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Monday, April 29, 2013

Over 80 people are being held in  Guantanamo after being cleared of any terrorist involvement. This is unconscionable.

Mr. President, Let These People Go.
If we cannot release them into their own countries, then they should be released into the United States. That, after all, is the full implication of Colin Powell's dictum: "If you broke it, you own it." We have broken these people and are continuing to do so. It is time to stop.
As for those who are awaiting trial, the President should defy Congress -- just as it defies the President -- and bring them all to the United States for trial in our Courts, which are well capable of providing a fair trial.
Mr Obama should have done this on the first day of his Presidency, but better now than further delay.

Monday, April 1, 2013

Your Editorial , Social Security, Present and Future (New York Times Weekly Review, March 31, 2013: 10) is correct in dismissing the chained CPI as a solution. The adoption of the chained-CPI would be most regressive. Chained-CPI lags the regular CPI by 0.25%. Worse, the regular CPI lags an experimental elderly-CPI by 0.3%. The impact would be most severe on the poorest of seniors. As you suggest a firm elderly CPI should be developed.

There are other alternatives to ensure a solvent Social Security fund on both the paying in  side and at the paying out side.

As you suggest, paying in, we could lift or abolish the cap.

Paying out, we could change the tax treatment of Social Security. Rich Americans only pay income tax on 85% of their Social Security income. One hundred percent of social security income should be included in gross income. The impact on low income seniors would be negligible; on rich Americans it would be a modest increase in taxes.

Paying out we can also look at the payout rate. Despite being regressive at the paying in stage, Social Security is quite progressive when paying out.  Right now the Social Security formula for computing one's pension depends on Average Lifetime Earnings (ALE). Each year's earnings are converted into constant dollars and then a monthly average is calculated. Based on this, Social Security pays you:
- 90 percent of the first $767 of monthly ALE
- 32 percent of monthly ALE between $768 and $4,624,
- 15 percent of monthly  ALE above $4,625 to the cap of $9,475.
Changing the breakpoints, increasing the number of breakpoints (say new breakpoints at $3,000, at $6,000, and at $8000), or reducing the percentage payout at the highest level would maintain payouts for the poorest in our society, but reduce expenditures to those who can most afford it.

Could both Democrats and Republicans agree to such a scheme?