As the economy worsens …
What a guy – is there anything he can’t do? Spooky action at a distance.
From Harris:
Vice President Kamala Harris’ campaign is blaming former President Trump for the latest negative jobs report — nearly a full term after he left office.
“Donald Trump failed Americans as president, costing our economy millions of jobs, and bringing us to the brink of recession,” Harris for President spokesperson James Singer said in a statement.
“Now, he’s promising even more damage with a Project 2025 agenda that will decimate the middle class and increase taxes on working families, while ripping away health care, raising prescription drug costs, and cutting Social Security and Medicare — all while making his billionaire donors richer.”
Notice how she sandwiches Project 2025 in there, although Trump has never had anything to do with it and has explicitly disavowed it as well. But lies are Kamala’s stock in trade.
Speaking of stocks and trades, we now have this:
Nearly everything on Wall Street is tumbling Monday as fear about a slowing U.S. economy worsens and sets off another sell-off for financial markets around the world.
The S&P 500 was down by 2.4% in midday trading and on track for its worst day since 2022. The Dow Jones industrial average was reeling by 864 points, or 2.2%, as of 11:40 a.m. Eastern, and the Nasdaq composite slid 2.7%.The drops were just the latest in a sell-off that swept the globe. Japan’s Nikkei 225 helped start Monday by plunging 12.4% for its worst day since the Black Monday crash of 1987.
It was the first chance for traders in Tokyo to react to Friday’s report showing U.S. employers slowed their hiring last month by much more than economists expected. That was the latest piece of data on the U.S. economy to come in weaker than expected, and it’s all raised fear that the Federal Reserve has pressed the brakes on the U.S. economy by too much for too long through high interest rates in hopes of stifling inflation.
The Fed might end up reversing itself on that, increasing inflation.
For many years, pundits on the right have joked about predictions concerning the economy, putting in their headlines “unexpectedly.” It’s a joke because the newspaper reports almost always use that word, which makes “experts” sound like liars or fools or both. Is their constant failure to predict such things the result of stupidity, wishful thinking, and/or the fact that they’re propagandists?
More:
The weak jobs data also triggered what is known as the “Sahm Rule,” seen by many as a historically accurate recession indicator.
“The July jobs report is being viewed as a recession warning, and the markets are responding accordingly,” said Bill Adams, chief economist at the Dallas-based Comerica Bank.
With the jobless rate unexpectedly rising, the so-called Sahm rule is now in play.
Unexpectedly.
Here’s what Trump had to say:
“Of course there is a massive market downturn. Kamala is even worse than Crooked Joe,” Trump, 78, wrote on social media Monday morning — after the Dow Jones Industrial Average plunged 1,000 points in morning trading after closing down more than 600 points on Friday.
“Markets will NEVER accept the Radical Left Lunatic that DESTROYED San Francisco and California, as a whole. Next move, THE GREAT DEPRESSION OF 2024! You can’t play games with MARKETS. KAMALA CRASH!!!” Trump added.
That’s certainly an impressive collection of bilge and utter nonsense, even for the undisputed queen of nonsense. Increase taxes? What?
“KAMALA CRASH” is some nice alliteration, or the stage name of a bass player in a punk band.
@ Neo > “Vice President Kamala Harris’ campaign is blaming former President Trump for the latest negative jobs report — nearly a full term after he left office.
You have to remember that, in the Democrat lexicon, “[Republicans] caused X” means “[Republicans] noticed X was happening and told the public, who our media was keeping in the dark.”
And their claim that “Donald Trump failed Americans as president, costing our economy millions of jobs, and bringing us to the brink of recession,” totally omits that the Democrats manufactured and exploited the Covid Crisis in order to make that happen on Trump’s watch.
Harris has no understanding of economics, nor does she have an original thought in her head. She’s just reciting what somebody told her to.
Republicans did cause X.
As did Democrats.
Our Congress has abdicated doing most of the difficult part of its job as stated in the Constitution for decades; no matter what percent of which party it holds/held.
It abandoned the bulk of its role to raise money through taxation by instituting an income tax (the only fair tax for a free people are consumption taxes).
