Nice article! I think it boils down to a combination of 1) Growing political instability and 2) Unwillingness of either party to tackle the rising cost of social security and medicare. There are no good solutions here, cuts will need to be made.
Thanks! 1. Definitely (although some did point out the timing now instead of say in April is quirky, but that's just as an aside. )
2. Regarding social security - I actually might right about retirement systems at one point (less econ, more finance-y). But the way I think about social security funding from a design perspective is in two parts.
One part is the self-sustaining part - that is designing a defined contribution system with payouts adjusting depending on the macroeconomic factors. Some Scandinavian systems do that and the mechanism focuses on mainly keeping your relative income position in the same order.
The second part is the guarantee of a minimum standard of living. This requires a separate tax to fund. But if the first part is self-sustaining (a type of saving mechanism) then the second part is really the only debt worthy discussion issue.
Lastly, with the recent increase in real wages on the bottom of income distribution, I wonder how much extra will be generated for social security.
Nice article! I think it boils down to a combination of 1) Growing political instability and 2) Unwillingness of either party to tackle the rising cost of social security and medicare. There are no good solutions here, cuts will need to be made.
Thanks! 1. Definitely (although some did point out the timing now instead of say in April is quirky, but that's just as an aside. )
2. Regarding social security - I actually might right about retirement systems at one point (less econ, more finance-y). But the way I think about social security funding from a design perspective is in two parts.
One part is the self-sustaining part - that is designing a defined contribution system with payouts adjusting depending on the macroeconomic factors. Some Scandinavian systems do that and the mechanism focuses on mainly keeping your relative income position in the same order.
The second part is the guarantee of a minimum standard of living. This requires a separate tax to fund. But if the first part is self-sustaining (a type of saving mechanism) then the second part is really the only debt worthy discussion issue.
Lastly, with the recent increase in real wages on the bottom of income distribution, I wonder how much extra will be generated for social security.
Just some thoughts from me.