Payroll Tax Debate is a Sham

The latest “debate” over the need for extending a reduced payroll tax rate is emblematic of how much cowardice there is in Washington D.C. and how little most elected officials we send there respect the intellect of the majority of voters. If the Social Security system was being managed by the private sector, our lawmakers would have the perpetrators arrested and charged with crimes.
The actuarial realities of Social Security are dire. There isn’t a nickel set aside for workers who have paid trillions into the system and are on the verge of retirement. Collectively, current retirees and all of their predecessors have collected far more in benefits from the system than they collectively paid into the system. However, no politician will tell them the truth.

Many reform steps must be taken to save the system. First, the retirement age must be increased substantially to reflect the reality of longer life expectancies of participants. Second, either benefits must be capped and cut or payroll taxes must be INCREASED.

Unfortunately for working Americans, committing actuarial fraud is perfectly legal in Washington D.C. How else could President Obama and his predecessors get away with policies that make sure the Social Security system plunges deeper into insolvency?

Back in January Obama insisted on cutting the funds flowing into the already bankrupt Social Security system. He did it as part of a budget “deal.” Just three months ago the president threatened the nation’s seniors with a disruption of their Social Security checks IF the debt ceiling was not extended. Now this week the president insisted that the very payroll taxes that fund Social Security remain at a level that is far less than what is being paid out to seniors each month. And amazingly, Republicans are “divided” over what to do.

The reality is the president has no moral problem with borrowing to keep senior citizens placated. He has no problem supporting a policy that sets no money aside out of working people’s paychecks for their retirement years. How can he get away with this? He is betting that seniors don’t care that their benefits are not coming from what they paid in but instead are being borrowed. He is also betting the majority of working people don’t realize the insanity of putting money into a system that is not being invested for their own retirement. As terrible as this con game is, every citizen shares the blame for not screaming bloody murder.

Payroll Tax Debate is a Sham