News, Opinions & Events
“Goss argued that rising income inequality — with fast growth at the top and slow growth everywhere else — is the mystery ingredient that has thrown Social Security’s finances into turmoil earlier than planned. And the big change took place in the 17 years after the Greenspan Commission made its projection, from 1983 to 2000, he said.
“During that time, incomes for the best-paid 6% of earners rose by 62% in real, inflation-adjusted terms, he said. For the other 94%, incomes rose by just 17%.
“The net result was that the lion’s share of U.S. income growth was above the Social Security cap, and wasn’t subject to the program’s payroll taxes. The percentage of incomes subject to the program’s tax collapsed from around 90% in the early 1980s to barely 82% by the turn of the millennium.
“‘This is a massive change in the distribution of earnings, and that’s what caused us to have a much smaller share of all covered earnings falling below our taxable maximum,’ Goss said. ‘This is a major component of the shortfall we’ve had.'”
This is the first time that we’ve heard SSA’s chief actuary emphasize that growing income inequality is a major cause of Social Security’s financing shortfall. Here’s what we wrote five years ago:
“So far, residents of Bucks County appear mostly sympathetic to the workers. A few expressed concern about what the strike will do to auto prices and availability, but most who spoke with The Washington Post said they supported working people standing up for better pay in an era of widening income inequality.”
“Rising costs have pushed homebuying out of reach for all but the highest income households in a growing number of metros.”
In a well-functioning competitive market, increases in the supply of housing would not be limited to the highest income buyers. In the US version of capitalism, the housing market is not responding to the needs of most of the population.
- These state credits are usually built on the federal EITC, which delivered about $64 billion to 31 million working families and individuals in 2022. Along with the federal Child Tax Credit, the EITC lifted an estimated 6.4 million people out of poverty in 2022.
- This year, 12 states – Colorado, Connecticut, Hawai’i, Indiana, Maryland, Michigan, Minnesota, Montana, Rhode Island, Utah, Vermont, and Washington – expanded and improved these credits.
- To maximize the impact of their state credits, lawmakers should make the credit fully refundable, increase the matching percentage, extend eligibility to immigrant workers and older and younger workers without dependent children in the home, boost the credit for workers without children and extremely low-income families, and consider monthly payment options.
“The EITC plays a major role in combatting poverty in the United States and there is bipartisan support to expand its role. The EITC’s impact on
future Social Security benefits should be further analyzed. Receiving EITC supplements through the tax system instead of higher wages should not result in reduced Social Security benefits for low- and modest-income workers.”
“My academic colleagues and I often lament that even after the Occupy movement, Thomas Piketty’s bestselling book Capital in the Twenty-first Century, and Oxfam’s campaigning work focusing on the huge divides between rich and poor, inequality has only got worse. But this tends to be how inequality works. More wealth at the top means more power at the top. The rich capture our political, economic and social systems, block efforts for change and scare those who resist into submission. So rather than serious proposals to address our unequal society, all we are left with is the same old ‘education will fix it’ mantra, or an emphasis on the individual to ‘pick themselves up by their bootstraps’.”
“Today, Amazon tells sellers that if it detects a lower price for their products on any other online store, they will be punished, which is to say, their ability to get their products onto a place on the Amazon website where customers click will go away. The net effect, as Amazon itself wrote, is that ‘prices will go up.’
“Indeed, Amazon tells third-party sellers to raise prices…”Amazon founder and former CEO Jeff Bezos owns The Washington Post. The Post’s interim CEO Patty Stonesifer sits on Amazon’s board.
Consume reporting on the Amazon antitrust action by the Washington Post with a ton of salt. As the article above notes: “Amazon founder and former CEO Jeff Bezos owns The Washington Post. The Post’s interim CEO Patty Stonesifer sits on Amazon’s board.”
The New Conservative Voter: A realignment that focuses the Republican Party on pro-worker economic policy is well underway – American Compass
“Our new poll, out today, finds that GOP voters have abandoned the party’s traditional focus on tax cuts, deregulation, and free trade. While cultural issues receive the most emphasis, the center of gravity on economic policy has clearly shifted.
“We found a substantial preference for the New Right’s worker-first framing of key economic challenges to the Old Right’s business-friendly approach.”
“It’s no secret that workers are stressed out about their finances these days. Recent research from LendingClub shows that nearly two out of three workers are living paycheck to paycheck, thanks to rising prices, higher interest rates, climbing debt loads, discretionary spending habits and more. That stress is particularly potent for younger workers — nearly half of younger workers stay up contemplating their financial futures at least one night a month, according to a recent study from Northwestern Mutual.”
“’Today the FTC took a first step to restoring the liberty of every individual and business who relies on essential internet platforms to exchange goods, services, and ideas with one another,’ said Barry Lynn, who heads the antimonopoly group Open Markets Institute, and is a long-time advocate for aggressive antitrust enforcement in the tech sector. ‘The FTC did so by targeting some of the most egregious abuses by Amazon of the dominant position it has acquired over vast swaths of online commerce, and the corporation’s routinized manipulation of other people’s business for its own private purposes.’”
“Low” prices compared to what? How can a monopolist prove that it offers low prices to consumers when it has squeezed most of its competitors out of the marketplace?
Thanks to the Washington Post for running our letter:
“How can House Speaker Kevin McCarthy (R-Calif.), President Biden and Senate leaders claim to represent the working class and poor when Medicaid work requirements are a focal point in the debt ceiling standoff and the Trump-era tax cuts are not? According to the Congressional Budget Office, the work requirements in the Limit, Save, Grow Act would have a tiny impact (about $5.6 billion in fiscal 2025) on the nation’s $31.4 trillion national debt, but they would increase the number of uninsured and state costs and have no effect on hours worked by Medicaid recipients.
“In contrast, ending the Trump-era tax cuts, which disproportionately benefit the wealthy, could put a major dent in the national debt….”
Because most of this site’s readers won’t be able to get through the newspaper’s pay gate, here’s the draft of the letter sent to the Post:
Debt ceiling negotiators focus on a ‘speck’ in benefits for the poor, ignore the ‘logs’ in their own eyes.
Statement of Karl Polzer, Center on Capital & Social Equity,
U.S. Senate Budget Committee hearing: “Protecting Social
Security for All: Making the Wealthy Pay Their Fair Share”