People that “love their government” because the government “cares for them” are wrong!

People that “love their government” because the government “cares for them” are wrong!

Government is a complex multifaceted institution. It operates by law and policy. It has not soul, no feelings and no heart. Institutions, like a block of wood, cannot have feelings or emotions; therefore, it cannot care. In simple terms it is a great machine that provides governance for a people and their land.

People can love their form of government in how it fulfills the values and principles the nation loves and cares about. However, the government will and cannot return that “emotion”. Caring is an emotion that only living beings can have. Not institutions. We can dare to say that even the people working inside a government don’t care for “you”. They don’t know you, they have a job to do and a life to live. This is their preoccupation, not caring for the individual.

The closest we can come to “caring” is a representative form of government. Even so, to say that individual cares about you, knows you and will commit to your individual needs is ludicrous. At any given moment any politician has people that like them as well as hate them. That, my friend, is the harsh reality.

So, do not expect any branch or political organization to “care” about you. It makes you appear to be childish and wishful at best. Thinking adults know that the government is, and it is the citizens duty to hold it accountable to do what is best for the country and its people. For that, we have the power of the vote. That is your currency. Not a wished upon notion that you are cared for.

History Lesson on Your Social Security

History Lesson on Your Social Security

Just in case some young people (& some older ones) didn't know this. It's easy to

check out, if you don't believe it. Be sure and show it to your family and friends. They need a little history lesson on what's what and it doesn't matter whether you are Democrat or Republican. Facts are Facts.

Social Security Cards up until the 1980s expressly stated the number and card were not to be used for identification purposes. Since nearly everyone in the United States now has a number, it became convenient to use it anyway and the message, NOT FOR IDENTIFICATION, was removed.

Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program. He promised:

1.) That participation in the Program would be

Completely voluntary, No longer Voluntary

2.) That the participants would only have to pay

1% of the first $1,400 of their annual Incomes into the Program,

Now 7.65% on the first $90,000

3.) That the money the participants elected to put into the Program would be deductible from their income for tax purposes each year, No longer tax deductible

4.) That the money the participants put into the independent 'Trust Fund' rather than into the

general operating fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other Government program, and, Under Johnson the money was moved to

The General Fund and Spent

5.) That the annuity payments to the retirees would never

be taxed as income. Under Clinton & Gore Up to 85% of your Social Security can be Taxed

Since many of us have paid into FICA for years and are now receiving a Social Security check every month -- and then finding that we are getting taxed on 85% of the money we paid to the Federal government to 'put away' -- you may be interested in the following:

Q: Which Political Party took Social Security from the independent 'Trust Fund' and put it into the general fund so that Congress could spend it?

A: It was Lyndon Johnson and the democratically controlled House and Senate.

Q: Which Political Party eliminated the income tax deduction for Social Security (FICA) withholding?

A: The Democratic Party.

Q: Which Political Party started taxing Social Security annuities?

A: The Democratic Party, with Al Gore casting the 'tie-breaking' deciding vote as President of the Senate, while he was Vice President of the US

Q: Which Political Party decided to start giving annuity payments to immigrants?

AND MY FAVORITE: 

A: That's right!

Jimmy Carter and the Democratic Party. Immigrants moved into this country, and at age 65, began to receive Social Security payments! The Democratic Party gave these payments to them, even though they never paid a dime into it!

Then, after violating the original contract (FICA), the Democrats turn around and tell you that the Republicans want to take your Social Security away! 

The Government has no money, so how does it operate?

The Government has no money, so how does it operate?

From the Center on Budget and Policy Priorities

Where does the government get the money it spends?

• ·        Almost half of all federal revenue 47 % comes from individual income taxes. 
• ·        Another 33 % of revenue comes from payroll taxes, which are assessed on the wage or salary paychecks of almost all workers
• ·        Corporate income tax is 11% and the other 9% are other sources of tax revenue include excise taxes, the estate tax, and other taxes and fees.

Where does the taxpayer’s money go?