It makes no attempt to prepare a legitimate budget, nor stick within limits it imposes on itself, nor address its profligacy when ignoring those limits.
It abandoned its role of declaring war to the Executive branch.
It implements agencies, laws and policies with no adequate form of funding and does nothing when the funding is inadequate.
… and on, and on…
Rufus T. Firefly, 4:19 p.m., is correct — but also, the Biden-Harris administration has increased unnecessary spending, deliberately capped energy production, massively increased the regulatory burden on businesses and individuals, and permitted mass uncontrolled immigration thus putting pressure on social spending, housing, and lower-income wages and jobs.
I’d be interested to have Groucho (RT Firefly) Marx educate us about consumption taxes. Are they the same as value-added taxes? Are they easy to collect, hard to collect, …? Are they more robust against abuse than deductions in our current income-tax system? Would they destroy the existing tax-prep industry?
In short, what are downsides as well as upsides?
I knew once this meme of 2025 Project started it was going to be used like it is the Protocol of Zion.
I do think breaking the economy it to destroy the country, when we are back to the Great Depression the Marxist government will be in charge of the population
I agree with Kate. The GOP Congress elected in 1994 was a big disappointment. The fake “Budget Balancing” was just stealing Social Security trust funds, which was in surplus then because the Baby Boomers were at peak earnings.
The Biden\Harris team has no excuse for the inflation they set off.
@Paul Nachman:Would they destroy the existing tax-prep industry?
Is that supposed to be a downside?
Yes, when the government makes simple things hard, there is lots of money to be made by someone who can help you navigate the difficulties. If the government would stop going around breaking legs, the makers of crutches and casts would suffer thereby, it is true…
YouGov Poll: Plurality Say They Will Be ‘Financially Better Off’ if Trump Defeats Harris
Yeah, Harris isn’t going to be able to disassociate herself from the economy Biden/Harris created. People are not going to forget the cost of food and etc. under Biden/Harris.
However, I agree w/ David Axelrod that ..it’s absolutely Trump’s race to lose right now. Trump seems off his game right now, IMHO, and is certainly capable of running his mouth once too often. It also appears that He may have let her off the Debate Hook.
Don’t care for either tho – Down-ballot Voting for me this year…,
Paul Nachman,
I can answer those questions, but they are irrelevant. What gives any man or woman the right to take the wages another has earned? Free men and women can enter into voluntary agreements; sales taxes, property taxes, taxes on goods and services, etc… But the taxation of labor? Of productivity?
It would be easiest for Congress and the IRS to take what they need directly from my bank account via a wireless transfer. Much, much easier than the current system.
Peace on Earth and goodwill unto men would put hundreds of thousands of defense contractors out of work and think of what curing cancer would do to the livelihoods of oncologists.
The Nasdaq was down 3.4% at the end today, and roughly 14 or 15% in the last 3.5 weeks. It was a nice long ride up, and a quick brutal one on the way down.
@Michael K:The fake “Budget Balancing” was just stealing Social Security trust funds…
Those “trust funds” never existed in the sense in which you or I would have a “fund”. They were only ever accounting entries. Social Security taxes in excess of Social Security payments have always been spent and never saved. When the government spends them they write themselves an IOU, and that’s all the “trust fund” ever was, a promise to pay the future benefits even though the money was spent. The money used to pay out the “trust funds” has be taxed or borrowed like every other dollar the government spends.
It’s not clear what else the government could have really have done with the money. “Saving” money means putting it into the hands of banks or investors or under your mattress. Banks or investors get to profit from the sums that you save with them, money under the mattress loses its value to inflation.
They had to do this ridiculous dance to keep up the pretense that Social Security isn’t just welfare. A lot of people have swallowed the propaganda that Social Security is their own money that has grown, like a 401K would be, but a 401K was invested by someone who pays you back with the profits from the investment, and nothing like that happens with Social Security. It’s the government paying retired people today with the payroll taxes collected today, and always was.
