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I think Jenkins does a good job laying out some of the broader points. I will add that there is a huuuuge battle coming in that, even to get to the point where politicians can float ides like adding years to the retirement age, means testing benefits etc. there will be a gnashing of teeth driven by standard bearers from both sides that will rev this up barley a moment after the first sentence is complete as to suggestions for deailing with either entitlment issue.
Wisconsin is just a tune up.
Let's Begin Obama's 'Conversation' on Entitlements
A couple retiring last year paid $109,000 into Medicare but can expect $343,000 back from the system.
FEBRUARY 26, 2011
some salient points from the article-
Don't doubt that Mr. Obama's real impulse, like that of most Democrats, is to let things ride and then simply, amid a crisis, start slashing benefits for the "rich" while also raising taxes on "the rich." Unspoken has been a Democratic assumption that an aging electorate, in a crisis, would be willing to tax itself to the hilt to prop up an unreformed or barely reformed Social Security and Medicare.
snip-
Let's lay down a couple of markers for "the conversation" Mr. Obama pretends he wants to have. The transition to a new system, in which workers save for their own retirement consumption, will have to be financedthat is, we'll have to borrow to settle the claims of those who are retired or nearing retirement and can't be left in the lurch.
Medicare is the real killer. According to Eugene Steuerle of the Urban Institute, an average couple retiring last year can look forward to consuming Medicare benefits with a present value of $343,000, having paid Medicare taxes with a present value of $109,000.
And don't let that figure get your hopes up, because even that $109,000 is not available today. That money was spent long ago. The government's trust funds are a fraud. Indeed, by some large amount, society missed out over many decades on domestic savings and investment that would have taken place had workers not been relying on unfunded government promises to support them in retirement.
snip-
The flip side of this depressing consideration, though, is a happier one. Moving toward a system of real savings, in which payroll taxes would flow into some version of personal accounts controlled by the worker, would bring a big improvement to incentives. We could expect a sizeable growth dividend to help finance the transition.
By "finance the transition," of course, we mean today's workers having to reach into their own pockets twice, paying for their own retirement while also making up for the saving their parents and grandparents didn't do. When people talk about generational injustice, this is what they mean. But the pain can be lightened and spread more evenly with borrowing. Here's where we should not be afraid of debt. The bond market can be trusted to distinguish between good debt and bad debtbetween borrowing to fix the system and borrowing to prop it up.
read more at-
Jenkins: Let's Begin Obama's 'Conversation' on Entitlements - WSJ.com
Wisconsin is just a tune up.
Let's Begin Obama's 'Conversation' on Entitlements
A couple retiring last year paid $109,000 into Medicare but can expect $343,000 back from the system.
FEBRUARY 26, 2011
some salient points from the article-
Don't doubt that Mr. Obama's real impulse, like that of most Democrats, is to let things ride and then simply, amid a crisis, start slashing benefits for the "rich" while also raising taxes on "the rich." Unspoken has been a Democratic assumption that an aging electorate, in a crisis, would be willing to tax itself to the hilt to prop up an unreformed or barely reformed Social Security and Medicare.
snip-
Let's lay down a couple of markers for "the conversation" Mr. Obama pretends he wants to have. The transition to a new system, in which workers save for their own retirement consumption, will have to be financedthat is, we'll have to borrow to settle the claims of those who are retired or nearing retirement and can't be left in the lurch.
Medicare is the real killer. According to Eugene Steuerle of the Urban Institute, an average couple retiring last year can look forward to consuming Medicare benefits with a present value of $343,000, having paid Medicare taxes with a present value of $109,000.
And don't let that figure get your hopes up, because even that $109,000 is not available today. That money was spent long ago. The government's trust funds are a fraud. Indeed, by some large amount, society missed out over many decades on domestic savings and investment that would have taken place had workers not been relying on unfunded government promises to support them in retirement.
snip-
The flip side of this depressing consideration, though, is a happier one. Moving toward a system of real savings, in which payroll taxes would flow into some version of personal accounts controlled by the worker, would bring a big improvement to incentives. We could expect a sizeable growth dividend to help finance the transition.
By "finance the transition," of course, we mean today's workers having to reach into their own pockets twice, paying for their own retirement while also making up for the saving their parents and grandparents didn't do. When people talk about generational injustice, this is what they mean. But the pain can be lightened and spread more evenly with borrowing. Here's where we should not be afraid of debt. The bond market can be trusted to distinguish between good debt and bad debtbetween borrowing to fix the system and borrowing to prop it up.
read more at-
Jenkins: Let's Begin Obama's 'Conversation' on Entitlements - WSJ.com