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Originally posted by generalissimoI've been keeping my eye on the UK and will do so as things continue to unfold. They still have a lot of compromising to go before they become solvent.
http://www.bbc.co.uk/news/uk-politics-11462986
[b]Universal allowances, such as child benefit, could be curbed to help fund a major shake-up of the welfare system, David Cameron has indicated
"The prime minister wants to wrap all existing out-of-work benefits into a single payment that encourages work.
Speaking as the Tory conference got ...[text shortened]... discouraged rather than perpetuated by the system. These are certainly admirable measures.[/b]
I have a hunch that within twenty years we'll be looking back at them as a case study.
Originally posted by badmoonSimply lowering the retirement age does not allow people to retire. Presumably there would be an actuarial reduction in the amount of retirement income (income replacement) at a younger age. Health care is also an issue for retirees, and Medicare does not begin until age 65. Less income coupled with the cost of private health insurance can be significant deterrents to “early” retirement. To remove those deterrents comes at a cost—to somebody.
The retirement age in the US to get SS should be lowered to 60 and 62. Get the older workers off the payroll so younger workers can get jobs.
At the same time, let’s realize that “normal” retirement age is a rather arbitrary construct. And workers, whose deferred wages into pension funds often represent their primary capital investment (perhaps only second to a home!)—as Theresa Ghilarducci, mentioned in the article cited by No.1, pointed out years ago—are not generally allowed to retire whenever they want. The same for beginning to collect the return from wages deferred through taxation into Social Security. They may have to wait longer than they would like—and than they originally expected to if retirement ages are raised. They may have to retire earlier than they would like, because of health or disability.
Imagine having your money (deferred wages) invested in a secure, collective mutual fund. Part of the security—as well as the relatively low necessary wage-deferrals—is based on actuarial calculations as to average mortality, disability and retirement age. Part of the attractiveness of this retirement vehicle is, as mentioned, the low cost of investment, relative to promised payments (which means that you can also, if you wish, invest (save) other money in riskier individual, as opposed to collective, accounts).
Then imagine that those who run this mutual fund get to change the age at which you can begin to collect. As they wish. In spite of what the contract was at the time your wage-deferrals into the fund began. Whether or not you’re talking about a private (defined benefit) pension plan or a social security program, the analogy remains. From the worker-investor’s point of view, it is simply license to violate the original contract.*
Raising the retirement age for people who are already invested in such a program is nothing other than a benefit cut, based on the lower life-expectancy—and hence the less income collected—at higher retirement ages (not to mention the lower actuarial probability that the individual will survive to collect a return on their wage-deferrals at all). That is the whole idea behind raising the retirement age: to reduce costs by reducing the amount of the payout.
It always seems so easy to recommend violating the contracts on which someone else’s livelihood depends.
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* I realize that U.S. Social Security is an inter-generational transfer program, and that the analogy is therefore not exact. That does not change the fact that retirees under the program receive benefits based on their wage-deferrals (via taxation) over the years. In any defined benefit program, it is payout-amounts, not interest-rate returns, that are purchased by the wage-deferrals.
Originally posted by highdrawHere is another quote from Uncle Ben.
Its important to make the poor uncomfortable in their poverty....Ben Franklin
"It would be a hard government that should tax its people one-tenth part of their income."
Of course, I ran across this quote from Reagan and had to share it.
"The governments view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."
I sure miss Ronny. :'(
Originally posted by whodeyI thought you were so worried about deficits? And yet you "miss" the man responsible for a large part of the current US debt?
Here is another quote from Uncle Ben.
"It would be a hard government that should tax its people one-tenth part of their income."
Of course, I ran across this quote from Reagan and had to share it.
"The governments view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."
I sure miss Ronny. :'(
Originally posted by telerionThread 134528 : UK as badly off if Ireland, if it were as honest
I've been keeping my eye on the UK and will do so as things continue to unfold. They still have a lot of compromising to go before they become solvent.
I have a hunch that within twenty years we'll be looking back at them as a case study.
Originally posted by zeeblebotAs things stand, I consider off balance sheet obligations as just very unlikely payouts, but you point is well made.
Thread 134528 : UK as badly off if Ireland, if it were as honest
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Originally posted by KazetNagorraMy point here is that we should not have to tax the citizenery to death because of its out of control spending. But you are correct, taxes do need to go up as does cutting spending. The question is when? I think we can both agree that a healthy economy produces much more revenue than a sick one. So then should government wait to raise taxes until the economy has recovered so that it will not hinder growth that creates a healthy economy?
I thought you were so worried about deficits? And yet you "miss" the man responsible for a large part of the current US debt?
Originally posted by whodeyThat's the big question in fiscal policy circles. There's no consensus yet, but I think the general (non-partisan) view is that we should hold off on increasing taxes and cutting spending programs until the economy has recovered. Then there needs to be a very serious discussion about broadening the tax base and lowering rates as well as some explicit expectations management of entitlement programs. Ideally, lawmakers will come up with a proposal in which nearly everybody (except the most desperate) have to put some skin in the game either from additional taxes or reduced programs. That way nobody's left feeling like they are getting screwed over.
My point here is that we should not have to tax the citizenery to death because of its out of control spending. But you are correct, taxes do need to go up as does cutting spending. The question is when? I think we can both agree that a healthy economy produces much more revenue than a sick one. So then should government wait to raise taxes until the economy has recovered so that it will not hinder growth that creates a healthy economy?