Charlie Rose

SharkswithfrikingLazers  03/15/2011 05:13 PM Report

Social Security is really not part of the budget issue as Paul Ryan has said.

(THE SOCIAL SECURITY PROGRAM SHOULD NOT BE ON THE TABLE)

THE Actuary Speaks

The speech:

http://www.c-spanvideo.org/program/298428-1

By Chief Actuary Stephen Goss

MY NOTES:

The calculations for Social Security are VERY sensitive to population growth rather than increases in productivity.

3.3 workers per beneficiary (1975 to 2008) moving to only 2 workers per beneficiary after 2030!

Our population is really aging from 2010 to 2030 and will create a great deal of change! There is something more than just a bulge of baby boomers—also life expectancies are increasing (perhaps not with all the obesity). 2.5-3% growth of the labor force with Baby Boomers. The now predicted 1% growth of labor force means much slower GDP growth.

THE BIG FACTOR—changing birth rates of two children per woman versus three per woman. 1965 is when we saw this transitional shift.

Now the average benefit is $1,000 per month per beneficiary. So after 2030 when there are only two workers (341 times 2) you will only get $682 a month instead of $1,000 in benefits. (The math is a 32% drop in benefits but calculates to a 25% reduction because in 2022 benefits are lowered by 7% and more of the benefits are taxed over time. 1.2% CPI average is slower than average wage growth so there is a predicted fall for social security beneficiaries. They will fall behind the worker standard of living.)

Social Security's net effect on the total federal debt is really nil. If publicly held debt is the issue then Social Security has a big impact. However, Social Security is really not part of the budget issue as Paul Ryan has said.

How long will Social Security be solvent under the current law? 2037 is the projected year until the trust fund uses all the reserves--$2.6 trillion--if nothing is done. Disability insurance will run out in 2018. However, DI can get a larger percentage of the pot to bring it up a bit.

The $2.6 trillion reserve augments the benefit payments until 2037. (Now there is 75 cents coming in for every dollar of benefits. The 12.4% is a flat tax rate except the tax on benefits. Social Security has NO borrowing authority. In 2010, $16 billion was drawn from the Trust Fund for benefits but interest alone on the money in trust was well over $100 billion. )

SOLUTIONS FOR 2037: retirement age increased, reduce monthly benefit, increase tax of 12.4% above $106,800 (current ceiling), increase immigration further (need more workers to pay), increase births. Choices in a nutshell: lower benefits by 25% or increase revenue by 33% or a combination of the two.

Social Security has progressive bend points which means income redistribution. So then $800 monthly earnings you get 90%, next $4,000 you get 32% above that you get 15% return. HOWEVER, higher income folks, on average, live longer than lower income folks so this is, for the most part, a wash—you live longer, and over this longer time at less money, get about the same as those who die earlier getting more net money.

The 1977 amendments in Social Security made huge changes—the problem was three to four times larger at that time. The 1983 amendments raised the age and turned Social Security around dramatically.

SOCIAL SECURITY & THE BUDGET: Social Security is a mandatory program. The revenue is DEDICATED. The General Fund of the Treasury has borrowed from this $2.6 trillion. Social Security is its own separate entity operating on its own trust fund basis. Two debts: total debt and then publically held debt. There is on-budget and off-budget and Social Security is off-budget. So Social Security has ZERO effect on-budget (except perhaps interest that is owed by the General Fund to the Trust Fund of Social Security). There is NO net effect to the on-budget flows. Even when the $2.6 trillion is gone there is no net effect to the on-budget. (This accounting system is confusing and makes it easy to con the public.)

