posted on February 25, 2004 11:26:16 AM new
gotta love this one, but hey, who cares, let's talk about sex issues instead....not
By MARTIN CRUTSINGER, AP Economics Writer
WASHINGTON - Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) urged Congress on Wednesday to deal with the country's escalating budget deficit by cutting benefits for future Social Security (news - web sites) retirees. Without action, he warned, long-term interest rates would rise, seriously harming the economy.
In testimony before the House Budget Committee, Greenspan said the current deficit situation, with a projected record red ink of $521 billion this year, will worsen dramatically once the baby boom generation starts becoming eligible for Social Security benefits in just four years.
He said the prospect of the retirement of 77 million baby boomers will radically change the mix of people working and paying into the Social Security retirement fund and those drawing benefits from the fund.
"This dramatic demographic change is certain to place enormous demands on our nation's resources — demands we will almost surely be unable to meet unless action is taken," Greenspan said. "For a variety of reasons, that action is better taken as soon as possible."
President Bush (news - web sites) said he had not seen Greenspan's comments, nor spoken to him, and declined to respond directly to a reporter's question about them.
Bush said that "my position on Social Security benefits is, those benefits should not be changed for people at or near retirement."
He renewed his call for personal savings accounts for younger workers that he said "would make sure those younger workers receive benefits equal to or greater than that which is expected." And Bush repeated his promise to cut the deficit in half over five years.
While Greenspan urged urgency, Congress is unlikely to take up the controversial issue of cutting Social Security benefits in an election year.
Greenspan, who turns 78 next week, said that the benefits now received by current retirees should not be touched but he suggested trimming benefits for future retirees and doing it soon enough so that they could begin making adjustments to their own finances to better prepare for retirement.
Greenspan did not rule out using tax increases to deal with the looming crisis in Social Security, but he said that tax hikes should only be considered after every effort had been made to trim benefits.
"I am just basically saying that we are overcommitted at this stage," Greenspan said in response to committee questions. "It is important that we tell people who are about to retire what it is they will have." He warned that the government should not "promise more than we are able to deliver."
While the country is currently enjoying the lowest interest rates in more than four-decades, Greenspan warned that this situation will not last forever. He said financial markets will begin pushing long-term interest rates higher if investors do not see progress being made in dealing with the projected huge deficits that will occur once the baby boomers begin retiring.
"We are going to be confronted ... in a few years with an upward ratcheting of long-term interest rates which will be very debilitating for long-term growth," Greenspan told the committee if the deficit problem is not addressed.
Greenspan suggested two ways that benefits could be trimmed. He said that the annual cost-of-living adjustments for those receiving benefits could be made using a new version of the Consumer Price Index (news - web sites) called the chain-weighted index, which gives lower readings on inflation.
He also said that the age for retirement should be indexed in some way to take into account longer lifespans. He noted that presently the age for being able to get full Social Security benefits is rising from 65 to 67 as one of the changes Congress adopted in the mid-1980s, based on recommendations of a commission Greenspan chaired. In his testimony, Greenspan said Congress should go further and index the retirement age so that it will keep rising.
As he has in the past, Greenspan called on Congress to reinstitute rules that require any future tax cuts to be paid for either by spending cuts or increases in other taxes.
While that would erect a high hurdle to Bush's call for making his 2001 and 2003 tax cuts permanent, estimated to cost at least $1 trillion over a decade, Greenspan again repeated his belief that spending cuts rather than tax increases were the best way to deal with the exploding deficit.
While not ruling out totally the use of tax increases to deal with at least part of the looming surge in spending on Social Security, Medicare and other entitlement programs, Greenspan urged caution in increasing taxes.
"Tax rate increases of sufficient dimension to deal with our looming fiscal problems arguably pose significant risks to economic growth and the revenue base," Greenspan said. "The exact magnitude of such risks is very difficult to estimate, but they are of enough concern, in my judgment, to warrant aiming to close the fiscal gap primarily, if not wholly, from the outlay side."
posted on February 25, 2004 11:55:54 AM new
There is going to be a baclash from all of this.
I think are going to wake up to tax cuts for the the wealthy while all middle class benefits are gone.
How is it that Gov Arnold can have several million dollar mansions and watches worth more than many people will earn in a life time, but we have no resources for medical care and schools ?
I don't want to hear this crap about all the hard work these million and billionaires have done, 99.999% of them got it by shear luck.
If hard work was the measure by which a person obtained wealth in this country, underground coal miners would have been the wealthiest people in this country.
posted on February 25, 2004 12:02:41 PM new
it is not enough to work hard alone,or work smart alone,but it must be both.
ss also has a growing number of disabled folks,lack of medical insurance force them into disability.
i remember there was a time,americans are able to go back to italy,greece etc and live comfortably on ss .
may be we can look forward to living comfortably in rwanda,ethiopia etc.
