I'm almost to the point in which I don't know what to say any longer. The news coming out of our nation's capitol is stupefying. Each time I think I've heard the craziest proposal or the worst gobbledygook imaginable, someone immediately tops it. Yesterday offers a great case in point.
For the past several years conservatives and many Democrats too have been sounding the alarm about social security. It's going to be unable to meet its obligations in 2050, 2040, 2030 and I wouldn't be surprised if someone next claims 2020! We've got to do something drastic to save it, we are told.
So, the current scuttlebutt is that we need to raise the age of retirement AND reduce benefits IF we hope to save this American institution from going belly up. (Mind you, these are toothless scare tactics, but this IS the rhetoric we hear coming out of Washington these days.)
You can imagine my utter dismay when I read the proposed bipartisan deal reached between the White House and Republicans over the extension of ALL the Bush tax cuts. As reported by OpenCongress, nestled into the language is a "One-year payroll tax holiday." Hmm. I wonder what payroll tax they could be referring to?
But hey, it gets even worse. If this language is included in the bill that passes, it will set up the very same scenario playing out right now. As the one year time period draws to a close, Republicans will say we need to extend it or it will amount to a tax increase. President Obama will hem and haw. Realizing that the next year will be an Election year, he certainly won't want to be portrayed as raising taxes and so a new compromise will be rendered to extend the payroll holiday again.
All the while, the talking heads will tell us that we've got to do something drastic about social security...like raise the age of retirement and slash benefits.
This whole situation is beyond surreal!
For the past several years conservatives and many Democrats too have been sounding the alarm about social security. It's going to be unable to meet its obligations in 2050, 2040, 2030 and I wouldn't be surprised if someone next claims 2020! We've got to do something drastic to save it, we are told.
So, the current scuttlebutt is that we need to raise the age of retirement AND reduce benefits IF we hope to save this American institution from going belly up. (Mind you, these are toothless scare tactics, but this IS the rhetoric we hear coming out of Washington these days.)
You can imagine my utter dismay when I read the proposed bipartisan deal reached between the White House and Republicans over the extension of ALL the Bush tax cuts. As reported by OpenCongress, nestled into the language is a "One-year payroll tax holiday." Hmm. I wonder what payroll tax they could be referring to?
Social security payroll taxes, which, under current law, are split equally between employees and employers, would be reduced from 6.2% to 4.2% with all of the benefits of the reduction going to the employees. For the average U.S. salary of $50,000, this would mean tax savings of about $1,000 next year. Obama originally wanted to include an extension of his “Making Work Pay” tax credit, which provides workers up to $400 annually for all workers, but Republicans objected and the payroll tax holiday was included instead. Reducing payroll taxes is generally considered the most stimulative form of supply-side policy...Yes, that's right. The very fund that we're told is running out of money will, through a bipartisan agreement, be starved of more income. Makes perfect fiscal sense, doesn't it?
But hey, it gets even worse. If this language is included in the bill that passes, it will set up the very same scenario playing out right now. As the one year time period draws to a close, Republicans will say we need to extend it or it will amount to a tax increase. President Obama will hem and haw. Realizing that the next year will be an Election year, he certainly won't want to be portrayed as raising taxes and so a new compromise will be rendered to extend the payroll holiday again.
All the while, the talking heads will tell us that we've got to do something drastic about social security...like raise the age of retirement and slash benefits.
This whole situation is beyond surreal!
As someone with hopes to retire very soon, I feel like I am running in a dream, the kind where you never really make your goal. It just keeps getting extended. 66 became the new 62; 66 will become the new 72...
ReplyDeleteOh, you silly girl. Don't you know that serfs like you will never be allowed to retire? They will ensure that you work until you drop. :-D
ReplyDeletethe debt-based monetary system created in 1913 when the federal reserve was created doesn't work the way you think it does. the gov't must run deficits or a whole lot of loans will default.
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http://en.wikipedia.org/wiki/Triffin_dilemma
The Triffin dilemma (less commonly the Triffin paradox) is the observation that when a national currency also serves as an international reserve currency (as the US dollar does today), there are fundamental conflicts of interest between short-term domestic and long-term international economic objectives. This dilemma was first identified by Belgian-American economist Robert Triffin in the 1960s, who pointed out that the country issuing the global reserve currency must be willing to run large trade deficits in order to supply the world with enough of its currency to fulfill world demand for foreign exchange reserves.
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the same issues apply domestically -- the gov't needs to continually run deficits in order to create the money such that the interest on all the loans created can be paid back.
bankers and politicians get the money first, before inflation hits, so they benefit. the middle class and savers and pensioners get screwed.
our founding fathers were very smart to have a precious metals monetary system rather than a debt based one. alas, few people today can see thru the propaganda to understand the issue.
alas, the inherent problems of the system mean that at some point it will collapse, either thru hyperinflation, or thru massive deflation and debt default. both are painful, but to different groups of people. something new will then replace it.
--sgl
Vermont's Senator Bernie Sanders points out the real problem: http://www.youtube.com/watch?v=H5OtB298fHY
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