I'm not wrong. But, whether you agree with me or not you certainly can't blame social security or medicare for inflation that those programs didn't create.
The fact is, a huge component of the cost of social security stems from legislation passed in the early 70s (with broad bipartisan support) that pegged social security benefit payouts to inflation. About 50 years later when inflation has averaged about 3-4% year over year, inflation accounts for about 50% of the current cost of social security payouts. Going forward, all the scary projected future costs of social security factor in 2-3% inflation for the next 50-70 years.
If you honestly want to cut Social Security then an obvious way to do it is to just cut inflation. If corporations are so great and productive then that shouldn't be any big deal. Over the past 5-6 years we have seen large amount of stock buybacks by corporations instead of investing in their business. Therefore you can't blame entitlement programs for "crowding out" investment dollars.
But currently, the mere mention of the dreaded word "deflation" has Wall Street running for the hills. So it creates a cycle. Create easy money and deficit spending to inflate the economy. .Inflation causes SS and Medicare costs to go up and those programs are left holding the bag.
Say wha? wrote:
ryan foreman wrote:
Remember, what the whole idea of SS and Medicare is. Its a social safety net so that when the economy goes into recessions and markets go down you can fall back on it. In other words, Social Security along with various other government programs established throughout the 20th century WAS and IS the bailout. But when the moment of truth came in 2008, the wealthy looked at the prosect of relying on social security and they were terrified. So they effectively created entitlement programs of their own by bailing out Wall Street banks and having the Fed prop up asset prices.
Well that's an interesting historical analysis. Incorrect, but interesting.