How come no one has ever proposed the simplest solution to social security?

[Dark]

Pay our workers more.

Gee, imagine that.

No raising taxes as both the government and the average worker are making more.

No cutting benefits because we'll be making more in taxes.

The business makes more because their worker is focused, not distracted by a late mortgage, a late car payment, their kids' day care or healthcare.

The worker makes more, obviously, because they are paid more.

But, that increase also means they're paying more money in taxes to social security.

Now I know that long term, more corrections will be necessary.

But, can't we all agree that this is a good starting point?

[Rhythm and Blue]

1. Because that is an absolutely ridiculous plan.

The way I read this, you're pretty much proposing we make something out of nothing here; it's the same as just printing more money. Nothing more is being produced, and nobody is taking a hit here to cover increased wages for the poor. It seems like all you're suggesting we do is universally increase the numbers written on paychecks by some set amount. That, of course, will simply lead to price inflation to reflect both increased labor costs and the new income levels of consumers. Yes, that's right. Your plan amounts to nothing but state-mandated inflation.

You haven't changed the share of the pie that people have. You haven't created more pie. You've just changed the numbers written on the pie, and in doing so devalued our currency, destroyed the value of people's savings accounts, and destabilized our markets.

Is there a positive to this plan? I don't see one.

The reason that people rarely propose the simplest plan is that in economics, things are never quite so simple. You can't solve the problem of poverty by printing more money, just as you can't solve every problem by repeatedly slashing taxes.

[Dark]

6. Actually, it is possible.

Is there a positive to this plan? I don't see one.

Uh, I listed them.

As to your claim that my ideas "increase the numbers on pay checks by some amount," isn't that what a regular paycheck amounts too? And payraise?

Here's a good place to start: stop exempting salaried employees from overtime. Companies are able to eliminate jobs because they can make one employee do the work of three.

Next, make CEOs have a salary cap based on the pay of the lowest paid woker. They can only receive 50 times what the lowest paid woker receives.

European Countries' CEOs are paid avbout 30-40 times what their workers receive.

Note: that doesn't actually limit the amount of money a CEO can make. Just the amount he can make by screwing over workers.

[Rhythm and Blue]

7. But those benefits cannot actually materialize.

As per your OP, you have not increased GDP per person, nor have you redistributed wealth; you've simply increased the numbers uniformly. It doesn't actually benefit anyone if everyone else's numbers have risen by the same amount. There's still the same amount of stuff out there to buy, the same number of people looking to buy it, and they have the same relative purchasing power. I mean, sure, the government could print twice as much money next year as they did this year, and everyone's salary would on average double. But it wouldn't mean anything, because inflation would kick in and erase those gains (as well as people's savings, as well as any value the dollar might still have had).

Now, what you're proposing here might actually have some uses. Exempting salaried employees for overtime? Ooh, that can be tricky, especially when you factor in business travel and people who take work home. Still, I'll say it's a fundamentally okay idea, though I'd imagine the gains to the social security fund would be marginal, especially since many salaried workers are past the cap level.

Second plan? That would indeed bring some small benefit. However, it wouldn't be useful at all to employees. Companies do not pay people as much as they can afford to; they pay them as little as they can and still keep them. The cash saved would not be doled out to employees, but rather would be profit either reinvested or simply given to shareholders. Both are more useful to the economy than having the cash rot in the CEO's pockets, yeah, but not to the extent where social security is "saved."

A far more useful, far more simple plan would be to simply eliminate the cap.

[Lydia Leftcoast]

8. No, it's not printing money, it's redistributing it

I listened to the Bill Moyers program that I taped on Friday, and the financial experts he had on were saying that U.S. CEOs make about $40 million per year and that hedge fund managers make even more.

It's not that companies don't have the money to pay more; it's that the top managers' greed has gotten out of hand.

Furthermore, the CEOs and hedge fund maagers pay FICA only on about the first $100,000 of their earnings.

I say either pay the workers more or remove the cap on FICA assessments.

[Rhythm and Blue]

9. Removing the cap is a good idea that will actually help solve the Social Security problem.

Lowering CEO salaries? Not seeing any statistical benefit, nor am I seeing any evidence that this will in turn raise worker salaries.

[Trillo]

19. Now hold on one minute,

isn't that just what creative accountants do? Shift numbers around, take a few cents off workers raises and or benefits, so shareholders feel good about the 20% raise given to the CEO. Even in times of decreased performance, CEO salaries keep going up. What other possibility is there if it isn't shifting numbers around?

And as for making 'something out of nothing', that's precisely what bankers do. A person comes in for a loan, gets approved, and the bank creates the money out of thin air (subject to fractional reserve requirements).

Why is it that what those at the upper portion of the pyramid do is good when they do it for their own benefit, but bad when the same thing is done for the benefit of those lower in the pyramid.

Frankly, your post reads like sarcasm, while your point about producing something seems in mainstream thought. This, also, has it's own problems. For one example, the environment. Making more things is hard on limited earthly resources, etc.

