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Obama: Gut Social Security Now, Don't Wait Till The Election
Incredible that a Democrat would propose loud and clear that our Social Security system should be gutted starting immediately to get an up-tick, illusory as it may turn out to be, in GDP just before the next election. But President Obama's proposal to cut the employee portion of our payroll taxes in half and also cut payroll-taxes for small businesses will do just that.
The two measures would remove $240 billion from our Social Security system during 2012 and hand it over to consumers and businesses so that they can do some magic with it.
Will that nudge up GDP? Not by much. The problem is that the money we consumers spend goes into products that are to a great extent imported. Hence, our trade deficit will rise. This has already happened with the current payroll-tax cut. Since January, it has given consumers about $80 billion in additional spending money. And true: It nudged up consumer spending.
At the same time, our trade deficit, particularly with China, skyrocketed. YTD through July, it hit $433 billion. Same period last year: $330 billion. The $103 billion increase is largely attributable to rising consumer spending (including the impact of higher prices). A humongous trade deficit like this, aside from being a terrible drag our economy, is also subtracted from GDP (GDP = Consumption + Investment + Government Spending + Exports – Imports). And true again: GDP so far this year has barely budged though consumer spending is up.
Will it create jobs? Well, let's look at our current payroll-tax cut. And we see that a few jobs are being created in the U.S., but not many, and none last month. Meanwhile, lots of jobs are being created in China. Coincidence? Maybe not. This is the result of many years of corporate efforts to offshore production and services to countries where labor is cheaper (15.4 Million Missing Jobs). So the impact on job creation, thanks again to our trade deficit problem, will be minor.
So, what does cutting payroll taxes accomplish? It reduces the flow of money into the Social Security system by $240 billion a year.
And no one can ever let a payroll-tax cut of this magnitude expire. It would be perceived as a huge tax increase. It's already happening. The current one is supposed to expire by the end of December. But heck no! Instead, an even bigger one is being proposed to take its place. So this won't be a "temporary" cut. It'll be permanent. At least until the money is gone—maybe in a decade or so if disbursements stay at current levels.
Presidential candidate Rick Perry, who called Social Security a Ponzi scheme and monstrous lie, and who wants to unwind it, couldn't have come up with a more effective plan to put his campaign rhetoric into action.
Meanwhile, in another corner of Washington, a bipartisan group of lawmakers is hunkering down, trying to figure our how to make politically feasible and perhaps sensible adjustments to our entitlement programs, including Social Security, ironically, to keep them functional for a few more decades. Makes you wonder if these people ever talk to each other.
For some people, the $2.6 trillion Trust Fund doesn't exist, and thus the whole issue would be moot. Well, for Wall Street bankers it existed enough to where they were dying to get their hands on it when President Bush wanted to privatize it. Remember? At the time, I had dinner with some of them, and so giddy were they about the prospects of all this money flowing their way that they were barely able to eat. In fact, the Trust Fund is loaded with treasuries, like any wealthy and conservative investor. Whether or not these treasuries will be worth anything in the future is another question, but not just for the Trust Fund.
Wolf Richter - www.testosteronepit.com
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It's amazing how it takes the horse to be not only out of the barn but in the next county before people start putting two and two together. You think you're smart Mr testosteronepit ? I think your testosterone is between your ears. If you were serious, you would have been on this bandwagon 10 years ago--now you are like a politician who sniffs the wind. Who needs people like you? Go figure out what the next hot-button issue is. Maybe you can get elected to congress.
It's too late, baby-boomers, too late.
"It's too late, baby-boomers, too late."
Uh, no.
Uh, yes.
The baby-boomers' money was spent LOOOOOOOONG ago. We're talking decades. The money *everyone* puts in goes to the general fund, not a trust fund (kinda like it used to be until Lyndon Johnson added this 'nifty' thing called a Unified budget. Google it.). Hear that flushing sound from decades back?
You guys knew this. You've been flushing your money down the toilet for decades. You haven't done ANYTHING to change it. By definition, that's too late.
So now we ALL can say 'Stop The Ponzi.' You can't heal the patient unless you stop the bleeding.
The trust fund is a small portion of SS funding. SS is still largely a pay as you go system. So where are most of the funds for SS? They are in your pocket right now. Time to pay up.
And you'd better understand that one way or another you're going to.
"The trust fund is a small portion of SS funding. SS is still largely a pay as you go system. So where are most of the funds for SS? They are in your pocket right now. Time to pay up."
