Examine this Post, and consider the implications. I agree with Menzie Chinn totally in his conclusion. Debtors have traditionally claimed that everything would be alright, and it never turns out well. The accumulative destruction of debt has always been hidden, and everyone gets entrapped with potential collapse at some point in their economic life; Debt seemingly designed to close in upon one at the first sign of trouble, a factor ever-present at every level of success. I wish I had statistical studies on which to base my assertions, but will wing a Statement expressing that Interest on Debt probably eats as much living Income as it enhances; this claim advanced simply because there exists institutional structure to take Profits from debt acquisition. Any introduction of Profits leads to a maximization of such revenues, which will never be of benefit to the Consumer. This is specifically not saying that finance is wrong, or not beneficial; it simply states that finance is always overused, and this overuse will destroy the benefits to the User.
There is a lot of critical condemnation of Social Security from the conservative Right, and here is a relatively counter to such claims. What saved Us from the Great Depression was the specific decision to take action to protect the Poor, and what reversed the economic downturn was getting funds into the hands of the Poor which turned them back into Consumers; something that Conservatives never admit, but was always true. Today, We have people always pointing out the differences between recessions, but the Curative to recession still remains the Same; turning the Poor into Consumers once more. We now have about twenty million people without Work, and spending less than they were in their prime earning years. We will not reestablish the economy until We get this group fully functioning once more. We gain nothing by an attack upon Social Security which will double the number incapable of economic function.
Paul Krugman provides some necessary information about Social Security. Best Estimate states than Social Security will eventually absorb about 6% of GDP. The only real fix which Social Security needs is separating Medicare from Social Security. Fancier fixes are always advanced, and will hopefully settle on simply raising FICA taxation when it becomes necessary; said increase made to replace the revenue necessary. It is too simple an Outcome, though, and opposed by both Republicans and Democrats. I would desire revision of the Tax Code, but could accept a 3% tax of Capital Gains for Social Security, and a 2% taxation of Capital Gains for Medicare to replace the necessary revenues. The hidden kicker here lay in the fact that the Capital Gains taxation rate need not be changed at all, Congress simply reminded that they must find their own funding somewhere. This should be the banner Democrats should utilize in the coming Elections. lgl