Most citizens understand the problem with Social Security Trust shortfalls is not the amount of funds being used by today's seniors as longevity grew----it was persistent looting of our public trusts over these few decades of CLINTON/BUSH/OBAMA. Simply recovering a fraction of the tens of trillions of dollars in Wall Street and corporate fraud placed back in our SS Trust and Medicare Trust would maintain our developed nation quality of life. EASY PEASY. Social democrats shouting for EXPANDED AND IMPROVED SOCIAL SECURITY see removing the cap on higher wage earners regarding payroll taxation as shoring up SS Trust for the long-term for everyone. The expansion comes to those left long-term unemployed and losing their pensions, homes, et al making sure they have that minimum senior monthly payment. Yes, they earned it----it simply replaces what these few decades of systemic fraud took from WE THE PEOPLE.
All this can be done with our existing Federal Social Security very easily---no changes needed. What Roosevelt Institute and progressive posing Clinton/Obama Wall Street neo-liberals want to do is REGRESSIVE----AND PRIVATIZES SOCIAL SECURITY TO THE WALL STREET MARKET.
We've talked much about Obama's myRA-----this is the structure that becomes that privatized SS. It pretends to be VOLUNTARY CONTRIBUTIONS OF PAYROLL TAXES-----but the structure will replace what is our current payroll deductions sending all that revenue to Wall Street accounts. It's true that is what CLINTON/BUSH/OBAMA have done these few decades and it is why the SS Trust has dwindled. They just want to make it official.
REWRITING THE RULES OF THE AMERICAN ECONOMY:
AN AGENDA FOR SHARED PROSPERITY
Roosevelt Institute on Social Security
Our system of public retirement savings, in the form of Social Security, remains strong and effective. Administrative costs are but a fraction of those in the private sector, and recipients of
Social Security are protected against fluctuations in stock prices and inflation.
The main concern with our public Social Security program is budgetary:
there is a worry that it is not self-sustaining. Whether it is or is not depends on a large number of variables that will inevitably change over the relevant time horizon—the next half-century. What is clear is that we may need to make adjustments as time goes on. And there are many ways that we can make such adjustments. For example, we should remove the payroll cap that limits the amount of revenue Social Security raises. In addition, the government should expand retirement security by providing a voluntary public retirement program above Social Security to further supplement retirement security. The plan could be modeled on private individual retirement accounts (IRA), but the public would
have many additional benefits.
Lower transaction costs and reduced opportunities for exploitation are immediate advantages. But the government could also match savings for the worse off—the opposite of our current system for encouraging savings, which overwhelmingly subsidizes the rich.
Such a program, what might be thought of as a public option for retirement, would be unsubsidized, but would provide competition and standards for the private sector. In the end, all would benefit from this greater true competition in financial services.
Here we see where Obama and Roosevelt Institute took this 'social benefit' policy to save SS -----CATO Institute. Here is where I shout to my Republican friends that Heritage and CATO as right-wing public policy think tanks that used to be conservative have these few decades under Bush neo-cons long left conservatism----and joined the far-right global Wall Street neo-liberalism. This SS privatization policy was written during the Clinton era and Clinton started the attack on our SS Trust ----Bush super-sized those attacks---and Obama imploded the entire SS Trust with today's subpriming of our government bond markets.
Roosevelt Institute uses all the same social Democratic terms FDR did as he created this senior retirement system in the New Deal----they simply intend to kill it and allow Wall Street to more easily use those funds as fodder.
Social Security Choice Paper No. 8
A Plan for Privatizing Social Security
By Peter J. Ferrara
April 30, 1997Executive Summary
As Social Security’s problems become more apparent, there is growing support for the concept of privatizing the retirement program. As the debate grows it becomes more important to move beyond generalizations and provide detailed proposals for how such privatization can be accomplished. Without endorsing any specific proposal, the Cato Project on Social Security Privatization will present a number of possible privatization scenarios.
In this study, Peter Ferrara offers a proposal based on the following key elements:
- Current workers could be free to choose either the private option or Social Security. For those who choose the private plan, workers and employers will each pay 5 percent of wages, instead of the current Social Security payroll tax of 6.2 percent for each, into private investment accounts, resulting in an eventual payroll tax cut of 20 percent. Besides supporting retirement benefits, the accounts would finance private life and disability insurance, thus replacing Social Security survivors and disability benefits.
- Workers who opt out of the current Social Security system would receive recognition bonds from the federal government that would pay them a proportion of future Social Security benefits equal to the proportion of lifetime taxes they had already paid.
- Benefits promised to current retirees would be paid in full, with no reduction of any kind.
Indeed, the yearly transition deficit would be offset after about 14 years. After that, the privatization reform actually starts producing a surplus for the federal government. About 20 years after the reform is begun, that surplus would be large enough in 1996 dollars to eliminate completely a federal deficit as large as today’s.
These projections place the transition in a whole new perspective. They show that the transition is financially feasible and manageable, and that modest short-term sacrifices would lead to long-term surpluses that would ultimately reduce the federal budget deficit.
I showed that World Bank chart having both the US and Canada together reduced to 7% of global middle-class and we know that will be moving to the NEW definition of middle-class. The bulk of SS Trust funds come from payroll deductions from the middle-class----then the working class so if wages and salaries are going to go THAT LOW-----Wall Street has eliminated the base filling that retirement fund. NO REVENUE TO LOOT SAY THE 1% WALL STREET----we need to lift the cap for payroll taxes to hit the affluent citizens to keep that pot of money to loot.
So, lifting the cap for payroll taxes to include the affluent is NOT to save SS Trust for today's middle/working class------they are creating a NEW NEW DEAL where this retirement trust is privatized and hits the only group of citizens still having any wealth----the affluent 5% to the 1%. Think those 5% will see any of those payroll tax deductions in this privatized SS Trust?
Remember this stat?
'Look where the World Bank has the US with Canada in 2030 regarding middle class---7%. Asian Pacific looks high at 66% but that is a middle-class mostly at $20-30 a day. Now, let's think where much of that small amount will go----children's education'.
'Some Democrats want to expand Social Security -- but a new effort to push 401(k)-style accounts poses a real threat'
To bring American wealth down to developing nation wealth all under the guise of wealth justice for those black and brown global citizens toiling in International Economic Zones for no money-----the middle-class wealth includes its retirement accounts both pension, 401K, and this SS Trust. We talked how this coming economic crash targeting the bond market will take out those pensions and 401Ks------this is the plan that will take out the American SS retirement structure.
Wednesday, Feb 5, 2014 07:43 AM EDT
The quiet war on Social Security: Meet the dark side of MyRA
Some Democrats want to expand Social Security -- but a new effort to push 401(k)-style accounts poses a real threat David Dayen
You cannot understand the Obama administration’s new retirement savings account, known as “myRA” (short for my retirement account), without understanding the underlying dynamic inside the Democratic Party over retirement security. In this sense, myRA is a deliberate distraction from the emerging movement to expand Social Security, to ensure everyone has a measure of dignity in retirement.
