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Should We Raise Taxes or Cut Social Security?

News 2010/07/27 14:19:48
We should raise taxes.
We should cut entitlements.
We should do a little of each.
We should do neither.
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Bailout of the auto industry: Check. Bailout of the bank industry: Check. Bailout of Social Security and Medicare: Hey, stop thinking about yourself!

That's the gist of Neel Kashkari's Washington Post Op-Ed on Monday. Kashkari is the managing director of the multi-billion dollar investment management firm PIMCO. He worked in the Bush administration and ran the Troubled Assets Relief Program until May 2009. (TARP, coincidentally enough, bought troubled assets from -- PIMCO.)

In what seems like a coordinated publicity tour among politicians, economists and pundits, Kashkari says, "most economists agree that raising taxes cannot pay for these commitments; entitlements must be cut [to cut the deficit]...our shared beliefs in free markets, fair play and the rule of law inspire entrepreneurs to pursue their dreams and give global investors confidence to bring their money to America."

Bailing out industries that made poor decisions: Free market at work. Bailing out entitlements that you paid into for years: Poor decision making.

“Billionaires” Mock Calls To Cut Social Security from Talk Radio News Service on Vimeo.



Should We Raise Taxes or Cut Entitlements to Reduce the Deficit?

Read More: http://www.washingtonpost.com/wp-dyn/content/artic...

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  • GinaMagini 2010/07/27 17:15:02 (edited)
    We should cut entitlements.
    GinaMagini
    +9
    Cut spending. Cut spending! It doesn't take a genius to figure it out. Why is there no choice for cutting spending, only cutting entitlements? There is other spending that could be cut. How about foreign aid? How about we stop funding asinine research into subjects that matter to no one? Cut politicians' salaries and benefits? Cut funding of luxury items like the arts? When people are starving, they don't remark, "oh how I wish I could go buy a painting for my wall!" No, they want the necessities. Trim the budget to the necessities.

    Social Security should not be cut. We should have been allowed years ago to put the money into private accounts where the government couldn't steal it. But, democrats didn't want that!

    And bailing out companies is not the free market at work. Letting bad companies fail would have been the free market solution.

    Cut cut cut cut. That's the answer.

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  • steven 2010/07/28 21:12:39
    We should do neither.
    steven
    A false dichotomy of choices is the best we can do? Seriously? Idiots, all of them. We need to cut spending -- how about we begin with the billions going to Pakistan? Then maybe we could save on paper in DC by making the morons in charge actually READ the bills they vote on. We could certainly begin to phase out socialist insecurity and phase in personal saving accounts based on precious metals that hold their value. In fact, don't punish those who choose to be wise by taxing them to death after they have saved it and need to spend some of it. Raising taxes and spending making government bigger, seems to be the only answer some of these fools have -- solution: automatic recall on idiots. Then get the government regulators out of the picture and let American ingenuity do what it does best -- innovate, invent and create jobs for Americans and bless the rest of the world in the process. Socialism doesn't work, EVER, morons. Liberty is what made America the shining example it once was. Liberty is what gave the world what it knows of modern conveniences, hospitals, universities, etc. Get out of the way and let liberty work again.
  • dee Hoover 2010/07/28 15:28:36
    We should raise taxes.
    dee Hoover
    It seems that the entire tax system is now slanted to help the rich get richer and "to hell with the shiftless" poor. Entitlements should take precedence over wars of choice, i.e Afghanistan and Iraq.
  • Arclight 2010/07/28 13:57:11
    We should cut entitlements.
    Arclight
    We should do a lot of both. We also should make it highly tax-advantageous for offshore American firms to return to the USA to create jobs here. Obomination himself said he would do this during the campaign, but it is now more than obvious, our curious, left leaning "leader" is more wind than sail on this point. Jobs would lead to less need for entitlements. Right now we are training future generations to look to entitlements as a way of life. Just when we were making some progress along comes Mr Left Wing Nut (Obama) and we fall backwards into a big crush of new giveaways (mostly as a gambit to stay in power). NOT GOOD!
  • Lt. Fred 2010/07/28 12:34:33
    We should do neither.
    Lt. Fred
    +1
    De-stimluating the economy by raising taxes or cutting spending would have a negative effect on government revenue. If government spent less or taxes more, deficits would be higher, because people would spend less, meaning unemployment would go up. Most government revenue comes through income tax, so a higher unemployment rate would mean lower tax revenue, and a higher deficit. Most of Obama's raise in deficit was caused by just that.

    The only way to escape deficit is to stimulate the economy back into full employment. Once there, inefficiencies in spending like the war on drug, the pointless wars and the state-funded and unnecessarily large millitary-industrial complex can be cut, and taxes on the wealthy and corporations raised to Reagen levels. Also, rich people should probably pay MORE of their income in tax, not less.