• ·        The government spends about $3.7 trillion, over $3.2 trillion was financed by federal revenues. The remaining amount ($438 billion) was financed by borrowing. 
• ·        $888 billion or 24% is paid out through Social Security benefits to 2.3 million spouses and children of retired workers, 6.1 million surviving children and spouses of deceased workers, and 10.8 million disabled workers and their eligible dependents; a total of 19.2 million people.
• ·        Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and Affordable Care Act (ACA) marketplace subsidies — together accounted for 25 %, or $938 billion.
• ·        Defense and international security assistance (includes the cost of supporting operations in Afghanistan and other related activities, described as Overseas Contingency Operations): Another 16 percent of the budget, or $602 billion
• ·        Safety net programs: About 10 percent of the federal budget in 2015, or $362 billion
• ·        The federal government must make regular interest payments on the money it borrowed to finance past deficits— these interest payments claimed $223 billion, or about 6 percent of the  Budget.
•  

How The Budget Deal Changes Social Security For Couples

How The Budget Deal Changes Social Security For Couples

By Mark Miller

CHICAGO (Reuters) – Among its many provisions, the budget deal moving quickly through Congress puts an end to “file-and-suspend,” a lucrative strategy for couples that can boost lifetime Social Security retirement benefits by hundreds of thousands of dollars.

File-and-suspend was a little-known strategy until a few years ago, but it has been quickly gaining popularity because it permits married couples to have their cake and eat it too.

The strategy calls for the higher-earning spouse to file for Social Security benefits at his or her full retirement age, but then suspend that filing while the benefit grows, until as late as 70. The lower-earning spouse can then claim spousal benefits at his or her own full retirement age, and later shift to their own full benefit, if it is larger. (A spousal benefit is half of the primary earner’s benefit.)

The Center for Retirement Research has estimated that file-and-suspend adds $9.5 billion in annual benefit costs to the program.

The White House targeted it for elimination in the budget plan issued last year, calling it an “aggressive” move used by high-income households to “manipulate” benefits. The budget deal approved by the House this week would clamp down on the practice for anyone who turns age 62 after calendar year 2015.

File-and-suspend has been at the top of the list for reform over the past year – and it was thrown into this deal as part of the political horse trading that yielded the crucial agreement to beef up Social Security’s disability insurance trust fund.

That fund is on track to run out of money next year, which would have produced an immediate 19 percent cut in disability benefits; that problem has now been pushed down the road to 2022.

The budget deal reallocates funds from Social Security’s retirement trust fund – a move pressed for by disability advocates and the White House but resisted by Republicans.

FOLLOW THE MONEY

The original bill language also implied that benefits would be ended for spouses who already were receiving benefits under a spouse’s suspended filing.

That would have been a damaging, unwise move since it would have pulled the rug out from people relying on benefits – and it would have been an administrative nightmare for the Social Security Administration.

Congressional sources say that was never the intent, and that the language in the bill is being revised to clarify that only new file-and-suspends are disallowed, beginning 180 days after the bill is signed into law. That opens a window for six more months for people to file and suspend, if they choose that strategy.

More routine spousal strategies will remain in place, and couples should study them carefully. It still makes sense for higher-earning spouses to delay their filing, and some lower-earning spouses may want to file for the 50 percent spousal benefit ahead of their own full retirement ages, if that benefit is greater than their own full benefit. (For more on how much couples can reap in additional benefits, see http://reut.rs/1ePEqXg)

It is also possible to boost Social Security benefits through delayed filing by continuing to work or by drawing down retirement nest eggs to fund living expenses in the early years of retirement while allowing eventual Social Security benefits to grow.

Still, the rapid-fire nature of the budget deal shows the need for a more serious, long-range debate about Social Security.

“There hasn’t been a discussion since the Bowles-Simpson commission (about five years ago) about serious, fundamental Social Security reform,” says Jason Fichtner, senior research fellow at the Mercatus Center at George Mason University, and a former deputy commissioner of the Social Security Administration. “Frankly, reform should be done holistically, but instead this got done as part of a negotiation over the disability insurance problem.”

Retiring soon? Think Again: MEDICARE PART B PREMIUMS TO RISE 52%

MEDICARE PART B PREMIUMS TO RISE 52% 

7 MILLION ENROLLEES MUST PICK UP THE TAB

2016 might not be anything like 2015 for about 30% of Medicare beneficiaries — roughly 7 million Americans. That’s because premiums for individuals could increase a jaw-dropping 52% to $159.30 per month. And for individuals whose incomes exceed $85,000, premiums could end up ranging from $223.00 to $509.80 per month.

