can someone explain taxes/budget/expenses

[RIJIMMY]

I'm sure I can find this online but we have some smart folks out here and hopefully this will be a non-partisan discusson
I dont get the budget issues and shortfalls.
I keep reading that most of the US budget is taken up by entitlement progams - SS, Mediacare.
So the "rest" is sort of our cost of living, infrastructure, military, admin, etc.

here is what I dont get.
We all PAY, outside of our taxes, for SS and Medicare. Its gets deducted IN ADDITION to our fed and state taxes.

so, is it that these programs cost more than what is paid in, so then the govt takes the fed income tax revenue and uses to fund these programs?

I guess Im not understanding why its always discussed to raise income tax when the problem appears to be that we not raising enough money for SS and Medicare. Im not sure if my question makes sense

[buckman]

I think they steal it all for the general fund and then play ponzi games with it

[RIJIMMY]

didnt take me long - just found my answers

United States federal budget - Wikipedia, the free encyclopedia

So, its pretty obvious that the issue in this country is not that we need higher taxes or that government is spending too much. Not at all.
The real issue is that SS and Medicare are failed programs! they're not working. The money I pay today, should be invested to pay me tomorrow, the revenue generated from that investment should be paying for the people who didnt pay into the system. This is mind boggling to me. Maybe I havent been paying attention.

[scottw]

yes, every penny that you pay is immediately being sent to someone else, and then some last year(2010)....there is no "lock box"

I wouldn't worry though, the surgeon in chief has taken a scalpel to the budget and in a most thoughtful way he eliminated what was necessary to both cut spending and increase investments(spending) and managed to do it all for a tad under 4 Trillion....we should be just fine by 2012...ahhhhh...2015....ahhhh...2021....

the real problem is that the government has to continue spending their money on these pesky and unnecessary tax cuts... if the goverment didn't have to pay for tax cuts they could keep more of their money and then we could have a 5 trillion dollar budget and then all of our problems would be solved and everyone would be happy

[Chesapeake Bill]

Jimmy,

What I fail to understand is how, in the midst of all this talk about cutting spending, the government decided to reduce the FICA by 2% and leave the cap in place. If they wanted to do something to ease the pain they would have left the FICA at 6.2% and removed the cap. I'm willing to continue giving my 2% if it helps.

[RIJIMMY]

Originally Posted by Chesapeake Bill

Jimmy,

What I fail to understand is how, in the midst of all this talk about cutting spending, the government decided to reduce the FICA by 2% and leave the cap in place. If they wanted to do something to ease the pain they would have left the FICA at 6.2% and removed the cap. I'm willing to continue giving my 2% if it helps.

I agree! lets focus on the REAL problem. Its not govt spending, its not federal income tax....its failed programs!

[scottw]

Originally Posted by Chesapeake Bill

Jimmy,

What I fail to understand is how, in the midst of all this talk about cutting spending, the government decided to reduce the FICA by 2% and leave the cap in place. If they wanted to do something to ease the pain they would have left the FICA at 6.2% and removed the cap.

I'm trying to recall which idiot proposed this???



I'm willing to continue giving my 2% if it helps.

I don't think anyone will argue or complain if you go ahead and send that extra 2% in this year...I will be the first to applaud your generosity

[spence]

I think it's mostly about increasing costs and demographic changes. Also, as the funds excess shrinks they can't benefit from interest income.

SS can be fixed, it's Medicare that's the biggest problem.

-spence

[justplugit]

Originally Posted by spence

it's Medicare that's the biggest problem.

-spence

I agree it is a big one. Being on Medicare myself along with many of my friends I see
unsustainable medicine costs due to all the new procedures that are available and
the fact that Docs need to protect themselves from lawsuits.

In addition many Docs are dropping out of Medicare because of the hassles
and fee cuts..
My wife needs a new hip, bone on bone, and the specialist we have opted
out of Medicare because of the hassles. Wait till more government HC.

Therefore his treatments comes out of my pocket, $200 first visit, $75 each
visit after that and $5000 for the surgery.
IMHO he deserves it because he's one of the best, highly trained and has a heavy overhead.
Ya get what you pay for and the Govt is out of dough let alone what it will need as
the Baby Boomers enter the program.

Don't worry though, the $600 Billion saved in Medicare fraud will pay for them.

