Liebman is arguing for an "add on" private retirement count, which would be in addition to Social Security. This is what Bill Clinton proposed as well. It is not privatization. No current funds dedicated to Social Security would go to the new accounts.
This is very different from the "carve out" program of partial privatization that the Republicans have pushed. You can find discussion of how these are differ in a billion places on the web.
Anyway, Obama's not proposing this. This was an idea that Liebman worked up a few years ago.iYEPer: Anonymous (not verified)
Condo flippers are not the only "investors." Did homeowners expect the value of their property to go up? Were they planning to give a lot of it back to the government if the value rose unexpectedly? I would say the answers are respectively yes and no. People who own their primary residences are investors, and most of the problems are due not to mortgage rates but to the value of their investments declining. I don't think that it's necessarly a good idea to protect people from the consequences of a losing investment. Facing the problem of job loss as you suggest, on the other hand, would help the middle class and below without discriminating on the basis of whether they own or rent their homes.
I saw some graphs saying 50% was going to use this to pay down debt, which isn't the plan of economists to stimulate the economy. I question this too when the issue is too much debt and repressed wages, how this is really going to do much.
25% were going to put the check into savings.
You might consider registering for I know you're very active on these issues and if you just post anonymously, most of the site features are turned off and you go into a moderation queue versus being able to really use the site "as your own".
Wages are being cut across all Industries. Milk at $4 a gal. and Gasoline over $3 per gal. and wages are decreasing(?) I have IT experience but find I can do data entry work (a low stress job) for just a few bucks less per week rather than a high stress job managing a communications network (that often requires wearing a pager and staying late in the evening). It's not that clerical jobs pay so well, it's that skilled labor and higher stress positions are paying so low. College Degrees are buying candidates top pick for job positions in call centers and entry level office jobs earning $10 per hour. New graduates will find it difficult to leave their parent's home. The over 40, that lost their jobs and had to 'reinvent' themselves find that even if they worked 2 full time jobs they will never earn what they did in the 'good old days'.EPer: rahcn
General Motors Corp. today announced it will offer retirement incentives up to $62,500 to clear out its most senior workers and make way for lesser-paid new hires under a deal struck with the United Auto Workers. http://www.detnews.com/apps/pbcs.dll/article?AID=/20080212/AUTO01/802120...EPer: dkmich (not verified)
US Universities open campuses overseas
In a kind of educational gold rush, American universities are competing to set up outposts in countries with limited higher education opportunities. American universities — not to mention Australian and British ones, which also offer instruction in English, the lingua franca of academia — are starting, or expanding, hundreds of programs and partnerships in booming markets like China, India and Singapore
Will the programs reflect American values and culture, or the host country’s? Will American taxpayers end up footing part of the bill for overseas students? What happens if relations between the United States and the host country deteriorate? And will foreign branches that spread American know-how hurt American competitiveness?
Great, we have US public universities, being funded by US taxpayers, focusing in on opening up campuses abroad when their primary function is to educate students who reside in their respective states.
Actually at that time immigration into the US was quite restricted and was not a factor in the high unemployment rates of the early 1930's. There was the immigration act in 1924 which (in a discriminatory way) greatly limited immigration. Wage or labor arbitrage wasn't the issue.
The causes of the Great Depression are still debated by one of the major ones was consumer debt, which we see today, consumers were overextended.
There was also a run on the banks and a too small money supply. Many blame the Federal Reserve for enabling easy, overextended credit and then did nothing to increase the money supply when the crash happened.
Another cause cited was the increasing divide between the very rich and the poor
Then, they passed the Smoot-Hooley Act, which had incredible tariffs, average 50% which caused retaliatory tariffs from other nations, but exports, international trade was a very small percentage of the US economy at that time.
If you want to go to labor arbitrage through immigration, look to 1820-1920, many examples in the US.
But do you notice how the causes of the Great Depression and what is happening now sound all too familiar?
