One simple but powerful step we should take to get entitlement spending under control is to apply means-testing to retirees who have already received more than they paid into the system in social security and medicare benefits. Just calculate the present value, in today’s dollars, of all social security and medicare taxes paid with a reasonable return on investment and an inflation adjustment. Then calculate the benefits received in today’s dollars, just using an inflation adjustment. Anyone who has already received more than he/she paid into social security in today’s dollars would then be means-tested and if they have enough income, their future social security benefits would be reduced or taxed more. Then do the same thing for medicare.
That’s the only fair thing to do for people under 40, because under the present tax and benefit system, higher income people under 40 are being absolutely destroyed financially by social security and medicare. Any person under 40 who earns more than about $60K is effectively an endentured servant of the United States, which now owns a large part of his income, and these young people will be getting hit with a huge negative return on investment by social security. That huge negative ROI subsidies the incredibly great deal that social security has been for many affluent seniors. I know because my late parents got that sweet deal too and I didn’t like paying for it.
Of course, we don’t hear one single congresscritter talking about the confiscatory taxes being imposed on higher income young people to pay for this super sweet deal for many affluent seniors, because congress is all scared out of their minds by the AARP and other aggressive, selfish senior lobbies. Well it’s time to change that cowardly behavior and call a summit meeting to get entitlements under control and stop these confiscatory taxes on young Ameicans, and also get cut our budget deficits back to reasonable levels.
You sound just like my son...he’s physicist too.
Good idea on reforming entitlements. It should not be for the poor beyond what people were screwed out of all their working lives. When caculating payments in made by seniors, both the employer’s share and the employee’s share should be counted as their payment into the ponzi scheme.