A friend and I have a thought exercise where we allow the following premises:

- You have complete, authoritarian control over the United States

- You can do anything that is physically possible. Send people to the moon? Fine, but it will take at least 10 years to develop the technology and make the journey.

- You can do anything that is financially possible. Deficits can be run, but not too large for too long

- You can’t bring anybody back from the dead. It’s not a pretty sight, we don’t like doing it.

The main goal is to diagnose what we think is wrong with America and try to fix it.

Here’s my suggestion for the day –

Social Security needs a means test. Roughly speaking, there should be a sliding scale to phase out social security benefits as your assets and previous lifetime earnings increase. Social security was established as a safety net, not a way to Christmas bonus for people who had been fortunate enough to have high earning careers.

More here: http://en.wikipedia.org/wiki/Means_test

Two rejoinders to potential arguments:

1) Yes, this does “punish” people who had high earnings and saved money. Arguments about the correlation between genetic inputs and social outputs aside, putting money in the hands of people with lower incomes has a much higher spending multiplier than putting money in the hands of those likely to save it. To my amateur eyes, this is the biggest problem with a Reagan-style tax regime in which the absolute dollar value of GDP may increase, but becomes too concentrated in a smaller number of people who don’t spend the money but instead chase yield. The world does not have a savings problem thanks to China. It has an aggregate demand problem.

2) Raising the social security age IS NOT the solution to our social security solvency problem because the same people who social security was originally created to support (intermittent and domestic laborers and those marginally employable for various reasons in and out of their control). It’s hard to do physical labor into your 60s.

Side note: Conservatives fought tooth and racist nail against the passage of social security.

Labels: but usually only one side is right., There are two sides to every story

¶ 7:41 AM