    Presuming a reasonable growth rate, the debt-to-GDP ratio would gradually decrease, putting the US back into a fiscal safe-zone. There is no need to cut economically efficient and socially advantageous programs like Social Security and Medicare.
  • Falcon 2010/07/28 06:51:00
    We should raise taxes.
    Falcon
    On those who benefited most from the last tax cut while the economy went in the toilet because of it. Take SS out of the general fund and put it back in it's own trust.
  • Lt. Fred Falcon 2010/07/28 12:38:22
    Lt. Fred
    +1
    Tax cuts don't send the economy into the toilet. They're just suboptimal stimulus. Tax cuts barely stimulated growth or employment at all. The money would have been better spent on a social program like a public option, public transport, national ports, or something of that nature. Presuming that it needed to be spent at all- and was a surplus so bad?- it should have been spent in the most economically efficient way possible.
  • Falcon Lt. Fred 2010/07/29 21:10:59
    Falcon
    Tax cuts inevitably produce national debt, national debt weakens the dollar, a weak dollar hurts the economy. Bush and Reagan's tax cuts did not stimulate growth or the economy at all... not even barely. Yes, the money could have been used for infrastructure which would have stimulated both. Or we could have continued to enjoy a budget in the black maintaining a stronger dollar which would also stimulate both.
  • Lt. Fred Falcon 2010/07/30 10:09:27
    Lt. Fred
    That can be true. It isn't necessarily so. A weak dollar can actually boost the economy, by strengthening exports. But the big cost of tax cuts is the opportunity cost. Taxes are cut instead of some useful program- which is a cost.
  • teamrn 2010/07/28 05:39:46
    We should do a little of each.
    teamrn
    By doing a little of each, I mean that EVERY proposed tax should be thought through and all consequences realized-BEFORE IT IS ENACTED. As far as entitlements, IMHO, Medicare and Social Security INEQUITIES, should be cut. Inefficiency and waste should be cut. People who are, like myself, TRUE beneficiaries of these programs should be allowed to stay on the 'ranks.' But the scofflaws who have been allowed to stay on the rolls, year after year, should be forced off.

    Bottom line, we must cut spending where we can and we must cut entitlement spending when we can. Pare down to the 'nth' degree, but we have to stop this reckless spending. Nearly 1/2 the stimulus bill (which HAD to be passed immediately to prevent the sky from falling) remains unspent. We also have to cut reckless leaders, both Republican and Democrat.
    prevent sky falling remains unspent cut reckless leaders republican democrat
  • Lt. Fred teamrn 2010/07/28 12:47:29
    Lt. Fred
    +1
    Inefficiencies should be cut. That goes without saying. The biggest current inefficiency in the US economy is the 10% of potential workers who are unable because government is too afraid of debt to move the economy back into smooth running- even though (as I explain above) full employment is the only way to move out of deficit. Cutting two of the most efficient and socially positive economic actors in the country isn't the way to do it.

    Inequities should be cut. The United States is the most unequal economy in the Western World (except- according to some measures- Great Britain). The only way to build a more equal and prosperous economy is (unsurprisingly) some kind of government involvement.

    The US government owes social security holders their money back. The government borrowed it on condition of return. The constitution actually prohibits the US government defaulting on loans owed.

    As I explain above, the deficit can be relatively simply resolved (in a fully employed economy) through wiping out the most egregious inefficiencies in the US government and society: the tax system that takes from the poor and gives to the rich, the millitary that's twice as large as it needs to be, the pointless and bloody wars and certain unnecessary and socially negative laws.
  • Falcon Lt. Fred 2010/07/29 21:13:53
    Falcon
    Very well stated Lieutenant.
  • teamrn Lt. Fred 2010/07/31 04:08:10 (edited)
    teamrn
    Fred, You stated, "The only way to escape deficit is to stimulate the economy back into full employment. " FULL employment cannot exist until you have a utopian society which allows for FULL funding of the ADA; and even then some are so disabled that employment isn't possible.

    "full employment is the only way to move out of deficit. " The country doesn't need full employment to move out of deficit. The government and people need to work SMART, EFFICIENTLY, EFFECTIVELY and discuss disagreements, rather than hurl insults at each other. I refer to the horrible exchange between representatives Peter King and Anthony Weiner on the House floor last night. How far have we sunk?
  • Lt. Fred teamrn 2010/07/31 12:20:03
    Lt. Fred
    Ah, ignorance. Full employment is a specific state of the economy. It exists when all or nearly all participating members of the economy (usually about 60%) are employed in some way. The treasury regards full employments as between 3 and 5% unemployment. Other economists regard it as less than 1% or 0% unemployment. I meant it in the sense the treasury use it.

