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Amitai Etzioni

Amitai Etzioni

Posted: September 9, 2010 09:39 AM

Needed: A Social Security Holiday

What's Your Reaction:

A recent forum in The Nation includes commentaries by seven public intellectuals about the ways Obama is progressing. At least five of them blame his failing on The System and urge that more attention be paid to his "major achievements." They are not doing any favors to the Democrats' and the President's reelection prospects or to his agenda, because they divert attention from those matters in which Obama has considerable degrees of freedom.  I am not referring to past mistakes -- those are water under the bridge -- but to their extension into the near future.

The System is indeed stacked against the progressive agenda. However, it did not make Obama get ever more deeply mired in Afghanistan. It did not force him to increase the levels of U.S. troops in Afghanistan, nor to sign off on a fantasy of nation-building on the cheap, leading with the demand that Afghan's corrupt government -- which the U.S. continues to prop up -- curb corruption. True, he might have taken a short-term hit from the right if he followed the Biden strategy of disengagement and used drones and Special Forces to deal with the few remaining Al Qaeda members left in Afghanistan.  However, this was a political choice, not a course Congress or the lobbies forced on the Commander-in-Chief. Most important, it is not too late for him to reverse course, say, by following the promised December review.

Second, nobody can stop Obama from framing the forthcoming election as a contest between those who advocate economic growth and those who want to hit the brakes just as the economy is about to take off.  I am not talking about more infrastructure-building which takes years to have an effect and much of the money goes to jobs overseas.  What is needed is a year-long social security holiday, which would inject into the economy some $650 billion over 12 months, which would put money into the hands of workers and employers in short order.

The conventional wisdom that the American people are all worked up about the deficit is a myth. A July poll shows that 70 percent of Americans favored reducing the unemployment rate over reducing the deficit. A Gallup poll shows that the top issues Americans are concerned about are the state of the economy in general (30 percent) and unemployment (28 percent). The deficit got the nod by a mere 7 percent.  And this holds not just for Democrats. A July Quinnipiac poll finds that 61 percent of independents and 58 percent of Republicans think that reducing unemployment is more important than reducing the deficit!

There is a season for everything. Now we must stimulate more; next year, or in two years, we will make deficit reduction our priority.  In effect, the president would do well to lay down specific markers. For instance, he could state that if unemployment falls below 7%, he will cut the deficit say by 20%; once it falls to 6%, some more;  and that he will jump on it with both feet -- cutting costs and raising revenues -- once unemployment falls below five percent.

The Democrats cannot win if they make the deficit their cause, as they will be outgunned by Republicans, who will claim that whatever deficit reductions the Democrats favor, they will do better.

It is time for a Hail Mary pass. The Democrats cannot lose much worse in November than they are now slated to suffer if they come out with a strong "pro-growth, the hell with the deficit now" message. 

In short, if Obama does not change course, the voters are likely to face a lousy economy and a miserable war, not just in 2010 but also in 2012. We owe him a loud and clear wake-up call, as he seems all too certain to follow the failing policies and politics he has followed so far.

 

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markie G
...all 6's, 7's + 9's
03:33 AM on 09/13/2010
soc sec holiday is a very, very bad idea---i cannot believe that anyone who is sincerely concerned about preserving soc sec would fall for this gingrich-ian ploy to further weaken soc sec and give more ammo to those who want to "reform" (destroy) it---

the solution to soc sec problems is so blindingly obvious--remove the income cap on SS taxes--one of the solutions to getting more $$ into the economy is just as obvious---tax the top 2% and get those hoarded resources back into circulation thru stimulus, etc---and can i get a witness for the forgiveness of all outstanding student loans?---talk about immediate economic stimulus....
12:49 PM on 09/10/2010
A Social Security holiday? Rob Peter to pay Paul and bootstrap ourselves into a healthy economy....Brilliant! Although this idea wouldn't solve a single problem it does illuminate the real problem which is that you can't run a country on "poor taxes". How is SS paid for? With a poor tax of the payroll variety. Other poor taxes are the income tax and sales tax. And when you think about it is all obvious BS.

Frank, the factory worker, has a job that pays $600 per week but after IRS, FICA, his portion of medical insurance, state tax, and possibly more, his paycheck is $385. He costs his employer $1200-$1800/wk after paying the bulk of his med ins, matching his SS, etc. Frank goes to the store and buys $200 worth of family supplies and is charged $238. And it gets much worse. Since the people who make and sell the products he is buying have to pay the same BS they have to include that in the price Frank pays. There is a lot of compounding of the BS particularly if the product is made in USA. Estimate are that 65-75% of the price of a USA made product is this BS cost.
08:19 PM on 09/11/2010
No way does your figures add up.

