No. of Recommendations: 9
Interesting observation by Krugman in his blog yesterday:

"Remember, back in the 1980s the Greenspan Commission supposedly fixed Social Security’s finances for 75 years, that is, until 2060. Why, then, do most projections show the trust fund running out well before then? Not because life expectancy is rising — that was already built into the projections. No, the big reason is rising inequality, which has led to a growing share of income coming above the payroll tax cap, so that SS revenue lags behind overall compensation. And yet the conventional wisdom is that we should respond to a financing issue caused by rising inequality by slashing benefits, further increasing inequality."


I bet we could actually lower the FICA tax rate and secure Social Security for hundreds of years if we applied the tax to all income (even hedge fund managers earning billions of dollars in one year) dividends, interest, and capital gains.

intercst
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