The Republican Party Wants to Defund Social Security (1 Viewer)

[Red Hot Tamales]

Why wouldn't they?

 

[Osaurus]

So they’re fighting to maintain payroll taxes now?

 

[spodog]

For anyone who might care enough to actually read the proposal, it has nothing to do with defunding Social Security. 

https://www.whitehouse.gov/presidential-actions/memorandum-deferring-payroll-tax-obligations-light-ongoing-covid-19-disaster/

It is merely suggesting that suspending the 6.2% employee FICA obligation for the balance of the year for lower and medium wage earners, and then determining in early '21 whether to treat that suspension as a 'freebie' that won't have to be paid or to make it up in 2021 by temporarily increasing the withholding rate.   

 

[supermike80]

hot take 

 

[SoBeDad]

For anyone who might care enough to actually read the proposal, it has nothing to do with defunding Social Security. 

https://www.whitehouse.gov/presidential-actions/memorandum-deferring-payroll-tax-obligations-light-ongoing-covid-19-disaster/

It is merely suggesting that suspending the 6.2% employee FICA obligation for the balance of the year for lower and medium wage earners, and then determining in early '21 whether to treat that suspension as a 'freebie' that won't have to be paid or to make it up in 2021 by temporarily increasing the withholding rate.   

But, Reducing Or Eliminating Social Security Payroll Taxes Could Cause Major Disruptions

And from AEI:  Businesses balk at payroll tax deferral

Sounds like it's a pre-November publicity stunt by Trump. 

 

[spodog]

But, Reducing Or Eliminating Social Security Payroll Taxes Could Cause Major Disruptions

And from AEI:  Businesses balk at payroll tax deferral

Sounds like it's a pre-November publicity stunt by Trump. 

Both of those articles point out anticipation of challenges with administering this.    Of course payroll processors don't want to do it, as it places a burden on them with no corresponding increase in $ to cover their work.    Employers don't like it either, as most employees have no idea how this even works and will blame them for their paychecks being smaller in 2021 when the deferred FICA withholding for 2020 is being held out of their pay, so they will take the brunt of the questions and dissatisfaction.      In those regards, it isn't much different than most federal government fees and taxes that are somebody's else responsibility to collect on behalf of the Federal Govt. 

Neither of those objections provides support to the thread title that Red Hot Tamales chose to give to this thread, either as a trolling maneuver or as seriously uninformed. 

 

[NightStalkers]

Why wouldn't they?

Social Security is a legal Ponzi scheme.  It is dependent on the Social security taxes coming in being bigger than what goes out.  Once that doesn't happen it is insolvent and will have to be funded directly from the General Funds of US Govt.  There is no Lock Box like Gore lied about.  Each year not matter which party  in charge they take the Social Security Surplus and use it for the General Fund the US govt uses to pay it's bills.  Has been for years.  My brother used to work for an agency who monitored that.  The problem is the growth of the Govt's obligations including the servicing of the Debt.  The Debt in the next few years will be the biggest line item in the US Budget bigger than DOD or Medicare and Social Security if i remember correctly is due to go red in 2029 i think.  So another big chunk of debt to be paid.  

And none of this involved the Big ideas that the Democrats want to do if Biden wins. (Don't get me started on Trumps spending)  I saw that AOC's green new deal was forecasted to cost 90 Trillion which more than the total GDP of every country on the planet.  Even if you stretch it out over 10 years it would still be 3x of the budget now.  And the worst thing it won't work.  California went to a "Green power" setup and started disabling fossil fuel plants.  The result is this year random outages.  Not only is California not able to produce enough Green energy they can't borrow enough from other states which are burning fossil fuels and the pollution is still there just not in California but the same overall.  And they still can't keep the lights on.

 

[OrganizedChaos]

Trump did mention that assuming he wins in November he would permanently eliminate the payroll tax and it could be funded in other ways such as the general fund. Of course if that happens would be eliminated or greatly diminished since it would be fighting with everything else in the general fund. Sorry I don’t know how to link something here but just google and you can find it easily. It has nothing to do with the current deferral mentioned above outside of being brought up I believe when it was being discussed

 

[Juxtatarot]

 My brother used to work for an agency who monitored that.  The problem is the growth of the Govt's obligations including the servicing of the Debt.  The Debt in the next few years will be the biggest line item in the US Budget bigger than DOD 

No, not even close

 

[NightStalkers]

No, not even close

  You own graph shows the debt service  at 375 billion.  That is before the covid debt we have added on.  Govt has spend what 4 Trillion extra this year? (not arguing whether is needed)  And likely  will have to spend a bunch next year.  That means that 375B is going to go up by at least 20 percent just this year as if i remember right we were at 22T in debt and  is now 26T.  And NONE of this is taking into account what will happen if Interest rates start to climb.  Each dollar we borrow now is at historic low interest rates .  That won't last forever.  And like i said Social Security become insolvent as soon as  the payers don't outweigh collectors.