The liabilities for the future are there also. but the liabilities dont stop at the recipient's pockets.
It takes a lot of money to "administer" SS. Where does this money come from?
All of the employees of the SSA
All of the buildings owned by the SSA
All of the ulilities and vehicles and computers and paper ............
Typical libtard thinking.
The government can pay for it all.. duuh.
"It takes a lot of money to "administer" SS. Where does this money come from?"
Your other pocket, moron.
Looks llike Bernie Sanders is the only person who gets it.
The elite want to drain every dollar from the little guy before they destroy they blow up America for good.
Job looks like it is 90% complete. Bloomberg reports the QE 4 will be a direct purchase of Bank Equities.
Keep it all in the family, Eh.
And what's that tell ya? "when even bernie sanders gets it you know we're...
how does the math work when the subsidiary (The Fed) of a company's (The local Federal Reserve Banks) owners (the JP Morgan, et al families) buy the owners companies-or something like that.
I gurss you are kind of right. its like marrying a sister or cousin and then wondering why the offspring are FUBAR
Kill them ALL!
http://www.youtube.com/watch?v=i6hy93MeW60
Military using 'live ammunition' on 'unarmed protesters' in Cairo
Pitchforks and torches work pretty well in the hands of insurgents. But here in the US, you have to cut off the MickeyD's for a day or two before that would happen, and as an aside - "Do you want to give up the best job you could find"?
Ah, the "trust fund" - is made up of Ts, however they are "special" treasuries - special in the sense they are non-marketable treasuries. That makes them IOUs... of IOUs, seems to me.
don't you just wonder what happend to the $3.5 Trillion that Rubin took out of the Social Security Trust Fund in 1995? Us Debt did not increase that much-how the hell did $3.5 Trillion disappear?
Wasn't the collateral for that to have been shares in the public/private partnership?
Hell's bells---maybe we are funded---could someone check this out, please? om
AARP / Old People (who turned thier heads for the last 50 years while the Laws were ALL! Changed) - 0
Wall Street / Lucky Sperm Club - 1
At least those old people worked and contributed into the system. Welfare takes $1 trillion each year and those leeches never contributed a penny into the system.
"At least those old people worked and contributed into the system"
The system appreciates their contribution.
Those leeches don't riot as long as we feed them.
Sun Tzu,
I agree about Welfare. How on earth did they fund that out of the Social Security Trust Fund? Many people never paid in a dime yet they get life time benifits from the Social Security Trust Fund. No wonder the system is broken with all of the Leaches sucking the life blood out of a system for the elderly and retirement.
Waterfallsparkles @11:01,
Many people never paid in a dime yet they get life time benifits from the Social Security Trust Fund.
H2oFall,that is the tip of the iceberg.
Try funding illegal aliens, and giving very luxurious monthly benefits to political asylum refugees,for 12 mos,no telling what else.
When they say General, they meant General.
Pork Barrel projects, paid for in states all over the USA,out of the General Fund.(alias SS Trust Fund).
Had the fund never been touched, and the funds invesed at JUST T Bill rates we would have Trillions of surplus right now,instead of BROKE.
Many more people are on welfare now than before the economy crashed. Some of those people were gainfully employed for many years, and got laid off. Don't act like everyone on welfare is a leach at this point. It's just ridiculous to think that with these levels of unemployment.
If we are going to have a country that has private property, so that some people without a job have nowhere to live and nothing to eat if we don't help them, then social services are necessary. Only if we got to a place where everyone was guaranteed a place to live with enough space to feed themselves can we successfully have no safety nets. If people have no options to feed themselves, there will be unrest.
Existing requires that we need a place to exist.
2008 = 33 million on welfare
2011 = 45 million on welfare
The economy was fine before 2008. Why were there 33 million on welfare? That's over 10% of the population.
If they need social services, let them work for it. Let them pick up trash, clean the lakes, paint over graffiti
There's only so much trash to pick up, pal. What you're seeing is one of the results of the industrial and information revolutions. The alternative is Neo-Luddism. You don't get to vote on which one you want.
I know we don't get to pick, but I do think it would be nice if they set aside a place where people who couldn't make it well in the modern world could choose to live in earlier ways, growing their own food, building their own houses. Yeah, I know, it will never happen.
The economy was fine before 2008.
That's hilarious!
Go on with your ignorant bad self... you want real welfare? Look at the military-industrial complex and Wall Street... you'd rather blame a bunch of poor mofos who can't find a job, than the people that are robbing this country blind.