Do the math; the average Social Security benefit was $1,180.80 per month. That would make the $159.30  a whopping %13.5 of the SSI! 

What gives? Blame the “hold harmless” provision in the law that addresses cost-of-living adjustments (COLA) for Social Security benefits. That law limits the dollar increase in the premium to the dollar increase in an individual’s Social Security benefit, according to a report by Alicia Munnell of the Center for Retirement Research at Boston College.

The consumer price index (CPI) is not likely to increase in the period used to determine the COLA for 2016. That means it’s very likely that Social Security recipients — for just the third time since automatic adjustments started in 1975 — will not see an increase in their benefit, according to Munnell’s report.

WHO MUST PAY THE HIGHER MEDICARE PART B PREMIUM? 

This group includes individuals who enroll in Part B for the first time in 2016; enrollees who do not receive a Social Security benefit; beneficiaries who are directly billed for their Part B premium; current enrollees who pay an income-related higher premium; and dual Medicare-Medicaid beneficiaries, whose premiums are paid by state Medicaid programs.

What might you do or consider if you’re among those who have to pay the higher premium? 

Individuals who enroll in Part B for the first time in 2016. 

“Enroll earlier if you’re already 65 and otherwise eligible,” says Michael Kitces, publisher and author of the Nerd’s Eye View blog. “If you’re not eligible now, I’m afraid you’re stuck.” 

Enrollees who do not receive a Social Security benefit. 

Those who are already on Medicare or could apply immediately and who were going to start Social Security benefits in the next year or so might consider applying right now instead, Kitces says. “Those who file in the coming weeks should be able to get both Social Security benefits and Medicare in November and December, which are the two months used for measuring, and therefore make themselves eligible,” he says. If you are among those considering different Social Security claiming strategies — such as file-and-suspend, restricted application and delay to age 70 — there’s no getting around it. You’ll have to do cost-benefit analysis to see if the benefit of the strategy is greater than the cost of the increased Medicare Part B premium.

In the long run, Kitces says, those who anticipate living a long time and who will benefit from delaying Social Security by several years should still delay. “The value of delaying Social Security is far more beneficial than the squeeze from hold harmless,” he says. 

Beneficiaries who are directly billed for their Part B premium. 

If you’re already getting Social Security benefits, request to have your Part B premium deducted from your Social Security check ASAP; you should still have time to be eligible for hold harmless, Kitces says. 

Enrollees who pay an income- related higher premium. 

“It is critically important for folks to review the Social Security notice of 2016 Medicare B premiums that will be in mailboxes later this fall,” says Katy Votava, president of Goodcare.com in Rochester, N.Y. “It’s not uncommon for people to qualify for a decrease because their income drops to a lower bracket as a result of specific lifechanging events.” The problem, Votava says, is that Social Security doesn’t know about those events unless the person notifies the agency.

For those whose incomes are still above the thresholds: “Unfortunately, you’re stuck here,” Kitces says. “If possible, get your 2015 income below the line, so that at least if hold harmless kicks in again ... you can benefit slightly from the second time it flows through.” 

Dual Medicare-Medicaid beneficiaries, whose full premiums are paid by state Medicaid programs. 
“Since your Medicare premiums are being paid by the state at this point, it doesn’t effectively matter whether hold harmless applies for you or not, as to the extent higher premiums occur, they will be paid by the state anyway,” Kitces says. “Not surprisingly, I believe there are some states who are not so happy about this.”

Franklin Roosevelt , a Democrat , introduced the Social Security (FICA) Program.

Franklin Roosevelt , a Democrat , introduced the Social Security (FICA) Program.

He promised:

1) That participation in the Program would be completely voluntary,.

It is no longer voluntary.  

2) That the participants would only have to pay 1% of the first $1,400 of their annual incomes into the Program,

Now 7.65%    On the first $90,000. 113,700.00

3) That money that participants elected to put "voluntarily" into the Program would be deductible from their income for tax purposes each year,

No longer tax deductible.  

4) That money which participants paid would be deposited into an Independent "Trust Fund" rather than into the General Operating Fund; and therefore, would only be used to fund the Social Security Retirement Program, and no other Government program.