Bye the way CBO mislabled this,Debt Service Is a Mandatory spending item.  If we default on that the whole world economy will crash.  And the damage to the US economy would be horrific.  There in no Germany standing by bailing out Greece for the US.  No one has the money to bail out the US.  We are like 25 percent of the total GDP of the world. 

If you read what i said i didn't say it would happen right now but a few years might not be far off.  Another way to look at it is if the percentage of debt service goes up faster than the rate of growth in the Economy then all we are doing is living off the worlds biggest Credit Card.

 

[BassNBrew]

  You own graph shows the debt service  at 375 billion.  That is before the covid debt we have added on.  Govt has spend what 4 Trillion extra this year? (not arguing whether is needed)  And likely  will have to spend a bunch next year.  That means that 375B is going to go up by at least 20 percent just this year as if i remember right we were at 22T in debt and  is now 26T.  And NONE of this is taking into account what will happen if Interest rates start to climb.  Each dollar we borrow now is at historic low interest rates .  That won't last forever.  And like i said Social Security become insolvent as soon as  the payers don't outweigh collectors.

Bye the way CBO mislabled this,Debt Service Is a Mandatory spending item.  If we default on that the whole world economy will crash.  And the damage to the US economy would be horrific.  There in no Germany standing by bailing out Greece for the US.  No one has the money to bail out the US.  We are like 25 percent of the total GDP of the world. 

If you read what i said i didn't say it would happen right now but a few years might not be far off.  Another way to look at it is if the percentage of debt service goes up faster than the rate of growth in the Economy then all we are doing is living off the worlds biggest Credit Card.

Can't we just print more money?  The Fed is trying to stimulate inflation anyway.

 

[NightStalkers]

Can't we just print more money?  The Fed is trying to stimulate inflation anyway.

I am not sure how the Fed gets away with it.  One of the things that led up to the Nazi's was the Wiemar Republic just printing money and German money became worthless.  I guess it basically a digital shell game that no one country wants to call us out on as most countries are net exporters to the US.  They don't want to close out us giving them money.  One of the bigger dangers is who is buying the Tbill debt.  A lot of this goes to China.  If they stop buying the debt then the rest of the world has to pick up the slack and most of the world doesn't have the liquidity China seems to have  On the other hand China rips off almost all US companies if they do business in China with requiring the intellectual property being given to them.

Some inflation (small) is not always bad.  Some countries like Japan suffer from Stagflation which if i remember right is the inability to raise prices at all.  That can be worse than inflation depending on severity of the inflation rates.

 

[BassNBrew]

I am not sure how the Fed gets away with it.  One of the things that led up to the Nazi's was the Wiemar Republic just printing money and German money became worthless.  I guess it basically a digital shell game that no one country wants to call us out on as most countries are net exporters to the US.  They don't want to close out us giving them money.  One of the bigger dangers is who is buying the Tbill debt.  A lot of this goes to China.  If they stop buying the debt then the rest of the world has to pick up the slack and most of the world doesn't have the liquidity China seems to have  On the other hand China rips off almost all US companies if they do business in China with requiring the intellectual property being given to them.

Some inflation (small) is not always bad.  Some countries like Japan suffer from Stagflation which if i remember right is the inability to raise prices at all.  That can be worse than inflation depending on severity of the inflation rates.

Yup.  We probably have some room to work with.

 

[Juxtatarot]

If you read what i said i didn't say it would happen right now but a few years might not be far off.  Another way to look at it is if the percentage of debt service goes up faster than the rate of growth in the Economy then all we are doing is living off the worlds biggest Credit Card.

You wrote that the debt servicing will be more than social security, Medicare or defense in a few years. My only point was that it won’t be.

(By the way, social security isn’t a Ponzi scheme.)