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I'd like to expand on a point that I made in comments to this post, which is that whatever problems Social Security has can be addressed by helping more Americans get to work and encouraging and/or requiring corporations to pay a fair wage for a day's work.
While it's true that even the worst doomsday scenario for Social Security can be averted by adjusting the amount of income subject to payroll taxes and/or reducing benefits by just a few percentage points, the better solution is to get more Americans working. The lower our unemployment numbers, the better off the program is.
But it's about more than Social Security. As Robert Reich and AFSCME President Gerald McEntee have both said, we don't have a deficit problem. We have a revenue problem. Reich in particular goes further than just addressing the deficit and lays out a good path to follow for total economic recovery:
Big American companies are sitting on almost $2 trillion of cash because there aren't enough customers to buy additional goods and services. The only people with money are the richest 10 percent whose stock portfolios have been roaring back to life, but their spending isn't enough to spur much additional hiring.
The Republican bromide -- cut federal spending -- is precisely the wrong response to this ongoing crisis, which is more analogous to the Great Depression than to any recent recession. Herbert Hoover responded the same way between 1929 and 1932. Insufficient spending only deepened the Great Depression.
The best way to revive the economy is not to cut the federal deficit right now. It's to put more money into the pockets of average working families. Not until they start spending again big time will companies begin to hire again big time.
Don't cut the government services they rely on -- college loans, home heating oil, community services, and the rest. State and local budget cuts are already causing enough pain.
The most direct way to get more money into their pockets is to expand the Earned Income Tax Credit (a wage subsidy) all the way up through people earning $50,000, and reduce their income taxes to zero. Taxes on incomes between $50,000 and $90,000 should be cut to 10 percent; between $90,000 and $150,000 to 20 percent; between $150,000 and $250,000 to 30 percent.
And exempt the first $20,000 of income from payroll taxes.
Make up the revenues by increasing taxes on incomes between $250,000 to $500,000 to 40 percent; between $500,000 and $5 million, to 50 percent; between $5 million and $15 million, to 60 percent; and anything over $15 million, to 70 percent.
And raise the ceiling on the portion of income subject to payroll taxes to $500,000.
It's called progressive taxation.
The lion's share of America's income and wealth is at the top. Taxing the very rich won't hurt the economy. They spend a much smaller portion of their incomes than everyone else.
It's the economy, stupid. It's always the economy, and by that I mean jobs and wages. Republicans didn't take over the House of Representatives because of healthcare reform or spending or concerns over the deficit or even the fact that Obama is black, though all of those were factors.
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