We're trying to find out what we can about it. Of course if we move, it will be a moot issue for us.
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We're trying to find out what we can about it. Of course if we move, it will be a moot issue for us.
... it would be worth your while to fight the increase. Higher property taxes (and the frequency of hikes) are part of the mortgage qual process and could negatively impact the selling price. I still think it would be funny to put them on the spot and back up their claim with facts.
Evie ![]()
Raise the prime lending rate. This lower the deficit by bringing more money back to the Treasury through the Federal Reserve. It would increase seniors retirement funds, lessening their demands on the system. The cost would be picked up by younger, working consumers allowing them to make the decision on how much they are willing to borrow at the higher rates. Even if seniors could only get 5% interest on savings they would still need $300,000 for yearly income of $15,000 added to their SS monthly payment. That also means that many of them would also be paying taxes on that income, further decreasing the deficit. Greenspan's nightmares over inflation has created this situation where seniors are needing more funds, due to their resulting loss of income.
for their customers which, as you note, include young consumers. It would also be an increase in borrowing costs for business which would slow down the rate of economic recovery. It could even reverse economic growth. In fact, that's how the Fed uses that rate. They are trying to influence business borrowing rather than young consumers. Actually, the banks would probably welcome an increase in the rate. It would give them a better chance to increase their margin.
It is a bummer that this hits so hard on the seniors. It is not, however, a Republican phenomenon. The low rates started under Clinton.
It may not be called a tax, but my concept of Tax is based upon the principle that any money collected by any government, no matter from what venue, constitutes a tax. There are a lot of different costs from government upon individuals and businesses by many different names, but in the simplest understanding it is money being collected by a government body which in simplest terms is a "tax".
Yes, economic growth could suffer, or efficiency improvements could offset that so it was cancelled out. That realization is why I said this situation needs correction over a period of years, rather than shocking the economy by too rapid a movement toward higher prime lending rates. This adjustment would not take more than 1.5 points increase stretched over a 3-4 year period to allow for gradual adjustment. It should also be announced as a 4 year plan so businesses and banks can have confidence in which direction to move. This quarterly guessing game Greenspan has been playing too long is getting old.
It is the rate banks must pay if they borrow money from the Fed. The Fed is not really the government, and banks are not expected to actually borrow from the Fed. If they do, its kind of a black mark against them. They usually borrow from each other if funds are needed.
The prime rate functions as a bench mark against which interest rates are set. Thus, a bank will loan money to a large customer at, for example, prime plus one, which means the customer will pay the prime rate plus one percent. The government doesn't get any money from this except for income tax on any profit that the bank earns on the loan. Also, the customer's interest rate will rise or fall as the prime rises or falls.
... which is nothing new. The President's bipartisan commission -- flying under the election politics radar -- has made similar suggestions all along. Fact is, whether or not the "fund" is raided, the current system of today's revenues paying for today's recipients will eventually go to deficit. If the government hadn't spent it and it was actually in a fund somewhere, perhaps the interest on that money would have increased available funds, but that didn't happen.
The fact is that when it was implemented, the retirement age was 3 years OLDER than the average lifespan. Routine angioplasties and cutting edge cancer therapies didn't exist to extend lives. The average lifespan is now creeping towards the mid seventies with no substantial change in the retirement age. IOW, the average person can look forward to 10 years of bennies. When the boomers retire, there just won't be as many people paying in. Something has to be done for the FUTURE of the program.
Of course, if privatized, in a couple of decades those about to retire will no longer be held hostage at the whim of politicians.
Evie ![]()
Because you're younger than I. Another example of Republican "reverse Robin Hood" policies in action.
-- Dave K.
Speakeasy Moderator
click here to email semods4@yahoo.com
The opinions expressed above are my own,
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check and see under who's banner retirement ages were first increased and benefits reduced Dave--it wasn't Republican.
How about Moynihan? Was he?
Bottom line is that REALISTS recognize that whatever else has been done with surplusses from past years, etc., at some point in the not too distant future, payments out will exceed payments in. With fewer young workers and increasing retirees, only those living in Egypt think we can keep benefits at today's level and have the system survive.
I'm not yet in the category of about to retire, but I am anxious to see SOMETHING done now so we can plan better for the INEVITABLE cuts.
Evie ![]()
Hi, Evie.
If we still had the surplus that Bush has given to the wealthy, we'd be able to make up the SS deficit from general funds. Don't tell me you actually believe the nonsense about a "trust fund?" The surplus in the "trust fund" has been financing part of the "general fund" deficit for decades.