-sig file -------the lobster in the boiling pot of water who tries to prevent the others from climbing out.
posted on February 25, 2004 12:16:04 PM new
Working smart doesn't even figure into it anymore. There are entire pools of "smart" people in India waiting to work for $1000 a month.
Arnold, just like Bill Gates and a host of others was at the right place at the right time and fell into it.
I don't begrudge any of them making the money, but I do begrudge them getting tax breaks while middle class benefits crumble.
There is nothing that Arnold or Bush or any other millionaires/billionaires can do with that extra couple hundred thousand in tax breaks that is more important than our school systems or medical care.
Them buying another Rolls Royce or Hummer does nothing for working middle class. Spread that same money around to middle class consumers and they will buy Chevies and Hondas that will put thousands to work.
posted on February 25, 2004 12:25:20 PM new
I heard that Bush is going to create more than 3 million jobs. I didn't hear the time frame - maybe that's after November.
posted on February 25, 2004 12:50:31 PM new
Governments do not create jobs, the markets do that. All the government can do is to provide a stable platform for an economy to grow.
As far as baby boomers go that is a problem world wide, something will have to give.
I can see them raising the age limit before you can apply for pensions and tax hikes to offset it.
There will be more to come.
posted on February 25, 2004 01:00:50 PM newGovernments do not create jobs, the markets do that. All the government can do is to provide a stable platform for an economy to grow.
Government created all jobs - government even created the market. You can not have a modern economy without the laws and institutions promolgated and enforced through government. A true markey economy is a lawless jungle that we see functioning in many countries with weak governments. Government policy can and does impact job creation. I can not understand how people have been brainwashed into thinking that the government has no effect on economies - it can and does have a huge effect.
As far as baby boomers go that is a problem world wide, something will have to give.
It is not a world wide problem. It is only a problem in the industrialized world.
posted on February 25, 2004 01:39:29 PM new Government policy can and does impact job creation.
I can not understand how people have been brainwashed into thinking that the government has no effect on economies - it can and does have a hugeeffect.
I should have made my point more clear. I do think that most people do understand that. Policy can make or break any economy. No one would ever think that a government has no effect.
It is not a world wide problem. It is only a problem in the industrialized world.
In that sense, yes. However it still is a worldwide problem. Its just that the rest of them do not have pension plans but it will still impact poor nations just as it does rich nations.[unless most of them starve to death first]
posted on February 25, 2004 01:53:10 PM new
Just the textbook evolution of economies.
separate farms ----> agrarian economy -----> light manufacturing -----> industrialization ----> services based
You don't pay someone $80k/yr to screw on a left-side door mirror when someone will do it for $20k/yr. Doesn't happen at the mom & pop level and shouldn't happen at the corporation level either.
Arnold and Bill did not "fall" into anything. Both are very shrewd business men and people of vision.
posted on February 25, 2004 02:11:59 PM new
Des - please explain Arnolds vision in California cause something is escaping me here. The plan is to get the state out of debt using... wait for it.... a loan. But here is the problem with the loan. California has a negative credit rating and all current bond issues are now on watch status after we missed a recent payment. Now... what kind of interest rate do you thing the state is looking at on that loan?
But WAIT! It gets better. The people of California are not all that enthused about this bond issue and so the gov feels the need for more advertisement to push it. Since advertising costs money you must do fund raisers to get the funds. So where is our "not bound by outisde or corporate interests" Govenor holding these fundraisers? New York City. Now, could you tell me why anyone in New York City would give 5-500K (hey, that's one of the boxes available - I ain't making this up) to purchase advertising for a California bond issue.
~~~ • ~~~ • ~~~ • ~~~ • ~~~
If it's really "common" sense, why do so few people actually have it?
edited to fix the plethora o typos
[ edited by Fenix03 on Feb 25, 2004 03:16 PM ]
posted on February 25, 2004 02:12:46 PM new
It doesn't matter what is done with social security, I know I won't see any when it comes for me to retire.
Marriage is a Human Right not a Heterosexual Privledge
posted on February 25, 2004 03:15:05 PM new
You know common courtesy would have you fixing that plethora o' typos before copying it
~~~ • ~~~ • ~~~ • ~~~ • ~~~
If it's really "common" sense, why do so few people actually have it?
posted on February 25, 2004 04:33:46 PM new
We go through this each election cycle. "Social Security is going to be cut." Only to put FEAR in to the minds of the elderly. lol
Does anyone here recall any cuts ever being made in Social Security? I sure don't.
