Traditional wisdom suggests that saving money while in debt is a bad idea: you pay hundreds of times more in finance charges on money you owe than you would get in interest on money you save. Under this scenario, your "safety net", at least until you are debt-free, would be the credit lines you are clearing out. However, in a response to a Lifehacker comment I made outlining this traditional wisdom, someone replied that given the financial crisis, companies could then lower your credit limit, regardless of cause, killing your safety net. Given this, is the traditional wisdom now wrong? [more inside]
posted by WCityMike on Oct 13, 2008 - 19 answers

I notice that conspicuously absent from public discussions about reform of the Social Security is imposition of a reasonable system of means testing. The idea whereby wealthy seniors, who don't need social security payments to keep themselves in a comfortable lifestyle, don't collect from the general fund which was created to protect the poor and disabled, seems reasonable to me.

Given the alternative solutions of payroll tax increases, elimination of benefits, and/or huge budget deficits, means testing along with Bush's proposed private investment accounts could lead to a win-win social security reform-- one that maintains the traditional safety net for low income seniors and disabled while encouraging savings and investment. What's wrong with this idea? Why is no one making this argument?
posted by NorthCoastCafe on Jan 26, 2005 - 23 answers