You are too fucking stupid to understand that NONE of them should be robbing us. You justify the personal welfare state by pointing to the corporate welfare state. Some other fuckhead like you will justify the coporate welfare state by pointing to the personal welfare state.
Now that deserves a green arrow!
I say we can blame them both. This didn't happen overnight.
Green JW, but
Who the hell is aarp?
They do not represent anyone that I know----The deal was not made so that another bunch of leeches could suck blood out of the old. The deal was a simple and straightforward proposition to be certain that even the most profligate among the population)such as this oldman) would have enough to sustain life in their 'old age'.
The contract was simple and automatic and had it been funded, we would not be having this discussion today nor would the funds been invested in death and destruction for the past fifty years.
JW, I never liked paying into it for the 39 years that I did so, never believed that I would receive back what I had paid in, but it is all that I have as income and, perhaps if I live to 76 I will receive back what I paid in inflation adjusted dollars.
I know who AARP is and that they are seen as the watchman of the old, but they do not represent me. My deal was made by FDR and there was no other choice. This voice spoke loud and clear about funding SS to the extent that it was one of the 'love it or leave it' issues that finally sent me to South America. I'm still hearing 'love it or leave it' from these patriots----ha,ha,ha
Wasn't it the Courts that said that it was not a Trust Fund but a Tax? So, after that decision it became a Tax and an Entitlement. Like we did not pay into it.
I feel cheated because if it turns out to be a Tax then the Government lied to me about my tax rate. Instead of my Tax rate being 35% it was 50%. You know when they were collecting the money it was a contribution to Social Security and Medicare in old age not a tax. No one would have stood for a 50% Tax rate. So, after 40 years of someone "Contributing" to Social Security and Medicare the Courts now say retroactivly it is a Tax. IF THAT IS SO THEN GIVE ME BACK THE 15% OF TAXES I PAID ABOVE THE STATED TAX RATE FOR ALL OF THOSE YEARS WITH COMPOUNDED INTEREST.
I don't get it. I've sat here and read countless 'replies' to this article and everyone seems to be talking about shit that doesn't mean anything. The TPTB will screw you no matter what kind of 'program' you think is appropriate. EOS. Get over it. There is only one solution to this problem and it kinda has ties to the NRA....if you know what I mean. If you are in the 1% and have money to contribute to whatever cause you think is important, than you know this fear I speak of. Like the kid who took your lunch money......he wouldn't stop until someone stood up to him and beat his ass with a big stick.
It is 'stick time'.
Obama realizes that he is a one term failure, so he will throw America's working class under the bus to please his masters. The focus will then turn to Congressmen who want to keep their jobs. If anybody thinks these cuts will not be fought tooth and nail they are crazy. A litmus test, "Will you restore SS?", will quickly be applied to all. Any party that doesn't sign on will become a historical footnote within a few years.
If the system isn't restored you can expect a wide swath of Americans to permanently turn their backs on this government. If you thought this July 4th was quiet, you haven't seen anything, yet.
This is going to be like the O.J. Trial ... A bunch of shocked white folks are going to be walking around open mouthed on November 7th wondering how Big O pulled off his re-election.. He already has 238 electoral votes locked, and stealing the rest in places like Florida is not going to be that hard.
Well said. If you're going to have an assault on the most popular of all programs, have the bankster's big buddy, Barry do the dirty work. Barry is the perfect Manchurian Candidate. Espouse Liberal themes and goals and then do the direct opposite. A perfect way of convincing people that Liberal ideas are terrible when they are carried out in the most terrible manner possible.
Most popular of programs? Such a popular program would NOT be mandatory. If SS wasn't mandatory, nobody would opt in except for fools.
SS is NOT mandatory you stupid dipshit dumbass. It's VOLUNTARY. You voluntarily sign up for it and get your "social security number".
And yes thare are people who never signed up for it and never got a "social security number". They pay no FICA tax.
Nobody but NOBODY "volunteers" for it.
I was 6 when my parents got my SS card/number. I don't exactly recall them discussing whether or not I'd like to "volunteer" to enter the program.
You, sir, are an asshat.
You must be about 27. Once you've started paying for 20+ years, you start to get possessive about Social Security. This is EARNED BENEFITS my friend. Social Security has nothing to do with the deficit. It has been sponsoring wars and tax cuts for years. You are a moron if you think it is not a popular program.
I'm 38 and I've been working since I was 15. Let me out of the system now and they can keep my prior contributions.
I'm late 50s and I believe anyone who gets "possessive" about SS is a fool.
