“No Way Out” of Debt Trap, Gross Says: U.S. Living Standards Doomed to Fall

[johnsmith]

WTF? The VWRC strikes again!

[coyotes_geek]

Repugs, Blue Dog dems, corporate lobbyists ed up health care reform, not Obama.

Repugs didn't write or vote for the bill, so you can scratch them off this list.

[Wild Cobra]

Someone should do something about those Obama tax cuts.

No kidding, but he didn't cut taxes.

With SS being in a near future mess, why was the SS contribution cut from 6.2% to 4%. Shouldn't we have increased it instead?

[ElNono]

No kidding, but he didn't cut taxes.

That makes no sense.

[Wild Cobra]

That makes no sense.

OK, what did I miss?

[ElNono]

Someone should do something about those Obama tax cuts.

No kidding, but he didn't cut taxes.

[Wild Cobra]

Real helpful El... (not.)

What were the Obama tax cuts missed?

[ElNono]

You're telling him "No kidding (someone should do something about those Obama tax cuts)" and follow it with "but he didn't cut taxes".

Do I need to post a colorful chart so you understand that doesn't make any sense?

[Wild Cobra]

You're telling him "No kidding (someone should do something about those Obama tax cuts)" and follow it with "but he didn't cut taxes".

Do I need to post a colorful chart so you understand that doesn't make any sense?

The only cuts I'm aware of is the SS. Most people consider SS a tax. That's why I stated it as I did.

Now are the tax cuts I'm not aware of, or you just going to play games?

[boutons_deux]

"Most people consider SS a tax."

SS is a public retirement fund, NOT a tax, NOT an en lement

[CosmicCowboy]

"Most people consider SS a tax."

SS is a public retirement fund, NOT a tax, NOT an en lement

More proof Boutons has lost complete touch with reality.

[Winehole23]

What were the Obama tax cuts missed?

Pretty sure CG was referring to Obama signing the extension of the Bush tax cuts last December.

[TeyshaBlue]

[boutons_deux]

More proof Boutons has lost complete touch with reality.

So you're assuming the T-bonds held by SS will be defaulted on?

There's nothing wrong with SS that isn't easily fixable, eg, the VRWC needs to quit LYING about the SS.

If the Repugs get into WH and both branches of govt (they already have control of SCOTUS), I'm sure they will destroy SS and middle/working class citizens in deep(er) and Wall St hauling in $Ts in "fees".

[CosmicCowboy]

So you're assuming the T-bonds held by SS will be defaulted on?

There's nothing wrong with SS that isn't easily fixable, eg, the VRWC needs to quit LYING about the SS.

If the Repugs get into WH and both branches of govt (they already have control of SCOTUS), I'm sure they will destroy SS and middle/working class citizens in deep(er) and Wall St hauling in $Ts in "fees".

It is a totally rational conclusion that the US will not have enough current tax revenue to pay off the T-Bonds held by Social Security as they mature. They will either print loads of money or default. No other choices.

[coyotes_geek]

I see 5 options. None are pretty.

A) Repay SS with a bunch of printed up funny money.
Upside: Doesn't require tax increases or benefit cuts.
Downside: Inflation. Might collapse the dollar. Everyone suffers, especially low income Americans who are most vulnerable to inflation.

B) Come up with $10 trillion dollars worth of tax increases to repay SS with.
Upside: Won't with inflation. Wouldn't require benefit cuts.
Downside: Might not be feasible to tax another $10 trillion dollars away from Americans on top of their other tax commitments (READ: MEDICARE) Taxpayers end up getting hit with a double-whammy of having to pay SS taxes, and then higher income taxes on top of that to repay the debt owed to SS. Everyone suffers.

C) Borrow money from the "non-public" to repay the debt owed to the public.
Upside: No tax increases. No benefit cuts.
Downside: Increased interest expenses would cause defecits to skyrocket, thus putting more and more pressure to make big cuts to other government programs. Removes the "public debt default" as an option. Financial markets would tolerate the U.S. defaulting on it's own citizens, but a default on non-public debt would cause a catastrophic global crash.

D) Default on the SS bonds.
Upside: Doesn't require new taxes. Makes defecits significantly easier to control.
Downside: Requires massive benefit cuts to SS recipients.

E) Some combination of A-D above.

[RandomGuy]

It is a totally rational conclusion that the US will not have enough current tax revenue to pay off the T-Bonds held by Social Security as they mature. They will either print loads of money or default. No other choices.

We will have the revenue to pay that off, but that isn't he problem with SS, barring some planetary catastrophe.

The problem is that the future liabilities (well actually current, but let's not split hairs about technical accounting issues) of the fund will far exceed the assets held.

[RandomGuy]

I see 5 options. None are pretty.

A) Repay SS with a bunch of printed up funny money.
Upside: Doesn't require tax increases or benefit cuts.
Downside: Inflation. Might collapse the dollar. Everyone suffers, especially low income Americans who are most vulnerable to inflation.

B) Come up with $10 trillion dollars worth of tax increases to repay SS with.
Upside: Won't with inflation. Wouldn't require benefit cuts.
Downside: Might not be feasible to tax another $10 trillion dollars away from Americans on top of their other tax commitments. Taxpayers end up getting hit with a double-whammy of having to pay SS taxes, and then higher income taxes on top of that to repay the debt owed to SS. Everyone suffers.

C) Borrow money from the "non-public" to repay the debt owed to the public.
Upside: No tax increases. No benefit cuts.
Downside: Increased interest expenses would cause defecits to skyrocket, thus putting more and more pressure to make big cuts to other government programs. Removes the "public debt default" as an option. Financial markets would tolerate the U.S. defaulting on it's own citizens, but a default on non-public debt would cause a catastrophic global crash.

