Problems With "Conservative" Solutions
Listening to Newt Gingrich run at the mouth on Kudlow's weekend show about solutions to various problems. I've heard the same from other conservative thinkers.
The Solution: Block Grant [Whatever] To The States
The Problem: It just gives state governments a big pot of money to play around with and spend on state bureaucracies. It DOESN'T MATTER what kind of federal rules are attached to the money, it ends up being spent to provide comfortable incomes for a handful of bureaucrats (I'll cite my experience with adjustment to blindness training in Illinois for my daughter, doesn't matter what CFR 341 says the state is supposed to do, or what would be efficacious, you get what the state decides they want you to have which in this case was a box of trinkets you could pick up at WalMart). You want the state to follow the rules YOU have to take them to court (the appeal process is a joke).
The Solution: Means Test Social Security and Raise The Eligibility Age
The Problems: While both of these will probably have to happen, the problem with raising the eligibility age is that every decade after age 30, it becomes an order of magnitude more difficult to find a job. It's 10 times as difficult at age 40, 100 times more difficult at age 50, and 1000 times more difficult at age 60. When you get kicked to the curb somewhere between the age of 45 and 55, which is almost a virtual certainty, where are you going to go to work? Be a sales assistant at Stuff-Mart? You going to be able to finish raising a family on that? Save for your old age? Didn't think so.
Means testing. Robert Samuelson was talking about starting means testing with people making 60K a year. What about all that money they paid in all those years. Yes, I know it is a scam Ponzi scheme, but they still paid in tens of thousands of dollars. Is that money just confiscated? Do they get any property interest in it (i.e. partial privatization). Didn't think so.
The Solution: Require that the unemployed undertake retraining to collect
The Problem: Yes, most people I know collecting unemployment tend to dawdle around about finding a job. On the other hand, I've collected unemployment a couple times, am doing so now. I have two degrees, one of them an MBA. I've worked really hard to stay at the leading edge of my profession, and it's not an arcane "buggy whip" kind of profession. There are, however (I believe although I can't prove it) issues of gender and age discrimination that are really hard to overcome. I'm running my job hunt at 150 mph every day. I wouldn't mind going back to school, but go back to school for what? Learn to run a numeric-controlled lathe? Learn how to use PowerPoint, Word, and Excel? I'm already expert level PowerPoint, Word, and Excel.
How about more rigorous policing of the job search instead? I keep the detailed log that's required, and nobody's ever asked to see it.
How About This Solution?
Let me keep more of what I make. Don't tax me out of my house to pay for failing schools. Let me start and run a business without a ball and chain of regulations on my ankle, and the IRS' foot on my throat. Just leave me alone.
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Jul '10
Re: Problems With "Conservative" Solutions
Means testing social security will be a great way to increase divorce rates among seniors.
May '10
Re: Problems With "Conservative" Solutions
@Kenneth. Divorce among seniors will be only one of the many pernicious unanticipated consequences of means testing. Hiding assets will be another.
May '10
Re: Problems With "Conservative" Solutions
Thanks for bringing up raising of the eligibility age. Republicans mention that all the time, but I suspect anyone who brings up the issue of age discrimination will be painted as a whiny "victim." Here's a question: how many 70 plus year olds do you want driving during rush hour regularly. (Yeah, yeah, we'll all be taking mass transit.)
Jan '11
Re: Problems With "Conservative" Solutions
At least they (probably) won't be texting while driving.
Oct '10
Re: Problems With "Conservative" Solutions
Great post--to the main feed, please, powers that be.
I imagine that everyone here is in favor of your solution. You've laid out the problems very well.
Oct '10
Re: Problems With "Conservative" Solutions
"Means testing. Robert Samuelson was talking about starting means testing with people making 60K a year. What about all that money they paid in all those years. Yes, I know it is a scam Ponzi scheme, but they still paid in tens of thousands of dollars. Is that money just confiscated?"