Productivity assumption is 1.7% growth which is the average per capita over the last century. However, Social Security is VERY sensitive to population growth for benefits rather than productivity.

engagable  11/16/2010 03:26 PM Report

After listening to Paul Ryan spin his concepts of economics into a twisted gnarled mess, I had to go look up his background online. I found that he has no background in economics! His concept that we all should be entrepreneurs if we want to have wealth is simply flimsy. Where would entrepreneurs be without their labor force? Not everyone can be the entrepreneur! Not everyone should be! Ryan says he is not a wealth distributionist. But if there is not some effort to see that wealth is distributed among the working class and the middle class, then capitalism fails miserably in the end. Ryan's attempt at finding a solution to our current economic problems falls far short of a vision that is acute, comprehensive, and wise! God help us all if his theory were to prevail.

grice  09/16/2010 01:34 PM Report

The most defeating thing in life and politics is the conviction and assumption that nothing can be done to alter the status quo. At least not significantly. The responses below to Benezra's remarks seem to rest on that assumption.

That, I submit, is what Paul Ryan and his proposal recognize. It is what they seek to overcome. They ask us to look very closely at the emperor to see if he really has on any new clothes, as tradition would have us believe---to look with eyes not blinded by the "conventional wisdom," but open to recognize nakedness if that is what is there.

Dramatic shifts almost always begin with rejection of highly elaborated conventional forms, things that have been trimmed and added to and fluffed up externally, but whose essence remains unchanged.

Consider painting, for instance: in the disastrous end of the long Victorian Peace, the frills and furbelows of 19th-century thought made no sense. Not to a world that had experienced World War I. The old devices did not meet the expressive needs of a changed world, where belief that "God's in his Heaven; all's right with the world" was no longer possible. A fundamental shift had occurred in the world. The temporary amazement of the time found expression in abstractionism, cubism, non-idea laden forms---brand new and very simple forms. Eventually, there would be Wyeths and Midwestern realists and landscape painters and lots more. But at first there was stark simplicity, devoid of any idea other than "I'm thinking here. No conclusions yet." The shifts in painting reflected the shifts in the world.

Today, everyone goes about saying how the world has changed, that it's gone global. And yet we're still operating on principles meant for a different world. Our leaders are tweaking this or that part of measures created for a different time and situation, assuming nothing new can be devised and certainly nothing simple. God forbid simplicity! For in simplicity, people recognize what their actions really mean, what they are really doing. And they might have to assume some responsibility for them.

One thing that struck me about Mr. Ryan's ideas is that they rest firmly on the notion that economics, both macro and micro, have changed, sometimes in ways we might ought to have precluded, but changed dramatically nonetheless. The corollary to that is that fundamental economic devices and policies (e.g., ways of raising funds to support the government's operation) must be found that meet the new situation. The old ones we've been touching up are not serving the purpose for which they are designed. They are threadbare.

Ryan is saying while we're arguing over where to draw the line with tax rates or whether the raise taxes by 2 or 10 percent, we're wasting critical time. What we need to do is find an essentially new and simpler model that reflects our current economic realities and that forces us to face our priorities. It's time somebody said that.

Mr. Ryan put forward some figures of his own, I suspect to show how the changes he proposes would work. Yet he emphasized his is a template that will have to be examined, discussed, and adjusted. While he makes a good case for his plan, he sees it as one d that will have to be shaped by serious discourse.

Why must we assume things must be this way or that? Because it relieves us of thinking and acting?

Why must we assume our congressional representatives must be dull and self-interested? After all, we elect them.

Perhaps others are like me and see in so many of the so-called new plans only old, failed plans given a new name by a jaded p.r. team.

To assume the worst about others, to assume nothing can be changed, to assume no good will exists is self-fulfilling and finally reveals a philosophy that doesn't deserve to survive and certainly doesn't deserve to thrive. Nor will it.

Some of any changes proposed will be jarring and we'll have to provide for the transition, but I welcome the hard look at America's situation in 2010 Mr. Ryan's plan demonstrates.

I live in the South, a region that learned the folly of depending entirely on others for its manufacturedl goods---the hard way. Might it not be a good idea to bring some of those jobs back to the U.S.? Then I might be able to find a sturdy aluminum manual drip coffee pot such as folks in my part of the country have depended on for ages. Right now every such pot is being made in China and is of such shoddy construction, the handles fall off and the pots shrivel with the heat of boiling water. God only knows what toxic substances are exuded from those visible, flawed weld joints. Has such a large and diverse society of ours ever developed a service economy in which everyone could find employment? Should we not ask questions like those?