A year ago, the Social Security expansion movement was limited to dreamers, and had little to no clout on Capitol Hill. But thanks to some dogged determination, liberals began to recognize that the country stood at the precipice of a retirement crisis. Years of conversion from defined-benefit pensions to defined-contribution 401(k)-style plans made returns uncertain and subject to the vicissitudes of the stock market (as well as the greed of mutual fund managers, who subjected accounts to high fees, eroding the balances). Meanwhile, the savings rate plummeted amid stagnant wages (indeed, the savings rate is currently at historically low levels). What was once a three-legged retirement stool – pensions, savings and Social Security – had been whittled down to one. And the only viable way to avoid a disaster of baby boomer seniors falling into mass poverty is to expand the last leg of the stool, Social Security.
This notion of expansion gradually began to pick up adherents, from activist organizations like MoveOn.org and the Progressive Change Campaign Committee to think tanks like the New America Foundation. In November, Elizabeth Warren endorsed expanding Social Security in a speech on the Senate floor. The expansion movement had some momentum, and tangible legislation from liberal Tom Harkin and moderate Mark Begich to rally behind.
ALL OF THE GROUPS ABOVE ARE CLINTON WALL STREET NEO-LIBERAL OUTLETS-----THEY WERE POSING PROGRESSIVE WITH EXPANSION STANDING BEHIND THIS ROOSEVELT INSTITUTION STANCE ON SOCIAL SECURITY.
It is in this context that you must place the myRA policy. The Obama administration clearly heard the growing demand to do something about retirement. In a speech in Pittsburgh the day after the State of the Union address, President Obama said that “if you’ve worked hard all your life, you deserve a secure retirement,” adding that most workers don’t have a pension anymore, and while “a Social Security check is critical … oftentimes that monthly check, that’s not enough.”
But instead of going ahead and endorsing Social Security expansion, Obama introduced myRA, a glorified savings account deducted from your paycheck in amounts as little as $5. It’s portable from job to job, and it earns a small amount of interest, the same as the Thrift Savings Plan for government workers. The account can never go down in value, and it’s backed by the full faith and credit of the U.S. government. Plus, you can withdraw the funds whenever you want without a penalty.
This is a nice thing to have, but has little to do with retirement. Americans don’t need a new savings account vehicle; they need higher wages so they can actually manage to save a few dollars out of every paycheck.
In fact, every benefit of the myRA – portability, easy access, protected investment, small interest accumulation, government protection and no fees – could be accomplished through an interest-bearing savings account distributed through the post office, as it did from 1911 to 1967.
HERE YOU SEE YET ANOTHER WALL STREET POLICY FOR SOCIAL SECURITY----WHY WOULD WE TIE OUR SOCIAL SECURITY TRUST TO THE BOND MARKET? THAT IS WHERE IT IS RIGHT NOW.
Postal banking, recently endorsed by the inspector general of the Postal Service, would serve a triple role – promoting savings, helping the Post Service survive, and cutting out the greedy middlemen like payday lenders and check cashing stores that cost the 68 million Americans with little or no access to financial services nearly $89 billion a year. The inspector general says that postal banking, too, could be accomplished by executive order.
In fact, postal banking avoids one potentially malign implication of myRA. The accounts are capped at $15,000: After that, the account holder must roll them into a Roth IRA, subjecting the money to the whims of the market – and handing it over to Wall Street fund managers. You can see myRA in this context as a veal fattening pen for small savers before they get led into the Wall Street slaughterhouse. The administration has yet to finish the Department of Labor’s fiduciary rule, which would force investment advisers to act in the best interests of their clients. Until that gets done, it’s foolhardy to funnel more savings into Wall Street’s hands.
The administration would tell you that the myRA is a small-ball solution merely because it was all they could accomplish without Congress’ involvement, and that it’s a good first step, to get people to think about saving for retirement. But you have to understand what the administration wants Congress to do about retirement security. The president said it in his Pittsburgh speech: “Let’s fix an upside-down tax code that right now gives the wealthiest Americans big tax breaks to save, but does almost nothing for middle-class folks, doesn’t give them the same kinds of tax advantages … And we need to give every American access to an automatic IRA on the job, so they can save at work.”
The president rightly calls out retirement tax preferences that flow to the wealthy; in fact, these subsidies are massive – over $140 billion a year – and the New America Foundation study on expanding Social Security identifies them as a source of revenue that could pay for the entire expansion. But that’s not what the president wants to do. He wants the middle class to get the same kind of subsidies so they can open their own IRAs – automatically enrolled IRAs, in fact (a behavioral economics nudge, to force people to invest). He wants to double down on a failed system where retirement savings are leashed to the stock market.
That’s the real battle over retirement security inside the Democratic Party. The Obama wing wants the private market – in this case, private retirement accounts – to solve the problem, while the progressive wing wants government to act and deliver a defined benefit through Social Security. Given that Social Security, even in its current state, is the most effective anti-poverty program in America, and 401(k)-style accounts have hastened a crisis, I know which approach I would choose.
It’s pretty clear, then, that myRA is an effort to distract from the burgeoning Social Security expansion movement, offering an alternative that remains grounded in the private market, to throw liberals off the trail. In fact, in a perfect example of how allergic the administration is to using government solutions in this area, even the myRA – a simple savings account – will be run by a private-sector money management firm. The White House chooses not to see how a government program that has been efficiently run for over 75 years can do the job of delivering dignity in retirement, without having to build a better mousetrap.
It’s fine to want to make the current mess of the employer-based retirement account system better – the aforementioned Tom Harkin has a bill to do just that – but liberals shouldn’t take their eye off the prize. They have the simplest, easiest-to-explain solution to this crisis: expand Social Security, and use the hundreds of billions in retirement tax preferences to pay for it. Anything less is a poor substitute.
What makes this version of privatization of SS Trust more repressive is the targeting of our very poor----which if things MOVE FORWARD WITH CLINTON/BUSH/OBAMA will be 99% of Americans---is they now need to save money from that meager amount they are paid to be socially responsible. Rather than deducting payroll taxes with a lower-end limit to keep the poor from losing wages they need as with FDR SS Trust-----they will be taking it from all wages. That $3 a day or $20-30 a day that would be exempt from SS payroll deductions will now send money to a privatized fund everyone knows no one will see when they retire.
THIS IS THE BOOTSTRAP MENTALITY THAT APPLIES TO THE POOR----BUT CORPORATE WELFARE QUEENS ARE FINE.
Basically what these 'retirement' structures become is a COMPANY STORE situation where what little one earns returns to the corporation for what they call GLOBAL CORPORATE SOCIALISM. There is no retirement in developing nations----they work until they cannot---and hope their families take care of them.
States around the nation had CLINTON WALL STREET NEO-LIBERAL candidates running with this same poverty myRA account at the state level----in Maryland that was Heather Mizeur---posing progressive in helping the poor with this everyone-in payroll reduction.