At 60K, SS contributions for 20 years are 180K. Now figure that same person worked 40 to 50 years. When SS said it was necessary for retirement, they didn't leave the much for a secondary plan.
Jul '10
Re: Problems With "Conservative" Solutions
This shows how totally out of touch people like Gingrich are with average Americans.
Average Americans actually believed, however naively, that the Social Security taxes extracted from their earnings were a guarantee of a future return. Not a return based upon some politician's arbitrary decision that they don't actually need a return, but a return based upon trust.
Sure, go ahead and change the criteria for people under, say, the age of 40. But to change it for people who have typically paid the maximum FICA tax for 20 years or so is a breach of trust.
I'll give up my Social Security benefits when Newt gives up his Congressional pension and his Congressional health benefits.
Dec '10
Re: Problems With "Conservative" Solutions
The main problem I have with block granting programs XYZ is that they are normally things the states should be handling anyway. Stop extracting the money from the states, running it through the sieve of Washington where it gets partially diverted to other programs, and then sending it back to the states in a diminished quantity. Let the states collect and spend the taxes directly. Those states that are efficient and economical in the provision of government services will attract citizens and serve as models for those that can't quite get with the program on their own.
Jul '10
Re: Problems With "Conservative" Solutions
Permit me to expand upon my previous comment.
For more than 40 years, the federal government has confiscated 13% of my earnings, under the guise of an investment program which would pay me returns upon retirement. Not returns contingent upon means-testing; guaranteed returns.
Now, the lofty Gingrich presumes to tell me that people who were industrious enough and prudent enough to accumulate some amount of savings should be denied what was promised to them. This is perverse: what he's saying is, "Let's take care of those who were profligate, but revoke our promise to those who were responsible."
Jan '11
Re: Problems With "Conservative" Solutions
I agree with J. D., this is a great post.
There are indeed problems with Newt's solutions - the biggest being that they are a band-aid on a sucking chest wound. Even if we block granted the Depts. of Education, Transportation, etc., means tested SS, and all the rest, it would only kick the taxpayer down the road, as they say. We need to take a chain saw to the federal government in the next few years or we will be joining the PIGS of the EU in the financial quicksand. I'm a boomer, a not so proud member of the Greediest Generation, and I've long ago written off my FICA "contributions." So, am I over-reacting. Please tell me I am.
Jan '11
Re: Problems With "Conservative" Solutions
Nah. It'll mean they do it more slowly.
Oct '10
Re: Problems With "Conservative" Solutions
KC Mulville
Nah. It'll mean they do it more slowly. · Mar 13 at 3:16pm
While looking for the phone they dropped under the seat they're driving from.
Nov '10
Re: Problems With "Conservative" Solutions
FICA does mean Federal Insurance Contribution Act. I think, that given its official name, it could be assumed, without mental leap, that it was never intended to be a tax. Same with Medicare -- it is and always has been profiled as an insurance premium. The error is calling them collectively regressive payroll taxes. That's why a means test is immoral. Pay for life insurance for 30 years and have the insurer decide not to pay you because you don't need it is ludicrous and no one would stand for it. Why would you do so for SS or Medicare?
If the present value of expected benefits exceeds the present value of the paid premiums that might be a cause adjusting the payout but under no circumstances should the payout be reduced to zero.
Edited on Mar 13, 2011 at 4:28pmDec '10
Re: Problems With "Conservative" Solutions
True, but we also don't expect the insurer to spend all our premiums like drunken sailors and pay claims out of others' current premiums.
Since all the money they take for FICA, Medicare, and income tax goes into the same overdrawn checking account wouldn't it be more honest (though less politically beneficial) to just take one tax and be done with the deception?
Jan '11
Re: Problems With "Conservative" Solutions
Sure, there are issues of gender and age discrimination. Yes, governments, local and national are corrupt with impenetrable bureaucratic barriers to redress grievances. Of course politicians have made promises that are impossible to keep, lying through their teeth, knowing that when the fit hits the Shan there will be an accounting, but most of them will be long gone. In politics, as a general rule, you go along with malfeasance to get elected; anyone not know that?