And remember gay civil unions are going to greatly increase the Social Security and Medicare programs.
Is there reason to panic? I think we have plenty of time, during the next 4+ years of the Bush administration to work out what will need to be done before 2020 rolls around.
Some facts:
[i]It is worth noting that Social Security is currently running a large surplus and is projected to continue to run annual surpluses for more than two decades into the future. The Social Security trustees projections show that the fund's trust will be able to support all scheduled benefit payments for nearly forty years into the future. If Social Security benefits are cut, without any corresponding reduction in the tax rate (which is exactly Mr. Greenspan's recommendation), then this would mean that Social Security taxes are being used to finance the general budget, not Social Security.
This point is especially important in this context since Mr. Greenspan had chaired the 1982 Commission that proposed a set of Social Security tax increases that were designed to build up a large surplus to help defray the costs of the baby boomers' retirement in later years.
In other words,
Mr. Greenspan's argument was that it was desirable to raise Social Security taxes above the levels needed to support the program in the eighties, nineties, and zeros, so that the tax rate would be somewhat lower than would otherwise be necessary in the twenties and thirties.
If benefits are now cut below the levels that had been scheduled, then it breaks the link between Social Security taxes and Social Security benefits. Social Security taxes were simply used to finance the general budget.
The Social Security tax is highly regressive because it only applies to wage income and it is capped at approximately $85,000, so that wage income above this level is not subject to the tax. It is extremely unlikely Congress ever would have approved such a regressive tax to support the general budget. It would have been appropriate to note, in describing Mr. Greenspan's proposal, that the cumulative surplus in the trust fund is now approaching $2 trillion.
This should give readers an idea of the extraordinary deception involved in proposing to cut Social Security benefits as a way of reducing the federal budget deficit.
posted on February 25, 2004 05:43:57 PM new
[i]Arnold and Bill did not "fall" into anything. Both are very shrewd business men and people of vision.[/]
Fall into it is exactly what happened. You wouldn't even know Gates' name if the first company that IBM visited for an OS owner had been at the office when IBM stopped by. Gates didn't even have an OS until he knew IBM wanted one and he then went and purchased one for $50,000. How many kids his age had $50,000 to do that? Gates was born on third base and you thing he hit a homerun.
Arnold didn't come to the US with $38. He had a very rich American mentor from the body building community that supported him as well as opened doors for him.
Given the same circumstances, 95% of the population could have done what these guys did. They were just lucky to be in the right place at the right time.
The only thing shrewd about them was using an advantaged perch to get them even more advantages.
posted on February 25, 2004 05:48:23 PM newGiven the same circumstances, 95% of the population could have done what these guys did. They were just lucky to be in the right place at the right time.
Sorry, but not true. Most people just don't have the get up & go to do what Gates & Schwarzenegger have done. It takes more than "luck" to make & keep mega-bucks.
******
Censorship, like charity, should begin at home; but unlike charity, it should end there --Clare Booth Luce
posted on February 25, 2004 06:10:33 PM new
reamond,
if so,why dont you put your money where you mouth is and go do what gates and others have done instead of acting like sour grapes on this board.
there is no rich mentor or sugar daddy on this board who can help you buy a piece of software for 50k,not even 5k!
so go to work.
-sig file -------the lobster in the boiling pot of water who tries to prevent the others from climbing out.
posted on February 25, 2004 09:32:02 PM new
You obviously didn't read what I said--They were just lucky to be in the right place at the right time.
All you can do is "be" and just by luck you may be in the right place at the right time at some point.
why dont you put your money where you mouth is and go do what gates and others have done instead of acting like sour grapes on this board.
Give me Gate's daddy's money and I'll get it done.
Gates had access to a PC at a private school back when few people in the world would have access to much less a young student. His wealth and private education also gave him access to Yale, which he was so confident in never having to work, he never went to class and dropped out.
But stopwhinning-- if it is hard work that makes your luck, then why are you wasting your time here ? Apparently the only reason you aren't a millionaire is because you are lazy and spend too much time here.
I don't have sour grapes, but I do have to call it when I hear these rustic BS diatribes about the hard work these wealthly people did.
If hard work or hard and smart work makes one rich, then professors and underground coal miners would be the richest people on earth.
posted on February 26, 2004 04:22:13 AM newDoes anyone here recall any cuts ever being made in Social Security?
Cuts made to Medicare are cuts made to Social Security and they just made cuts last September. Oh, sorry, they are called a "reduction" in benefits caused by the Republican's so-called "Medicare Balanced Budget Refinement Act." Funny thing is, these cuts don't affect the big hospitals, just the small struggling clinics and doctor's offices.
