Thursday, November 11, 2010

Timing is Everything – The Deficit Commission

The news as of late (apologies for the style, but I just finished watching my almost favorite new show, which is from Britain, and is called Top Gear.   They do outlandish things to cars while speaking dry English wit.  I just saw a tank chase a Land Rover.)

Anyway, let me start again.  I need to get back into my regular American style of writing.  Okay, I’m ready.

There is news that the U.S. deficit commission has recommended some severe cuts in Social Security.  Now that it is clear that the Social Security fund will start to pay out funds as it takes them in around 2016, there is a need to adjust the payout in benefits so that they do not exceed what is being paid in.  In other words, Social Security needs to balance the inflows with the outflows.  Cuts in benefits are being proposed to achieve this calibration. 

One proposed benefit cut is to extend the age when a person can start receiving the full regular benefits from 66 to 68 in 2050.  Of course, Eric Cantor, the House of Representatives soon to be Majority Leader has recommended that a person eligible for Social Security should be able to take a tax credit in lieu of the regular payments.  This would apply to those people who can afford to take such an option.  There are several articles on the commission’s report, but I am providing a link to the Barron’s article. 

The article also discusses fiscal spending cuts as well as ending of some of our most treasured tax deductions, including the most beloved home mortgage deduction.  Since the next two posts will be on taxes, I thought the article would serve as a good transition to the next topic.   

(By the way, for those interested, the tank caught the Land Rover and blew it up.  The host commented that the Land Rover was an excellent off-road vehicle, but was not well suited for invading a country.)

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