I sense your frustration and anger, but I’m put-off by your remark: “…go back to school for what? Learn to run a numeric-controlled lathe?” If your problem is that you can’t find a job, that’s one thing. But if your problem is that you won’t take a job that’s beneath you, or one that’s too much trouble to learn, you loose my sympathy.
The Gingrich remark was trifling. If you’re looking for a politician who will create an easy path to reestablishing your erstwhile lifestyle, you’ll need a good telescope, because it has become clear to all but the most delusional that the easy times are gone – even for malfeasance.
Aug '10
Re: Problems With "Conservative" Solutions
Yep. They took your money and put it in a trust-me fund. Then Johnson started this unified budget thingy where the report a single number of the total inflows to the govt - total outflows. This hid significant deficits because Social Security had significant surpluses. Then the Trust-me fund was told to invest in IOU's called Govt Bonds. This has the effect of moving money from the Trust-me fund to general revenue. Now we are in a position of paying benefits, repaying IOUs and issuing new IOU's.
We could stop entitlement spending today. Each person receiving an entitlement check today was responsible for the government decisions in the past that have bankrupted those programs - the bill is due now. Since the Federal Govt operates on a budget (most years) that sunsets each FY, we can stop entitlement spending anytime.
We should not continue to pay into bankrupt schemes knowing we will not receive the benefits.
Sep '10
Re: Problems With "Conservative" Solutions
Robert Promm: FICA does mean Federal Insurance Contribution Act. I think, that given its official name, it could be assumed, without mental leap, that it was never intended to be a tax. Same with Medicare -- it is and always has been profiled as an insurance premium. The error is calling them collectively regressive payroll taxes. That's why a means test is immoral. Pay for life insurance for 30 years and have the insurer decide not to pay you because you don't need it is ludicrous and no one would stand for it. Why would you do so for SS or Medicare?
If the present value of expected benefits exceeds the present value of the paid premiums that might be a cause adjusting the payout but under no circumstances should the payout be reduced to zero. · Mar 13 at 4:22pm
Edited on Mar 13 at 04:28 pm
Check this out:
What you pay for Medicare won't cover your costs
Looks like SS is (about) a wash but, re Medicare, we get a lot more than we pay in.
Nov '10
Re: Problems With "Conservative" Solutions
The King Prawn.
Since all the money they take for FICA, Medicare, and income tax goes into the same overdrawn checking account wouldn't it be more honest (though less politically beneficial) to just take one tax and be done with the deception? · Mar 13 at 4:30pm
I just like to get the principle right first. That is often lost on many.
Feb '11
Re: Problems With "Conservative" Solutions
I can't resist some libertarian tough-love here: while I'm totally on board about the means-testing, I too want to address the comment about "what am I supposed to go back and learn? Powerpoint?" I hear variations on this rant all the time from older men whose careers are in flux, and to my dismay, it's always men who claim to espouse conservative views. You know, the same men who are continually telling me to suck it up and life is hard and [insert further conservative facts of life].
This rant usually has two parts: first, there will be a well-polished venting about the the appalling state of the world/laziness of the young and/or unionized.
That's par; it's what follows that drives me batty. When I suggest some new areas of work they might study up on, or helpfully point out a WSJ article about market trends, they'll retort that they--at the elderly age of 55---refuse to contemplate any sort of reinvention. NO MORE LEARNING, missy!
Clearly any employer who fires such a gem of an employee is obviously discriminating because of age!
Edited on Mar 13, 2011 at 7:30pmNov '10
Re: Problems With "Conservative" Solutions
Patrick in Albuquerque
What you pay for Medicare won't cover your costs
Looks like SS is (about) a wash but, re Medicare, we get a lot more than we pay in. · Mar 13 at 5:40pm
I think that we understand this well. Stating to obvious with clarity, how would we expect Obamacare to be any different?