In other words, we have a progressive Social Security system specifically designed to help the lowest earners and a tax break system designed to help the highest earners.
Spot the group that’s missing.
THE MISSING MIDDLE – HOW TAX INCENTIVES FOR RETIREMENT SAVINGS LEAVE MIDDLE-CLASS FAMILIES BEHIND
https://www.nirsonline.org/wp-content/uploads/2022/05/NIRS-T…
I humbly thank the middle-class voters who supported the politicians that brought us this. But why?
intercst
For decades, companies have tried to get folks to sign up for 401K programs. Company matches…group ‘participation awards’ if everyone signs up.
Remember my former company arm-twisting folks to join the 401K program and ‘save for retirement’. Some would never sign up.
SS was never meant to be the sole means of support for retirees. Of course, way way way back when, companies had pension plans…but less than 50% ever qualified for them - ten year vesting, etc, or taking pension credit funds when they left after 10 years as a lump sum…if they could.
For years, folks talked about a 3 legged stool of income for retirees…SS, pensions/annuities/ and personal savings.
So SS is skewed? Yeah, low earners get ‘higher percentage’ back in payments than high earners. High earners contribute a lot more and get a meager return. Half of what a lower earner gets. And likely 85% taxable, while low low income folks pay next to nothing on taxes on SS.
Is there a cure? Dunno.
Low earners already get food stamp subsidies. Housing subsidies. And likely carries on into retirement as well. Free nursing home care if they need it under Medicare…if meet the ‘no assets’ requirement…
Solutions?
t.
< Free nursing home care if they need it under Medicare…if meet the ‘no assets’ requirement… >
Medicaid, not Medicare.
Every state is different with Medicaid. Check your own state’s provision before you rely on them.
Wendy
But why?
Supply side econ with slow GDP was not supposed to be the result. But supply side econ does not actually grow an economy.
Musk who can not make up his mind if he is coming or going is still stuck in the supply side mindset and outsourcing to China. The country is moving on. Actually the entire western world is moving on.
Is there a cure? Dunno.
Yes there is a cure. Use fiscal policy to grow the GDP at a much faster rate. The policies absolutely have to increase productivity and the nation’s wealth. This means a much wealthier lower, middle, upper middle and 1%.
It does not mean tax cuts for the wealthy like the 2017 cut that are major contributors to the current inflation. It does not mean over reliance on monetary policy as we just did during the pandemic which is a major cause of the inflation. You can not have inflation unless the wealthy have the dollars to fuel it. The current inflation is obscene and most of it is because the tools to manage the economy are geared towards supply side econ.
Use fiscal policy to grow the GDP at a much faster rate.
The policies absolutely have to increase productivity and the nation’s wealth.
These policies are fundamentally contradictory. So, which do you choose–and why?
No. of Recommendations: 0
Use fiscal policy to grow the GDP at a much faster rate.
The policies absolutely have to increase productivity and the nation’s wealth.
These policies are fundamentally contradictory. So, which do you choose–and why?
Jerry,
Explain why they are fundamentally contradictory?The easy way to increase GDP is to borrow and spend.
The easy way to decrease the nation’s wealth is to borrow and spend.
Borrow and invest wisely can both growth GDP and increase wealth, but investing wisely can be elusive.
“Borrow and invest wisely can both growth GDP and increase wealth, but investing wisely can be elusive.”
With current debt levels and still increasing inflation…we have a time bomb.
If treasuries are now 2%… that’s 2% interest on 31 trillion debt (increasing at a least a trillion a year)…what’s that amount…OMG! Interest will consume a big chunk of the budget…for force trillions more in borrowing.
I remember when you could buy a 30 year Treasury paying 13% interest (1981)
https://www.govinfo.gov/content/pkg/ERP-2011/pdf/ERP-2011-ta…
Now imagine if interest rates spiked to 10%… of 31 trillion dollars… if the fed borrowed long term that would be 3.1 trillion dollars a year in interest. What’s the current budget? Not much more than that!
three and six month notes were 14% in 1981!
The current inflation trend is NOT good. For anyone other than big debt holders.
t
The easy way to increase GDP is to borrow and spend.
The easy way to decrease the nation’s wealth is to borrow and spend.
The easy way to increase GDP is to call financial speculation “product”. The tax code favors financial speculation, so we get more financial speculation, so GDP soars, while the benefits accrue only to the speculators.
In fact the financial sector accounted for 2.8% of GDP in 1950 and rose to 7.9% of GDP in 2012. It is now over 8%. Finance now gets 25% of corporate profits while it employs only 4% of the work force.
https://seekingalpha.com/article/4358470-financialization-of…
Financialization requires no heavy capex, no employees to cut into the “JCs” profits with demands for pay, just skim off the labor of others, for the benefit of the “JCs”. The perfect business model.
/sarcasm
Steve
Ah there are several ways to for the federal government to spend without increasing the deficits. The three big ones are to increase the upper income tax bracket, increase the upper income bracket capital gains taxes, and to increase corporate taxes. Those entities are all currently very under taxed.
Productive spending is very simple…
We need better transportation policies.
We need chip making.
We need to pick up college tuitions because it creates consumers and savers out of successful younger people.
We need not to increase welfare but to stop any policies state local or federal that penalize couples with children from marrying. Raising children without a father costs us as we incarcerate those children in larger part later.
There are other common sense things we need. This is not hard. This is common well studied cost/benefit analysis. The government economists are constantly studying this but have been shut down or shut out for the last 40 years. Shutting them out is ignorant.
We need to pick up college tuitions because it creates consumers and savers out of successful younger people.
You are taking a Leap of faith here. If tuition was free how many more people would take up a non-productive major, such as basket weaving? If the government pays everyone’s tuition how much do the schools raise tuition?
Mike
If tuition was free how many more people would take up a non-productive major, such as basket weaving?
Or any business major (equivalent to basket weaving). MBAs are all over the place–dime a dozen. Which is why so many businesses required an MBA to even be considered for a job. The value of a degree is only dependent on it being relatively scarce.
So, the only degrees worth such an investment would be the hard sciences. AND it goes in cycles, depending on what is “hot” that year (bio, chem, petro, medical sciences, and so on).
There is ongoing demand for technicians too. Those could easily be relatively low-cost (in terms of training/education–maybe 2 yrs?) to justify “free tuition” and reasonable job prospects.