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One proposal to fix Medicare, tax code
Buttons promoting Medicare for all ages being distributed by the California Nurses Association in Los Angeles.
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Most analysts expect actual policy-making in Washington will take a break at least through the election. And so we march inexorably toward that so-called "fiscal cliff," with no deal to address future government deficits.
In this dismal atmosphere, Fortune Magazine decided to turn two veteran journalists loose on the problem. Geoff Colvin and Allan Sloan often come down on opposite sides of economic issues, but they could agree on the big, broad moves it would actually take to get our fiscal house in order.
In a recent column in the Washington Post, the two took on several economic issues in the U.S. that they believe won't be fixed, even after the 2012 presidential campaign comes to a close.
Sloan says Medicare is one area where emotion plays a role beyond economics. He proposed either restricting the amount of money spent on health care at the end of people's lives or requiring people to pay for the care themselves.
"If you want heroic care, everyone else is not going to pay for it," Sloan said. "You buy an insurance policy, you use your own money, and everybody who will be honest about this will tell you what we're proposing is completely rational, but nobody will say it in public for obvious reasons."
Sloan's solution to the tax code includes treating all income the same, getting rid of itemized deductions, and eliminating the "accured" alternative minimum tax. Listen to the complete interview for more.
Horwich. So the solution to Social Security shortfall which will start to affect us in 2034 is to cut benefits and raise the retirement age. How about making the wealthy (who were given huge tax cuts while we were engaged in two Middle Eastern wars) pay back the nearly one trillion dollars that Bush borrowed from Social Security. The top 400 incomes during those years averaged tax rate of just over 16%.
Simplistic conservative nonsense masquerading as thoughtful centralism. Social Security would be secure for the next 75 years if the cap on taxing earnings was removed. Medicare is more of a problem, but there hopefully would be more ways to raise revenue - like instituting Medicare taxes on investment earnings. Also, allowing younger, healthier people to buy into Medicare would bring needed funds in the program while providing an insurance option to those under 65.
Social Security is only "secure" for the next 75 years if you believe that all the money that has been "borrowed" out of the Social Security trust fund will be paid back with out having to borrow to pay it back.
Since Reagan "fixed" Social Security, the Congress has looted the surplus funds SS collected over what it paid out. This is like having a part time job that pays into a separate bank account for your kids college fund, but each year you take out money and leave an IOU note in its place. At some point the IOU's have to be paid back so JR can go to college. All the money is gone when JR hits 18, where does that money come from? Your full time job does not cover your spending, your part time job has helped make ends meet but only by trading JR's college fund for IOU's.
When you treat the IOU's as funds, then yes, JR can go to Harvard. When you try to pay JR for college those IOU's have to be converted to cash from your other income.
Thanks to Obama, SS is even closer to the point that expenses exceed income. Because the last dozen presidents have spent more and more than is brought in, Obama doing his best to keep the doubling of the debt every 8 years, there is no cash to cover the IOU's needed to be paid back. So even more borrowing.
When you look at what has been promised and then what has been set aside to cover it, math says it is not going to happen and it is not going to be pretty.