Under Johnson the money was moved to  The General Fund and spent.  [Now this is where somebody should have been impeached or gone to jail for fraud and   malfeasance of office.]

5) That annuity payments to retirees would never be taxed as income.

Under Clinton & Gore , policy was established that up to 85% of your Social Security can be taxed.  

Since many of us have paid into FICA for years and are now receiving a Social Security check every month -- and then finding that we are getting taxed on 85% of the money we paid to the Federal government to "put away" -- you may be interested in the following:  

Q: Which Political Party took Social Security from the Independent 'Trust Fund' and put it into the General Fund so that Congress could spend it?

A: It was Lyndon Johnson and the  Democratically controlled House and Senate.

Q: Which Political Party eliminated the income tax deduction for Social Security (FICA) withholding?

A: The Democratic Party.

Q: Which Political Party started taxing Social Security annuities?

A: The Democratic Party with Al Gore casting the 'tie-breaking' deciding vote as President of the Senate, while he was Vice President of the U.S. 

Q: Which Political Party decided to start giving annuity payments to immigrants?  

(AND MY FAVORITE):  

A: That's right!
Jim my Carter  and the Democratic Party.

Immigrants moved into this country,   and at age 65, began to receive Social Security payments! The Democratic Party gave these payments to them to get votes, even though they never paid a dime into it!

Then, after violating the original contract (FICA), the Democrats turn around and tell you that Republicans want to take your Social Security away!

What makes these facts really crippling to our nation is that uninformed citizens believe it!  

If enough people receive this, maybe a seed of awareness will be planted and maybe changes will evolve. 

 

It's worth a try. How many people can YOU send this to? Actions speak louder than bumper stickers.

US SHOULD NOT TAX SENIORS’ BENEFITS

US SHOULD NOT TAX SENIORS’ BENEFITS

U.S. Rep. Thomas Massie, RepublicanLast week I introduced the Senior Citizens Tax Elimination Act (H.R. 589). This bill would assist our struggling middle class by eliminating an unnecessary and unjust double-tax on seniors.

Social Security itself is financed by tax dollars, so forcing elderly and senior Americans to list these benefits as taxable income on their tax returns is absurd.

This sneaky technique allows Congress to obtain more revenue for the federal government by taxing benefits owed to citizens who have paid into Social Security most of their lives. When Social Security benefits are taxed, they are, of course, reduced for the person who receives the benefit.

As the Congressional Research Service reports, “Until 1984, Social Security benefits were exempt from the federal income tax. The exclusion was based on rulings made in 1938 and 1941 by the Department of the Treasury, Bureau of Internal Revenue (the predecessor of the Internal Revenue Service). The 1941 Bureau ruling ... viewed benefits as being for general welfare and reasoned that subjecting the payments to income taxation would be contrary to the purposes of Social Security.”

In other words, the 1941 equivalent of the IRS viewed the taxation of Social Security benefits as being unjust and contrary to the purpose for which Social Security was created! For over 40 years, then, Social Security benefits remained untouched by tax-happy congressmen. What made Congress change its mind?

Well, perhaps the opportunity to obtain more revenue for the federal government was simply too enticing for most lawmakers, who didn’t see anything wrong with taxing Social Security benefits to get more money for the government’s coffers.

When Congress first implemented the tax in 1984, it set politically palatable levels so as not to affect middle class retirees.

However, because the thresholds for taxing Social Security have not been adjusted for inflation, more and more retirees are now subject to the tax. What was considered a generous retirement income in 1984 is no longer comfortable, so eliminating this tax will benefit increasingly large numbers of Americans.

As the number of retirees forced to pay this tax increases, public awareness of the tax on Social Security benefits will likewise increase. If congressmen are inundated with complaints from their constituents regarding this unfair and unjust tax, surely Congress could find the will to reduce or eliminate it altogether.

As my colleague and fellow cosponsor Ron DeSantis says, “Americans pay taxes their entire working lives to support Social Security, so there is no reason why these earned benefits should be taxed once again when they receive them. Congressman Massie’s legislation promotes transparency by blowing the whistle on the federal government for double- taxation.”
The Association of Mature American Citizens supports HR 589, and says that the bill “rightly eliminates the unfair income tax on Social Security benefits and ensures that older Americans, who have paid into Social Security throughout their careers, are not excessively taxed by the federal government. Given that mature Americans and seniors have already paid tax on their Social Security contributions via the payroll tax, it is irresponsible for the government to double-tax the benefit in order to generate more revenue. The ‘Senior Citizens Tax Elimination Act’ will not only enable beneficiaries to retain more money for retirement, but it will restore integrity to the Social Security program.”

