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Uncle Sam's IOUs

By Owen Paine on Sunday March 21, 2010 11:04 PM

Hearken to these words of doom from our sober bland dwarfs at the Associated Press:

"For more than two decades, Social Security collected more money in payroll taxes than it paid out in benefits — billions more each year.

Not anymore. This year, for the first time since the 1980s, when Congress last overhauled Social Security, the retirement program is projected to pay out more in benefits than it collects in taxes — nearly $29 billion more.

Sounds like a good time to start tapping the nest egg. Too bad the federal government already spent that money over the years on other programs, preferring to borrow from Social Security rather than foreign creditors. In return, the Treasury Department issued a stack of IOUs — in the form of Treasury bonds — which are kept in a nondescript office building just down the street from Parkersburg's municipal offices.

Now the government will have to borrow even more money, much of it abroad, to start paying back the IOUs, and the timing couldn't be worse. The government is projected to post a record $1.5 trillion budget deficit this year, followed by trillion dollar deficits for years to come."

Glory be to mighty Clio and her twists and turns -- this enduring payroll robbery, instigated long ago by Dembot neoliberal daylight felons like the late Daniel Patrick Moynihan, and their oily Repug sideshow wizard collaborators like Alan Greenbriar, may be about to end -- temporarily of course, and more to the point, accompanied by rams' horns and tinkling cymbals from our press lords' minions, as evidenced by the above chiliastic foreboding.

To throw clear light on the matter, here are the words of a moderate, apparently non-hysterical, actually union-sponsored, apologist for the staus quo ante -- as in "ante up" -- of this heisting system, one Monique Morrissey, shown at left:

"The economy has shed eight million jobs, so payroll tax receipts are down 2.5% compared to pre-recession estimates. As a result, Social Security is projected to run a primary deficit—a measure that excludes interest on trust fund assets -- until 2014, when CBO expects the economy will be back at full employment."
So there you have it: we the McJobbled weebles of America, Inc. have this brief three-year-plus interval when maybe we all aren't building the trust fund pyramid ever higher (toward 3.8 trillion) directly out of our own sweat- and boredom-soaked pay streams

And to my delight it also means that ever so briefly, Uncle Satan must borrow everything he does borrow from elsewhere than from the earnings of us wage smurfs, make up the difference between our payroll tax pay-in and SSI's pay-outs, not, as in the recent past, with yet more increases in payroll taxes but with money borrowed from other sources.

The AP barn-burner of a "news article" linked up top is a fabulous example of routine corporate mass-media disinformation. The second link, the response by the unpaid imbecilic system apologist, makes for a nice complementary read, inasmuch as it steadfastly demolishes the AP's horror tale rather nicely -- err, up until it falls into the rabbit hole itself, assumes a sheeplike mein of stupid pious civics-class blockheadish prudent concern, and downright joins the Moynihanite morons' bandwagon ride to abject idiocy. I am not exaggerating.

"This is not to say that the system faces no challenges," Morrissey observes, with a solemn Polonius-like wag of the head. Yes, brothers and sisters, there are right-wing jungle drums and smoke signals, but also neoliberal geek chicken little-ings too, that rotate on this spike.

"Wages for most workers were flat even before the recession hit, Social Security’s finances have been slipping since the system was last in balance in 1983."
That is, the fabled Moynihan moment. Now this is patent bullshit. Where in hell did the $2.5 trillion surplus the system now sports come from?
" The system... needs periodic adjustments to address changes in life expectancy and other long-term trends... "

-- most recent adjustments have been to extend the life span of the system as now constituted...

i.e. improving the outlook without increases in taxes --
"CBO projects that payroll tax receipts will only cover about 80% of promised benefits after the trust fund is drawn down in coming decades. ["Coming decades" as in the decade of... 2040! -- OP]

"To put this in perspective [That's always the bend-over phrase -- OP], future generations will still receive higher benefits, in inflation-adjusted terms, than retirees today because of economic growth."

What's so wrong with that, you say? Just wait!
"Nevertheless... it would be far preferable to raise revenues so promised benefits can be paid in full...This can be achieved by increasing payroll taxes a modest amount (equivalent to 0.5% of GDP)"
There you have it: raise payroll taxes, soon if not now; after all, the sooner the raising the lesser the raise, eh?