The employer would pay a matching 7.65% of the worker's salary for Social Security and Medicare. That would be $45.90 for a $600 salary. Most employers don't pay the bulk of medical insurance, but if they do, it would be high, but not anywhere close to $1200 to $1800 a week. It would be more like $1000 a month.

Money out of the worker's pay is sent to various placed by the employer, but it is not coming out of the employer's pocket. It is coming out of Frank's pay check. The federal and state tax is out of Franks pay and is an estimate of what he will owe when he files his taxes. He may get a lot of it back.

The estimates of what payroll taxes add to the cost of what we buy are probably inflated, too.

Are you indicating that we should quit paying for Social Security and Medicare so we can give more profit to those who we buy from? Those who have more money than good sense?
12:44 PM on 09/12/2010
In no way did I intend for my figures to add up. That is why I used "more" and "etc.". I am using approximations provided by employers and they count everything, which you may not agree with. They have to pay into an unemployment fund, worker's compensation fund, provide parking spaces, toilet facilities, ETC. Many complain that their health insurance expense is larger than their payroll expense. But my comment wasn't about numbers. I was trying to show the foolishness of collecting money at a low level (which I call a "poor tax") in order to pay expenses. Regardless of the numbers the money has to come out of the product. Think of it as a farmer paying his expenses out of his seed money instead of his sales. In answer to your question, I am indicating we should quit paying for Social Security and Medicare out of payroll taxes and pay for them out of profits.

You know, most of the people writing comments here are not journalists who are experts at expressing themselves. There is also a limited amount of space. In the future why don't you try to understand what the writer is trying to say instead of indulging in your petty picky picky?
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Devaron Namsaar
11:40 AM on 09/10/2010
I think everyone in this nation who has a brain knows that it is the common people, not the rich who pay the taxes and support the county. IF the deficit is going to be reduced it is not the wealthy who will reduce it. Inflicting abuse and overburdening the common people is a suicidal notion and strategy and of all the issues facing this nation taking away the ability of the common people to pay taxes or buy goods is the one issue that will end this nation and all the political, weapons industry, military, war BS.
The federal reserve can make all the phony money it wants to and it won't mean a thing if it does not get into the hands of the spending public. When the common people stop spending the nation will stop existing because this nation above all else, unfortunately, is capitalistic in every sense of the word. The problem with the current politicians is that they have forgotten which side of the bread is buttered. They continue to think the corporations pay their salaries and support their campaigns and provide all those nice things and benefits... but the truth is it is the people, the spending public that provide it all... and when the public runs out of money the corporations will die, the wars will end, and the weapons will no longer be produced. and worse than this issue is the civil war that will ensue... the end cometh!!!
08:39 AM on 09/10/2010
A general tax holiday for people earning below $200,000 might be possible. But reducing the income of the Social Security fund is a bombshell which will backfire with the next Republican election, or even sooner. It was always the intention of the business community, after redirecting retirement money from a common pool to the "safety" of Wall Street, to announce that the Social Security fund is indeed broke, and seniors would now either work for peanuts with any energy they have left, or starve to death. Anything that distributes money away from the Social Security fund is a gift to the top 1% wage earners who believe that they 23% is not enough of the national income for them.
07:36 AM on 09/10/2010
No, a social security holiiday is not needed. Neither is a hail mary pass. A mortgage holiday would put much more into the economy. So would increasing unemploynent insurance $100 a week for a year. Unemployed workers in Atlantic europe get 80% of their wages as unemployment insurance. So they can pay their major creditors who in turn can pay their creditors. Demand doesn't slacken as much as it does here, so their recessions don't last as long.

Agreed that democrats should not make the deficit their cause. Democrats have just about worn-out the godwill they inherited from the New Deal Democrats. If they mess with Social Security it will be over for them.
06:49 AM on 09/10/2010
So far they do not seem to be taking your advice.

The sages of MSNBC are spending every day discussing how they don't understand what is happening or why voters are too dumb to bow to them.

I live in DC (near your university) and in the past few days I have seen a few center-left people become deranged and scream things like "F-ck the Tea Party!" out loud to their neighbors and passersby.
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Donald Fannin
05:30 AM on 09/10/2010
Taxes cuts are not going to be effective in getting us out of this mess. In economic hard times people and business hoard money. Tax cuts will just give them more money to hoard. Those that are employed and business are the ones that would benefit from this plan. They can afford to hoard. The unemployed are the ones who have to spend whatever they receive just to live. I agree that the announced infra-structure spending will not kick in soon enough, but it is the right idea. The government needs to buy things. It needs to buy things that are on the shelves right now. It needs to replace the American consumer.

Also i fear that cutting the Social Security Tax will further weaken the system and give those who are wanting to modify it more ammunition.
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03:02 AM on 09/10/2010
NO. We do not need a Social Security holiday. We need corporations to start paying their taxes - close the loopholes - and we need the Bush tax cuts for the upper 2% to expire. We need to reign in wealthcare entitlements handed out to giant corporations that don't need them - corporations that are holding American workers hostage, and we need to quit with the no-bid government contracts. We can furthermore tax corporations that have shipped American jobs overseas accordingly. Then Obama can take out his red pen and start eliminating waste from the budget.