-- Dave K, Speakeasy Moderator
click here to email semods4@yahoo.com
The opinions expressed above are my own,
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It doesn't have anything to do with President Bush's tax cuts. Read Greenspan's comments. He's NOT calling for tax increases. They'll strangle the economy and make things worse. President Bush's tax cuts were needed to stimulate a faltering economy which came out of the Clinton administration.
Hi, KP.
Of COURSE it has EVERYTHING to do with the tax cuts. We had a huge budget surplus, and Bush used about half of it for tax cuts primarily directed to the wealthy. Now greenspan cites the deficit as one reason we have to cut SS benefits (because he won't raise taxes, and the deficit is too high now to use that source). Numbers aren't needed -- just read Greenspan's testimony with an open mind!
-- Dave K, Speakeasy Moderator
click here to email semods4@yahoo.com
The opinions expressed above are my own,
and do not necessarily reflect those of CNET!
that you take your own advice. Read Greenspan's comments with an open mind. He's saying taxes SHOULD NOT be raised. SPENDING should be reduced. It couldn't have anything to do with a faltering economy could it? What is the classic response to a recession? Cut taxes. JFK knew it, and did it. I don't know why you have such a hard time understanding it. BTW, the deficit isn't particularly large by historical standards. Greenspan is trying to get the politicians, Republicans and Democrats, to come to terms with what the baby boom is going to do to SS beginning in about 5 years.
I think it's his responsibility to increase "cost" by raising the prime lending rate by 1.5 - 2 points over the next 4 years, and let everyone know ahead of time exactly what he's going to do so they can develop definite plans to compensate. Remember, according to you a rise in the prime lending rate is "cost" not "taxes". In my opinion however it will bring more money back to the Treasury and allow the banking system to more efficiently adjust how this "cost" is passed onto the population at large.
However, it probably will not bring more revenue to the Treasury. If it slows, or stops, an economic expansion, businesses will make less profit. Less profit means less Treasury revenue.
... the disappearance of the "Clinton surplus" has NOTHING to do with the tax cuts, as the downturn in the economy was what resulted in its evaporation well before any of Bush's tax cuts went into effect.
You have it backwards as to which surplus is real and which is imaginary. With SS being a pay as you go scheme, it has had real surplusses (and still does AFAIK, but not for long) I believe since its inception. That being SS taxes paid in > SS benefits paid out. The fact that those funds weren't put in a "lock box" but were borrowed against and spent (who was in charge of the legislature during most of these raids?) doesn't change the reality that SS is still operating in surplus. No projection coming from any side of political ideology has that surplus lasting for very long, and when the baby boomers retire the equation will quickly shift to one where SS tax in < SS benefits out. Now those funds will have to come from somewhere and I'm voting for spending cuts elsewhere rather than more tax and spend.
The surplus you insist is real, is really the imaginary one. Several articles have been linked to several times in SE regarding how the various agencies "cooked the books" with the economy to generate that PROJECTED surplus. That it disappeared had everything to do with downturn of the economy that began under Clinton and nothing to do with future tax cuts. Also, for someone who likes to repeat the mantra about learning from history, why is it that you haven't seemed to learn from history the FACT that Reagan's tax cuts INCREASED (substantially at that!) revenues. There is not a direct relationship between tax rates and tax revenues.
Your generation will be cared for Dave. It's mine that will probably bear the brunt, because instead of the politicians telling me now that I will be getting diddly squat, my future SS taxes will go to pay for your benefits while at the same time the government has to come up with more money from my pocket that could otherwise be saved for my own retirement where assuredly I can look forward to reduced SS bennies
By that time, the generation behind me will probably (hopefully) be free to take care of themselves, but I have great doubts those of us caught in the middle who have paid in for some time already, and who will pay to make good on the governments promises to those older than us, can look forward to being similarly "done right".
Evie ![]()
hasn't had to bother knowing anything about the subject since then.
Dave's real goal is the complete redistribution of wealth.
Upset at the tax cuts and rebates but ask him what he did with his--the very thing he accuses the wealthy of doing with theirs.