It's not "earned benefits". There is no contractural obligation for any benefits They can change FICA amounts and benefit amounts as they wish. They could keep taking FICA out of your paycheck and stop paying any benefits.
SS is just another welfare program. FICA is just another tax. The tax and the benefits are not connected They can change either one at will.
Anyone believing SS creates any sort of contractural obligation is a complete fool.
I'm 42, and have been paying in for 25 years.
They can KEEP every fucking dime they've taken from me up to this point if they'd let me out of the program for the next 25 years of my life. I'd sign away my right to collect in a heartbeat if I could be released from the bullshit tax for the second half of my life.
"They can KEEP every fucking dime they've taken from me"
Could not have said it better. It is a welfare tax. Once you pay it, it is gone. if you want to apply for welfare, er.... SS benefits, then do it. I mean we all pay taxes. If you need welfare, take it. But if you think that SS is solvent because the future revenues are in the pockets of all of the people who continue to pay into SS (myself included), then you have failed to look at the liabilities side of the equation. The future payouts go to those same pockets!
How can we take a system where the same people pay in, then take out, and there is supposed to be a net gain somewhere in there because......ummmm.........because we hired a bunch of overpaid government beaurecrats to "administer" the program? I wonder where the money to build all of the buildings where all of this " administration" originates??
let me guess... The BOZOS in Washington DC (Dollar Catastrophe) whom administer the funds in the SS system are so good at what they do, that there is enough extra to build the buildings, pay the BOZOS and still have a zero sum gain.
If anybody were to run an insurance company in the manner that this SSA has run their "insurance fund", the regulators would be oh so quick to point out the ponzi scheme they uncovered.
To call SS a Ponzi is backwards. Mr. Ponzi is a grain of sand in the universe next to the black hole that is Social Security.
my opinion of course
<LongBallsShortBrains >
Surely you jest, SS is nowhere near the same as Welfare......................
SS was PAID for by you , for you.
Welfare is for those who cannot,will not,game the system.
You bitch slapped every one here calling SS FREE.
This isn't earned. It is stolen, by force. Big difference. How can I get possessive about something I'll never see? About something I don't have a say in?
'It's mandatory, so we made it popular!'
Silver Bully,
Dude you missed the point......................on purpose.
This isn't earned. It is stolen, by force. Big difference.( FROM YOUR LABOR,your checks) How can I get possessive about something I'll never see? (because it's YOUR FRIGGING MONEY!)About something I don't have a say in?(Exactly, but you have moral claim to whats yours.)
While I agree w/ the rest of your statement SSI is EARNED, because they stole(w/ a promise) it from the worker.
While they DO force us to pay it, it's with the understanding it will BE there for YOU when your reach retirement.
Personally,I think we first need to MEANS test WELFARE recips...............there's were the big bucks are going and being stolen.
Able bodied, baby dumping bitches,PAYED extra to not marry, and have as many as you can for more support for the NUMEROUS semen donors.
SSI/MC is not where the cash has gone, it been stolen, and given to those that 90% never gave a dime, nor workled a day honest labor in their life.
It's a Progressive Program, designed to bankrupt the system by bleeding it dry, there's the cash, and there is the CRIME.
Yeah, like Colorado, New Mexico, California, Arizona, Nevada, Texas and Oklahoma was stolen from Mexico. It's been stolen fair and square ....uh, well maybe not fair but square. Get over it! Thinking about going to the cops and trying to retrieve the stolen property that you know the location of? Fuggetaboutit! They got guns!
Of course suggesting that liberal (socialist) ideas are only bad if they are executed with deliberate malice doesn't change the fact that socialist implementations writ large have an unblemished record of failure.
lieberman was the first hard-core "Manchurian Candidate" - PRETEND 'liberal" back in the '60s when it was the means of UPWARD MOBILITY for the political shape-shifting Neo-Con then STAB minority voters in the back during the 2000 election....
...don't forget, lie-ber-thug was Obama's "SENATE MENTOR" when Obama became the first "Black" Senator...
the next total hard-core Democratic killing "Manchurian Candidate" was rahm emanuel - obumer's first Chief of Staff. Wayne Madsen reports that the "Powers that Be" have BLACKMAIL stuff on obumer from his "Chicago Man's Club" membership, and Alex JOnes reports that emanuel used to SHOUT AT and PUT DOWN "president" obama - in front of others, right in the white house !
Uh ... FYI, in the hierarchical order, Jews are above black guys.
"Barry is the perfect Manchurian Candidate."