Still, it's hard to argue that if you have 100 people, and only 50 apples, the best thing to do is figure out how to grow 50 more apples instead of cutting every apple in half.

Of course, no one seems to mind if the CEO takes 40 of the apples for himself and leaves the other 10 to be divided up among the 99 others. Part of economics, it seems, is convincing other people that the CEO taking 40 of the apples is a good thing.

[Lyric]

2. I think the simplest solution is to raise the salary cap n/t

[SoCalDem]

3. Eliminate the cap...and include "unearned" income

like interest on all that ill-gotten loot that's been hoarded for centuries by a few choice families :)

They GOT it by cheating the system (and all of us little-people)

[Rhythm and Blue]

4. Bingo nt

[MercutioATC]

18. I hit the FICA cap every August......and I agree with you.

Yes, it'd be money out of my pocket, but it's the fairest way to deal with at least part of the problem.

[Yupster]

10. Two part plan

1. Eliminate the cap.

2. Bring all workers into the social security system. It's a universal system with millions of workers excempted from it, mostly schoolteachers.

Those two changes would solve the problem and are both fair anyway.

Why should only some income go towards social security? Of course the benefit formula should go up as the premiums go up too, but that wouldn't mean much as the bendpoint formula to figure benefits is incredibly progressive.

Why should millions of teachers not be in social security anyway? Of course they should be.

[The Inquisitive]

5. because that will change nothing

you increase nominal wages that way, no real wages. All that would happen is the price level would rise and wages would have to continually jump to meet them. That's it in the most basic sense, there is a long ripple effect and a bunch of feed back mechanisms that would prevent your solution from working.

If you want to increase the US workers wages you have two solutions. Work on decreasing income desparity, or the Gini Factor, and increase GDP per Capita.

[TahitiNut]

11. I've said that REPEATEDLY.

By far, the best action taken to enhance the health of the Social Security system in the last 6 years was to increase the federal minimum wage. Absolutely EVERY dollar of increased payroll also increased the payroll taxes going into the Social Security system.

The WORST impact on Social Security has been from the "war on the middle class" ... which has depressed payrolls for the "bottom 90%" who're the people who sustain Social Security.

The Social Security system is like a canary in a coal mine. When we hear about some projected shortfall, it's a warning that the working class is getting SCREWED.

On top of this, the labor force has lost TEN MILLION JOBS from what merely AVERAGE growth would offer in the last 6-7 years. That's ten million fewer workers participating in the economy and contributing to the retirement of their parents and grandparents.

[Lasher]

15. Demand side economics.

True that. And increased wages for workers in general would help the overall US economy.

[aquart]

12. No, it's dumb. Beyond dumb.

I worry sometimes. I just do. Talk about witless thoughts.

[alofarabia]

13. Means test. Bill Gates should not get social security

benefits on the backs of regular workers. It's a tax, and there are lots of taxes that we pay for which we recieve no tangible benefit (for example, singles and childless couples pay property taxes that go to schools, which doesn't directly benefit them).

Of course, the challenge would be to establish the correct ceiling and methodology to determine when you don't qualify for social security benefits. Some kind of sliding scale, I would imagine.

[AdHocSolver]

14. A better plan: bring jobs back to the U.S.

You increase the social security fund without having to change any rates just by creating more jobs here. You bring jobs back to America by changing the tax laws and import laws to "encourage" companies to pay Americans for doing the work. More employed Americans means more people paying social security tax.

So-called "free trade" is a fraud. It only works to the benefit of the corporations because of the way the tax laws and customs laws are set up. Change the rules to make it more profitable to keep the jobs here and you solve many problems at the same time.

Why is exporting jobs a fraud? Because it does not save the American consumer any money. The savings in labor costs are more than offset by higher corporate profits, bigger executive salaries, and higher transportation costs. An example. I went to a local department store to buy some socks. I decided on a house brand and picked a 2-pack of socks off the shelf. I noticed they were labeled made in the U.S.A. I thought as long as I am here why not get another package. The next package was the same exact price, but labeled made in China. Even if the U.S. worker was paid only minimum wage, the Chinese worker was paid at most one tenth as much. Yet, I would be paying the company the same amount for either package. I put the made in China package back.

Another time I went to buy a sweater. There were two "designer" labels and a house brand sweater. The designer label sweaters were all made off-shore and were higher priced than the house brand that was made in the U.S.A. I remember reading a few years back that the Nike shoes that Americans were shelling out as much as $100 for cost $3.00 to manufacture in Asia.

The corporations tell Americans if you lose your job, just go back to school and update your skills for that high paying high tech job. Well, the high tech jobs have all been sent off-shore to Asia. What's more, they are all done by low paid workers who don't even have college degrees. All the manufacturing is automated anyway. You don't need a high tech education to manufacture the stuff.

[Dunedain]

16. I say

Remove the cap and raise a bottom.
To me, that's simple and doable.




I also say stop spending it in the first place.

[JTFrog]

17. Must have record profits. Screw the people.

The two party system represents 4% of the people and 100% of the corporations.