Wednesday, January 28, 2009

Guest Post at NOSSR

I've got a guest post today at Notes on Social Security Reform (NOSSR).

The post explains how the stimulus bill would impact Social Security.

In brief, the stimulus actually discourages the saving that Social Security is designed to promote. Much of the tax cuts will result in lower payroll taxes. This takes funds that were intended to support Social Security and puts them in peoples hands. In fact, the stimulus has been promoted to make people spend their rebates. The plans shifts funding from the future to today, essentially an increase in benefits today at later generations expense (given that we will so no linked decrease in benefits).

The plan also looks to put more people on SSI, the means-tested program for low-earners with short work histories. By increasing the income cap, the plan actually encourages those at the margin to stop working.

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