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

[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.

[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.

[RIJIMMY]

Originally Posted by RIROCKHOUND

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

it is when you subtract the things you cannot control - interest and mandatory

[Fly Rod]

43%! Well then instead of hiring 5,000 more IRS people lets hire 1000 and asign them to go after medicade fraud of which is a few billion.

[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.

[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

[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.
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[albin35]

The opposite of progress
Is Congress.

Vote E'm Out.

[justplugit]

Originally Posted by spence

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.


Posted from my iPhone/Mobile device

It's basically robbing Peter to pay Paul. Paul spent his money and now Peter
is broke.

If the money was kept in a "locked box" from the beginning Peter would still have his money
and Paul would have to live within his means.

The true reason for our financial condition is, we don't live
within our means.

[spence]

I guess it depends on if you believe in the full faith and credit of the USA. Good thing we have cash-flow.
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[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.

[scottw]

Originally Posted by spence

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.(it's an unsustainable redistribution scheme..a disaster)Posted from my iPhone/Mobile device

there was a lot of money in the Bernie Maidoff trust on paper but it was mostly "invested"(spent)......the "Trust Fund" was invested into the massive expansion of the welfare state and the Great Society(aka Road to Ruin)...that "investment" should really pay off


[QUOTE=spence;837478] I guess it depends on if you believe in the full faith and credit of the USA. Good thing we have cash-flow.


"cash flow"

printing record amounts of money that does not exist
borrowing record amounts to pay for things that you can never afford

"cash flow"

Bernie Maidoff had "cash flow"

let the nationwide dependent class protests begin

[spence]

That's a pretty lame response.

[QUOTE=scottw;837544]there was a lot of money in the Bernie Maidoff trust on paper but it was mostly "invested"(spent)......the "Trust Fund" was invested into the massive expansion of the welfare state and the Great Society(aka Road to Ruin)...that "investment" should really pay off

Originally Posted by spence

I guess it depends on if you believe in the full faith and credit of the USA. Good thing we have cash-flow.


"cash flow"

printing record amounts of money that does not exist
borrowing record amounts to pay for things that you can never afford

"cash flow"

Bernie Maidoff had "cash flow"

let the nationwide dependent class protests begin

Posted from my iPhone/Mobile device

[scottw]

[QUOTE=spence;837563]That's a pretty lame response.

Originally Posted by scottw

there was a lot of money in the Bernie Maidoff trust on paper but it was mostly "invested"(spent)......the "Trust Fund" was invested into the massive expansion of the welfare state and the Great Society(aka Road to Ruin)...that "investment" should really pay off



Posted from my iPhone/Mobile device

well, the assertions were ridicuolus sooooo...I guess it was a proportionate response....

the protests have begun....btw

From an economic standpoint, the question of whether the trust fund is fact or fiction comes down to whether the trust fund contributes to national savings or not.[16] If $1 added to the fund increases national savings by $1, the trust fund is real. If $1 added to the fund increases national savings by $0, the trust fund is not real. A substantial body of economic research argues that the trust funds have led to only a small to modest increase in national savings and that the bulk of the trust fund has been spent.[16][17][18][19] Others suggest a more significant savings effect.[20]

If the Social Security Trust Fund causes government spending to be higher and/or income tax rates to be lower, then the trust fund is not contributing to national savings. No money is being saved. On the other hand, if government spending and tax rates aren't affected by the existence of the trust fund, then the trust fund has contributed to national savings. If trust fund increases national savings, then it really is a trust fund and has fulfilled its purpose. This has been the subject of considerable controversy.


The economic question is not whether the bonds represent legal obligations that will be fulfilled, the economic question is whether the U.S. bonds held by Social Security represent savings by allowing Social Security taxes collected in the past to reduce the need for taxes in the future. Was the money added to the fund in 1984 actually saved so that it could be spent on a retiring baby boomer in 2020 without a tax increase? If the only way for the federal government to repay the bonds held by Social Security is by raising taxes in 2020, this suggests that the excess money collected in 1980 was spent on other government activities, not saved by Social Security. Those(fools) who believe the trust fund is real would say that tax increases would have been even higher without the trust fund.

this sounds very familiar.."if it weren't for me and my spending, things would have been much worse"

[buckman]

Originally Posted by spence

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

IOU's are not real money. That's what replaced the $$$ they stole.

Brian's right. Unemployment is another area of wasted $$$. 99 weeks and running......

There's a huge sign on a little store here in Cambridge. I'll take a picture for you. It says " WICs checks accepted , play the lottery".

I went in...No baby fornula for sale....surprise!!!!

[scottw]

this says it all

The Social Security Trust Fund is the means by which the federal government of the United States accounts for excess paid-in contributions from workers and employers to the Social Security system that are not required to fund current benefit payments to retirees, survivors, and the disabled or to pay administrative expenses.

The trust fund contains the securities that will be redeemed to make benefit payments in the future when contributions derived from payroll taxes and self-employment contributions no longer are sufficient to fully fund then-current benefit payments. (The controversy over its meaningfulness is a topic of the sustainability of the unified Federal budget.)

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.

the term "scheme" is appropriate


just think about the masses that will mobilize in 2102 to save their entitlements!!!!

[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.
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