    {The government and people need to work SMART, EFFICIENTLY, EFFECTIVELY and discuss disagreements, rather than hurl insults at each other.}

    This sentence has no meaning. It's just cliche and conventional 'wisdom'.

    Actual economic reality cares not for the way in which full employment is achieved. But the federal government shouldn't even bother to try to achieve a lower deficit until unemployment is (at least) halved.
  • THE ONE 2010/07/28 05:27:15
    We should do neither.
    THE ONE
    WE SHOULD VOTE OUT OBAMA AND PUT SOME ONE IN THE WH WITH SKILLS, EXPERIANCE AND IS NOT A SOCIALIST.
  • jnl72 2010/07/28 04:14:58
    We should do neither.
    jnl72
    You just cannot raise taxes during a recession. It's suicide! Cut corporate taxes, and tax revenues will go up. Cutting corporate taxes will help companies hire more employees, which will get employees spending again. It's common sense. Raising taxes is a horrible idea right now.
  • Falcon jnl72 2010/07/28 06:47:48
    Falcon
    So why will they hire more people if they are not selling product? This scenario puts the cart before the horse.
  • jnl72 Falcon 2010/07/28 12:31:48
    jnl72
    I see what you're saying, but there is a lot of fear in the economy right now, which is why some companies, especially small businesses, don't want to hire anyone. They may need more employees, but they're worried about new taxes, especially related to the health care bill, so they don't want to hire. In addition, other businesses cannot get loans because banks are still not extending credit. If the banks would lighten up and extend credit, some businesses could grow and hire. I would love to start my own business, and in my area, there's a perfect market for the product I want to sell. I just can't get the funding right now. There's no doubt that I could sell product. I would be the only provider in a 15-20 mile radius, which is filled with the type of businesses who would buy this particular product.

    How is raising taxes going to help? It's just going to put more of a strain on people and businesses.

    This wouldn't take care of all issues, but it's a piece of it. Govt just needs to stop reckless spending. Period.
  • Falcon jnl72 2010/07/29 21:28:52
    Falcon
    +1
    You are absolutely right about the banks. We gave them the money to do it with, we just need to make them do it instead of giving poor performers big bonuses.

    Raising taxes back to pre Bush, better yet, pre Reagen on those that enjoyed the biggest windfalls from them would work towards decreasing the debt... that would make a stronger dollar. A strong dollar has always strengthened not only the US economy, but the world economy.

    I agree with you that government should stop with the reckless spending. Selling a toilet seat or claw hammer to the military for $600 and getting away with it just because you are a defense contractor is ridiculous. The biggest part of our budget is defense spending $664B, while the next biggest, Social Security and Medicare are at $78B. Yes, the health care providers need to be brought in line but the defense industry is far out of control. They are our biggest liability.
  • Lt. Fred jnl72 2010/07/28 12:50:19
    Lt. Fred
    +1
    If you cut corporate taxes, the corporations will do the same thing that they did when the US government gave them money directly: pay out massive bonuses to their worst performing CEOs, to shareholders, and in profits. That's not very good stimulus.

    But you are right in saying that any form on negative stimulus is a bad idea. Cutting spending is a bad idea, raising taxes is a bad idea. Until the economy is healthy, everyone should just ignore the deficit.
  • Gary jnl72 2010/07/28 15:47:53
    Gary
    Cut corporate taxes to raise revenues? Nonsense! Corporate taxes have been cut about as far as is fair. Reagan did it and had to borrow a couple of trillion dollars to make ends meet.
    Bush did it and had to borrow several trillion dollars to make end meet. Pure voodoo economics.
    All smoke and mirrors.

    Republicans...borrow and spend, borrow and spend

    Create the illusion of prosperity while the economy crumbles.

    That's Republican/conservative economics in a nut shell.
  • beavith1 Gary 2010/07/28 21:23:04
    beavith1
    if you only had a clue what you were talking about...