Kate and Michael K,
The slope of the trend line of national debt increase of Obama’s 8 years and Trump’s first 3 years is nearly identical. And then COVID came along…
I don’t feel like looking it up, but isn’t Clinton the most successful President of the past 30 years in regards to keeping national debt in check? I know, I know, the dotcom bubble and the wall coming down and the Gingrich Congress… But still, Clinton was a Democrat and did better than both Bush’s, Trump… even Reagan*.
*I know, I know, Reagan’s spending caused the wall to fall that gave Clinton the peace dividend that swallowed the goat to catch the dog … 😉
Things just got exciting!!!
Niketas,
Buy gold? I have it on good authority from Ron Paul there’s still some room at Fort Knox.
Why was Trump’s age mentioned, but they never mention Harris’s age? Sexism? Of course now that Biden is out, Trump is too old.
Could be markets reacting to more than the jobs report. The ME is getting set to explode.
The really scary thing is that about 40% will vote for Harris regardless of how bad the economy is.
Cornhead:
I think nearly 50%.
Neo:
Probably right. But it depresses me even more.
As you have noted, a mind is very difficult to change. And women especially hate Trump. I just wonder if these women go to the grocery store and don’t understand that Dem policies are why inflation got out of control. I guess people know nothing about economics.
@Rufus:Buy gold? I have it on good authority from Ron Paul there’s still some room at Fort Knox.
Or let us keep the money. Crazy talk, I know. We’d just waste it. Not like the Top Men in the government.
Youve talked to them what do they say is responsible for the inflation
Yes they lie about everything they created a fake site that presented their narrative
Then used an algorithm to boast that site to top remember they didnt include a link
I do think more on our side should push back on the lies they are telling about Project 2025. The only one I recall doing so is David Harsanyi. But they seem to just make up whatever they want to denounce, “without evidence”, as they say.
}}} The fake “Budget Balancing” was just stealing Social Security trust funds, which was in surplus then because the Baby Boomers were at peak earnings.
This was Clinton & Dem chicanery, not the GOP.
Not to suggest the GOP have not been very disappointing for decades. Just that this wasn’t one of their stupid tricks.
The simple fact that government agencies are not bound by GAAP is a massive issue in general.
The state of New York dealt with an early 90s shortfall, a problem as they have a “balanced budget requirement” — by selling Attica Prison to the separate, “independent”, government bonding agency (they sell bonds to raise money for government projects). They then paid rent to the Bonding Agency to continue to use the prison.
In other words, they basically took out a loan on their credit card to pay the bills, and claimed that, having paid the bills, the budget was “balanced”.
Seriously.
And it was exactly this same kind of thing that Clinton did in claiming to have “balanced the federal budget” — the money which was kept separate prior to that point, being collected for SS & Mediscam, was merged into a big slush fund with income taxes, and “bills” were all paid out of that. Same kind of scam that NY State did, they spent money collected for longer-term purposes for short term tom-foolery.
“Come The Revolution”, one of the new rules which needs to be put into place is that all government agencies, at all levels, must use GAAP — Generally Accepted Accounting Practices — for all budgeting and accounting. No exceptions, not state, not local, not federal. Civil AND criminal penalties apply to all involved in any violations of this practice. Not a few “scapegoats”, but all people involved in the chicanery.
Governmental Accounting books are largely open to public inspection (the only exceptions would be needful “security” based projects on the Federal level can be in a black box, subject to exposure after, oh, 25 years. But bookkeeping must be followed and kept for that time frame, and criminal and civil forfeiture penalties can be applied after that time — so if you ripped things off, your kids might be footing the bill… No Bankruptcy exclusions allowed)
Any consumption tax that taxes the necessities is inherently tyrannical.
“The really scary thing is that about 40% will vote for Harris regardless of how bad the economy is.” Cornhead
“I think nearly 50%.” neo
A clear demonstration that 40-50% of people are incapable of wise self-governance.
Silicon valley observations from average guy.
Tech companies laying off.
Homes used to sell over asking price within a week or 10 days, now see houses still for sale six weeks after listing.
Construction friends laid off, first time since 2009.
Just anecdotes from the neighborhood
Fullmoon:
I love neighborhood anecdotes!