Does anyone really think the global corporate campus company store is going to be there for human capital bringing no profit? REALLY???
myRA: Helping Millions of Americans Save for Retirement
February 11, 2014 at 5:20 PM ET by David Hudson
President Obama announced in his State of the Union address that he is directing the Department of the Treasury to create "myRA" -- a safe, simple, and affordable "starter" retirement savings account that will ultimately help millions of Americans begin to prepare for retirement.
Let’s do more to help Americans save for retirement. Today, most workers don’t have a pension. A Social Security check often isn’t enough on its own. And while the stock market has doubled over the last five years, that doesn’t help folks who don’t have 401(k)s. That’s why ... I will direct the Treasury to create a new way for working Americans to start their own retirement savings: myRA.
— President Barack Obama, State of the Union, January 28, 2014
The most secure retirement requires a three-legged stool that includes Social Security, savings, and pensions. Although Social Security will remain a guaranteed benefit all Americans can rely on, about half of American workers, and 75 percent of part-time workers, lack access to employer-sponsored retirement plans like 401(k)s.
These plans are usually the most effective means of saving for retirement. That’s why President Obama announced in his State of the Union address that he is directing the Department of the Treasury to create "myRA" -- a safe, simple, and affordable "starter" retirement savings account that will ultimately help millions of Americans begin to prepare for retirement.
What is myRA?
myRA is a new type of savings account for Americans who don’t have access to an employer-sponsored retirement savings plan. Workers who sign up will be able to have a portion of their paycheck directly deposited into their myRA automatically every payday.
What are the benefits of myRA?
It’s simple: Contributions as low as $5 can be made through easy-to-use payroll deductions. Savers can keep the same myRA when changing jobs, and can also roll the balance over to a private-sector retirement account at any time. Savers will also be able to withdraw their contributions tax free at any time.
It’s safe: Contributions to the account are invested in a Treasury security, which means it will be backed by the full faith and credit of the United States. myRA’s feature government-backed principal protection, so the account balance will never decrease in value, and will earn the same interest rate that is available to federal employees for their retirement savings.
It’s affordable: There are no fees, and workers can enroll in the program with a minimum contribution of $25, and add to their savings through regular direct deposits as low as $5 each payday.
How do workers sign up for myRA?
By the end of 2014, workers whose employers choose to participate in an initial myRA pilot program will be able to sign up online. Employers will neither administer the accounts nor contribute to them, but will send the direct deposit to each participating employee’s myRA.
Other proposals to help Americans save for retirement:
In addition to myRA, the President will work with Congress on two other proposals to help Americans save for their retirement.
Since half of all American workers lack access to employer-sponsored retirement plans, the onus is often on individuals to set up an IRA. Whereas 90% of workers automatically enrolled in a 401(k) plan through their employer make contributions, fewer than 10% of workers eligible to contribute to an IRA voluntarily do so.
The President’s budget will propose to establish automatic enrollment in IRAs (or “Auto-IRAs”) for employees without access to an employer-sponsored savings plan. Employers that do not provide a workplace savings plan would have to connect their employees with a payroll-deduction IRA. This proposal could provide access to one-quarter of U.S. workers.
Removing inefficient retirement tax breaks for the wealthy
Current retirement tax subsidies disproportionately benefit higher-income households, many of whom would have saved with or without incentives. About two-thirds of tax benefits for retirement saving go to the top 20% of earners, with one-third going to the top 5%.
The President has proposed to limit the benefits of tax breaks, including retirement tax preferences, for high-income households to a maximum of 28% of the value of the deduction or exemption. The President has also proposed to limit contributions to tax-preferred savings accounts once balances are about $3.2 million – large enough to fund a reasonable pension in retirement.
Here is an article from 2001----when Clinton was leaving and Bush coming to office. We knew back then that a growing national debt was taking our SS Trust. Bush/Cheney famously said as they allowed the national debt climb to $4 trillion-----national debt does not matter----so now Republicans and Clinton neo-liberals with Obama have that national debt to $20 trillion with the current bond market frauds---and yes, it does matter. This is how they will reduce what we currently know as our monthly Social Security payment attached to a developed nation COLA----Cost of Living-----and bring that SS payment down to this NEW middle-class retirement payment. When this crash hits----the Clinton/Bush/Obama crowd will pretend to be fighting over the growing national debt-----close government a few times and then use austerity to end our SS Trust.
Clinton/Obama 1% Wall Street Libertarian Marxism is now pushing for a basic income----paid throughout life that will become that third world senior retirement payment.
'Every dollar in the Social Security Trust Fund is matched by a corresponding dollar of national debt'
Below is another right wing privatization article but it rings true as to our SS Trust being used as fodder. It is true as well that Gore----as a Clinton neo-liberal POSING PROGRESSIVE with this LOCK-BOX policy----know what would stop the looting of SS Trust? Reagan moved our SS Trust into the general funds of the US Treasury so they could be looted----
SIMPLY RETURN THEM TO THAT PUBLIC TRUST OUT OF US TREASURY HANDS. EASY PEASY.
Gore of course didn't want to take SS Trust from US Treasury---he wanted to PRETEND a lock box would keep Wall Street pols out of our PUBLIC TRUSTS. As for the Republicans always shouting to privatize retirements----where are all the pensions, 401Ks, and real estate investments many Americans tied to the stock market?
The purpose of this essay is to explain a complicated and important issue in practical terms. For those who are interested in the technicalities, the footnotes contain detailed documentation to complement and substantiate the main text. All financial data is based on figures produced by the U.S. government. Since these figures are constantly changing, for the purpose of uniformity, the year 2000 is used as a baseline.
The Impact of Social Security on the National Debt
By James D. Agresti
September 1, 2001
As of December 2000, more than a trillion dollars of the U.S. national debt is owed to the Social Security program. This amounts to $3,600 for every man, woman, and child living in the United States. By 2015, this figure is projected to reach $9,000 per person, burdening young people with a debt that they had no part in creating. To make matters worse, some politicians are pushing a proposal to "save Social Security" that would increase this figure dramatically.
This essay will explain and substantiate the following points:
- Citizens are being misled about the national debt.
- Despite what you've been told, the budget has not been balanced for the past 3 years.
- Every dollar in the Social Security Trust Fund is matched by a corresponding dollar of national debt.
- What is referred to as "raiding the Social Security Trust Fund" has no effect on the Social Security Trust Fund. Its real effect is to raise the national debt.
- What is referred to as "putting Social Security into a lockbox" has no effect on Social Security.
- Some politicians are promoting a plan to "save Social Security" that could add 9 trillion dollars to the national debt.
- Privatization would block politicians from using Social Security as a smokescreen to run up debt behind the backs of citizens.
More often than not, when a politician or reporter uses the term "national debt," they are not really referring to national debt. They are only referring to a portion of it. The United States government divides the national debt into two categories:
- Money that it owes to federal entities such as the Social Security program.
- Money that it owes to non-federal entities such as individuals who have purchased U.S. Savings Bonds.