Obama could then use the accumulated savings to put Americans back to work in all sorts of fields in addition to infrastructure maintenance and development. If certain entities within the private sector wish to sit on enormous profits because the less fortunate 98% of the population won’t cave to their demands of privatizing Social Security and Medicare, then they can give back their wealthcare entitlements.

If they don’t feel like contributing to the country that helped them accumulate their wealth, then perhaps they’d make a better go of it in China or India… Goodbye and don’t let the door hit you in the @$$ on the way out. We can always begin anew and perhaps then the incorporated fiefdoms can revert back to the principles free market competition dictated by supply and demand.
01:37 AM on 09/10/2010
I concur with RESEARCH and strongly disagree with Mr. Etzioni.
1) make every dollar of earned income pay into social security. As a self-employed person I make over $106,000 I receive a 15.3 % tax cut! I love it. but it's a lousy model for the government.
2) While I like the SS tax cut, it doesn't prevent me from wanting to make $1million year - if I should be so luck.
3) the part that Mr. Etzioni doesn't grasp is that as soon as Dems sign on for a cut to regular workers' SS cut, the Reps, will propose this to be permanent. We will promptly see social security disappear and the disaster on the middle and working class seniors will be complete. Not only will their pensions have been fleeced by their former employers, but SS will have disappeared as well.
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Donald Simon
10:37 PM on 09/09/2010
Printing money that we don't have will invoke the Law of Unintended Consequences
10:00 PM on 09/09/2010
What is needed it is to remove the SS income cap,

and raise personal income tax marginal rates:
50% over 250k$
90$ over 2.5M$
10 year income averaging.

Like the USA had when it became the most powerful economic power in the world!
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GENE DEVAUX
Political activist, degrees in Accounting and Econ
12:03 PM on 09/10/2010
I don't necessarily agree on raising those tax rates that high, but I do remember that when Ronald Reagan was president, the top rate was 50% for families with high incomes. I do like the idea of 10 year averaging. People who have a very good year may also have many bad earning years. I also agree to raise the SS income cap but I would rather see very high income folks pay into the system for a longer period than they do now. Rush Limbaugh makes 50 million dollars a year. He makes enough to pay off his Social Security taxes in one or two days. All he does for all of that money is to be an on air republican propagandist for three or more hours a day. Tax him for at least six months. The most important thing to do is to roll back the Bush tax cuts for the 2% of high income people. They can afford to pay it and that would reduce the deficit and make more money available for a government stimulus program. When businesses are not spending, the government is the spender of last resort.
03:52 PM on 09/10/2010
SS tax him for his whole productive life.

It's a totally fair flat tax.
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dadw5boys
Disabled Vietnam Vet
09:45 PM on 09/09/2010
To keep from HORNORING the U.S. Treasury Bonds the Social Security Trust Funds holds the USA must go Bankrupt.

Doubling the pay of Doctors who treat Medicare and Medicaid Patients then the Unfunded Drug Bill were meant to crash Social Security with over spending !!!

Now all thats left if to crash the U.S. Government to get out of paying the Treasury Bonds.

Vote wisely !!!!
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GENE DEVAUX
Political activist, degrees in Accounting and Econ
09:31 PM on 09/09/2010
The so-called "fair tax" is non-sense. That concept would burden low and middle income Americans with more taxation and would stifle economic growth because many people would just have to stop buying things that they want because all of their income would have to be spent only on bare necessities. This is a Dick Armey concept. It would be a regressive tax on All Americans but it would hurt the great majority of us most of all.
01:52 PM on 10/05/2010
Gene's opinion seems to be nonsense. The FairTax (actually opposed by Armey) does not tax on any necessities through the prebate. It repeals the regressive payroll taxes which 74% of Americans pay more of than our rich, loophole ridden 'progressive' income tax. People will always buy new things but with no IRS and the made in America label coming back, the economy will be very strong. FairTax . org has an amazing amount of research on it.
09:17 PM on 09/09/2010
This is just Reaganomics under a different name. Inflate to a higher level, revenues pick up and then we will deal with the deficit. Of course dealing with the deficit never happens. There are always other economic problems that can be identified as more important than dealing with the deficit. Been there, done that. This fairy tale is finished.
08:59 PM on 09/09/2010
Why did Elizabeth's greeting to Mary in Luke get used as a sport's term? Yes I know it means to make a desperate attempt to score a touchdown by throwing an unwise pass. Maybe it has something to do with the Catholic ritual—that probably explains it, but everyone is not Catholic, fortunately (there are still Jewish people alive)..