Actually, it is much much much more complex than this
The federal government cannot “save” money, because the federal government is the source of money. Think about that. All the Fed can do is increase or decrease the Money Supply. And this has serious implications of its own.
It was the general tightening of the Money Supply which has been agreed upon since the 1960s as the reason that the Great Depression went on for as long as it did.
MOST of the time, any recession clears itself out within about 2-3 years. TGD went on because the Fed, in the 1930s, kept the available amount of money too tight, especially after the Bank Failures in the early 1930s, which was the real major downturn, not the classic Black Tuesday crash, which hurt badly, but had much less affect on the “average American” than you might expect. Black Tuesday started the boulder rolling downhill, but the Bank Failures that followed were the really major issue, and even there, it was the Fed’s Tight Money policies which exacerbated and prolonged the problem for many many years, and it was only WWII that really ended them… and that was more by instituting a “fever” to cover up the issues that still remained, but slowly were repaired during the war.
A point of view I would suggest, for considering money…
A good way to look at the Money Supply is essentially as an instantaneous accounting for all the assets of a nation. If you “sold everything” at something resembling “current” prices to some hypothetical entity that was buying the whole nation, lock, stock, and barrel, the money you would get would be “the money supply”. What the country is worth at that given instant, in terms of “dollars” (francs, yen, rubles whatever). Now, of course, this is a constantly varying amount — things raise and lower in value depending on various events and situations… The value of oil drops if they develop a new technique for finding, or extracting, oil. It goes up if there is something that increases demand or threatens the extraction/distribution system (summer vacations, for example, or a war in the ME). And, of course, some assets depreciate. The value of all the cars in the nation drops over the course of a year, as wear and tear apply to them. Commercial real estate values go up and down depending on demand for them, even as wear and tear reduces the value of those same properties — and some owners pay for maintenance and others don’t, so this, too, affects the valuation of those properties. As some things become more scarce, we search for alternatives, and this, indeed, is important and tied to our understanding of science and technology — as copper prices began to go through the roof, in response to increasing communications demand in the late 1970s, we developed fiber optics to replace copper wiring, and the price of copper went down substantially for a time, as we replaced all that copper wire with glass fiber, freeing it up for other usages. Technology can render an entire industry moribund — the replacement of horses with cars meant that Buggy Whips were no longer a growth industry.
In other words, knowing what The Nation Is Worth at any given time is an arcane and mystical bit of guesswork.
And this is where the opportunity for government tom-foolery comes in. The government is in the job of supplying money — it essentially should be a comparatively fixed amount, “easily” calculated:
Money supply == “Value of current Assets” + “Value of new production” – “Cost of maintenance” – “Cost of Depreciated value of assets”.
But there are those in government who see benefits, here, to themselves and their cronies — If you print more money, it gives government “leaders” the opportunity to spend it on pet pork projects. And the issue with this isn’t overt and problematic, because its effect tends to be delayed somewhat. When you print more money than is defined/required by that above “simple” equation, you have, essentially, changed the value of the dollar (franc, yen, etc) to be less. There is no magic, here. The money is merely a placeholder for the assets/wealth of the nation, nothing more. If you print more dollars without a consequent increase in the assets/wealth, then all you’ve done is made the value of a dollar less. In classical terms, you are adding base metal to the coinage, “extending” the gold you have to produce more apparent value but not doing anything to the real value.
And this is where inflation/deflation happens — if the money supply goes up faster than the above equation says, you get inflation — the money is worth less — it becomes a placeholder for a smaller array of assets than it was before… If the money supply goes down in comparison to the above equation, you get deflation — each dollar represents MORE of the assets of the nation, not less.