It is time for Congress to end this tax. Please let your representatives know your position on Social Security Taxation and to support HR 589!

Once more with feeling: Gas tax?

Once more with feeling: Gas tax?

by Charles Krauthammer

WASHINGTON — For 32 years I’ve been advocating a major tax on petroleum. I’ve got as much chance this time around as did Don Quixote with windmills. But I shall tilt my lance once more.

The only time you can even think of proposing a gas tax increase is when oil prices are at rock bottom. When I last suggested the idea six years ago, oil was selling at $40 a barrel. It eventually rose back to $110. It’s now around $48. Correspondingly, the price at the pump has fallen in the last three months by more than a dollar to about $2.20 per gallon.

As a result, some in Congress are talking about a 10- or 20-cent hike in the federal tax to use for infrastructure spending. Right idea, wrong policy. The hike should not be 10 cents but $1. And the proceeds should not be spent by, or even entrusted to, the government. They should be immediately and entirely returned to the consumer by means of a cut in the Social Security tax.

The average American buys about 12 gallons of gas a week. Washington would be soaking him for $12 in extra taxes. Washington should therefore simultaneously reduce everyone’s FICA tax by $12 a week. Thus the average driver is left harmless. He receives a $12 per week FICA bonus that he can spend on gasoline if he wants – or anything else. If he chooses to drive less, it puts money in his pocket. (The unemployed would have the $12 added to their unemployment insurance; the elderly, added to their Social Security check.) The point of the $1 gas tax increase is not to feed the maw of a government raking in $3 trillion a year. The point is exclusively to alter incentives – to reduce the disincentive for work (the Social Security tax) and to increase the disincentive to consume gasoline.

It’s win-win. Employment taxes are a drag on job creation. Reducing them not only promotes growth but advances fairness, FICA being a regressive tax that hits the middle and working classes far more than the rich.

As for oil, we remain the world champion consumer. We burn more than 20 percent of global output, almost twice as much as the next nearest gas guzzler, China.

A $1 gas tax increase would constrain oil consumption in two ways. In the short run, by curbing driving. In the long run, by altering car-buying habits. A return to gas-guzzling land yachts occurs every time gasoline prices plunge. A high gas tax encourages demand for more fuel-efficient vehicles. Constrained U.S. consumption – combined with already huge increases in U.S. production – would continue to apply enormous downward pressure on oil prices.

A tax is the best way to improve fuel efficiency. Today we do it through rigid regulations, the so-called CAFE standards imposed on carmakers. They are forced to manufacture acres of unsellable cars in order to meet an arbitrary, bureaucratic “fleet” gas-consumption average.

This is nuts. If you simply set a higher price point for gasoline, buyers will do the sorting on their own, choosing fuel efficiency just as they do when the world price is high. The beauty of the tax – as a substitute for a high world price – is that the incentive for fuel efficiency remains, but the extra money collected at the pump goes right back into the U.S. economy (and to the citizenry through the revenue-neutral FICA rebate) instead of being shipped overseas to Russia, Venezuela, Iran and other unsavories.

Which is a geopolitical coup. Cheap oil is the most effective and efficient instrument known to man for weakening these oil-dependent miscreants.

And finally, lower consumption reduces pollution and greenhouse gases. The reduction of traditional pollutants, though relatively minor, is an undeniable gain. And even for global warming skeptics, there’s no reason not to welcome a benign measure that induces prudential reductions in CO2 emissions.

The unexpected and unpredicted collapse of oil prices gives us a unique opportunity to maintain our good luck through a simple, revenueneutral measure to help prevent the perennial price spikes that follow the fool’s paradise of ultra-cheap oil.

We’ve blown this chance at least three times since the 1980s. As former French Foreign Minister Jean Francois-Poncet said a quarter-century ago, “It’s hard to take seriously that a nation has deep problems if they can be fixed with a 50-cent-a-gallon” – 90 cents in today’s money – “gasoline tax.” Let’s not blow it again.