These are people who worked all their lives and they should have these benefits. Again, the wealthy don't have to worry. They're collecting grand pensions and collecting Social Security benefits while the blue collar retiree has to worry each day how he's going to put food in his mouth. He**, my mother is 69 and still has to work part-time. She's been working non- stop since she was 15.
Is that how it goes? Our extravagant Republican administration spends all the money and our poor and elderly have to pay it back? What a crock.
posted on February 26, 2004 05:52:40 AM new
reamond,
i am not the one who whines about gates and others of their good fortune.
i believe gates dropped out of harvard,not yale and his money came from his grandfather,an inheritance of a cool one million dollars.
he dropped out to start his own business.
i spent time on this board as i like to spend time on this board,i have no intention of waiting for someone to hand me some money and make me the next bill gates.
as for rich people getting richer and collecting ss etc,many of these rich people do charity work quietly,they dont broadcast or send out spam emails everytime they give money to good cause.
remember the nurse who survived the chicago massacre by the drunken guy by hiding under the bed and spent years testifying in court?someone set up a trust fund for her so she does not have to work .
that model in nyc who was slashed in her face by her landlord??the guy who found peachtree accounting set up a fund for her,she is now married and a full time homemaker and mother.
look around yourself and see how hard people have to work -being at the right place at the right time,i have heard that before.
first that person must realise it is the right time(many of us have missed the boat as we dont know when is the right time and wrong time).
as to be in the right place,same thing,you have to know if you are in the right place,then it takes kwowledge,judgment,willingness to take risk and the stamina and energy etc to take it thru.
dont just look at the expensive cars they drive or that expenisve house they own or the expensive watch etc they wear,find out how many hours they work,how much stress they take and the toll it takes on their family.
if you want to be the next bill gates,look no further than your credit card issuer or local banker for start up capital.
-sig file -------the lobster in the boiling pot of water who tries to prevent the others from climbing out.
posted on February 26, 2004 08:42:15 AM new
That is all interesting stopwhining, but it doesn't address the issue that wealthly people should not be taxed at a higher rate because they "worked" hard for their billions.
The tax situation now is that people like Gates and Arnold are taxed at a rate less than a working single parent. That is not only unfair, it is unwise.
Why is it that Arnold can acquire a million dollar watch collection and several million dollars worth of homes and several million dollars worth of vehicles and yet he needs a tax cut, all the while our schools and health care system are crumbling ?
Hard work had nothing to do with their huge accumlation of wealth. In fact, managing wealth is the easiest job in the world.
posted on February 26, 2004 09:07:39 AM new
reamond said,
Hard work had nothing to do with their huge accumlation of wealth. In fact, managing wealth is the easiest job in the world.
////////////////////////////
If so,then why was so much wealth lost in history??
Someone posted on ebay forum that her mother and her friends are shopping for staples on ebay as they lost their wealth in the stock market.
i see more and more people shopping at 99 cents store,why??
dont tell me it is a challenge to find lowest price for both rich and poor.
rich people spend money,poor people spend money,it is a national pastime,and when rich people spend money,they spend more and it is good for the economy and it creates jobs.
you know they cant take it with them.
-sig file -------the lobster in the boiling pot of water who tries to prevent the others from climbing out.
posted on February 26, 2004 11:32:15 AM newThey were just lucky to be in the right place at the right time.
Reamond is correct on some issues. Take ebay for example. They were lucky enough to be the first auction site to take off, and now nobody can touch them, not even yahoo could make a dent when they had free listings! Luck does have alot to do with it.
posted on February 26, 2004 11:52:11 AM newIf so,then why was so much wealth lost in history??
All of whose wealth has been lost ? What are you talking about ??
Someone posted on ebay forum that her mother and her friends are shopping for staples on ebay as they lost their wealth in the stock market.
So they were multi-millionaires and they lost all their money in the stock market and now buy staples off eBay. You're kidding right ? How does this support anything you've asserted ?
and when rich people spend money,they spend more and it is good for the economy and it creates jobs.
You don't know what you're talking about. Once you amass a huge fortune you spend very little of it as a percentage of the whole. This massive amount of wealth becomes a money making commodity in itself.
How many car and house can these super rich buy ? How much jewelry can one person wear ?You put that same money in the hands of thousands of middle class consumers and it helps the economy a thousand fold as compared to that same money in the hands of a single person.
you know they cant take it with them.
No they can't, but it can and does flow through generations now practically tax free. I hope you're not going to make the argument that inheirented unearned wealth is also due to "hard" work.
[ edited by Fenix03 on Feb 25, 2004 03:16 PM ]