And this is where the “Quantitative Easing” crap comes in — it was a deliberate and willful effort to scam people who had dollars — especially foreigners — by making the money they had taken worth less over time. What are you going to do with those dollars, they are just paper — symbols of the value of assets, not the actual assets? And if the symbols are lowering steadily, then… Hey, LOOK, a PUPPY!! :-/
==============
There are three/four schools of economic reasoning (“four” if you actually think Marxism is a school of economic reasoning):
1 — Monetarism, or “Chicago School” (Milton Friedman)
2 — Keynesianism (Duh: Keynes)
3 — Austrian School (Ludwig von Mises and Friedrich Hayek)
Keynes has been largely repudiated, because, according to Keynes, what happened in the USA in the 1970s was impossible — it was impossible for there to be stagnation and high inflation. Keynesianism is popular among Big Government types, though, and so it was revised to form “NeoKeynesianism” — which then got repudiated by what happened in Japan after 1990 and well on into the 20th c.
No one who is economically competent can support Keynes, but many still do, just as damn fool idiots still support Marx.
So, in the end, it’s pretty much down to either the Monetarists of the Austrians, but, TBH, I suspect the true answer is some kind of amalgam of the two.
I’m neither claiming absolute knowledge nor special expertise, here, but
a — Friedman is the only one whose ideas have been actually tested at all — in 1975, after a coup in Chile, he became seriously involved in efforts to fix the Chilean economy, using the principles he and others developed and extolled during the 60s and 70s. The end-result is often referred to as “The Chilean Economic Miracle”. In the course of the next 35 years, Chile’s economy improved by a consistent 165% or so of the rest of “Latin America” — and Chile has been in good financial straights during most, if not all, of that time, even as most other South American nations have been economic basket cases.
b — OTOH, there is certainly a feeling that the Austrian School’s “boom and bust” cycles fit experience. The main concept of the Austrian school is that there is a natural “boom and bust” cycle that is unavoidable. The “Boom” times are when people are taking money (often “cheap” money, because of the government meddling in things) and investing it widely. Some of those investments pay off, and others don’t. The ones that don’t need to be eaten, to be liquidated, to be written off (the “Bust” part). There is often a reluctance to accept this, because no one wants to eat it. The government often interferes with this, trying to stop it, and all this tends to do is to make it worse, and make it take even longer to clear out the detritus of malinvestment.
And this is why I tend to suspect both are relevant, that the proper understanding derives from some amalgam of the two. Keeping control of the money supply (Friedman) is certainly important and relevant to keeping things on an even keel — for reasons suggested in the above discussion of the Money Supply.
But I do also suspect that the Austrians are correct, and that there are inevitable B&B cycles that must occur, unavoidably. Not every investment is fruitful. And you have to eat the ones that were not, or you are just fooling yourself: “That artwork HAS to be worth more than $3000!! I paid more than $10,000 for it!!”
Fixing this mess we have allowed our “representatives” to dig us into is going to be very painful. And anyone who thinks that anyone — Trump or the GOP or anyone else — is going to wave a magic wand and fix it all… not going to happen. We’ve let the Money Supply go nuts. That has to be corrected. And we have a lot of bad investments as a result — that, too, has to be corrected.
I will state, right now — this is going to be kinda like 2007-2008, maybe worse — the Right has been complaining about the fact that this shit is unsupportable for a decade or so, now. As they did when they warned, ca. 2003-2004, about the idiotic mishandling of government funds led to the collapse of the RE market in 2008. I will expect that the economy will clear up a bit with Trump elected, but it’s going to need a corrective time — akin to the recession of 1981 — where things are going to go to shit for God alone only knows how long. Leaving the Dems in power is only going to make things much much worse. OTOH, this is allowing the Dems to set up the GOP as the fall guy for their chicanery, because most people don’t comprehend how this shit has a lag time. So…
Dems win, Good or Bad? There are good things for both. They get stuck in a bag of their own making, if they win. Because it will collapse pretty soon after that. Trump wins, he improves things for a bit, but then somehow, that Bust cycle has to take place, and it’s quite the doozy.
And when that collapse happens, if the Dems are in power, it won’t be pretty. There will be civil war, IMNSHO. And Gen Z is going to bear the brunt of it. That’s not as bad as might be expected, much better Gen Z than the whiny Millennials. There are sensible kids raised by Gen Xers in the Gen Z crowd. Probably enough to make the difference. We shall see.