Shock Report! Government Wastes Huge Amount of Taxpayer Dollars

Shock Report! Government Wastes Huge Amount of Taxpayer Dollars

 by Onan Coca 

The federal government wastes most taxpayer dollars, not only by making poor or fraudulent spending decisions, but also by funding inefficient entitlement programs and unnecessarily redistributing wealth, argues Heritage Foundation budget economist Romina Boccia.

“Any Social Security check going to a millionaire, I call that government waste,” Boccia told The Daily Caller News Foundation. “If we decide that the government has a role to protect the elderly and disabled from destitution, if we think that a federal role is required there, then sending Social Security checks to millionaires is a waste.”

Much attention is given to wasteful discretionary spending on things like completely unnecessary bridges or lavish parties for bureaucrats, and a 2014 Gallup poll showed Americans believe the government wastes 51 cents of every dollar, Boccia points out in her new report, titled “Eliminating Waste and Controlling Government Spending.” But in terms of economic principles, most of that waste happens in the realm of mandatory spending on programs like Social Security and Medicare.

Mandatory spending now consumes two-thirds of the federal budget, and by 2030 Medicare, Medicaid, Social Security and U.S. interest payments will consume 100 percent of tax revenues, according to the Congressional Budget Office.

“Paying government benefits to people who shouldn’t receive them, and creating bad incentives for people to work less and retire earlier — that is really what we think of as waste,” Boccia told TheDCNF. “The baby boomers who don’t need their Social Security checks still take them, and they’ll live off of them, and they’ll just leave a greater inheritance to their children, who are also well off.”

She also pointed to massive waste in Medicare and Medicaid spending.  ”If we want to provide health care for these people, it doesn’t mean that the government has to provide it,” Boccia said. Rather than insist the government finance and provide health care to the elderly, for example, she suggests giving them a check and allowing them to purchase health insurance in the relatively efficient private market.

Medicare and Medicaid have the highest rates of “improper payments.” Last year the federal government reported over $100 billion of improper payments to the programs, including overpaying for medical equipment and paying benefits to dead people.

“Miss-targeted and poorly run entitlement programs have for years driven and continue to drive the increase in federal spending and debt,” Boccia said. “And if we include that then it makes sense that you might think that the government wastes most of the dollars it takes in.”

“Instead of just thinking about mismanagement, fraud, and stupid spending examples like RoboSquirrel,” she added, “we really ought to look at a definition of government waste that is based on economic principles.” 

Must act now to save Social Security

Must act now to save Social Security

The way Washington is working or not working suggests it has adopted as an official slogan, “Don’t just do something, stand there.” Washington has come to a virtual standstill. The president is becoming more and more unpopular and Congress even more so. Legislation that traditionally had bipartisan support, such as highway bills, can’t budge. And if we can’t find common ground on such basic government functions as road building, the outlook is bleak for more challenging bills such as immigration reform and the national debt.

An unwritten rule has become clear: The bigger the issue, the smaller the response. And that is notably true for Social Security.

Social Security has been and remains a crucial piece of the social safety net. The program provides $863 billion in benefits to more than 59 million retired workers, disabled workers and survivors of deceased workers. The program lifts over 22 million Americans out of poverty and is the major source of income for most retired workers.

Social Security today consumes almost a quarter of the entire federal budget. And that number is growing, and that’s why I’m writing this. I wholeheartedly support Social Security, but it’s time we all acknowledge that the math underpinning Social Security requires our leaders to take action.

Fact: For the past four years, Social Security has been running deficits. The trust fund has been paying out more in benefits than it collects in revenues. These deficits aren’t temporary either. The nonpartisan Congressional Budget Office has determined that by 2032 the Social Security trust fund will run out of money. When that happens, all beneficiaries, including low-income retirees at the poverty level, will receive an immediate 23 percent cut in their benefits just to keep the program afloat.

The situation is simple: Baby boomers are retiring, we’re living longer and we’re retiring younger. Fixing it, however, challenges politicians. If we act now, we can make modest changes that will be enough to protect the program. We can spread smaller changes over more years and generations. But if we wait until Social Security is out of money, restoring solvency will require abrupt changes in benefits and/or taxes.