Debt owed to federal entities
2.7 trillion----Social Security Trust
Debt owed to non-federal entities
National debt (total)
The debt owed to federal entities accounts for more than 45% of the national debt, yet it is often dismissed or ignored. The excuses that people use to justify disregarding this portion of the national debt generally run along the lines of, "This is just money that the federal government owes to itself. It's only a bookkeeping device. It's as if you owed money to yourself." This line of reasoning ignores the fact that U.S. taxpayers have to pay for this debt. The federal law that governs the payment of the national debt draws no distinction between money owed to federal versus non-federal entities. Both must be paid with interest.
A prime example of downplaying the debt owed to federal entities appears in a 207 page economic plan published by the Bush administration. Not until page 201 is there any mention of the full national debt. This plan states that Bush will retire "$2 trillion in debt over the next ten years." The problem is that this figure only applies to the debt owed to non-federal entities. What about the rest of the debt? Buried in a table on page 201, we find that the debt owed to federal entities increases by 3.8 trillion dollars, and the overall national debt increases by 1.5 trillion dollars.
Worse than this, some people completely ignore the debt owed to federal entities, but have no problem with including it in the assets of the federal programs to which the money is owed. During the 2000 presidential race, the Gore-Liebermann campaign released a 192 page economic plan that contained over 150 uses of the word "debt." This plan does not mention or even acknowledge any of the debt owed to federal entities. Yet, the plan states that the Social Security program will remain solvent until 2037.
Contrast this assertion with the fact that in 2015, the Social Security program is projected to start spending more money that it collects in taxes. This is a 22 year discrepancy. How does Social Security stay solvent for 22 years while spending exceeds tax revenue? It collects on the money that it has loaned to the federal government; i.e. the debt owed to federal entities. If Gore and Liebermann want to dismiss the debt that the federal government owes to Social Security, to be consistent, they would also have to state that the program would become insolvent in 2015. But they don't do this. They pretend as if the federal government doesn't have to repay the money that it has borrowed from Social Security while simultaneously including this money in the assets of the Social Security program.
Members of both political parties have distorted this issue on numerous occasions, and the vast majority of news reports on the subject that have been reviewed by Just Facts contain varying degrees of misrepresentation or inaccuracy. A simple rule of thumb to keep yourself from being duped is to be familiar with the numbers. As of December of 2000, the national debt is about 5.7 trillion dollars and the annual interest on it is about 373 billion dollars. If your favorite newspaper or public servant cites figures that are significantly different, be aware. The U.S. Government keeps an up to date accounting of the national debt at http://www.treasurydirect.gov/NP/BPDLogin?application=np [Revised 9-27-09]
Despite what you've been told, the budget has not been balanced for the past 3 years
Since 1998, politicians, TV networks, radio stations, magazines and newspapers have referred to the budget as "balanced." This is not consistent with the fact that the national debt has risen every year since 1960, including 1998, 1999, and 2000. The numbers below come directly from the United States Bureau of the Public Debt.
Fiscal Year Closing
National Debt (billions)
September 30, 1997
September 30, 1998
September 30, 1999
September 29, 2000
How can the budget be "balanced" while the national debt is rising? It depends upon on how one defines the "national debt." If someone's definition of national debt excludes the debt owed to federal entities, they are not accounting for the interest on the debt owed to federal entities. This is exactly what has been going on.
Every dollar in the Social Security Trust Fund is matched by a corresponding dollar of national debt
The "Social Security Trust Fund" is an account that contains the assets of the Social Security program. In 52 of the 63 years that Social Security has existed, it has run surpluses.What does Social Security do with this surplus money? By law, the only thing that Social Security can do with this money is to purchase federal bonds. Consequently, all of the assets in the Social Security Trust Fund are in the form of federal bonds.
A point worth noting here is that buying federal bonds is the same thing as loaning money to the federal government. When someone buys a federal bond, what they are buying is a promise from the federal government to return to them the money that they paid for the bond plus some interest. When a person borrows money, it is referred to it as "borrowing money." When the government borrows money, it is referred to "issuing bonds." The next time you run up $1,000 on your credit card, tell yourself or your spouse that you are issuing bonds. It sounds a lot better, and it may get you off the hook; at least in the short term.
For this reason, some people refer to the bonds in the Social Security Trust Fund as "worthless IOU's." This characterization is inaccurate. The bonds in the Trust Fund are as real as any U.S. Savings Bond that you might happen to own. The Social Security program loaned this money to the federal government and has a legal right to receive it back with interest.
This can be a difficult concept to grasp, because it doesn't make sense that the federal government owes money to a federal program like Social Security. The key to keeping this straight in your head is to be aware of the following facts:
1) The Social Security program levies it own taxes.
2) The finances of the Social Security program are separated by law from the rest of the federal government.
On the other hand, some people talk about the Social Security Trust Fund as if it were a pile of money sitting in a vault in Washington D.C. This is also inaccurate. The federal government has borrowed this money from Social Security and used it for other purposes. When Social Security cashes in its bonds, the federal government will need to come up with the money to pay Social Security back. Where is this money going to come from?
The federal government has two options:
Take it from people by taxing them, or borrow it.
The bonds in the Social Security Trust Fund are assets for those people who will be receiving Social Security benefits at the time when these bonds are cashed in, but these same bonds are also debt for those people who will be paying income taxes at that time. As a side note, the national debt is not paid for with Social Security taxes. It is paid for with income taxes, corporate taxes, sales taxes, and excise taxes.
To summarize, the Social Security program has assets; not worthless IOU's, but every dollar in the Trust Fund is matched by a corresponding dollar of national debt.
What is referred to as "raiding the Social Security Trust Fund" has no effect on the Social Security Trust Fund. Its real effect is to raise the national debt
When a politician is looking to scare up votes from senior citizens, a tried and true tactic is to accuse their opponents of "raiding the Social Security Trust Fund." It may be hard to accept the following facts because people have been told the opposite for years, but not only is it against the law to touch the Social Security Trust Fund for anything other than Social Security, it has never happened.
Many people make the mistake of thinking that President Lyndon B. Johnson started using Social Security Trust Funds to finance other government programs. In 1969, Johnson started combining the financial data of the Social Security program with the financial data of the federal government for the purpose of reporting the budget. Up until that time, when the federal government reported its budget, it treated Social Security consistent with the fact that its finances are separated by law from the rest of the federal government. In 1969, the federal government was running a deficit and the Social Security program was running a surplus. By adding the two together, Johnson was able to tell the American people that the federal budget had a surplus, while in reality, it had a deficit. This was a considerable negative because the budget deficit was hidden from the public, however, Johnson did not change the actual finances of the federal government or the Social Security program; only the manner in which they were reported.
So what does "raiding the Trust Fund" mean? When Social Security loans money to the federal government, the government can either spend the money or use it to pay off someone else that the federal government owes money to. If the federal government spends the money, this action is what some people refer to as, "raiding the Social Security Trust Fund."
This is an inaccurate description of what is taking place because not one dime is taken out of the Social Security Trust Fund. Examine this scenario from Social Security's standpoint. Social Security loans money to the federal government and will collect on the money and interest in the future. Now examine it from the federal government's standpoint. The federal government borrows money from Social Security and spends it. This increases the national debt.
