I thought this post made a number of excellent points. Really, is America the only place that can't figure this stuff out?
I've got family in Sweden. They have a whole different way of life there. They don't have to sweat about money like we do. They think we are crazy here. I agree.
Color me dubious, though, about using a VAT. No matter what scheme we use to raise money, those with enough money and power will try every trick in the book to evade it. Just look at Alex Jones and his amazing "Disappearing Fortune" trick. Stinkier than an Onion.
Trump would have us all think that tariffs will be a magic wand that raises money, painlessly. But nothing does.
Here is our "hard" problem. How do you tame the power, and ingenuity, of people who are highly motivated to get their way? Like the CEOs making 200 times what their workers do? Like "Neutron" Jack Welch, "Chainsaw Al" Dunlap, Adam "YouWork/But I Win!" Neumann, etc? And of course, the Tech Bros?
Is there ever a simple answer to this? A formula, or magic bullet?
America is a place that mainly believes in individual pursuit of self interest. We long ago got over that old-fashioned "religion" stuff. Sorry, Jonathan Edwards, your tree fell in a forest where nobody heard it.
We do not love a God, we love ME. We love luxury. We love technology. Because, we dream...of everything. And want it.
And if we can't measure it, it doesn't count. "Scientific Materialism" has triumphed here! Wait, please don't use that term. Let's call it "efficiency."
I am a baby boomer. Evidently not an "OK boomer!" since I am still working in my 70s. I do not own a house. I have no pension or 401K. I was only able to replace my 24-year-old car when Social Security finally started coming in. I am waiting for this alleged Ponzi Scheme to show up for me. Where I live, in an "affluent" state, nobody can afford anything anymore: cars, housing, health care, education. Doesn't matter if you have a BA or an MA, either. America has become impossible. You lose a job here, you can lose everything. One strike, and you are out. Don't think it can't happen to you, or your family.
So when Elon sees a "Ponzi scheme" everywhere but where he is, that's pure projection on his part, since he is literally sitting on top of the world right now, even owning most of the satellites orbiting around it! Trump will own Greenland, Musk will own Mars. They are divvying up the universe, but let's not look at that, let's look at social support programs?
And look at those other beneficiaries of Pretty Ponzi, aka Monopoly, conveniently lined up in a row at the Coronation: The Tech Bros. Or are they actually hostages? How did Tim Apple miss that official team photo? Smart of him! Keep out of the limelight.
Gotta give it to them, these Ponzi Boys did discover a whole new law of physics: unlike water, money flows uphill! Power, too. At least around here.
So I say: the kid with the chainsaw? Give him the Dunning-Kruger Award, or maybe the Freddy Krueger Award, or maybe the Texas Chainsaw Massacre Award, under the circumstances.
Just kidding, barely.
I am brand new to this Substack. Has anybody here looked at the example of the original Whiz Kid, the "Numbers Guy" Robert McNamara, who brought thousands of American boys home in caskets? He did win the "Numbers War," in his mind. Can you say "Body Count?" Back in reality, my classmates and I, sitting in homeroom, listened as the names of graduates of our public high school who had just died in Vietnam were read out over the intercom. Casualties of the Numbers War.
We have to look less at the map, and more at the territory, is all I am saying.
BTW I live about 20 minutes from Sandy Hook Elementary. Let's just say Alex Jones does not get much sympathy around here. I know the mother of the teacher in the first classroom that the shooter entered. I will leave it at that. There are monsters and lambs in bucolic Connecticut.
While I agree that your interpretation of Social Security is the vision, it is not the reality.
The average baby boomer is a millionare. We are siphoning off money from the poorest, working, and faimly raising (yes I am aware of the piddling $2,000 child tax credit) to give money to the wealthy so they can over consume and we are deficit spending on top of that so we can keep it up!
The rent seeking by the larger generations against the smaller ones has to end, but maybe this is just an externality of democracy.
But it’s a vision that should go into Democrats shadow agenda for the future.
As a pre-Boomer, :) I’ll assure you it wasn’t intentional, just garden variety reluctance to raise taxes to properly fund SS and Medicare commitments. (They weren’t even partially taxable 50% until 1983 and 85% in 1993). And it’s not our fault that the VAT had not been invented in 1935 and FDR went with a wage tax.
"The average baby boomer is a millionare" -- I guess if you really do mean "average" in the sense of "mean" that's probably correct, but that's hugely skewed. The standard joke applies about how if Bill Gates (or I guess now Elon) walks into a bar, the "average" wealth in the room skyrockets, but it doesn't make a dime of difference to anyone's actual wealth. The median net worth is more like $250k.
