First Posted: 07-26-10 01:43 PM | Updated: 07-26-10 01:43 PM
Remember Neel Kashkari? Back during the financial crisis, Kashkari sat at the U.S. Treasury's Office of Financial Stability, where he was in charge of implementing the Troubled Asset Relief Program TARP). TARP is the fancy name for an SUV full of $700 billion in taxpayer money that went to revive the do-not-resuscitate and zombie banks of the world,
Now this wingnut is on the op-ed pages of the Washington Post, with a message for the olds: STOP BEING SO "ME-FIRST" and let us cut your entitlements! He is trying to equate free markets to a government program that will celebrate its 75th anniversary shortly.
Our belief in free markets is founded on the idea that each individual acting in his or her self-interest will lead to a superior outcome for the whole. The financial crisis has reminded us that free markets are not perfect -- but they do allocate capital better than any other system we know. A "me first" mentality usually makes markets more efficient.
Okay! So, a person who retires today probably entered the workforce in the mid to late 1960s. They acted in their self-interest, let's say, and this led to some "superior outcomes for the whole."
It was so "me-first" of those people to not consider the possibility that decades after they started contributing to the nation's wealth, that another generation of idiots would come around and destroy it, leaving us with no other choice than to push those aging former societal contributors out onto ice floes to die!
What jerks! Where was their foresight? Why weren't they smart enough to get way into toxic mortgage-backed securities? They could be the ones holding America hostage today!
Cutting entitlement spending requires us to think beyond what is in our own immediate self-interest. But it also runs against our sense of fairness: We have, after all, paid for entitlements for earlier generations. Is it now fair to cut my benefits? No, it isn't. But if we don't focus on our collective good, all of us will suffer.
Why would the Wall Streeters or the affluent care about Social Security. The Social Security tax is regressive and is capped at $108,500. It has little impact on affluent families right now. However, the cap has to be raised continually to fund the SS program. Beside the abstract ideological views of Neel Kashkari, the Wall Streeters would love to loot the Social Security trust fund.
Something similar happened in the UK when Margaret Thatcher was Prime Minister and today UK citizens enjoy retirement benefit approximately one half of what US seniors enjoy.
The government can run large national programs like Social Security and Medicare more efficiently than private enterprise. Private enterprise needs substantial profits, large executive salaries and perks and management fees to function.
Congress let corporations manage 401Ks and people who were laid off in 2008-2009 found that one third of their savings had disappeared to pay for bogus management fees.
It would be easy to fix the Social Security system by reforming the FICA payroll tax. The Medicare tax is 1.45% on all earnings and this tax is paid on 100 per cent of the income of millionaires and billionaires.
No so, for Social security: it is 6.2% on earnings up to $106,800. After the cap, the millionaires and billionaires stop paying. The individual pays 6.2 per cent and the employer pays a matching tax amount.
Rightardia advocates cutting the Social Security tax, but like Medicare tax all earnings and eliminate the cap. This would prevent the cap from becoming a political football and also flatten the tax. The payroll tax cut would benefit the middle class and the poor.
When President Bush refused to raise Social Security, that meant he did not want to raise taxes on the the wealthy which Bush considered to be his base of 'have mores."
If the payroll tax cap was raised to $200,000 per year, there would be NO Social Security funding gap for more than 100 years.
source: http://usliberals.about.com/od/socialsecurity/a/SocSecReform.htm
and the Huffington Post
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