We've been through deflation before. Deflation turned the 1929 panic into the great depression.
This period was also accompanied by a flood of immigrants (read: cheap labor) which made wage deflation possible.EPer: MikeR
Just check out what IBM (an American IT Firm) is doing nowadays.... you'll be shell-shocked. They are "asking" people to stay in a room with 4-5 people together.EPer: Anonymous (not verified)
From Obama's website:
Obama does support adding on savings accounts for the lower income groups to encourage national retirement savings by those that need it most
i.e. partial privatization.
Now, his economic adviser's plan on his Academic website:
Jeffrey Liebman, who again, is an economic adviser to Obama.
Thus an important goal for retirement policy should be to encourage all workers to accumulate sufficient individual savings so that the combination of Social Security and private nest egg allows them to maintain their standard of living during retirement. Proposals to introduce personal retirement accounts as part of Social Security can be seen as an attempt to deal with this second challenge
Second, we agreed to add enough new revenue to maintain currently promised retirement income levels, but we devoted all of the new revenue to personal retirement accounts equal to 3 percent of payroll for every worker
Fourth, we agreed to have personal retirement accounts in the plan, but the accounts were heavily regulated. So, in particular, they would be mandatory and when you get to retirement, you would be required to take out all your money in the form of an annuity a payment that lasts as long as you live. This ensures that people cannot squander all of their savings in the first few years of retirement.
Sure looks like partial privatization of social security to me.
Reply to: Obama's Economic Advisers
EPer: Anonymous (not verified)
I emailed you via this site's interface, which is only for trusted users. Welcome to the Economic Populist. As you can see the corporate tax code is a hot debate.
Just wanted you to know I have finally made it over here. If you access my account at the great orange satan, you can see I have managed to set up a new email account. Give me a holler if you like.EPer: New Deal democrat
You can now hide comments from anonymous and not trusted users from viewing. It takes two people blasting a comment for it to be hidden.
I'm working on making this site so the group controls the content.
I never said I supported his views ever.
I'm working through it as well and I see a positive in the idea of a tax holiday to repatriate foreign profits to the US but not as he suggests, distributing to the taxpayer and then taxing it.
I have a different idea, which is not taxing those foreign corporate profits, but only when used for reinvestment purposes, i.e. building up new manufacturing here, hiring here, building infrastructure here, not distributed to the shareholders via non-corporate taxed dividends and just passing the tax onto the shareholders.
All I'm saying is to keep it civil and to keep it on the math.
Too many sites flame first, think later and you can imply your conclusions easily by looking at the math as you do above.
Then, the other point is I want the corporate perspective on this site, knowing how they view things and taking into account their own goals I think can only help us advance an agenda which brings jobs, investment back to the US.
His post actually got me to think about this to respond. I think that's good.
To me, this is not just a 1 element issue of taxes, it's the overall international capital flows and why I think it will have an effect.
Did you look at CPA's VAT proposals? So that is some tax reform with respect to trade agreements and proposals like that certainly need to happen in conjunction with reforming the corporate tax code itself.
On insourcing cheap labor, that's another area that needs to be addressed but a different one.
Again, his prevailing wage idea is a major component of H-1B reform, so it's not way out there and that's one of the techniques we are pushing heavily for.
What would create a global minimum wage in effect to deal with this hunting the global for cheap/slave labor? From a multinational corporation's view, labor isn't just labor it's the total costs involved and sharedeconomicgrowth does point that out.
It isn't "one" solution here, we need policy change across the board so I don't think just changing the corporate tax code is the answer.
I also looked at Rangel's tax reform and he does not appear to have a tax holiday to get those corporate profits returned to the US and I think that's a bad idea and will lead to corporations relocating their headquarters, everything, to another nation-state.
Truth is there is a US asset and corporation fire sale going on right now and this is a real threat to the US economically.
