As much as I hate the idea of new taxes, or of perpetuating the hugely draining welfare state, I don’t see a reasonable way out of either.
We can not reasonably slash social security or medicare without drastically changing the retirement & medical landscape. I think the best idea I’ve heard so far is to terminate SS except for people above a certain age (essentially the folks who are too old to have any hope in hell of building up the savings needed) and below a certain savings. If you are wealthy, young, or have a healthy 401K &/or pension plan, no dole for you. Not surprisingly, the AARP aggressively opposes this idea. As for Medicare/Medicaid, that would require either going full on single payer, or changing the laws for insurance companies such that they can not deny coverage to the elderly, or spike their rates (which of course means no one is allowed to not have health insurance, which leads to all sorts of arguments). Also, means testing might not be a bad idea. If you have a health plan as part of your pension plan, you got no need to be on Medicare.
As for taxes, I think we’ll see a lot of the special tax breaks for certain industries disappear. Personally, I’m all for a flat tax, either personal, or corporate, makes no difference to me (since individuals will be paying it either way), but I ain’t giving up breathing or sex waiting for that to happen. Maybe we’ll get a reduction on regulatory burden for businesses, although I know the favorite idea is regulations that only apply to big companies and are waived for smaller ones (not sure how that will fly with regard to equal protection). Still, those regulations are a big revenue source for governments, so I’m not sure how much that will happen, even if it would make businesses more profitable and offer larger tax reciepts (politicians at all levels have a hard time thinking that far ahead).
sigh…
There are times I really want to just build a WIG & a seastead and go grow algae for biodiesel in tropical waters somewhere.
“We can not reasonably slash social security or Medicare without drastically changing the retirement & medical landscape.” Wrong!
We cannot reasonably hope to avoid national bankruptcy and collapse without slashing social security and Medicare without drastically changing the retirement & medical landscape.
Terminate my SS – and terminate my “Contributions” to that doomed ponzi scheme as well. I’ll not be donating to the retirement plans of others who are too stupid and lazy to save on their own. How about we just stop taxing savings and investments altogether and let us worry about our own retirements – or lack thereof?
VDH nailed it yesterday:
http://www.nationalreview.com/corner/274103/paralytic-western-society-victor-davis-hanson#
I recall a South American country successfully doing away with their national retirement plan in short order (I think it was Chile). The way it was done (IIRC) was the government created a cutoff criteria, and anyone who fit the criteria essentially got the value of their government retirement in one lump sum, to invest however they saw fit. Everyone else just stopped getting taxed. I think the government went into serious debt to pull it off, but the sudden influx in investment capital allowed them to start paying off the debt rather aggressively.
Sounds good – Argentina went the other direction and siezed everyone’s retirement savings.
We’ve known about the coming Social Security crisis for at least 25 years. Our politicians have refused to do the reasonable things to protect this, so we are royally screwed AND cornered. Thanks, Washington!
It has been called the third rail as long as I can remember. We needed to at least take the first few steps to improve this for multiple decades, and our politicians did nothing. We could have done it in a slow and controlled manner, but the courage and will was not there. Now we have to do it in a drastic way while in a panic.
Yet destructive idiots like Pelosi STILL demand that we take no reasonable steps. If she holds firm, and convinces enough people to support her position, instead of taking reasonable steps, we’re just going to have to put grandma out on the ice floe. When we are actually out of money, things get GRIM.
I tried to tell people. I tried.