You’re talking about a different kind of money. The government can save “money” (meaning income or assets) by spending less than it takes in (a quaint concept). It doesn’t have to put the savings anywhere, it can just pay down the debt.
And while the SS “Trust Fund” is indeed just an accounting entry, It is a meaningful indicator of what’s happening to revenues from SS taxes versus benefits. The trust fund is disappearing because SS taxes no longer are sufficient to cover current benefit payments. That’s useful information, not least because I think it’s important to view SS as a separate entity, with some connection between what people pay into it with SS contributions and what they get back. That’s the only reason SS contributions are capped, because benefits are capped. Once that connection is removed by having SS benefits paid out of general revenues, it formally becomes a massive income redistribution program.
Rufus
Trump and Harris recognize that the American public is hooked on public spending. It’s a third rail that nobody wants to touch. So much “cut spending!” But the electorate won’t really stand for that.
O Bloody Hell, do you work in the finance industry?
OBloodyHell – great comment @ August 5, 2024 at 7:49 pm.
I live in Dixie County, FL – one of the Top Pork Chop Counties in Florida (that’s what the BIG Counties call us when they ain’t looking for Pork Chop County’s votes) 🙂
“A good way to look at the Money Supply is essentially as an instantaneous accounting for all the assets of a nation.” – OBloodyHell
Where did you get this definition? Certainly not in any textbook I’ve read.
Money supply is basically the Federal Reserve Notes plus coins in circulation plus cash equivalents like savings accounts.
The lousy job report is Trump’s fault and the violence in Chicago can be traced back to LBJ being “mocked” out of office allowing Nixon to be elected. https://www.newsweek.com/chicago-mayor-richard-nixon-gun-violence-1922590
Sure.
“A good way to look at the Money Supply is essentially as an instantaneous accounting for all the assets of a nation.” – OBloodyHell
==
You’re badly misinformed.
Trump and Harris recognize that the American public is hooked on public spending. It’s a third rail that nobody wants to touch.
==
Politicians and sectoral lobbies are hooked on public spending, not the public at large. You have to be quite careful with Social Security, Medicare, and Medicaid; interest on the public debt you cannot touch. You’ve a great deal of discretion in re the rest of it if you’re willing to brave the manufactured media sh!tstorms and squawking from state and local pols.
The fake “Budget Balancing” was just stealing Social Security trust funds, which was in surplus then because the Baby Boomers were at peak earnings.
==
The trust funds consist of Treasury issues. There was no theft.
Any consumption tax that taxes the necessities is inherently tyrannical.
==
You need to sober up.
I don’t feel like looking it up, but isn’t Clinton the most successful President of the past 30 years in regards to keeping national debt in check?
==
No. Appropriations are made by Congress. The President can and does obstruct the Congress, as Obama did when he rejected the Simpson-Bowles plan. The ratio of federal debt to domestic product began to decline in 1995 when Democrats lost control of the committee architecture in Congress. Clinton, unlike Obama, was willing to negotiate.
“Hi, my name is William Devane and I wish I had a garage full of new two-by-fours.”
Did a bit of home improvement over the weekend.
All taxation is coercive. What to consider in evaluating a tax regime is how readily taxes can be evaded, whether or not it is a means of distributing bon bons to well-connected sectors or favored population segments, the degree to which it generates pareto inefficiency, and the degree to which it holds the impecunious harmless.
Re: William Devane
Don’t know the current references, just know Devane from “Marathon Man” and “Payback.” I heard he had a good run on a TV show.
Good enough for me.
They had to do this ridiculous dance to keep up the pretense that Social Security isn’t just welfare.
==
Social Security is an inter-generational transfer. You pay in, you get benefits later. Your benefits are earnings-related. It’s not structured like a dole program.
Um, do you think the threat of WW3 starting in the middle east might have something to do with the tanking stock market? The stock downturn is a worldwide phenomenon. Investors in Japan don’t care enough about the US jobs report to crash the Japanese market. And defense stocks are booming. Just saying…
…do you think the threat of WW3 starting in the middle east might have something to do with the tanking stock market?
–MrsX
Nah, it’ll be fine!