Fellow pinks, this amounts to a near-total capitulation to the Black Hundreds of Wall Street. Nothing could be more outrageous than to consider increasing taxes on payroll when they obviously need to be dramatically reduced, and this whole paper tiger masquerade hoiked out of the universe of public discourse like a third-grade spitball.

The only reason Uncle overtaxes payroll and accumulates trust funds is to undertax profits, rents, interest, dividends, etc. What for God's sake is a union stooge doing suggesting -- yes even suggesting -- an increase! -- No matter how modest, how gradual, how long-postponed, how lubricated and softened. Just the thought of it makes me want to fly down to wherever that poor grubbing dolt lives, find her mentors, and and and ...

* * * * *

Ahem. [Restraightens collar, runs puggy rubicund fingers through sparse but theatrically frizzy hair]

Okay, okay, I know, honest folks can get gulled, even smart honest folks. After all, the hegemons make us swim in their mischief 24/7. Not all of us have the trust capacity of a rattlesnake, like us Paines. So to uphold the code that has guided my life since 2000 ("fairness and balance at all times; scrupulous generous balanced unflagging fairness"), let me add the author partially recovers her feet with this parting bit of good class arithmetic:

"This can be achieved... better... by taxing earnings above $106,800, as Medicare already does."

Comments (13)

Pwog-mania in honest form -- here's what someone I know posted as his status update on Facebook today:

X_______ isn't sure what brings a bigger smile to his face: passage of a health care reform bill after 50 years of trying, or the apocalyptic whining from the Party of No (and their patsies). One is gratifying; the other is friggin' HILARIOUS!

This is a guy who works in the State Dept so he knows spin vs reality, facts vs puffery, investigative reporting vs punditry.

I think it is HILARIOUS but obviously not for the reasons he says. Notice the gloating at "winning one" against the Evil Rethuglicans, while not giving a damn about real reform, and while pretending it's historically momentous and a product of 50 years of "trying."

Yeah, the surreality is indeed HILARIOUS.


oxey that comment fits better
the post
dennis no menace eh ???

here the topic is payroll taxes
the social security system SSS

not first stage single payer ie
the medi sisters

the SSS has no reason to do anything except cut the employee side rate dramatically
and pop off the salary cap
just what those cuts ought to be is a matter for calculation

however the trust funds should be rebated in some fashion
starting now !!!!

dispersing 2.5 trillion
to the vast fleet of tipsy households
out here in little america
ought to go somewhere toward reducing
the effective demand gulf
that stag time america is presently enjoining

my take would be to disperse it
to who the hell paid it and if dead
to their various relatives and assigns

Definitely, op. It was my mistake posting it here. I can repost it there if you can delete it here! Sorry about that.


Let's not forget those small business people who have to pay both sides of FICA out of their earnings.


for the self employed ????

death by drowning in a vat of malmsey

go get yourself a decent exploiter
you yeoman snake


hey oxey

i needed the attention

feel free to miss post anything you like under one of my blurbs

i just won't necessarily have anything to add

i just copmplained at thomatose blog
about all you red hots pillorying me here
for my support of the "health bill"

hat? this ain't no ordinary hat! it's a bear-ay! a froggy chapeau, en rouge!

(or something like that)

Word of the day (for Morissey): Pie card.



you choate puked up miscreant


why is corrente not on mjs' list
of myrmidon blogs


If I undeerstand you, OP, you're saying why not pay back the $2.5 billion surplus accumulated by higher SS taxes over the past twenty years and borrowed in turn by Congress to balance its dshonest budget? That seems to be one of those obvious things that's never talked about -- like putting a cap on major league baseball salaries, or reducing military spending to reduce the deficit.

Speaking of Greenspan, the author of the original duplicitous plan to fund SS for the next millenium by raising paryoll taxes now, Martin Mayer has a book on the S&L Crisis, in which he reprints a letter of recommendation which certified the "sound business practices" of Charles Keating, which enabled him to first qualify as a S&L -- said letter written and signed by Washington attorney Alan Greenspan. He's always been on the take.


alan is on one of the longest slides
from public esteme in american history

what a great and glorious spectacle to behold

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