[RIROCKHOUND]

Originally Posted by spence

SS can be fixed, it's Medicare that's the biggest problem.
-spence

Absolutely.
Everyone 45-55, bump it 1 or two years later.
everyone under 45, SS now starts at 70.

I can't fathom how either side can't come up with a rational, commonsense way to work on SS

Medicare is the looming claymore w/ the boomer generation reaching AARP status...

Defense. Lets get out of Afganastan and Iraq before we think about anything else.

[Fly Rod]

Everybody wants to pick on Social Security

Lets start with the fraud on welfare and unemployment, needs to be revampt.

[RIJIMMY]

Originally Posted by Fly Rod

Everybody wants to pick on Social Security

Lets start with the fraud on welfare and unemployment, needs to be revampt.

look at the charts in the wiki link i posted. Almost all of the money the govt takes in goes to SS or Medicare. fixing anything else is small change.

[RIROCKHOUND]

Originally Posted by RIJIMMY

look at the charts in the wiki link i posted. Almost all of the money the govt takes in goes to SS or Medicare. fixing anything else is small change.

43% is not 'almost all'
it is huge though, and needs to be dealt with, as does defense.

[striperman36]

Originally Posted by RIJIMMY

look at the charts in the wiki link i posted. Almost all of the money the govt takes in goes to SS or Medicare. fixing anything else is small change.

Jim, but they are stealing the SS Surplus

[justplugit]

Originally Posted by Fly Rod

Everybody wants to pick on Social Security

The problem with the Social Security Trust Fund is the government has been borrowing trillions of dollars
from it since 1942 with the borrowing sky rocketingfrom the 70's on.
There are no $$$ left because of it, a Ponzi scheme for sure.

[spence]

Originally Posted by justplugit

The problem with the Social Security Trust Fund is the government has been borrowing trillions of dollars
from it since 1942 with the borrowing sky rocketingfrom the 70's on.
There are no $$$ left because of it, a Ponzi scheme for sure.

Not sure that's really accurate. There's a lot of money in the trust on paper, but it's invested in the US and shows up as debt.

The problem isn't as much SS as it is overall fiscal health.
Posted from my iPhone/Mobile device

[Chesapeake Bill]

Scott,

Ther isn't a way to give it back...I know you would be happy to take it for Uncle Sam but that isn't a viable option despite despite the generous offer! :smile: I hate giving the government any more money than I have to but woud prefer that they just keep what they are already getting instead of giving me some and taking more in the form of some new tax (that only makes me mad). Losing the cap makes the government more money as those making more than $110K continue paying while those making less don't hit the cap.

[Fly Rod]

The Feds stole the monies a long time ago to pay for, illegals, federal low income programs, Acorn, Planned Parenthood, federal pensions etc: and it has come back to hit em in the a_ _. We give Planned Parenthood at least 300 million a year, they are a private enity. We could put that towards Social. Where is the millions that we have given to Haiti?

We could probably balance the budget just by not giving monies to other countries that do not like or support us. We give 20 million to Cuba, 9 billion to Africa, 913 million to Russia and can you believe we give aide to China.

That is just a few.

[spence]

I guess it depends on if you believe in the full faith and credit of the USA. Good thing we have cash-flow.
Posted from my iPhone/Mobile device

[Chesapeake Bill]

Lots of things we could do immediately. Prisoners don't deserve social security. Stop paying them and anyone who marries them while they are incarcerated.

Don't hire more people to find fraud. Make the existing people find it. That's what CMS (part of SS) is for. A good friend was the guy who ran the programs and found the little old ladies in nursing homes double dipping. There has to be a lot more. Convert welfare into welfare for work. Start daycares, provide bus vouchers, and make the third and fourth generation welfare recipients work. They can clean streets or public buildings or something that provides a return and reduces costs.

Finally, open up clinics using new doctors in return for government liability from malpractice (for a certain period). Even if they are free, clinics would reduce the costs to hospitals and thus to health care. Put military medical folks there and use them to distrubute medicine instead of having medicare do it. It has to be cheaper that way...

..and I agree. Get out of the middle east. If only for economic reasons. We have predator drones and icbms...use them to maintain stability.

Just a few suggestions.

[spence]

Good to see you doing some homework on how the US Government work. Now go read up on Madoff so you can actually understand his scheme as well.
Posted from my iPhone/Mobile device

[scottw]

OK

While the system eventually will collapse under its own weight, the example of Bernard Madoff's investment scandal demonstrates the ability of a Ponzi scheme to delude both individual and institutional investors as well as securities authorities for long periods: knowingly entering the scheme even at the last round of the scheme, can be rational economically if there is a reasonable expectation that government or other deep pockets will bail out those participating in the Ponzi scheme..........


yup....