I don't disagree with your larger point here, but let's not exaggerate how wealthy the typical elderly person is. The large majority of Boomer retirees really do need Social Security in order to not be completely impoverished.
We probably should adjust the path of future benefits to use a more accurate inflation index, but raising the retirement age would be, to a large extent, forcing grocery shelf stockers to work until they drop dead, in order to subsidize doctors and lawyers. (The lower half of the income distribution has a much shorter life expectancy in retirement. The increase in population-wide life expectancy comes almost entirely from upper-income white collar workers living into their 90s.)
We can close most of the gap between projected outlays and income by simply uncapping the amount of tax the income applies to, same as Medicare. And we should.
(I'd also be open to trying to switch from a progressive income tax to a progressive consumption tax, or a blended system, as long as we stop preferencing investment income over earned income. We should not be putting a lighter tax burden on people who let their money work for them, compared to people who work for their money.)
A quick win woud be to convert all subsidies for preferred consumption (charitable deductions, health care expense, mortgage interest) into partial tax deductions. I think it is unfair that other taxpayers subsidize 22% of my gifts and (my guess) 0% of those of the other people in my church choir. And the step up of capital gains on inheritance instead of indexing them.
With a progressive personal consumption tax PPCT all income is taxed equally — at zero.
Uncapping the wage tax would make SS MUCH more progressive and truly redistributive, not my vision for social insurance which see as “sidewise” transfers among people in different life circumstances. Sometimes we are sick sometime not, sometimes we are “retired” sometimes not.
I’d leave the PPCT to transfer consumption down the lifetime distribution as it funds government functions and consumption of public goods.
I'm not going to nit pick on the errors of reference on how Medicare and Medicaid is funded, but I will say I've been stating for decades they need to have not limit on the SSI tax AND keep their paws off the funds that were there. They put it back into the general fund.
As for the VAT tax, that would surely stop all cash sales from skipping the sales tax and my solution is just like the EBT cards, swipe that before you buy anything and you get a different VAT % if you're lower income.
However, the problem with a VAT tax is what you see in Australia and New Zealand where some are over 30% and the left side of the US Government would run away with it when they can and the GOP will act like they're not but do the same. Yeah, I don't trust either of them.
I thought this post made a number of excellent points. Really, is America the only place that can't figure this stuff out?
I've got family in Sweden. They have a whole different way of life there. They don't have to sweat about money like we do. They think we are crazy here. I agree.
Color me dubious, though, about using a VAT. No matter what scheme we use to raise money, those with enough money and power will try every trick in the book to evade it. Just look at Alex Jones and his amazing "Disappearing Fortune" trick. Stinkier than an Onion.
Trump would have us all think that tariffs will be a magic wand that raises money, painlessly. But nothing does.
Here is our "hard" problem. How do you tame the power, and ingenuity, of people who are highly motivated to get their way? Like the CEOs making 200 times what their workers do? Like "Neutron" Jack Welch, "Chainsaw Al" Dunlap, Adam "YouWork/But I Win!" Neumann, etc? And of course, the Tech Bros?
Is there ever a simple answer to this? A formula, or magic bullet?
America is a place that mainly believes in individual pursuit of self interest. We long ago got over that old-fashioned "religion" stuff. Sorry, Jonathan Edwards, your tree fell in a forest where nobody heard it.
We do not love a God, we love ME. We love luxury. We love technology. Because, we dream...of everything. And want it.
And if we can't measure it, it doesn't count. "Scientific Materialism" has triumphed here! Wait, please don't use that term. Let's call it "efficiency."
I am a baby boomer. Evidently not an "OK boomer!" since I am still working in my 70s. I do not own a house. I have no pension or 401K. I was only able to replace my 24-year-old car when Social Security finally started coming in. I am waiting for this alleged Ponzi Scheme to show up for me. Where I live, in an "affluent" state, nobody can afford anything anymore: cars, housing, health care, education. Doesn't matter if you have a BA or an MA, either. America has become impossible. You lose a job here, you can lose everything. One strike, and you are out. Don't think it can't happen to you, or your family.
So when Elon sees a "Ponzi scheme" everywhere but where he is, that's pure projection on his part, since he is literally sitting on top of the world right now, even owning most of the satellites orbiting around it! Trump will own Greenland, Musk will own Mars. They are divvying up the universe, but let's not look at that, let's look at social support programs?
And look at those other beneficiaries of Pretty Ponzi, aka Monopoly, conveniently lined up in a row at the Coronation: The Tech Bros. Or are they actually hostages? How did Tim Apple miss that official team photo? Smart of him! Keep out of the limelight.
Gotta give it to them, these Ponzi Boys did discover a whole new law of physics: unlike water, money flows uphill! Power, too. At least around here.