    just something for you to consider. how do the political parties that control Congress factor into your mistaken view of governmental fiscal policy?
  • jnl72 Gary 2010/07/29 15:59:03
    jnl72
    Honey, how do you get that Republicans borrow and spend, when that's all Obama has been doing for the last 18 months? Everyone wants to blame Bush for the problems of the entire world, but did you know that when Dems took over Congress in 2006, unemployment was only at 4.5% and the economy was strong? Only after they took over Congress did this whole thing start to fall apart. Obama has spent an enormous amount of money....that we DON'T HAVE!
  • Heather ~Warrior Princess~ 2010/07/28 03:41:44
    We should do neither.
    Heather ~Warrior Princess~
    +1
    How about we stop spending money helping the entire world??? We are going broke and still trying to HELP other COUNTRIES! How about we think about the starving neglected kids in America???
  • Lt. Fred Heather... 2010/07/28 12:50:59
    Lt. Fred
    America spends very little on foreign aid.
  • Scarr~Green with Envy 2010/07/28 03:13:20
    We should do neither.
    Scarr~Green with Envy
    Ppl who are retired get money outta us workers. And the system will fail by the time we're that old! Why don't they have them apply for unemployment? I'm not that old yet so I don't know how the system really works.
  • ὤTṻnde΄ӂ 2010/07/28 02:57:12
    We should raise taxes.
    ὤTṻnde΄ӂ
    Raise taxes on the wealthy and pay back social security.
  • teamrn ὤTṻnde΄ӂ 2010/07/28 05:51:07
    teamrn
    Raising taxes on the wealthy; good plan, but make the 'cut' something like $500,000/year. Those with incomes below are the small businesses who EMPLOY people, and if they're taxed to death, they won't hire despite getting stimulus $$$.

    In other words, instead of those making $250,000; to be considered as wealthy, increase that amount to $500,000.
  • Gary ὤTṻnde΄ӂ 2010/07/28 15:52:54
    Gary
    Damn rights! Take the lid off payroll taxes and keep collecting it all the way up.
    Social Security would be in good shape for a long time to come.
  • frustrated 2010/07/28 01:42:54
    We should cut entitlements.
    frustrated
    not allowed to run for president but if i could, 1 everybody pays into SSI but pay out is on a reduction scale, make between 0 and 50,000 from other sources you get full amount, 50,000 and 75,000 you get half and over 75,000 you forfeit unless at some time in the future you fall below one of the thresholds.would work the same for all other entitlements. for people that are working an hourly wage there are no taxes on overtime wages. unemployment insurance works on a redution scale also, 6 months at full benifits and 12 at half..most government programs should be cut in at least half
  • Magus BN-0 2010/07/28 01:38:52
    We should raise taxes.
    Magus BN-0
    +1
    Let the Bush tax cuts for the millionaires expire.
  • jnl72 Magus BN-0 2010/07/28 04:17:34
    jnl72
    Good grief. The Bush tax cuts affected all tax brackets, rich and poor alike. When these tax cuts expire, ALL tax brackets are going up. The lowest tax rate of 10% is going up to 15%....up 50%! So, this was helping everyone, not just the rich.
  • Magus BN-0 jnl72 2010/07/28 05:17:24
    Magus BN-0
    Do you not understand that Congress can let the tax cuts expire for the top bracket, while extending them for everybody else?
  • jnl72 Magus BN-0 2010/07/28 12:25:00
    jnl72
    Oh, I understand that they can.....but they're not.
  • Magus BN-0 jnl72 2010/07/28 20:30:48
    Magus BN-0
    Actually that's exactly what they'll do.
  • Texas Johnny 2010/07/28 00:00:41 (edited)
    We should do neither.
    Texas Johnny
    +1
    Cut back on the size of government. Get rid of several departments, as well as cut spending especially on discretionary spending. How many millionaires or people with huge retirement accounts still get SSI? Just asking!

    Get rid of all the billions in waste as well and it would go a long way. People must get used to the idea of NOT depending on the government to solve their problems.

    Americans have been brainwashed into thinking the government will solve all our problems, it only multiplies them. The more taxes, the less freedom you have!

    problems americans brainwashed thinking government solve problems multiplies taxes freedom
  • Lt. Fred Texas J... 2010/07/28 12:52:14
    Lt. Fred
    I would suggest that Americans have been brainwashed to believe that tax cuts mean freedom. Do you really think people are most free without a government, as in Somalia?
  • Texas J... Lt. Fred 2010/07/28 18:07:11
    Texas Johnny
    Not in that way, as I see it. Cuts should mean a reduction in expenditures in the government budget, but the government keeps growing and so does the deficit.
  • Lt. Fred Texas J... 2010/07/28 20:21:35
    Lt. Fred
    Then do you agree that some kind of government is required to ensure freedom?
  • Texas J... Lt. Fred 2010/07/29 04:02:52
    Texas Johnny
    Of course, Did you think I am some sort of anarchist? Our founding fathers had it right in having a small a government as possible and the rights of man were God given and could not be taken away by the government
  • Lt. Fred Texas J... 2010/07/29 07:15:28
    Lt. Fred
    That means that the formula is more complex. Tax cuts might mean less freedom, or be unrelated to freedom altogether. A raise in taxes might actually mean more freedom. Government intervention might be bad (sending innocent people to Guantanamo) but it coud also be good (banning slavery, ending institutionalised discrimination).

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