If there were somewhere sensible toward which I might head, I would.
I live only a couple miles from Kirtland AFB.
It’s all gonna work out. 🙂
Um, do you think the threat of WW3 starting in the middle east
==
Unless Iran has a nuclear weapon they can get past the Iron Dome, this is not the way to bet.
Art Deco on August 5, 2024 at 11:01 pm
Am certainly no expert on Government economies, but the following quote has always stuck with me – tho don’t know if it’s correct or not:
It’s an inane declaration and should be ignored.
he was also in one of the last seasons of 24, as the President,
back in 2008, there was some enthusiasm for Obama, but then it just so happened a once in a lifetime thing, a major bank crashed 60 days before an election, the flagship of the Financial banking system
I am always amused at the amount of hype that finds its way into financial/economic news stories. For instance in this latest stop-the-press moment we are informed in pretty hysterical words that some stock index or another has fallen the most since way way back in history to 2022! OMG, that’s like two years ago! Did they even have cars back then? Did they use money or did they trade using trinkets?
yes their wayback machine is on the fritz, in 2020, the market dropped because of the lockdowns, but the fundamentals were strong, now anybodies guess,
they can look at the chart, do five minutes of research, dontcha think
@Art Deco:Social Security is an inter-generational transfer. You pay in, you get benefits later. Your benefits are earnings-related. It’s not structured like a dole program.
The first person to collect SS was Ida May Fuller in 1939. She paid in the equivalent of $490 in 2023 dollars, and before she died in 1975 had collected the equivalent of $497,793 in 2023 dollars.
Not everyone comes out that far ahead, but on average people on SS take out more than they put in, and since there’s nothing but taxes on today’s workers paying for it, it IS a dole. They can tie that dole to your earnings in some formulaic way if they wish, but it’s still a dole. Yes, those people paid for other people’s benefits with their taxes, but it’s a dole nonetheless, and it only ever worked as long as it did because the population grew and there used to be a lot more smokers and people doing heavy manual labor.
Median life expectancy in 1940 was 62. It’s now 79. SS was never intended to support retirees for decades, but here we are.
@Jerry:I am always amused at the amount of hype that finds its way into financial/economic news stories.
They’re almost always just-so stories or 20/20 hindsight; if people really knew why the stock market worked they’d be quietly making huge money, not telling everybody about it.
@O Bloody Hell:The federal government cannot “save” money, because the federal government is the source of money.
I think I know what you’re trying to say but this is glib and misleading, in my opinion. There are many kinds of money; the “source” of money is essentially public opinion about what’s suitable as money. When money gets scarce enough to impede commerce the public demands or creates substitutes. The public has been happy enough with the Federal Reserve system as it’s been since 1971, but given the decay of expertise in our institutions I wouldn’t count on it staying this way through my lifetime.
“The first person to collect SS was Ida May Fuller in 1939. She paid in the equivalent of $490 in 2023 dollars, and before she died in 1975 had collected the equivalent of $497,793 in 2023 dollars.” -Niketas C.
That’s misleading, since Congress made the decision to overpay for the first few years of the program. The system as originally designed was self-funded.
The Concord Coalition (remember them?) did an extensive paper on the origins and evolution of Social Security.
If you read the report, you’ll see that Congress grappled with what to do with the excess contributions since the beginning of the program. Some thought it should be used to pay down debt and others thought it should be invested in government bonds. The latter idea won partly because it was thought that would establish a legal requirement that a workers contributions be paid including interest.
Whether or not the trust fund holds iou’s or govt. bonds– it still receives a ROI for the contributions collected.
https://www.concordcoalition.org/issue-brief/history-of-social-security-part-1/
Not everyone comes out that far ahead, but on average people on SS take out more than they put in, and since there’s nothing but taxes on today’s workers paying for it, it IS a dole.
==
Insurance settlements are financed by portfolio income and premium payments, more the latter than the former.
==
The benefits are earnings related, they’re triggered by events you do not influence, and you have to establish a minimum quantum of contributions for f/t labor to qualify for anything at all. It bears little resemblance to AFDC, to give one example.
