it's going now.

This isn't going to make healthcare industry happy.

Patrick man..... No offense but your thinking is messed up.

I think you are projecting all of the problems of the Democratic party onto republicans.

The Democrats were the party of segregation. The official racist party.

Also as for statement about elderly white people being racist. Maybe your relatives are all racist but don't project that onto everyone else.

In fact I think that is probably the problem. You come from a background of screwed up racists democrats who cant thinks straight.

Your remarks are totally off base and cannot be supported by any history - ancient to contemporary.

"The Democrats were the party of segregation. The official racist party."

LOL.

http://en.wikipedia.org/wiki/Southern_strategy

The More You Know

Patrick, you are 100% correct. The Republican party is now controlled by Ayn Rand worshipping whacks. I don't want to live in a country where we let elderly or children starve, and not provide them appropriate medical care. The Republican party has dramatically changed since Reagan, and me and many conservative friends have no choice but to back the Democrats for now.

Bellingham Bob says

"The Democrats were the party of segregation. The official racist party."

LOL.

http://en.wikipedia.org/wiki/Southern_strategy

The More You Know

"The neutrality of this article is disputed. Please see the discussion on the talk page. Please do not remove this message until the dispute is resolved. (July 2011)"

So are you really going to dispute what even your biased article claims

"Though the "Solid South" had been a longtime Democratic Party stronghold due to the Democratic Party's defense of slavery prior to the American Civil War and segregation for a century thereafter,"

Sorry Bellingham Bob its simply an undisputed fact that the Democratic Party was known as the party of slavery. By and large African Americans sympathies were with the Republicans until the New Deal, which by the way ended up enslaving many new generations of African Americans once again by making them dependent upon govt largess.

so many ignorant, broad stroking statements here...including your's patrick.

I come here for real estate talk, not to start political debates that end up no where and point the fingers at either party....

>>>“The Social Security Trust Fund currently holds approximately $2.6 trillion and can pay full benefits through 2037,” says Rep. Xavier Becerra (D-CA), ranking member on the House Subcommittee on Social Security.

Also, we can actually increase Social Security benefits by taxing ALL income, not just wage income. This means taxing income above $106,800 and taxing dividends and interest. We might also consider raising the retirement age by, say, six months.

See: How To RAISE Social Security Benefits Now

http://www.ourbroker.com/news/how-to-raise-social-security-benefits-now-040511/#ixzz1Y6lzYyy5

? Like Social Security as we know it has been run well and fair? GIve me a break. So a worker pays into it for 40 plus years with no interest and collects $1000-$1300 per month and that is a good thing? You could take that same amount of money ( it is yours ) and have it put in your name drawing a nominal amount of interest and over the same time period have $400k in your account when you are 60 years old and have twicw the amount per month for the rest of your life. The point isn't Social Security which is just a savings account for people. The point is how are they handling your money and are they ripping you off with it nd the answer is they have done a horrible job abd they are ripping you off.

Mike -- Have you looked at the interest levels paid out on retirement accounts these days?

Let's say you took your $400,000 savings and got a 5-year CD. The interest rate would be 1.8 percent today according to BankRate.com. That's less than the rate of inflation and amounts to $7,200 a year -- or $600 a month.

>>>The elderly "also tend to be racist."

The people we see today as "elderly" are the people who ended segregation, populated the civil rights movement, ended gentlemen's agreements and tried imperfectly to improve a society where discrimination was rampant and lawful. We no longer deny college admissions on the basis of race or religion and today you can get a bank loan if your name ends with a vowel.

Probably the best thing the "elderly" did was to raise kids who largely don't see other people through the lens of race or religion.

I don't think any age group has a monopoly on racism and it surely still exists. But I also think that compared with what we used to have we've come a long way.

Marcus --

Where did you get the graphic?

Thanks.