The point to realize here is that it is not Social Security or senior citizens who get a raw deal in this situation, but younger people who will be stuck paying the debt in the future.
What is referred to as "putting Social Security into a lockbox" has no effect on Social Security
"I will put Social Security into a lockbox." This is one of the most common campaign promises. What does it mean? It means that Social Security loans its surplus money to the federal government, and the federal government uses the money to pay off someone else it owes money to.
Examine this scenario from Social Security's standpoint. Social Security loans money to the federal government and will collect on the money and interest in the future. As far as Social Security is concerned, this is no different than what happens during the so-called "raiding the Trust Fund" scenario. Now look at this from the federal government's standpoint. The federal government borrows money from Social Security and uses it to pay off debt that it owes to someone else. This leaves the national debt exactly as it was. It's like using one credit card to pay off another.
Although the effect on Social Security and the national debt is neutral, it would be great if this always happened, because the alternative is that the federal government borrows the money from Social Security and spends it, which increases the national debt. In 1999, Republican Congressman Wally Herger sponsored a "lockbox" bill in the House of Representatives. This law would have restricted Congress from using money borrowed from the Social Security program to spend on other government programs. It passed the House by a vote of 416 to 12. In the Senate, Republicans attempted to bring this bill up for a vote. To do this, 3/5 of the Senators must agree to do so. The motion to bring this bill up for a vote failed. 100% of Republicans voted for it. 100% of Democrats voted against it.
Again, the key point to realize is that there is no effect on Social Security. Also, in this instance, there is no effect on the national debt.
Some politicians are promoting a plan to "save Social Security" that could add 9 trillion dollars to the national debt
In 1999, the Clinton administration devised a plan to "save Social Security." Since then, Al Gore, Joe Liebermann, and the Democratic Party have endorsed and promoted this plan. By taking advantage of several of the canards exposed above, they portray it as responsible and painless, but the truth is that it would place an enormous financial burden on younger people. It works like this:
In the first debate of the 2000 presidential election, Al Gore stated:
"I will keep Social Security in a lockbox, and that pays down the national debt. And the interest savings, I would put right back into Social Security. That extends the life of Social Security for 55 years."
These assertions contain a series of lies that build upon one another to create a 9 trillion dollar illusion. This figure amounts to $32,000 for every man, woman, and child living in the USA.
Lie # 1 (the foundation): "I will keep Social Security in a lockbox, and that pays down the national debt."
As explained above, keeping Social Security in a lockbox does not pay down the national debt. It only pays down the debt to non-federal entities, which is offset dollar for dollar by increased debt to federal entities.
Lie # 2: " And the interest savings, I would put right back into Social Security."
Since the national debt remains unchanged, there are no interest savings. In addition, the average interest rate on the debt owed to federal entities is slightly higher than the interest rate on the debt owed to non-federal entities.
Lie #3: "That extends the life of Social Security for 55 years."
Since there are no interest savings, how does the Democratic Party intend to extend the life of Social Security for 55 years? A careful study of the proposal reveals that it actually involves taking money from the federal government and funneling it over to the Social Security program. It would obligate the federal government to pay 9 trillion dollars to the Social Security program above and beyond the money that the federal government legitimately owes to Social Security. Since the federal government is not projected to have this money, it would require increased taxes, cuts to federal programs, increased debt, or a combination of these.
The Gore–Lieberman economic plan asserts that the money used to extend the life of Social Security is "based on actual resources that are freed up by devoting the Social Security surpluses to debt reduction." For anyone not yet convinced that this is a bald-faced lie, consider the following. Gore's economic plan contains a 10-year budget proposal because this is the standard timeframe used for such proposals. It contains real numbers; i.e. "actual resources." How much money does this 10 year budget allocate to extending the life of Social Security? Not one penny. Gore's plan to "save Social Security" is structured so that none of the $9 trillion it requires is needed until 11 years into the future. Why 11 years? No reason is given. It corresponds to nothing except the date that his budget ceases to show "actual resources."
Most people don't have the time to dissect issues like this, and they are dependent upon the press to do it for them. After the debate referenced above, ABC, NBC, and CNN employed truth squads to judge the accuracy of Bush's and Gore's statements. None of these networks questioned Gore's assertions regarding this issue. To boot, the day after the debate, George Stephanopoulos, a member of ABC's truth squad, stated on Good Morning America that "Gore exaggerated a little bit …. but there were no big, big lies or distortions." Of course, it is always possible that 9 trillion dollars doesn't fit Stephanopoulos's definition of "big, big."
Privatization would prevent politicians from using Social Security as a smokescreen to run up debt behind the backs of the American people
SO, HANDING SOCIAL SECURITY DIRECTLY TO WALL STREET BY PRIVATIZING IS BETTER THAN MANIPULATION BY POLS? I THINK BOTH ARE THE PROBLEM.
Social Security in its current form is a tool that politicians can use to drive our country into debt without the public knowing about it. Between 2001 and 2010, the Social Security program is projected to collect 5,502 billion dollars in taxes and spend 4,726 billion dollars on benefits and administrative overhead. This leaves $776 billion in surpluses. If things remain as they are, the law requires that all of this money be loaned to the federal government. Once this money is in the hands of the federal government, it is up for grabs.
Privatization would put Social Security surpluses into the accounts of individual citizens. This money would be their personal property that no one could touch (including the individuals who own it) until they are eligible to receive Social Security benefits. The concept is simple: Get the money out of the reach of politicians. If they don't have it, there is no way they can spend it or take advantage of a confusing situation to make people believe that they are saving it.
Here we have our far-right 1% Wall Street Libertarians being pragmatic nilists again with what will become Marxism------this is what will replace a Social Security Trust that will simply be looted again and again.
This policy ends all social programs ---with a guaranteed payment for life. Of course---that payment today is made to look like our developed nation poverty and Cost of Living but it will become that third world Marxism----where everyone is paid that $3 a day or $20-30 a day from birth to death.
Something for which to strive!
Below you see the rebranding of CLINTON/BUSH/OBAMA into that far-right 1% Libertarian Marxism ending our public SS Trust having everyone living on the same low-level pay. Meanwhile, the 1% and their 2% are even more extremely rich. This is taking wealth inequity to the extreme---and this is where developing nations with International Economic Zones have had their citizens for decades------AND NOW THEY WANT TO BRING ALL THIS TO THE US!
Well, they say----you will be living, eating, being schooled on a global corporate campus in exchange for that basic income----
Talk about loss of free will, choices in life, climbing the economic ladder, your soul and freedom gone------that is what MAOist 1% Libertarian Marxism offers. But it does get rid of all those pesky FDR New Deal and MLK War on Poverty social programs AND our entire public sector----who needs the voice of WE THE PEOPLE!
As Stiglitz and those Roosevelt Institute folks would say-----WE NEED TO GET RID OF ALL THOSE RENT-SEEKERS so global corporations are operating efficiently ----that's SUSTAINABILITY.
