We're all told that Social Security will run out of money some time in the mid 2030's.
This ranks right at the top f the biggest lies told by our politicians to their constituents.
The government imposed a tax to "pay for" Social Security.
If Social Security requires a tax to be paid for, where is the tax that funds the military? What about Medicare? What about an infrastructure tax? What about a disaster relief tax?
Taxes are needed for exactly 4 reasons.
1. “To help stabilize the purchasing power of the dollar”.
2. “To express public policy in the distribution of wealth and of income, as in the case of the progressive income and estate taxes”.
3. “subsidizing or in penalizing various industries and economic groups”
4. “To isolate and assess directly the costs of certain national benefits."
Beardsley Ruml, the NY Fed Chair, wrote this back in 1946 and it was every bit as true then as it is today.
Social Security taxes fall under #4, isolating the cost of certain benefits. That's it, social security taxes are meant to make the costs obvious. The government can pay benefits just as it pays benefits for anything else. We could just as easily had a "military tax" so we could have all seen our contribution to the miliary each week in our paychecks. But no one would seriously believe that if the military tax wasn't collecting enough to offset the costs of the miliary that the military would go bankrupt.
The government collects taxes, the money is fungible. The fact that people will soon be colleting more benefits than workers pay into the system is a sign of the population imbalance, but what everyone needs to remember is that if we continue to pay Social Security, those benefits will be used to assist people in acquiring end of life care. How much will it cost society when 40% of Americans rely solely on social security for retirement take social security away in part or in whole, what will the cost be to society?
The reality is, there's not "trust fund" for social security in the way that we think about it. The government collects our taxes and they all get lumped together and used. Social Security taxes are added up on a spreadsheet and the government "borrows" from these amounts by subtracting from that spreadsheet. It's all a game of semantics meant to create the justification for lowering benefits blaming the lack of money rather than blaming the politicians who vote for it.
Paying people their social security is a choice the same as any other line item in the budget.
The wealthy want to lower spending so they can push for more tax cuts making them wealthier while the burden of caring for the Elderly will fall to the states or to individuals.
And it's worth noting that even if you believe that lower spending will somehow result in lower taxes (it won't), it will be offset by higher and higher state taxes.
The idea is for the working and middle class to have too little money to own anything. People will work their whole lives, renting everything and in the end owning almost nothing.
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