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Originally Posted by White Rabbit
Maybe the flaw is in the necessary requirement of 'cheap labor' ?
People have an annoying habit of not going along with being the cannon fodder that they are assigned to be by other people. Can't say I blame them.
Agreed. #3 and #4 are the most likely given past US political behavior.
As most reputable studies show, the sooner that any given required tax increase is passed (or any required benefit reduction is phased in) the better. The longer one puts off either choice, the larger the impact that choice will have, once it is made.
I understand that an increase of 16% of the present Social Security payroll taxes would solve the problem entirely, if the tax is passed sooner rather than later (I don't have a source off-hand for this - I'm citing from memory, I could be mistaken on the precise figure).
Given that the USA has the lowest level of taxes of any western nation, there is no substantive danger that such a tax increase would make the USA comparatively uncompetitive with the USA's major trading partners as the USA would remain the lowest tax jurisdiction even with such an increase.
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I agree most national taxation rates generally aren't a factor in trade competition but often wonder about the official US tax position. When I retired I had a friend at one of the big accounting/consulting firms pull their cost of living data by state and county. Some states/counties have take-your-breath away tax structures that when combined exceed anything published for mid-range EU countries.
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It is also to be noted that many other western nations are extremely competitive trading partners with the USA despite paying significantly higher tax rates. Indeed, the USA keeps losing trade ground to these higher tax jurisdictions. Canada for example has increased its market penetration of almost every class of exported product to the USA over the last 20 years (and has higher taxes every step of the way).
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I live in an area where wood products once provided the bulk of economic contribution and there are people here who hate Canadian wood products based solely on the fact that they consider them government subsidized by the Canadian national health program. When US government subsidized food exports such as grain are mentioned, 'that's a different story' is the standard retort. Canada faces some substantial US isolationist policy tariffs on virtually every product they export to the US in spite of NAFTA in US attempts to protect inefficient US industry and a higher internal Canadian tax structure and still continues to post impressive market share gains year after year.