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Reply #38: You have a wealth transfer from the middle to upper middle [View All]

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exboyfil Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Dec-05-11 11:48 AM
Response to Reply #31
38. You have a wealth transfer from the middle to upper middle
income to the middle and low income. How can it be characterized as anything but a welfare program? If the benefit formula was the same throughout the income classes (no distribution) then yes, it could be characterized as purely social insurance. Since it is not, then it has an element of subsidization in it. You have transfer both from current workers to past workers (who withheld less from their income in many cases) and from higher earning workers (but not the highest) to the lower earning workers.

This is not say it is a bad program. You just need to understand the mechanics of it and move forward. Understanding the mechanics will also prompt you to ask the question why should their be a cap on withholdings for earnings? You could also ask that question about other income, but at least let us start here.

How many people understand how Social Security works? A very few otherwise middle class earners would not make the stupid statement of letting them out of the system. The system must get that income to pay both benefits for the prior generation (which up until the late 1980s had a lower withholding rate) as well as the future benefits for those earning less than $30K.

I expect every dollar in Treasuries held by Social Security to be paid back. The S.S. Trust Fund is no different than any other holder of U.S. obligations.

I have said many times on this board that we should cut our defense budget by at least a third to match what is being spent by our allies (or least get closer). I has infuriated about President Obama going to Asia and saying we will increase our presence their without pointing out how little the Aussies pay in defense compared to their GDP.
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