These is rather long but please glance through to see where CLINTON/BUSH/OBAMA AS 1% WALL STREET LIBERTARIAN MARXISTS ARE GOING.
The Pragmatic Libertarian Case for a Basic Income Guarantee
August 4, 2014
From the perspective of anyone concerned with limiting government and encouraging individual responsibility, the contemporary American welfare state is a disaster. According to a report by the Cato Institute’s Michael Tanner, welfare programs at the federal level alone cost more than $668 billion annually, spread across at least 126 different programs. Add another $284 of welfare spending at the state and local level, and you’ve got almost $1 trillion dollars of government spending on welfare - over $20,000 for every poor person in the United States.
Not only does the U.S. welfare state spend a lot; it spends it badly. Poor Americans receiving assistance face a bewildering variety of phase-outs and benefit cliffs that combine to create extremely high effective marginal tax rates on their labor. As a result, poor families often find that working more (or having a second adult work) simply doesn’t pay. And still, despite massive expenditures by the welfare state, some 16% of Americans are left living in poverty.
Wouldn’t it be better just to scrap the whole system and write the poor a check?
In what follows, I will make the case for a Basic Income Guarantee (BIG) as a replacement for the current welfare state. There are a number of distinct ways of arguing from libertarian premises to a BIG, some of which I have discussed in the past. In this essay, however, I will focus on what I take to be the strongest and most persuasive libertarian argument. I will argue that a BIG, even if it is not ideal from a libertarian perspective, is significantly better on libertarian grounds than our current welfare state, and has a much higher likelihood of being achieved in a world in which most people reject libertarian views.
I begin in the next section by explaining what I mean by a BIG. I then proceed to set out four reasons why libertarians should support a BIG over the current American welfare state. I close with some reflections on libertarian ideals and political compromise.
A Basic Income Guarantee
For purposes of this essay, I will use the phrase “Basic Income Guarantee” quite broadly to refer to a wide range of distinct policy proposals, including Milton Friedman’s Negative Income Tax (NIT), Bruce Ackerman and Anne Alstott’s proposal for a Stakeholder Grant, the Thomas Paine / Henry George inspired idea of a citizen’s dividend, the Alaska Permanent Fund Dividend, and Charles Murray’s 2006 proposal for the government to write a $10,000 each year to every American citizen over the age of twenty-one. There is, of course, quite a bit of variation among these plans in terms of cost, payouts, implementation, and so on. Despite these differences, however, they all have in common two important features.
First, they involve a cash grant with no strings attached. Unlike other welfare programs which encourage or require recipients to consume certain specific kinds of good – such as medical care, housing, or food – a BIG simply gives people cash, and leaves them free to spend it, or save it, in whatever way they choose.
Second, a BIG is an unconditional grant for which every citizen (or at least every adult citizen) is eligible. It is not means-tested; checks are issued to poor and rich alike (though on some proposals payments to the rich will be partially or fully recaptured through the tax system). Beneficiaries do not have to pass a drug test or demonstrate that they are willing to work. If you’re alive, and a citizen, you get a check. Period.
A Pragmatic Libertarian Argument
No libertarian would wish for a BIG as an addition to the currently existing welfare state. But what about as a replacement for it? Such a revolutionary overhaul of the welfare state would almost certainly require a constitutional amendment, both to insulate debate somewhat from the pleas and protests of special interests, and to make it considerably more difficult to renege on the deal afterwards. Charles Murray has given us a rough idea of what such an amendment might look like:
Henceforth, federal, state, and local governments shall make no law nor establish any program that provides benefits to some citizens but not to others. All programs currently providing such benefits are to be terminated. The funds formerly allocated to them are to be used instead to provide every citizen with a cash grant beginning at age twenty-one and continuing until death. The annual value of the cash grant at the program’s outset is to be $10,000.
Suppose, to indulge in a bit of speculative fancy, that this deal was actually on the political table. Should libertarians take it? Given that it is not on the table now, should libertarians make some effort to get it there? I believe the answer to both of those questions is “yes.” A BIG might not be libertarians’ ideal policy – though more on this later – but it is almost certainly a lot better on libertarian grounds than what we have right now. Here are four reasons why.
Every one of the more than 126 federal welfare programs comes with its own bureaucracy, its own set of arcane rules, regulations, and restrictions, and its own significant (and rising) overhead costs. A BIG, in contrast, requires significantly less in terms of administrative expense. A program in which everyone gets a check for the same amount is simple enough to be administered by a computer program. And even a more complicated proposal, like Murray’s or like Friedman’s NIT, could largely piggyback off of the already existing bureaucracy of the federal tax system.
Eliminating a large chunk of the federal bureaucracy would obviously be good from the perspective of a libertarian concern to reduce the size and scope of government. But it would also be good from the perspective of welfare beneficiaries. Actually getting signed up for all the various welfare benefits to which one is entitled is tremendously costly in terms of time, effort, and skill at bureaucratic navigation. Many people miss out on benefits for which they qualify simply because they don’t know that the program exists, or what they need to do to draw from it. Getting the benefit of a BIG, in contrast, requires just a single signature on the back of a check. If we’re going to spend money on helping the poor, shouldn’t we make sure that they actually get the help we’re paying for?
Second, a BIG could be considerably cheaper than the current welfare state. How much cheaper depends on the details of the particular proposal. Some, like Murray’s, which involve a progressive tax on the BIG once a certain threshold of income is reached, appear to be considerably cheaper. Other analyses, like Ed Dolan’s, suggest only that a moderate BIG would not cost more than what we currently spend.
Part of the explanation of the relatively low cost of a BIG comes from the reduction of bureaucracy, described above. But another reason is to be found in Director’s Law: If you’re like most people, when you hear “welfare” you think about transfers from the rich to the poor. But in reality, most political transfers benefit the middle class at the expense of the poor (and rich). If the BIG is going to replace the welfare state, then transfers to the middle class such as subsidies for higher education, the mortgage interest deduction, and tax benefits for retirement savings ought to be cut right along with (if not before) SNAP, TANF, etc.
Again, how much a BIG would cost relative to the current welfare state depends on the details of the particular BIG proposal. Various proposals need to be evaluated on their own merits, and of course I do not wish to claim that every BIG proposal will be more affordable than our current welfare state. But neither is there any reason to believe that no reasonable proposal could be.
Whenever there exists a bureaucracy with the power and discretion to take from some in order to benefit others, there will also exist powerful incentives for individuals to manipulate that bureaucracy in order to better serve their own private interests. Agents of the bureaucracy itself will seek to expand its scope and budget regardless of whether such expansion serves the interests of its clients. And special interest groups will use various political mechanisms to channel the organization’s resources into their own pockets.
In theory, the welfare state doles out money and other resources on the basis of such factors as need and desert. But need and desert are both philosophically contested and impossible to measure objectively. And so, in practice, resources are doled out to those who can make the best political case that they need or deserve it. And this is a contest in which the genuine poor are at a serious disadvantage relative to the better educated, wealthier, and more politically engaged middle class.
