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who blogs at Dirigo Blue and Kennebec Blues
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Below lies a simple film allegory.

We Democrats, progressives, and liberals need to stick to principles. Not raising taxes on the wealthy even more than the tax cut given by George Bush is our compromise. And if the GOP wants to point out how to get revenues from existing loopholes, let's thank them and sew up those holes with a strong thread of fairness.

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Yes, going over the fiscal cliff will be a test of nerves and some initial qualms are sure to be felt. But once we jump we can then take control and move this country safely to land in a better place of no $110,100 FICA withholding cap, cutting the offense waged on our tax dollars by defense, and investing in people's aspirations and dignity.

Hold hands and jump!

Originally posted to Bruce Bourgoine on Wed Dec 05, 2012 at 06:12 PM PST.

Also republished by Social Security Defenders.

Poll

If it was you, you'd walk right up to the brink of the allegorical fiscal cliff and you'd...

81%9 votes
0%0 votes
0%0 votes
18%2 votes

| 11 votes | Vote | Results

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Comment Preferences

  •  Bruce - removing the SocSec cap is a bad idea (1+ / 0-)
    Recommended by:
    phonegery

    It's important to understand the fundamental structure of the Social Security system. It is a wage insurance plan, it has never been intended to be a vehicle to redistribute income from the wealthy to those earning less although as currently designed has a progressive feature in the benefit calculations. There is an important reason for the cap and removing it completely would end SocSec as FDR designed it and as we have always known it.

    SocSec is a wage insurance program. Each person "insures" their own salary and wages based on the contributions they, and their employers, make into the program. The reason for the cap is that high income earners have other retirement assets and don't need to "insure" all of their earnings. It's also why investment income is excluded from SocSec payments, because investment income doesn't stop when we retire so there is no need to "insure" it. If SocSec had no cap some people would have six figure annual SocSec retirement benefits. If you take the cap off of contributions, but cap payments, you have changed SocSec as we know it. SocSec is not a plan to redistribute income and that is why it has its own funding program and isn't funded by general tax revenues.

    The sensible path is to raise the cap over the next ten years until 90% of all wages and salaries are captured and allow benefits to increase as well. That solves the funding problems with SocSec.

    "let's talk about that"

    "let's talk about that"

    by VClib on Wed Dec 05, 2012 at 06:23:45 PM PST

    •  So don't cap payments. (1+ / 0-)
      Recommended by:
      VClib
      it has never been intended to be a vehicle to redistribute income from the wealthy to those earning less although as currently designed has a progressive feature in the benefit calculations...If you take the cap off of contributions, but cap payments, you have changed SocSec as we know it.
      You are correct about the progressive structure of the benefit calculation. As annual income rises, each marginal dollar gets you less and less in future benefits. There are three brackets: 90% credit, 32% credit, and 15% credit; details here.

      But there's no reason benefits have to be capped. Let high-earners continue to earn benefits credit at the current 15% credit rate, with no benefits cap. That would still be a great boost to the solvency of the system.

      "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

      by HeyMikey on Thu Dec 06, 2012 at 07:50:05 AM PST

      [ Parent ]

  •  But in the real world fiscal cliff, (0+ / 0-)

    there is no rope or parachute to break our fall. Our nation and its economy will plummet off the cliff and potentially be destroyed. We just don't know, it is all theories at this point. If it does permanently cripple us, what will you say then - gee, sorry?

    No, as a progressive I don't want to play chicken with the lives of children and seniors. President Obama understands that he should make a deal in the end, but he also knows how to ensure that it is the best deal possible. The GOP always is going to get something out of negotiating with the Democrats, because they are just crazier. They would take us over the cliff to serve their ideology, while we care about human beings too much. Thank goodness, really though, for that.

    •  The Administration is prepared to do so... (0+ / 0-)

      ..."Tim Geithner: Obama 'Absolutely' Prepared To Go Over Fiscal Cliff"

      http://www.huffingtonpost.com/...

    •  Nope. (0+ / 0-)

      We'd have a disaster if we went for several months, or a year, under the fiscal cliff's tax-and-spending requirements. But for a few days, or a few weeks, they'd be just an annoyance for most people. (Some, of course, would be hit hard.) It's not as bad as the debt ceiling, which would impose more drastic changes instantly if not lifted.

      I think the psychological-PR-spin dynamic means we won't get a deal till the last second, and I wouldn't be surprised at all if there's no deal till weeks after the new Congress is sworn in. Both sides, but especially the GOP, feel the need to demonstrate to their bases that they're being "tough." Thus for PR purposes, they can't be reasonable.

      The Dems have more room to be reasonable because being reasonable is actually considered a virtue by the Dem base. Not so among the GOP.

      "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

      by HeyMikey on Thu Dec 06, 2012 at 07:55:11 AM PST

      [ Parent ]

      •  How can you be 100% sure of this? (0+ / 0-)

        Maybe it's your gut, maybe you have some data to back up your belief. But the bottom line is that going over a cliff and plummeting through the air in a free fall always - always - is risky. How can we take that chance?

        •  Math. (0+ / 0-)

          The USA's current budget involves spending $3.6 trillion but collecting only $2.3 trillion in tax revenue. Thus if we had to quit borrowing, federal spending would IMMEDIATELY drop by about a third.

          The amount of spending reduction in the "fiscal cliff" is nowhere near 1/3 (details easily googlable), and it would of course be offset somewhat by higher tax revenue.

          "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

          by HeyMikey on Thu Dec 06, 2012 at 11:10:33 AM PST

          [ Parent ]

          •  I don't know. (0+ / 0-)

            Falling off of a cliff sounds pretty serious. There are poor kids, old people, etc. who I doubt would handle such a thing all that well.

            •  Exactly. That's why the term is misleading. (1+ / 0-)
              Recommended by:
              Bruce Bourgoine

              The politicos hyping it as a sudden, crashing disaster are trying to scare people so they might accept things they otherwise wouldn't accept.

              And the media is going along because the media needs drama. "This is not really such a huge deal" doesn't drive ratings or sell ads.

              "The true strength of our nation comes not from the might of our arms or the scale of our wealth, but from the enduring power of our ideals." - Barack Obama

              by HeyMikey on Thu Dec 06, 2012 at 12:49:14 PM PST

              [ Parent ]

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