Originally Posted by speculawyer
Today's Planet Money had a good story on what needs to be done to REALLY cut the deficit if you are serious about the budget.
Basically . . . let all the Bush tax cuts expire, cut various deductions, cut spending, etc.
Just read the article itself, and it's terrible:
Originally Posted by NPR
[Simon Johnson] argues that a tax hike is necessary to pay for Social Security and especially Medicare, which is projected to become significantly more expensive in the coming decade.
If you want to keep social insurance in place in a sustainable fashion, you need revenue. ... In the United States today, your main chance for getting revenue is don't extend the bush era tax cuts. Have an increase in taxes for people at the higher end, for sure, but also throughout the middle class.
This is just so wrong on so many levels, and, amazingly, not just from the realist perspective
. In the first place, even if you wrongly believe, despite all common sense, that taxes "pay" for government spending, social insurance is still
not "paid for" by "revenue" collected by income taxes, but from separate "revenue" collected by payroll taxes. Raising income taxes does not affect the "solvency" of social insurance unless and until Congress changes the law requiring that social security payments not exceed the amount of money the government taxes via the payroll
tax. Letting the Bush tax cuts expire will have no affect on that under current law.
In the real world, and exactly contrary to what Johnson said, if you want to keep social insurance in place in a sustainable fashion, you don't
need revenue. The government can always
meet its obligations to pay money, notwithstanding revenue. So if you want to keep social insurance in place, all that has to happen is that the Congress direct the government to pay for it. Period. If the government stops paying for it, that will have been a pure political
choice, i.e., the execution of class warfare against America's middle class. And Democrats and Republicans will have done it together. In this era of plutocracy and corruption, who says that bipartisanship is dead?
MIT should be embarrassed.