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4.11.2005
A quick post on Social Security; an example of class warfare in government. First, a few fundamental facts. If you earn less than 90,000 dollars then you are taxed on 100% of your income twice for the sake of Social Security and income taxes. As your earnings surpass that cap, your contributions to SS stop and you are only taxed once on your income. Thus there are two types of taxes, one that double taxes the working class on all their income and one that double taxes the wealthy on a small portion of their income and single taxes the rest of their income. So its safe to assume that payroll taxes are a tax on the working class. For many years the amounts collected from payroll taxes have exceeded the payouts to Social Security. Those extra proceeds have been used by the federal government to meet operating expenses. In return the federal government has issued bonds to the trust fund that, by law, have to be repaid. So remember this: The federal government has been spending excess payroll taxes at a time that it has been giving out income tax cuts. This is a clear transfer of wealth from the working class to the wealthy. It is shifting the burden of government financing to lower income earners. This is class warfare. This money, about 1.7 trillion dollars has been taken by the federal government to make up for lost revenue due to cuts in income taxes. And now they are talking as if they don't have to repay this money. Listen to this language. The government cannot “unspend” what it has spent in the past, and even if it could, the system would still be on a course toward insolvency. No, no, no. Its called borrowing. And you "pay back" what you have borrowed. Imagine that if you called up your credit card company today and told them that you cannot "unspend" the money that they gave you, and that you won't be able to pay them back the full amount that you own them, but that you would be willing to give them a small amount, that they could this money to invest in the stock market to make up for the whole amount that you won't be able to pay them, and that you predict that if they invest wisely, they should be able to earn the difference between what you owe them and what you gave them, and that they should consider the small check you've sent them payment in full... They would laugh at you. Because that money you spent has to be repaid. And according to the constitution the federal government must honor its debts as well, even if it is to the working class. Other people have pointed out that its incredibly irresponsible for the federal government to refer to its debts as simple IOUs. Especially given the enormous amounts that we have borrowed from foreign markets. Any money that is not used to pay for today’s Social Security benefits is loaned to the rest of the federal government to finance its current operations. The government, in return for the use of the money, issues an IOU to the Social Security Trust Fund. This IOU represents a promise to produce money when needed at a future time, money that the government can only acquire through future borrowing or taxation. Thus, even if there are assets in the Trust Fund, future taxpayers will still shoulder the cost of paying for Social Security benefits. In short, we have spent the money taken from the working class and spent it. In order to pay it back we would have to tax the wealthy. To avoid doing this we will instead look at ways to cut benefits from Social Security. Its a case of priorities. We can create the means to pay for a war in Iraq. We can create the means to pay for bigger military spending. We can create the means to pay for tax cuts. But when it comes time to create the means to pay for better education, better health care, and to secure retirement? We get outturned pockets. And that is how class warfare works. |
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