Saturday, February 12, 2005

Kevin Drum's Answer
To my question of how rolling back the income tax cuts could help social security (since SS is funded by payroll taxes not income taxes), Kevin says:
First answer: it has nothing to do with shoring up Social Security. You're right that SS funding is 100% (actually, more like 99%, but let's not get into that) via payroll taxes.

Second answer: the big problem we have in the future is that SS will go into the red. This will cause a bigger deficit. In order to prepare for that, we should be shoring up our general finances, and income taxes help that. If we don't do this, then when 2018 rolls around, we either have a *really* big deficit or else we need a *really* big tax increase. Increasing income taxes now makes the pain of dealing with 2018 smaller.

We should actually be doing three things right now. First, trying to get rid of the deficit so we're in better shape when 2018 comes. Second, dealing with Medicare, which has a huge funding gap. Third, shoring up Social Security. Those are listed in order of priority, and SS is very definitely the least important of the bunch.
So I don't have to start over understanding this mess. The effect is not direct, except that once the money going out *begins* to be larger than the money coming in to social security, the trust fund will be needed for benefit payments, and those bonds will come due. Assuming the government has to pay that bill with the general fund, it will add to the deficit if there is still one. So, propping up the budget with more income tax revenue would help us be in a position to pay the difference between payroll tax revenue and social security benefits without driving the budget into an even scarier hole. But that wouldn't help social security pay for itself, so it's more like addressing the symptoms not creating a cure (if you consider the illness to be the inability of SS to pay for itself).

Either way, so long as Bush is President, rolling back the income tax cuts is impossible. So other than to be reminding people of that Bush screw-up (the tax cuts) there's no sense in bringing it up as a legitimate political option right now.

Addendum: In asking Kevin to help make sure I understood the line between income taxes and social security I, jokingly, offered to repay his kindness by helping him with any music theory burdens keeping him up at night should he have any, since that's my expertise. In his reply, he added:
Well, if anyone could explain what a key is (as in "F Minor" or "G Major" or whatever) in a way that actually makes sense to me, that would be great. I understand it technically, but have never really been able to make sense of it. I have a feeling it's one of those "sunset to a blind man" things.
So, I'm going to give that a try this weekend and will post my answer here, explaining to him what a "key" is. That's actually a pretty scary question. Hopefully I'm better at that kind of thing than when I taught my very first class in Pittsburgh many years ago, and found myself trying to explain what "rhythm" *is* in some sort of precise absolute definitional way. I ended up, unexpectedly, having to try and discuss what "time" *is* and you can imagine what all kinds of hell that ended up like. As if anyone anywhere has a freaking clue what time is. It was a nightmare. So with the issue of "what is a key"?, I somehow have to couch it in the grand, metaphor-rich contexts that its powerful effects deserve, without being too bizarre and/or esoteric. We'll see how it goes.

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