So I say: the kid with the chainsaw? Give him the Dunning-Kruger Award, or maybe the Freddy Krueger Award, or maybe the Texas Chainsaw Massacre Award, under the circumstances.
Just kidding, barely.
I am brand new to this Substack. Has anybody here looked at the example of the original Whiz Kid, the "Numbers Guy" Robert McNamara, who brought thousands of American boys home in caskets? He did win the "Numbers War," in his mind. Can you say "Body Count?" Back in reality, my classmates and I, sitting in homeroom, listened as the names of graduates of our public high school who had just died in Vietnam were read out over the intercom. Casualties of the Numbers War.
We have to look less at the map, and more at the territory, is all I am saying.
May I implore you to consider the following?
https://www.theatlantic.com/magazine/archive/1978/12/the-monster-and-the-lamb/662832/
BTW I live about 20 minutes from Sandy Hook Elementary. Let's just say Alex Jones does not get much sympathy around here. I know the mother of the teacher in the first classroom that the shooter entered. I will leave it at that. There are monsters and lambs in bucolic Connecticut.
Good luck, America.
Thank you for reading to the end.
Thanks for writing.
Glad to be here. Thanks for reading.
I am also a radical centrist!
Do read Peter Ducker, that was a powerful story.
While I agree that your interpretation of Social Security is the vision, it is not the reality.
The average baby boomer is a millionare. We are siphoning off money from the poorest, working, and faimly raising (yes I am aware of the piddling $2,000 child tax credit) to give money to the wealthy so they can over consume and we are deficit spending on top of that so we can keep it up!
The rent seeking by the larger generations against the smaller ones has to end, but maybe this is just an externality of democracy.
But it’s a vision that should go into Democrats shadow agenda for the future.
As a pre-Boomer, :) I’ll assure you it wasn’t intentional, just garden variety reluctance to raise taxes to properly fund SS and Medicare commitments. (They weren’t even partially taxable 50% until 1983 and 85% in 1993). And it’s not our fault that the VAT had not been invented in 1935 and FDR went with a wage tax.
"The average baby boomer is a millionare" -- I guess if you really do mean "average" in the sense of "mean" that's probably correct, but that's hugely skewed. The standard joke applies about how if Bill Gates (or I guess now Elon) walks into a bar, the "average" wealth in the room skyrockets, but it doesn't make a dime of difference to anyone's actual wealth. The median net worth is more like $250k.
I don't disagree with your larger point here, but let's not exaggerate how wealthy the typical elderly person is. The large majority of Boomer retirees really do need Social Security in order to not be completely impoverished.
We probably should adjust the path of future benefits to use a more accurate inflation index, but raising the retirement age would be, to a large extent, forcing grocery shelf stockers to work until they drop dead, in order to subsidize doctors and lawyers. (The lower half of the income distribution has a much shorter life expectancy in retirement. The increase in population-wide life expectancy comes almost entirely from upper-income white collar workers living into their 90s.)
We can close most of the gap between projected outlays and income by simply uncapping the amount of tax the income applies to, same as Medicare. And we should.
(I'd also be open to trying to switch from a progressive income tax to a progressive consumption tax, or a blended system, as long as we stop preferencing investment income over earned income. We should not be putting a lighter tax burden on people who let their money work for them, compared to people who work for their money.)
A quick win woud be to convert all subsidies for preferred consumption (charitable deductions, health care expense, mortgage interest) into partial tax deductions. I think it is unfair that other taxpayers subsidize 22% of my gifts and (my guess) 0% of those of the other people in my church choir. And the step up of capital gains on inheritance instead of indexing them.
With a progressive personal consumption tax PPCT all income is taxed equally — at zero.
Uncapping the wage tax would make SS MUCH more progressive and truly redistributive, not my vision for social insurance which see as “sidewise” transfers among people in different life circumstances. Sometimes we are sick sometime not, sometimes we are “retired” sometimes not.
I’d leave the PPCT to transfer consumption down the lifetime distribution as it funds government functions and consumption of public goods.
I'm not going to nit pick on the errors of reference on how Medicare and Medicaid is funded, but I will say I've been stating for decades they need to have not limit on the SSI tax AND keep their paws off the funds that were there. They put it back into the general fund.
As for the VAT tax, that would surely stop all cash sales from skipping the sales tax and my solution is just like the EBT cards, swipe that before you buy anything and you get a different VAT % if you're lower income.
However, the problem with a VAT tax is what you see in Australia and New Zealand where some are over 30% and the left side of the US Government would run away with it when they can and the GOP will act like they're not but do the same. Yeah, I don't trust either of them.
No doubt a VAT would not be as pretty in reality as the picture, but it ought to be better than FICA.
And please do correct my errors on funding.