We cannot continue to listen to the fear mongers, such as the ones who say any changes to Social Security will result in cuts that hurt blue-collar workers, or the others who claim the only way to save Social Security is with massive tax increases.

It doesn’t matter how Congress goes about the reform: It can form a commission, create a super committee, appoint a study group. Whatever method is used must acknowledge the magnitude of the problem and the tradeoffs that are necessary.

Ask your congressmen what they are doing to ensure the future of Social Security. Don’t let them leave it to the next member of Congress who will represent you. And don’t let them leave it to the next generation to solve. If you fail to act and influence your representatives, you will have no right to complain when the collapse comes.

Social Security Insolvent, Voters Say 'Do Nothing'

Social Security Insolvent, Voters Say 'Do Nothing'

The main driver of the ballooning federal debt is wealth transfer payments. Indeed, more than two-thirds of the federal budget is money that goes from one taxpayer's pocket into someone else's. Some of this is naked wealth redistribution, like food stamps and other welfare. But much of it is what some call "earned" payments, like Social Security and Medicare -- money that has been taken from workers' paychecks for decades with the promise of a retirement return. The solvency of these programs, however, is in jeopardy.
Social Security already runs an annual deficit -- about $200 billion this year -- which will only grow worse as fewer workers support more retirees. From the start, politicians have raided the Social Security "trust fund" and spent the money on other general fund projects, leaving the program as a wealth transfer one instead of an investment as it's billed. Economist Walter Williams explains, "What the Treasury Department does is give the Social Security Trust Fund non-marketable 'special issue government securities' that are simply bookkeeping entries that are IOUs."

Now that benefits paid exceed taxes collected, the problem has become acute. According to the Social Security board of trustees, in 1945, there were 42 workers for every retiree; the current ratio of three workers to every retiree is unsustainable. Strictly speaking, Social Security is not a Ponzi scheme, in part because it's not against the law. Indeed, it is the law. (Try not paying payroll taxes -- a.k.a., "investing" in the system.) But it is structured exactly like a Ponzi scheme, and it will eventually fail for the same reasons.

Of the gap between Social Security taxes collected and benefits paid out, The Wall Street Journal's William Galston writes, "To close that gap while maintaining scheduled benefits, we would need to enact an immediate increase in the payroll tax rate from 12.4% to 15.9%. For workers earning $50,000 a year, that would mean a tax increase of $900, nearly 2% of gross income. And employers would have to match it. For workers making the maximum now subject to payroll taxes (a bit under $120,000), taxes would rise by $2,100."

If the income cap were lifted, workers at higher incomes would face an even more staggering tax increase. And yet as it stands, the payroll tax is regressive in that it hits lower income families disproportionately. If the income cap were doubled, it still wouldn't fix the problem. Galston notes, "One might imagine that such a sizable increase in covered earnings would be enough to stabilize the system for the long term. In fact, the CBO calculates, it would reduce the imbalance by only 30%. Indeed, eliminating the cap and taxing all earnings would solve just 45% of the problem."

Meanwhile, the expected return on the 12.4% in Social Security withholding from our income is practically criminal. Consider the potential return of investing 12.4% of a typical middle class income in indexed mutual funds, where decent investments would yield perhaps multiple millions of dollars over 30 years. Over a retirement span of 20 years or so, annual withdrawals could be six figures while still leaving a good chunk of change making money.

Compared to that, Social Security looks like the poorest investment ever concocted. In fact, from that perspective, Social Security is stealing our money by mandating that it do something for us in a worse way than we can ourselves.

Or put it another way. Financial advisers often recommend putting 10% to 15% of your income toward "retirement" (whatever that means to you). The potential return on that 15% over 30 years is fantastic. Unfortunately, Social Security is already taking over 12%, while giving us miserable returns. So for savers, Social Security is costing us significant returns that we could have realized but won't. What a "safety net."

In spite of the facts, Social Security has always been one of the most popular programs the federal government runs, and the overwhelming choice of voters is to do nothing to fix it -- let alone returning to the constitutional norm of the federal government staying out of your retirement. So we understand politicians desperate for votes not wanting to touch this beloved system. But Social Security is built on a half-truth at best, and it's unsustainable.