A BIG, in contrast, allows virtually no room for bureaucratic discretion, and thus minimizes the opportunities for political rent-seeking and opportunism. It is, as the late James Buchanan once noted, a perfectly general policy that treats all citizens the same. It is thus entirely ill-suited for use as a method of political exploitation. We should therefore expect to see much less rent-seeking and opportunism with a BIG than we do with the present welfare state, and therefore a more effective transfer of resources toward the genuinely needy as opposed to the politically well-connected.
Of course, no policy is perfectly immune to rent-seeking or political manipulation, and others have expressed what seem to me to be some entirely reasonable concerns about a BIG in this respect. But nothing that I have seen has yet convinced me that the problems with a BIG would be worse than those we have now, and there still seems to me to be good reason to think those problems would be considerably diminished.
Less Invasive / Paternalistic
One of the main differences between a BIG and the current welfare state is the unconditionality of the former. Under a BIG, everybody gets a check. Under the current welfare state, only people who meet the various stipulated qualifications are eligible for assistance. The precise nature of those qualifications varies from program to program, but can include not earning too much, not earning too little, not being on drugs, not having won the lottery, making an earnest effort to find work, and so on.
Conditions are put on welfare in order to ensure that assistance goes to the deserving poor, and not to the undeserving. But distinguishing between the deserving and undeserving is difficult business, and requires a variety of invasive, demoralizing, and degrading inspections into the intimate details of applicants’ lives. “Fill out this form, tell us about that man you live with, pee in this cup, and submit to spot inspections of your home by our social workers, or else.”
Maybe the state shouldn’t be in the business of giving out welfare at all. Maybe it shouldn’t be running schools, or highways either. But, as Jacob Levy notes, since it does do these things, libertarians have good reason to demand that it does so in a way that is as “more rather than less compatible with Hayek’s rule of law, with freedom from supervision and surveillance by the bureaucracy, with the ability to get on with living their lives rather than having to waste them proving their innocence.”
The conditional welfare state is not only invasive, it is heavily paternalistic. Restrictions on eligibility are imposed in order to encourage welfare recipients to live their lives in a way that the state thinks is good for them: don’t have kids out of wedlock, don’t do drugs, and get (or stay) married. And benefits are often given in-kind rather than in cash precisely because the state doesn’t trust welfare recipients to make what it regards as wise choices about how to spend their money. This, despite the fact that both economic theory and a growing body of empirical evidence suggest that individuals are better off with the freedom of choice that a cash grant brings. In-kind grant programs like SNAP (food stamps) persist in their present form not because they are effective but because they are the product of a classic Bootleggers-and-Baptists coalition: well-meaning members of the public like the idea that welfare recipients have to use their vouchers on food rather than alcohol and cigarettes, and the farm lobby likes that beneficiaries are forced to buy its own products. Poor people, meanwhile, are deprived of the opportunity to save that a cash grant would give them, and they are forced to waste time and effort trading what SNAP allows them to buy for what they really want.
Utopia is Not an Option
In Libertarian Utopia, we might not have any welfare state all, no matter how limited or efficient. Many libertarians believe that any redistribution of wealth by the state violates individual rights and is therefore morally impermissible. And even those libertarians who do not base their political ideology on a theory of individual rights will worry that welfare states will produce perverse incentives – both on the part of recipients and potential recipients, and in the political processes that sustain and shape government policy.
But we do not live in Libertarian Utopia, nor have any of its prophets yet produced any compelling plan for how to get There from Here. Moreover, most people are not libertarians, and so unless we are willing to impose our views on them by force, we must try to find policy proposals that can command the assent of those who do not share our fundamental moral commitments and empirical beliefs.
From this perspective, the question of social welfare policy becomes less an exercise in ideal theory and more a problem of comparative institutional analysis. The question is not whether a BIG is a perfectly libertarian policy in every way, but whether it is more libertarian than the other realistically available policy alternatives. I believe that the considerations examined above provide us with very strong reason for believing that it is.
But I also believe that a BIG need not be merely a compromise. Even in a Libertarian Utopia, in other words, I think there would be good reasons to provide a social safety net through the mechanism of a BIG. I have written about some of these arguments before, and while constraints of space prevent me from elaborating upon them here, I am happy to do so in the discussion that follows this essay.
For now I will say only that if the idea of a social safety net strikes many readers as obviously incompatible with libertarianism, this is testament to the way in which an excessively narrow understanding of libertarianism has come to dominate our political discourse. For many people, it seems, libertarian thought begins and ends with the ideas of Ayn Rand and Murray Rothbard. And, of course, both Rand and Rothbard were indeed important libertarians, and libertarians from whose ideas I and many others have profited immensely. But while those ideas have played and continue to play an important role in the libertarian intellectual tradition, they do not exhaust that tradition.
Once we adjust our eyes to see past the giants of Rand and Rothbard, it is clear that the libertarian intellectual landscape is far more diverse than it first appeared, and far less hostile to the idea of a social safety net.
We can, of course, define libertarianism however we wish, and it is possible to conceive it in a narrow enough way so as to rule out all support for income redistribution by definitional fiat. But any definition of libertarianism that is so narrow as to rule out the likes of John Locke, Thomas Paine, Adam Smith, Milton Friedman, Friedrich Hayek, Robert Nozick, Loren Lomasky, and Eric Mack, to name just a few, seems both historically distortive and pragmatically unhelpful. The arguments these thinkers have advanced on behalf of a (limited) social safety net might be mistaken. But that is something to be established by a careful examination of the substance of the arguments themselves. Arguments about what counts as a “real” libertarian position, especially arguments poorly informed by the writings of seminal historical and contemporary libertarian thinkers, do little to advance the debate.
A Few Words About Work Disincentives
So far in this essay, I have said virtually nothing to say about the many possible objections to a BIG. As a philosopher, this makes me profoundly uncomfortable. I am comforted somewhat by the knowledge that there will be plenty of time to explore these objections in the discussion that follows – and almost certainly plenty of prompting to do so by my fellow discussants! Nevertheless, before I bring this essay to a close, I want to say just a few words about what I take to be the most common, and also the most overrated, objection to a BIG.
Many people argue that a BIG will create a strong disincentive to work. From a theoretical perspective, this makes sense. If you lower the cost of unemployment relative to employment, you’re going to get more unemployment. The famous Negative Income Tax experiments of the 1970s seem to lend some empirical support to this hypothesis.
I find this argument unimpressive for two reasons. First, it is not at all clear that a BIG really would lead to a significant increase in unemployment. The actual findings of the NIT experiments were much more ambiguous than they have generally been represented to be in the nonacademic press. And insofar as a BIG allows welfare recipients who start working to keep more of their money than they would under a conditional welfare system, we should expect at least some reduction of work disincentives relative to the current system.