Of course you should tell everybody about this site, we're on the same team. All I'm saying that sort of behavior we see on the major blogs that's not reasoned, civil, doesn't analyze is a real wall to get more people to use their heads. We're all used to those other sites and the culture they create of flame first think later and it's one of the reasons we cannot get those people to look at the realities of global labor markets at all, immigration at all..
they flame first and refuse to look at any statistics, economic realities or even acknowledge how labor markets work.
Think about it, we lost the economic discussion on those major blogs with the flame claim that everything about it is obviously racist and discriminatory
i.e. no reasoned analysis allowed ! Let's not create that sort of culture here is what I am asking for.
Can't we deal with someone's proposal and point out the issues or not easily by looking a few things up? Sure we can.
I'm won't pretend to understand every detail of shared's tax proposal.
However, I'm not going to apologize for that, given there isn't 1 person out of a thousand who could follow it completely.
I made a very simple macroeconomic point, which I think is hard to contest. If you eliminate all current Corporate taxes, which average 23% (based on the BEA's annualized Corporate profit total of $1,612 billion, and the Treasury Dept's $370 billion fiscal 2007 Corporate tax total), you've reduced the after-tax cost of all production costs by $370 billion.
How do you think that compares with the aggregate labor cost savings of replacing 5 million American workers with 5 million Chinese workers, plus the wage suppression caused on 146 million American workers, plus the additional suppression from legal visa workers, and the employment loss and wage suppression 7 million employed illegal immigrants?
I don't know the answer to that, myself. But my guess is that eliminating Corporate taxes would have a much smaller effect than job loss and wage suppression would have. Professor George Borjas puts the wage suppression from immigration alone at about 4% annually, which works out to over $200 billion annually.
And that doesn't count the effect losing of $370 billion in Federal revenue, which necessitates increased Federal borrowing--increasing inflation and decreasing the buying power and production demand created by the expenditure of American labor income.
When someone's primary suggestion is a tax cut, and back-handed support of illegal immigration (by not emphasizing employer sanctions) he's missing the forest for the trees. And by default, it implies that he supports current Free Trade agreements, open borders, and amnesty.
And if the discussion of policy focuses on actions with relatively small effects (if any), it distracts from discussion and consideration of policies having larger effects.
When I've already spent 5-6 hours sorting through a self-serving and largely imcomprehensible "proposal", (since it was already posted on my own forum), I have every right and obligation to make some non-profane derogatory comments about its author.
And, Robert, I don't appreciate having to defend YOUR support of "sharedeconomicgrowth's" views on my OWN forum, since I've highly recommended your site on my forum, while adamantly (and publicly) opposing the views of sharedeconomicgrowth.
Members of my forum have noted my recommendation of of your site, and visited it as a result. But then they've questioned my support of your site--based on your support of sharedeconomicgrowth's views. Initially, I defended your initial response to shared's proposal, as simply tolerance of sharedeconomicgrowth's views. Apparently, however, you were not just "tolerating" them. You were supporting them. As such, I can no longer recommend your site. I'm now forced to withdraw my previous recommendation.
I readily tolerate opposing views, and even personal criticism on my own forum. In fact, I thrive on opposing views. But I cannot recommend another site to my forum members when I'm in fundamental disagreement with its administrator--especially on something as critical as the Corporate cheap labor lobby. And especially when such disagreement is actually brought to my attention by my own forum members.EPer: unlawflcombatnt
This is amazing, maybe some other economists should consider charting the data before they write.
Here's the NYTimes headline Productivity Growth Slows and the Costs of Labor Rise
Your graphs clearly show the costs of labor are not rising.
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Paul Krugman ("Left" economist, whatever that means these days), wrote an op-ed on Obama's health care plan.
If Mrs. Clinton gets the Democratic nomination, there is some chance — nobody knows how big — that we’ll get universal health care in the next administration. If Mr. Obama gets the nomination, it just won’t happen
The piece does a pretty good explanation of the plan details, anlaysis and to why he reaches this conclusion.
More via the Huffington Post op-ed.