[spence]

Madoff didn't invest, he just banked the money, falsified returns and paid investors largely from their own money.

If SS is a ponzi scheme than so is any government backed security.
Posted from my iPhone/Mobile device

[scottw]

Originally Posted by spence

Madoff didn't invest, he just banked the money, falsified returns and paid investors largely from their own money.

If SS is a ponzi scheme than so is any government backed security.
Posted from my iPhone/Mobile device

you appear to be catching on....

the government has not "invested" the money(unless you consider the cash transfers by a large beaureaucracy from one individual to another= investment), they spent it and are now paying their "investors" from current contributions by new "investors"(dupes)....exactly the same(except the "their own money" part)

if Madoff could have convinced the Fed to buy his debt and "create" some money for him...he might still be in business...

[RIJIMMY]

Originally Posted by scottw

you appear to be catching on....

the government has not "invested" the money(unless you consider the cash transfers by a large beaureaucracy from one individual to another= investment), they spent it and are now paying their "investors" from current contributions by new "investors"(dupes)....exactly the same(except the "their own money" part)

if Madoff could have convinced the Fed to buy his debt and "create" some money for him...he might still be in business...

scott is 100% correct.

[scottw]

it's really not too complicated, the problem is that "some" would like to tell you that it is, blather on about complexities and then tell you that you aren't smart enough to comprehend their blather when all that they've really succeeded in doing is to defend the indefensible while hypnotizing themselves with their own rhetoric.....which reminds me...have you seen/heard O'baby's new press guy.....HAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAA!!!!!!!!!!!!!!!

[Fly Rod]

I do not understand the big deal about social security at this time. Social is solvent to 2017 and still taking in more monies then it is paying out. The last incease to employers and employees to the payroll tax was in the early 80's of which has kept social solvent for the last 25 years or so. I would think that if the payroll tax was raised about 1.5% for employer & employee social will be good for another 40 years beyond 2017. Are your elected officials using social as a scape-goat? Social only takes up about 6% of the GDP As they take money from the reserve of social security, they are putting in IOU's. If elected officials would pay some of the IOU's it would make social even more solvent, but I am sure that the government has no intention of paying back, just keep taking. They are thieves and should not be taking monies to put into the general fund. Just because the country is broke does not give them the right.

When Rosservelt passed social in the 1930's it was a ploy for re-election since the average life span then was about 58 years old the government figured that 1 out of 10 would collect, then in the late forty's- fifties vacines were dicovered that increased the life span.

The young people of today should be paying more, their life span is much greater today with today's medicine and vaccines.

[spence]

Again, you don't seem to know what you're talking about. By law the SS trust must be invested in interest bearing securities.

Originally Posted by scottw

you appear to be catching on....

the government has not "invested" the money(unless you consider the cash transfers by a large beaureaucracy from one individual to another= investment), they spent it and are now paying their "investors" from current contributions by new "investors"(dupes)....exactly the same(except the "their own money" part)

if Madoff could have convinced the Fed to buy his debt and "create" some money for him...he might still be in business...

Posted from my iPhone/Mobile device

[scottw]

Originally Posted by spence

Again, you don't seem to know what you're talking about. By law the SS trust must be invested in interest bearing securities.


Posted from my iPhone/Mobile device

but I do, I posted this earlier, the govenment has issued IOU's to itself for any SS overage and promises to pay it back sometime and lumped the amount onto the National Debt...don't know about you...but if a guy running trillion dollar deficits gives me an IOU promising that the money will just materialize at a later date even though the account that the IOU is written on is overdrawn and will be so for as far as the eye can see....welll???

Paid-in contributions that exceed the amount required to fully fund current payments to beneficiaries are invested in securities issued by the federal government. The securities issued under this scheme constitute the assets of the Social Security Trust Fund. Because under current federal law these securities represent future obligations that must be repaid, the federal government includes these securities within the overall national debt.[1] The portion of the national debt that is not considered "publicly held" represents the obligations incurred by the government to itself, the bulk of which consists of the government's obligations to the Social Security Trust Fund. now that's funny...and you wonder where Wall Street get's all of their crazy ideas

you should start you own Ponzi scheme Spence