Posted on 10/13/2011 7:21:17 PM PDT by justsaynomore
Reagan Economist Breaks Down Cain's 999 Plan (Art Laffer)
(Excerpt) Read more at video.foxnews.com ...
“once those are gone,”
Like the gas, communications, cable, liquor, cigarette, etc., etc. taxes? Who said they’re going away?
You forgot to add that the invention of ATMs and airport E-tickets is the cause of today’s high unemployment.
There’s another elephant in the room that needs to be brought into the discussion:
Currently, our retirees are made of the Silent generation and some older Boomers.
Each year, about 3.5 million Boomers retire now.
My generation, Gen X, is the smallest of the three right now. We’re also the ones with the education and the work experience.
Millennials are a larger generation, but many of them haven’t even graduated highschool yet. The oldest ones have just gotten out of college and are just entering the work force. These kid have no work experience.
The question that people have been trying to figure out for a long time is; how will a shrinking working population support a VERY large retired population?
For 20 years, people have been watching the bubble work its way forward and people have known that this will be a disaster, but nobody’s actually come up with a solution.
I’ve seen Gen Xers complaining that they’ll have to support the Boomers while raising their own children and Boomers have scoffed at that. “I did it! You can too!”
No, it’s not the same. In 1960, it was 5 workers to one retiree. By 1997, it was 3.2 to one. Soon it will be two to one. Two to one is a LOT more pressure on a man trying to support a family of four than five to one.
The ONLY way that this system is going to survive is if we have two things; we need a THRIVING economy and we need immigrants. We need the working generations making so much money that they can afford to pay for their elders’ retirement and we need a larger workforce in general.
The thing is, Boomers have been in denial about this - just like everyone else. The fact is, they simply didn’t have enough kids for this ponzi scheme to work.
Cain is the only one that sees this big picture. Many FReepers here are screaming that we need to cut gov’t spending, but the bulk of gov’t spending is soon to be social security. Last year there were charts all over the news explaining that if we didn’t cut SS, we couldn’t survive. There is no way to deal with our national debt and maintain ss.
So are Boomers going to accept a 9% tax on their new purchases to save the whole system?
From what I’m seeing, they feel that they’ve sacrificed enough and they are unwilling to sacrifice any more. They stubbornly refuse to understand that if they don’t allow someone to step in and fix this system, they will get NOTHING when the whole thing falls apart. (Or get MUCH less. How does $200 a month sound to you? I think that sucks.)
Cain understands that if we have a thriving economy and in influx of healthy immigration, we can survive the next 30 years. Boomers with investments will THRIVE in a booming stockmarket. Boomers without will have the safety of SS. Yes, they might lose 9%, but that’s better than losing it all.
And please don’t get me wrong. I’m not BLAMING Boomers for any of this. All they did was be born. But the problem persists and Boomers need to acknowledge what a strain their retirement will put on the country and on the younger generations. They may have to give a little to save the system entire.
I was taught about this problem in the mid-80’s in school. 25 years later, we’re here. We all knew this storm was coming and few did enough to prepare.
Ignoring the problem and insisting that we maintain the status quo will destroy the entire country.
So I ask again; what are Boomers willing to do to save the system for THEMSELVES?
One more thing: When Boomers look at their $1200 a month SS check they might not think that this is too bad of a burden.
But they need to realize that a severely disabled person living in an assisted living facility can be costing up to $8000 a month PLUS medical expenses.
Add to that medical care for all of our elderly and you begin to see how bad this problem is. Break those* numbers down to a 2 to 1 ratio of worker to retiree and you’ll begin to see how serious this problem actually is.
I know how big the problem is, (my father is paying $9000 per month for a nursing home) and I too studied this problem both in undergrad (operations management) and graduate school (economics). We were talking about problems of sustainability in the early 70s. I know that government has been hoping that the influx of immigrants (legal and otherwise) will help raise the tax income - but many of these become part of the problem rather than the solution by taking up entitlement resources without putting anything much into the system. That is why California is having such serious problems.
We have saved all our lives because we knew this was coming and we have seen a lot of it go out the door helping relatives impacted by this economy, so I am all for answers. We know we will have to continue working long past retirement age - and can because we don’t wait around waiting for other people to bail us out.
The point is, it isn’t an easy problem and in coming up with the details of the solutions, any politician is going to have to realize that the “little people” have lost their trust in the system and in politicians who say one thing and do another - and pass huge bills before they read them so they can “see what is in them.”
It doesn’t matter what the plan is. Do YOU expect Congress to work in your best interest?
The problems are huge and we need serious answers. Cain did his homework, and he is using excellent marketing to get it across. The missing element is trust that in the long run the crooks in Congress won’t let the plan be a positive for the people. 999 can easily become 15-15-15 then 20-20-20. “Invisible” taxes can be put back.
I trust Cain to be a leader with the best intentions for the country, unlike others we have seen of late who have other motivations. AND he has the experience to actually do something positive, even if it isn’t exactly 999 in the form he is presenting it. The Dems won’t let that through as is - too many people want a free lunch - and they want to eat ours. It doesn’t work when such a low percentage of people who are able to work, aren’t and the number of people who can’t work is growing.
I can fix that easily — just eliminate a few deductions, and set a base tax rate of 5% that is not subject to deductions, so that everybody pays a little bit.
If you can’t get that trivial fix through congress, there’s no way you’ll get a 9% sales tax through.
i’m not even sure I support a national sales tax. We already have state sales taxes, and that’s good for states.
I’d rather see us re-institute a “state” tax, where each state was required to provide a fixed amount of money based on the population of the state. The state could raise the funds anyway they want, so the people could decide if they wanted to use a sales tax, an income tax, or some other tax.
These are all incremental changes that wouldn’t disrupt the economy, through fear and doubt into business, or implement an entirely new federal tax authority complete with it’s own beaurocracy, special interest deductions/credits, and ability to be manipulated by corporate interests with large lobbying arms.
Enterprise zones are just the most obvious example of how a sales tax regime can be manipulated to give government more power, and to bring lobbying dollars into the coffers of politicians in exchange for identification of where and what enterprize zones exist.
BTW, this isn’t really a “Cain” thing for me. Note that Rick Perry has expressed support for the FairTax, which is the end game for Cain as well. I’m not a fan of FairTax, because of the same reasons I’ve expressed before here, but it is less likely to be manipulated, and at least it is the END game, not some compromise intermediate less-desirable plan.
That is awesome - I was looking for that earlier today :-) Thanks!
NP :)
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.