Ed, are you trying to see how many iunsulting and inaccurate statements you can cram into a short message. Needless to say, I got my A in economics (and also labor Economics, BTW) in College, I watch "Nightly Business report" every day, and I don't believe in the redistribution of wealth. OTOH, the Republicans are doing a pretty good job of it by cutting taxes for the rich (do you know there was NO bracket reduction for folks in the 15% bracket and below that wasn't also given to the higher brackets, while folks in the top bracket will see a 12% decrease in the tax on their top income?) And now that the deficit has ballooned, greenspan wants to cut SS, which is the primary retirement vehice for the poor. THAT is income redistribution, Ed -- from the poor and middle class to the wealthy!
-- Dave K, Speakeasy Moderator
click here to email semods4@yahoo.com
The opinions expressed above are my own,
and do not necessarily reflect those of CNET!
there is even less excuse for your being so uninformed on economics.
When you say you don't believe in redistribution of wealth you are going counter to the argument you use every time you quote the party line of "tax cut for the wealthy" as the actual figures and percentages have been shown you many times. Yes, I do know the percentages of reduction and percentages still being paid but you seem not to. You are going counter to your "belief" every time you cry for the wealthy to pay a higher "fair share".
In other words Dave, you are only deluding yourself.
SS is, contrary to your beliefs, NOT redistribution of wealth but more of an actual example of "fair share" (although it too is aimed more at the less wealthy getting a greater portion on retirement). All who pay into it have the same percentages taken from their pay and only pay that up to a certain amount.
"...so we can plan better for the INEVITABLE cuts."
I remember in the 70's, in my mid 20's, several of us decided that SS wouldn't be there for us by the time we got old enough. And that talk has never changed over the years. All the debate, all the proposals, all the election year hype by too many Congressmen, Senators, and Presidental candidates; all of it hasn't change squat as far as establishing a reliable system that will remain solvent.
Sad thing is, even with talk like that in my 20's, I think I was 40 before I really realized I'd better get on the ball with saving more.
roger
... from the time I was old enough to comprehend, that SS would not be there for me by the time I got there. I think that's a fair bet. Either it will still exist but be so ravaged as to barely resemble current benefits, or it will have been largely phased out.
I think I missed replying to a post of yours in the SS Reform thread. You made a point about the temptation to spend the money if one had such a big chunk sitting there. I guess the penalty for withdrawal of more than a certain % would be that one was put back into the current or other government system.
Evie ![]()
everyone with half a brain has known it.
Hi, KP.
I repeat, "If we still had the surplus that Bush has given to the wealthy, we'd be able to make up the SS deficit from general funds." The idea that SS is a "separate" pocket is simple BS, to use your term. SS was only put "off budget" in the mid- to late 90's -- for decades before that, it routinely ran a surplus (at the moment, it still does), and that surplus was used to reduce the nominal size of the actual annual deficit. As for "what's Republican about it," Bush gave billions to the wealthiest Americans, and now Greenspan wants to cut the retirement safety net that's proportionally most important to the poorest Amwricans. The further down the socioeconomic scale you go, the higher the percentage of projected retirement income that SS represents. Folks with high-dollar incomes generally have company pensions, voluntary salary deferrals, sometimes stock options, etc. Odds are the slightly-above-minimum wage earner has only SS to rely on. As usual, the net affect of the Republican policies is a transfer of wealth from the lower socio-economic strata to the wealthier. That's what the Republican Party is all about, but they use smoke and mirrors to convince the Average Joe (and Jane) to vote against their own best interest.
-- Dave K, Speakeasy Moderator
click here to email semods4@yahoo.com
The opinions expressed above are my own,
and do not necessarily reflect those of CNET!
is not convincing. It's BS.
interest bearing obligations to the SS fund. These, of course, have not increased in value as fast as other investments. However, it is a little scarry to me to consider the possibility of SS giving gov't large positions in the stock of private companies. Wouldn't some of the politicians LOVE that. The private route is much safer.
Greenspan is being hypocritical talking about spending while he's been the one most irresponsible in depriving seniors of their chief source of income, normally through interest rates, by his extravagant policy of "giveaway prime lending rate" to the Banks. Every time he lowered the prime lending rate another quarter point he lost the Treasury millions, maybe billions of dollars, while at the same time robbing seniors from their interest income by undercutting them, and causing one of the largest banking booms in modern history. He has set up a situation that will take 4-6 years to undo now, because any faster increase of prime lending rates would stress the banking system too quickly, they need time to adjust and reduce the increased margins of profit between lending rates and bank borrowing rates. The seniors and the goverment have lost vast amounts of money due to Greenspan's policies, and the banks have had a field day, becoming the new robber barrons.