...you raise social security taxes.
Yes, raise the incoming Ponzi loot and everything will be fine.
Tyler Cowen writes:
According to his estimates, if no further steps are taken to shore up the finances of Social Security, the system will stop being able to meet its scheduled payment obligations sometime in the 2030s...
[O]ver the next 75 years, about 17% of scheduled benefits are currently unfinanced. Blahous estimates that the U.S. could cover that gap if the Social Security payroll tax were raised from 12.4% to 15.1%.Well, of course, you can always "solve" Social Security deficit by taking more from the youth but that only pushes the problem further down the road.
But another point that Cowen doesn't bring up at all is that the Social Security system is already running cash flow negative. This means the Social Security Administration has begun redeeming its securities that were issued by the Treasury Department.
The problem is the Treasury does not have the cash on hand to redeem the securities and has to go into the debt markets to suck more money from private sector capital to make the redemptions. Thus, distorting the structure of the economy away from capital formation which will result in downward pressure on the general standard of living.
And Tyler thinks there is no problem here. Now that is why I call being hardcore beltarian.
-RW
SS would be in less of a burn if they stopped giving money away to any Cuban who claims to have washed up on the Florida coast along with other uses it was not intended. This has been going on for decades. Of course, the public is stupid about things are financed and think it is a retirement program when it was intended to provide some sort of minimum income. SS gives benefits to those under 18 of a parent who died, disability, and other things it was probably not originally intended to be used for.
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