Is it possible for a home mortgage to be held by bank that issued it and that stands to lose if it permits us to finance a home that will require 90 percent of our two-person monthly income? Dare we consider such?

winter  09/15/2010 12:11 PM Report

Sorry for all the typos, esp. the reference to supply side economics when I meant DEMAND SIDE economics but even you

right wing criminal mindeds should be able to figure them out.

winter  09/15/2010 12:07 PM Report

Forget it, we tried supply side economics and it only served

the wealthy. We're going to try supply side economics for a while at least. Tax the wealthy back to where a household coould get by on one income and take some of those pamperings off the long form. No more suites at the Four Seasons for your sales staff and junkets to island resorts and din din and drinks paid for because you think you can't do business w/o them. The old lady will have to settle for acouple hundred dollar purse instead of that thousand dollar one and the kid will have to get fusion instead of a BBMW for her graduation present. And all that isn't even an eexageration. Whats been trickling down for decades is the top tax rate in lockstep with the influence peddling of lobbys and their revolving door bribes. They're so good at it that they've even managed to lobotomize middle class sentiment into advocating against itself. Its like Night Of The LIving Dead out there. Just look at this guy running against Cuomo for Governor of NY. Are you kidding me? THIS ( and the rest of the parade of clowns ) is what

they hold up to represent their values. You're all mixed up on the right. I'll bet you even think its a meritocracy out there too right.

doodah  09/15/2010 08:24 AM Report

Essentially, the FINANCIAL INDUSTRY HOLDS ALL THE CARDS. And they'll keep them until somebody GIVES them something else to 'buy'. They said thank you very much America (for the icing on the cake). Now give them an incentive to continue the game.

The politicians don't dare cross them, or they'll just play their cards somewhere else. Or not at all, they'll get their way through attrition; which is the state we're in now. Until people wise up and start appreciating the 'progress' made in 'healthcare', and the 'guaranteed' lower taxes for 'the middle-class'. .. and then what?

doodah  09/15/2010 07:46 AM Report

The REAL drag on the present economy, is the MISTRUST in the FINANCIAL INDUSTRY and the politicians that protect them. That is the single biggest rock sitting on the employers and consumers chests. The Dems want to say it's healthcare, and the Repubs want to say it's taxes and spending. How fucking original. Smoke & Mirrors.

Now having said that, I am all for simplifying the taxs, and pulling all the wrinkles out of the bullshit the shit fuckers created in the first place. But good luck with that, I'm sure the accountants and H&R Blocks and 'gainfully employed' IRS agents will appreciate that. Not to mention all the Bill Gates, Warren Buffets, and Donald Trumps of the world, the more confusing and frustrating it is for the common people, the better for the likes of them.

BENEZRAA  09/14/2010 05:51 PM Report

IN THE AGE OF THE CALCULUS AND CARTOONS

Like "grice", who provided an eloquent and salient commentary below, I say, "What a breath of fresh air!" "REMant" offered interesting ideas, too, as did "anne4444".

My own unique comments are:

(1) Especially in New York State, where we already pay very high sales taxes, property taxes, and school taxes -- yet NYS is barely solvent -- these types of taxes may yet themselves be regressive and diminutive to the value of the dollar;

(2) Sales taxes directly affect the prices of everything, so a significant Federal Sales Tax can be expected to dramatically increase market prices;

(3) Employees are typically unaware of the taxes they pay, until and unless they receive a tax refund, which they wait and pray for every year; employees will have to accustom themselves to seeing that money gone every time they make a purchase, regardless of whether or not the net result is in their favor, and I must emphasize the potential "or not";