==
The first person to collect SS was Ida May Fuller in 1939. She paid in the equivalent of $490 in 2023 dollars, and before she died in 1975 had collected the equivalent of $497,793 in 2023 dollars.
==
This is perfectly irrelevant. Every cohort which has reached retirement age since 1979 has spent their entire work life from age 21 making contributions to Social Security.
==
Median life expectancy in 1940 was 62. It’s now 79. SS was never intended to support retirees for decades, but here we are.
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What’s salient in the discussion of Social Security is (1) the share of the population who reach retirement age and (2) the life expectancy of persons who have reached retirement age. Life expectancy at birth is not a datum of interest. (IIRC, the life expectancy of persons at age 65 has increased by about five years since 1940).
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If you have cohort-specific retirement ages which float over the course of a person’s work life, the ratio of beneficiaries to working adults can be arranged to bounce around a set point. We could have maintained a consistent ratio had the minimum retirement age (which stood at 62 for the 1918 cohort) been raised incrementally to 68 in time for the 1955 cohort to draw benefits (eliminating early retirement around about 2001). The Republican minority in Congress and task forces associated with starboard think tanks proposed raising the retirement age ca. 1980. Tip O’Neill and the Democratic caucus in Congress responded with demagoguery.
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Partisan Democrats will shoot you the line that if you raise the retirement age it will be for naught because people will fill the disability rolls instead. NB, about 13% of the population between age 60 and age 65 currently qualify for Social Security Disability. People in their 60s aren’t nearly as wrecked as they pretend.
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The Disability program has suffered from mission creep courtesy inner ringers. A fairly simple adjustment to reduce the disability rolls is to debar by statute the award of disability benefits for ‘anxiety disorders’ and ‘mood disorders’. These categories currently account for 1/4 of those on SSDI.
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We could also maintain Medicare and Medicaid expenditure at a consistent share of personal income flow by adding deductibles adjusted each year.
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Supplemental Security Income and Social Security are two separate programs, with different goals and funded by different mechanisms.
The fact they are administered by the same agency leads to confusion.
As Art Deco pointed out SSI (the Disability program) has expanded. It would be fair to consider SSI as welfare.
SSI is financed by general funds of the U.S. Treasury — personal income taxes, corporate taxes, and other taxes. Social Security taxes collected under the Federal Insurance Contributions Act (FICA) or the Self-Employment Contributions Act (SECA) do not fund the SSI program.
SSDI is financed by payroll taxes. SSI is financed by general revenues. SSDI requires you have a sufficient work history and a sufficient recent work history. SSI does not. SSI is a program for people who were disabled before age 30 and benefits are set at a level which do not provide for basic expenses but do defray some of the costs that families assume in supporting the beneficiary. There are SSI old-age benefits as well.
Can the USSS afford to have Trump win the election?
Art Deco, SSDI wasn’t part of the original SS plan and has it’s own trust fund, separate from the SS trust fund. It’s benefit, as you say is tied to earnings, unlike SSI which is means tested and a fixed amount.
People over 65 are eligible for SSI.
My point was that SS (and SSD) aren’t welfare, while it would be fair to say SSI is.
Negative feelings about a particular thing tend to accumulate, even if slight, when repeated sufficiently.
If, every time a father or mother goes grocery shopping, they see they have to scant on the order, that’s not a passing feeling. Once a week, for four years…?
How many will vote for more of that to avoid mean tweets?
@ Richard > you make an excellent point, which is why the Democrats are claiming that TRUMP will “tank the economy!!” which they pinky-swear did NOT do themselves already.
Their base outside of the identity groups and Hamasniks and Marxist terrorists (if there is any such left) will buy the whole propaganda fish hook, line, and sinker.
Niketas Choniates on August 6, 2024 at 12:10 pm said:
” There are many kinds of money; the “source” of money is essentially public opinion about what’s suitable as money. When money gets scarce enough to impede commerce the public demands or creates substitutes.”
Exactly!! +++++ [public opinion = social agreement]
Or aka: when the value “stored” in the money is depreciated/deflated/devalued enough, people will demand or create a substitute.