But suppose that a BIG actually would, on net, increase unemployment somewhat. The second response is: so what? Is it so obviously a flaw in the system if it leads more parents to take time off work to stay home with their children? Or college graduates to take a year off before beginning to work? Or if, among the population as a whole, the balance between work and leisure is slightly shifted toward the latter? My point is not that there isn’t any story that could be told about why work disincentives might be a problem. My point is simply that, even if they were guaranteed to occur, they wouldn’t obviously be a problem. Explaining why these somewhat increased disincentives are a problem requires something more substantial in the way of economic, sociological, and philosophical analysis than often seems to have been assumed.
To my mind, there are other, much better objections to a BIG of the sort I have discussed in this essay. How, for instance, will it handle the issue of children? Would a BIG increase native resistance to increased immigration and thereby hurt the truly needy global poor for the benefit of the (relatively) wealthy American poor? And how could a BIG be politically feasible, given the strong investment various interest groups have in maintaining the current system? I look forward to exploring these questions, and no doubt many more that I have not anticipated, in the discussion that follows.
As you see this is a global ONE WORLD income structure for the 99% while the 1% will live that capitalist life getting richer and richer.
The sad thing to see is the installation of these Social Security retirement plans in developing nations under the guise of lifting those poor......as in Nigeria, Ghana, and Vietnam. Know where fraud and corruption is worse than today's America? Know where all that retirement for those poor we are told are being lifted into wealth equity as Americans are moved down to third world wealth with them? Mostly to global Wall Street where these nations will tie these funds.
“The Concept of Basic Income: Global Experience and Implementation Possibilities in Lithuania”
July 16, 2016 Kate McFarland Academic Literature, From the web
Lithuania has received little addition in the global movement for universal basic income. In June of this year, however, Algimantas Laurinavičius and Antanas Laurinavičius, members of Faculty of Economics at Lithuania’s Vilnius University, published a brief investigation into the possibility of a UBI in Lithuania.
In general, the authors present a favorable view of basic income. In their conclusion, for example, they note, “Empirical research has proved that all the experimental basic income programmes decreased the level of poverty – the more generous the programme was, the stronger its effect was on the reduction of poverty” (p. 61).
This suggests that basic income could be a boon to Lithuania, which is “categorized as a country with high income inequality and high level of poverty risk.” Here, though, Laurinavičius and Laurinavičius are pessimistic — concluding that, at present, the Lithuania “state budget or social insurance fund budget are too small to pay-out sufficient benefits of basic income” (p. 62).
To read their full analysis (whether or not on the way to offer a second opinion on the Lithuanian situation), find the article below:
Algimantas Laurinavičius and Antanas Laurinavičius, “The Concept of Basic Income: Global Experience and Implementation Possibilities in Lithuania,” Business, Management, and Education, Vol. 14, No. 1; June 10, 2016.
It's all about global social equity say Stiglitz and the Roosevelt Institute and the CLINTON/BUSH/OBAMA 1% Wall Street crowd.
JUST HOW LOW DO YOU THINK THAT BASIC INCOME CAN GO------$3 A DAY-----WORKING UNDER BAD CONDITIONS
'The threat of taking away a person’s livelihood can no longer be used as a means to force employees to work under bad conditions.”
WE THE PEOPLE KNOW PRAGMATIC NILISM WHEN WE SEE IT!
Here in the US we will not be able to stop it because our elections are rigged and full of fraud----this is why we must fix this NOW.
Guaranteed basic income? Why Switzerland said 'No thanks' (+video)
A majority of Swiss voters rejected a basic income initiative Sunday, which would have provided a monthly income of 2,500 Swiss francs ($2,563) of all citizens, regardless of employment.
By Story Hinckley, Staff June 5, 2016
Almost 80 percent of Swiss voters rejected a guaranteed monthly income Sunday.
Under the proposal, Swiss adults would receive a government check of 2,500 Swiss francs ($2,563) each month, and children under the age of 18 would receive a check worth 625 francs. Although the proposal had almost no political support, it gathered more than 100,000 signatures, so it was put to a public vote under Switzerland’s popular initiative political system.
A the idea of providing a basic income guarantee, or BIG, has held currency on the political left for decades.
OH, REALLY???? YOU MEAN THE WALL STREET CLINTON NEO-LIBERAL POSING LEFT????
More recently, some libertarians have also embraced the idea, seeing it as a cheaper, more efficient alternative to the current welfare state.
“Wouldn’t it be better just to scrap the whole system and write the poor a check?” Matt Zwolinski, an associate professor of philosophy at the University of San Diego, writes in an essay for the Cato Institute. “Unlike other welfare programs which encourage or require recipients to consume certain specific kinds of good – such as medical care, housing, or food – a BIG simply gives people cash, and leaves them free to spend it, or save it, in whatever way they choose.”
Proponents also say a BIG would ensure a passionate workforce, innovation, and suitable working conditions.
“An entrepreneur can now be sure that people will come to her because they actually want to work with her. Motivation will become a prerequisite for a job application,” write Enno Schmidt and Che Wagner, co-designers of the Swiss referendum initiative for an unconditional basic income, on their site Basic Income 2016. “The applicant can also say no to unappealing job offers more easily. The threat of taking away a person’s livelihood can no longer be used as a means to force employees to work under bad conditions.”
But the majority of Switzerland doesn’t buy this argument and are instead wary of the idea, believing it would cripple the Swiss economy by eliminating all motivation to work.
“If you pay people to do nothing, they will do nothing,” Charles Wyplosz, an economics professor at the Geneva Graduate Institute, told AFP.
And other opponents say a guaranteed basic income would cause international implications.
“Theoretically, if Switzerland were an island, the answer is yes,” Luzi Stamm, who opposes the idea as a member of parliament for the right-wing Swiss People’s Party, tells the BBC. “But with open borders, it’s a total impossibility, especially for Switzerland, with a high living standard.
"If you would offer every individual a Swiss amount of money," he said, "you would have billions of people who would try to move into Switzerland.”
Compared to its European counterparts, Switzerland’s economy is faring well. Switzerland had an unemployment rate of 3.5 percent as of April, far below the Eurozone average of 10.2 percent.
Finland and the Netherlands, with current unemployment rates of 9.8 and 6.4 percent respectively, are launching similar trial programs in the near future. Switzerland is the first country to put the concept up for popular vote.
The Finnish experiment will take place in 2017, with 180,000 Fins receiving a basic income of 500 to 700 euros a month. This may seem like a generous right for Finnish citizens to assume, but it is actually far less than the current average income of 2,700 euros in Finland. And under the Netherlands’ experiment set to take place starting January 1, 2017, four varieties of a basic income system will be tested among thousands of citizens and later compared to the current system.
But campaigners of Switzerland’s basic income system said they anticipated defeat.
“For centuries this has been considered a utopia, but today it has not only become possible, but indispensable,” Ralph Kundig, a lead campaigner, told AFP. And while the initiatives slim chances were obvious, “just getting a broad public debate started on this important issue is a victory.”
BELIEVE ME------BASIC INCOME POLICY IS DISPENSABLE. IT'S COMING FROM FAR-RIGHT LIBERTARIANS FOR GOODNESS SAKE!