(4) We live more and more in real time financially, owing to technology and the use of advanced mathematics; in the "Age of the Calculus" (my own designation, even though the Calculus dates back to Newton and Leibniz) any graduated form of taxation ought not be tied to fixed amounts and should instead be Calculus based (ergo, determined by "infinitecimal" increases and decreases in income [assuming an income tax] in the context of practical upper and lower bounds); this is not merely a matter of fairness, but, a matter of impact to wages and salaries, as the three-tiered simplified taxation rates proposed would tend to create three distinct, well-defined economic classes based on couples: those couples earning above, and those couples earning below the lower set amount (approximately $39,000 according to Mr. Ryan's proposal), and then those couples earning above $100,000; this taxation model would tend to force wage, salary, and income ceilings in a way that would hamper the proper functioning of a free market; this effect can already be seen in the proliferation of our poverty populations in the context of federal safety net programs as relates to the employment opportunities in terms of real wages and benefits; our so-called "safety nets" may be horrendous in terms of the reality of how they work or in many cases actually fail to work honestly; no trapeze artist would entrust his or her life to an analogous safety net, given the gaps and gaping holes and paperwork required by US economic "safety nets".

Yet, Mr. Ryan's proposals do offer a template, by which to proceed on a bi-partisan basis of "compassionate conservatism", to address making fundamental corrections to our nations economic woes. The principles, if I may abstract them from Rose-Ryan conversation, are as follows: (a) there is a need for a simplified and fair taxation model; (b) fairness requires a graduated taxation model that dramatically reduces loopholes, (c) low-income citizens must be assured that their incomes will remain above the poverty level [which will be reset to reflect real time economic reality ??? ], (d) Medicare and Medicaid may be reformed to become solvent based on means testing, and (e) a combination of Federal Income Tax reforms and a new Federal Sales Tax may in net work simply and well together to fund the government and sufficiently maintain our defense nets and our safety nets, and (f) our defense nets and safety nets may be reorganized and even downsized to be better and more efficient. This is a reasonable bi-partisan platform -- and as always, the devil may be in the details.

If only our political choices were as clear as the never ending battles and chases of our cartoon heroes such as Bugs Bunny v. Porky Pig, Roadrunner v. Wiley Coyote, Grandma and Tweety Bird v. Sylvester the Cat, Rocky and Bullwinkle v. Boris and Natasha, Pepe Le Pew v. Penelope Pussycat, etc. Or, perhaps they are that clear....

SharkswithfrikingLazers  09/14/2010 05:45 PM Report

Paul Ryan looks and acts great!

His name is popping up all over the country and even came up here in Houston at a Congressman's Town Hall meeting.

Though he has charisma I would have appreciated more questions on his ideas ala Paul Krugman.

I lean to Paul Krugman's arguments and I wish Charlie Rose would have raised them: http://www.nytimes.com/2010/08/06/opinion/06krugman.html and http://www.weeklystandard.com/blogs/paul-krugman-v-paul-ryan

Next time perhaps?

REMant  09/14/2010 04:42 PM Report

He's not a Tea Party person as far as I can see, but an old-fashioned supply-sider. However I'm sure he knows it isn't just govt debt that's the problem, but the way the economy's been working, and the only uncertainty I see in the financial world is whether they are going to be allowed to go back to business as usual, as was seen in the mkt's response to Europe's shrinking from dealing with capital requirements yesterday. Sorkin noted on this program previously Wall St remains unrepentant. Deal with bank and consumer debt along with the Fed'l budget and there's a chance you can dismantle the entire safety net, all the tax credits, welfare, health care and everything we do only because we skew the distribution of wealth so badly by continually creating so much money and other credit to begin with. A little thought about Say's Law should bring the realization that equal opportunity and equal outcome would not be so different absent financial manipulation. As for growth I don't think there's any honest observer who doesn't see that the economy has run better when all these things were in balance. The Reagan era saw a lot of wealth shifted from the middle class to the upper classes as a result of all the debt created, and while Greenspan's (not Clinton's) budget balancing helped turn things around, the process largely continued unabated because of the credit being created by the Fed and financial institutions, along with the trade deficit with China, Japan, et al. The result was an explosion in real estate, but also a whole lot of ppl going into big-time debt to finance their lifestyles.