D) Default on the SS bonds.
Upside: Doesn't require new taxes. Makes defecits significantly easier to control.
Downside: Requires massive benefit cuts to SS recipients.

E) Some combination of A-D above.

F) Raise SS tax rates, while raising the retirement age, and curbing benefits somewhat over time.

Address the problem from both ends, and suck up the fact that the population is aging.

[MannyIsGod]

Where are the greatest factors Americans have regarding their increased standard of living? Is it energy usage? So if our standard of living falls that mean we use less energy? I've thought for awhile that the world would have to catch up a great deal before our standard of living increases but what does that really mean in practical terms?

My initial thinking is that it is indeed energy usage in the form of excessive driving and decentralized cities. Baring technology increases that allow us more energy usage (such as better batteries and solar) people's driivng habbits will likely be the first to change. Second on that list for me would liikely be water consumption. I live in a place where the main river is a creek fed from snow melt that at its widest is maybe 4 feet. People out west will likely pay the price for trying to live in the middle of a desert. Sup Phoenix.

If the worst aspects of our standards of living dropping means reduced energy consumption and a surge in activities like recycling then I'm not too sure its a bad thing.

[coyotes_geek]

F) Raise SS tax rates, while raising the retirement age, and curbing benefits somewhat over time.

Address the problem from both ends, and suck up the fact that the population is aging.

I agree, but my list was intended to be specific to how we address the problem of the Treasury owing SS $10 trillion dollars that it doesn't have.

Raising SS taxes, raising the retirment age & curbing benefits all need to happen, but that's a tangential issue.

[boutons_deux]

Raising the retirement age + years has already been calculated to have a minuscule effect on the SS deficit, WHILE being extremely cruel to seniors who can't even find a job these days and perhaps for 10 years more of the Banksters' Great Depression. Being unemployed, they would be in extreme distress/poverty/wards of the state to have their SS checks delayed until 67 or 70.

[MB20]

I see 5 options. None are pretty.

A) Repay SS with a bunch of printed up funny money.
Upside: Doesn't require tax increases or benefit cuts.
Downside: Inflation. Might collapse the dollar. Everyone suffers, especially low income Americans who are most vulnerable to inflation.

B) Come up with $10 trillion dollars worth of tax increases to repay SS with.
Upside: Won't with inflation. Wouldn't require benefit cuts.
Downside: Might not be feasible to tax another $10 trillion dollars away from Americans on top of their other tax commitments (READ: MEDICARE) Taxpayers end up getting hit with a double-whammy of having to pay SS taxes, and then higher income taxes on top of that to repay the debt owed to SS. Everyone suffers.

C) Borrow money from the "non-public" to repay the debt owed to the public.
Upside: No tax increases. No benefit cuts.
Downside: Increased interest expenses would cause defecits to skyrocket, thus putting more and more pressure to make big cuts to other government programs. Removes the "public debt default" as an option. Financial markets would tolerate the U.S. defaulting on it's own citizens, but a default on non-public debt would cause a catastrophic global crash.

D) Default on the SS bonds.
Upside: Doesn't require new taxes. Makes defecits significantly easier to control.
Downside: Requires massive benefit cuts to SS recipients.

E) Some combination of A-D above.

Unfortunately, A.
If somehow they find a way to keep part of that money away from the public/banks, inflation could be "controled"

[101A]

Political pandering to the middle class will ensure that this imbalance continues.

Either the story is that you're overtaxed to pay for the slothful, or that "the rich" aren't taxed enough. Either way, you're the victim, despite the fact that the en lements and wars you expect someone else to pay for are what is driving federal expenditures, debt, and deficits to grow to unsustainable levels.

No politician wants to call the middle class on their bull .

Great point

[101A]

I see 5 options. None are pretty.

A) Repay SS with a bunch of printed up funny money.
Upside: Doesn't require tax increases or benefit cuts.
Downside: Inflation. Might collapse the dollar. Everyone suffers, especially low income Americans who are most vulnerable to inflation.

B) Come up with $10 trillion dollars worth of tax increases to repay SS with.
Upside: Won't with inflation. Wouldn't require benefit cuts.
Downside: Might not be feasible to tax another $10 trillion dollars away from Americans on top of their other tax commitments (READ: MEDICARE) Taxpayers end up getting hit with a double-whammy of having to pay SS taxes, and then higher income taxes on top of that to repay the debt owed to SS. Everyone suffers.

C) Borrow money from the "non-public" to repay the debt owed to the public.
Upside: No tax increases. No benefit cuts.
Downside: Increased interest expenses would cause defecits to skyrocket, thus putting more and more pressure to make big cuts to other government programs. Removes the "public debt default" as an option. Financial markets would tolerate the U.S. defaulting on it's own citizens, but a default on non-public debt would cause a catastrophic global crash.

D) Default on the SS bonds.
Upside: Doesn't require new taxes. Makes defecits significantly easier to control.
Downside: Requires massive benefit cuts to SS recipients.

E) Some combination of A-D above.

F. Systematic program to encourage Americans to partake in activities and lifestyles that are profoundly conducive to long-life spans. Give away filterless cigarettes, doughnuts, Soda; a legion of hot hookers - practically free, who won't allow protection. , be creative, wouldn't take much to significantly lower the life expectancy.

Dead people don't collect ss.

[RandomGuy]

Political pandering to the middle class will ensure that this imbalance continues.

Either the story is that you're overtaxed to pay for the slothful, or that "the rich" aren't taxed enough. Either way, you're the victim, despite the fact that the en lements and wars you expect someone else to pay for are what is driving federal expenditures, debt, and deficits to grow to unsustainable levels.

No politician wants to call the middle class on their bull .

Succinct and mostly correct. I think eventually it will have to come to a head.