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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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"A lovely little war" was what one correspondent called the 1983 U.S. invasion of Grenada. Most saw Operation Urgent Fury, its official name, as a guaranteed victory. The Caribbean island, the smallest independent country in the Western Hemisphere, was no match for American military might. Reagan championed the invasion as another step toward ridding the world of Communism, but the big victory over the little island also served as a major public relations coup for the recently battered administration.
http://www.pbs.org/wgbh/americanexperience/features/general-article/reag...
I don't need a 17 year old dickwad telling me anything junior. When you grow up and have a real job, perhaps you'll know how to pull your head out of your ass. In the meantime, I've got to go because your Mom's spilled her water dish again and an adult has to take care of these things.
Our leaders do not need an enemy to destroy the United States, they are doing the job of destroying the United States all by themselves.
You wanted change...you got change, so quitcher bitchin.
Absolutly correct Gunman! We are getting the change we deserve. A people who elect actors (Regan and Arnold) then inexperienced but well spoken /unknown younsters("O") have no right to complain . Suffer buyer's remorse in silence. We will find out if the voters of America have learned anything but after 8 years of bush I suspect 8 years of "O" is to be expected. Follow the money and examine the source!
I read this three years ago, can't remember who the author was but it is relevant enough that it bears repeating, even without proper attribution (I paraphrase):
This republic can survive Barac Obama. I fear it may not be able to survive the majority that put him in office.
Don't forget that used car salesman Sleazy Bubba who bombed the Balkans to cover up the fallting going on in the White House. He and his crony Bob Rubin were responsible for the repeal of Glass-Steagall
Obama is not well spoken. He is the best reader we have ever had as POTUS, although for "O" TOTUS is more applicable. The reader in chief cannot have a coherent or sustained conversation on any topic. In his defense I have not heard his thoughts on playing golf.
I think that while being President he is practicing for being the next Tiger Woods. Looks like that was his asperation rather than the Presidency.
Nah -- his golf will never approach Tiger's. And he allegedly prefers his fellatio performed by a (white) male.
Maybe he's just aspiring to a hot Swedish babe to replace Michelle Antoinette ....
What? I thought he was the best orator ever produced by these 57 states!
The Alarmist ,
He was just confused with the Arab/Islamic/Mooslim states.........................
Plus he's shitty at math, I think he counts visits to the same states, as a NEW state.(separate visit, new state)
Rivers... Just visiting from tigerdroppings?
What we wanted was a Chilean Model.
"plunder $240 billion from our Social Security system"
Plunder... Really? Really? Plunder. So that money was rightly the property of the Social Security System in the first place.
I see. Wow, thanks I learn so much from idiots like you.
Seriously, I'd do appreciate such wisdom at the beginning of your piece, it saved me from reading the rest.
Really!
Social security is funded by taxes, while there were surpluses, they were "borrowed". Now, the people who payed the retirement of others AND the surpluses consumed by the politicians.. face sharply reduced inflow in the SS fund for their own retirement.
Really, it isn't that hard - "that money was rightly the property of the Social Security System in the first place"!
"Now, the people who payed the retirement of others AND the surpluses consumed by the politicians.. face sharply reduced inflow in the SS fund for their own retirement."
Right, and they should. Why? Because they kept electing politicians who plundered the SS account to pay for their pet projects & other "social justice" needs.
What they should have done is fired the politicians & led a campaing to have those politicians charged in civil and criminal court for breech of contract & RICO crimes.
But they didn't. So don t ask me, or demand of my children to bail their asses out.
Way I see it, if this country doesn't give a shit enough about human life to protect innocent un-born children, Im not going to give a shit about the selfish bastards who passed those "freedoms" and lined a life of running up debt on social programs and promises they expect me and my children to pay.
Go eat oatmeal and powdered milk.
Sambro, you are as stupid as the other 31.
The property politicians intend to tax, to give to another they made promises to, is NOT the property of those the politicians made a promise to. That property which is intended to be taxed is the property of the individual, of the person intended to be taxed. The fact that the tax may be cancelled before collection begins does not mean that property now belongs to the intended recipients.
Idiots like you and the other 31 clearly are either selfish or ignorant of the concept of individual property as embodied by the US Constitution & Declaration of Independence.
Quite frankly, and the time is quickly approaching, where the younger generations are going to say F-you to the selfish bastards of the me/60/baby boom generation and tell them rightly that they can enjoy the fruits of their voting for politicians who they knew were taking from monies deposited into Social Security and using it to pay for all their feel-good social programs.
You nor any other ass-hole has the right to take my property to cover your ass and the ass of those you think deserve my property more than I.
For the most part 0H has great pieces, but the sycophants who post comments are almost all f'ing idiots.
The money is rightly the property the people who earned it, not some piece of shit like you and your pissant buddies who voted to steal it from others
The money is rightly the property the people who earned it,
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No. Money is property of the people who makes it. Other people are allowed to borrow it. Most people do not own the money they earn. Money is just lent to them.
The money is rightly the property the people who earned it,
My god, what a complete fucking idiot sheep.
Joining SS creates NO contractural obligation for any benefits. All you do is sign up to pay a tax. That's it.
Any benefits paid out are strictly at the discretion of congress. They can change benefit amounts anytime they wish, even eliminate benefits completely if they wish, and yes you continue paying the tax, because that's what you signed up to do.
Did I ever state otherwise you douche? I know about the court case.
No one signs up -- lol!
No mention was made about the money going to SS recipients that is spent immediately into the economy.
So the funds are being taken away from mostly needy citizens, that have paid into the SS system, and given to businessmen? bankers? Qui Bono???
Once again the poor are being robbed to benefit those less needy.
Our entire government and financial system has become a mechanisim to impose wretched poverty on all but a tiny fraction of citizens...
This will not end well.
That is why it should be ended. People should be allowed to keep and save their own money instead of having the government take it from them in return for bullshit promises that are never kept. Welfare should only be for those who are physically and mentally unable to care for themselves. Everyone else should be made to go on a WPA type program.
Maybe they better put a communist Chinese party in charge of it and make payments to the people need SS with plastic chinese toys.
The money will end up in the chinese hand eventually so why not just speed up the process and cut the paperwork?
I like that idea.
It has a. Sudden debt Kinda feel to it.
The toys are lead, the rice is plastic...