Due to statistical finagling our unemployment is not less than 10, but more like 15-17 per cent.

The $700 billion in question in the tax cut debate is only 3% of the tax receipts. The wealthy are never a major factor in taxation. The issue is one of equity (and again equal opportunity), and it is my view that most of their income comes as a result of the inflation in equities and assets the poor do not own, and hence is a factor in policies directed to increasing it, tho I realize they have lost a lot of that on paper. I would not want anymore than he to hurt small business investment, but I presume we are not talking about doctors, dentists and lawyers, etc. Certainly a flat tax would be better for everyone, and still be progressive even without two tiers, which BTW is not new either, but is as unlikely to pass as a privatization of social security. That's why I thought it might be offered in exchange for a single-payer health care system such as Japan's. He's right about the tariff situation, and a sales tax should increase saving, though one has to look at the states and localities in any such decision and not upset the balance between saving and consumption, plus realize that consumption taxes are regressive.

I sincerely doubt independents like most Republicans anymore than they do a lot of Democrats. If I were a GOP strategist I would not play them for fools, and at least urge Gingrich et al to keep their mouths shut. Boehner strikes me about as much of an asset as Pelosi. The longer the economic impasse goes on, the stronger a third party will become, and since I can't see the economy going anywhere, libertarianism seems only a matter of time.

grice  09/14/2010 03:27 PM Report

What a breath of fresh air! Realistic good sense---for a change.

I'm one of those Americans who is appalled and frightened by the ideological socialism of the current president and disgusted with the failure of the Republican Party to act on its self-proclaimed economic conservatism when it has had the opportunity to do that.

I'm sick of both parties running for a job, not an office of public service.

It's been a long, long time since anyone with an economic policy, rooted firmly in the historic commitment to free enterprise as the source of individual economic well being and national prosperity rather than the government's being the source of economic well being and prosperity has appeared in America. Watch this interview.

Here are some things I noted:

• Mr. Ryan's thought is anchored in the doctrine of Natural Rights wherein "happiness" was defined as a person's freedom to pursue economic endeavors that will provide a satisfactory even bounteous material living for himself and his family.

•Mr. Ryan does not regard that idea as antithetical to the provision of an "economic safety net" for those who fall on hard times or are naturally incapable of availing themselves of this freedom---a humane modification of classical capitalism.

• Mr. Ryan refuses to engage in personality politics: he sticks to ideas and is exceptionally articulate in stating those.

• Mr. Ryan is able to state complex economic ideas in ways they are understandable to any literate person---without betraying the ideas. So we know what he's talking about. No jargon. No subterfuge. I'm sure he will be accused of being simplistic, but not accurately. He makes his case step-by-step, adhering to tough logical standards.

•Mr. Ryan seems actually to feel the dangers which we as a nation face at this juncture----not as abstractions, but as real and present dangers that demand intelligent, non partisan-driven thought and action.

And by golly, after Hyde Park's elitism, a little town in Wisconsin looks terrific.

I've read Mr. Ryan's speeches, committee materials, and such for a while now. This is the first time I've heard him have even 30 minutes in which to state his purpose and plan. Good job, Charlie Rose, for affording us the opportunity.

JoeFriday  09/14/2010 03:26 PM Report

Paul Ryan is either a fraud or he is delusional. His tax & budget proposals would massively lower taxes on the Rich & Corporate, massively increase taxes on the Middle-class and Working Poor, scrap Social Security & Medicare, and massively explode the federal deficit and debt.

SCAM !

stickclan  09/14/2010 02:23 PM Report

Paul Ryan was superb in this interview. He proposes some great, albeit controversial ideas. We need more straight shooters like Rep. Ryan in D.C.!