Mr. Lincoln purportedly asked an attentive crowd the following question: If a dog has four legs and we count his tail as another leg, how many legs does the dog have? The crowd's answer was five.
Lincoln pointed out that the correct answer was four legs. Calling a tail a leg doesn't make it any more than what it is--a tail.
Our Social Security legislation was officially titled the Old-Age, Survivors, and Disability Insurance (OASDI) program. The problem with its title, of course, is that there's no insurance involved. In addition, Social Security payroll 'contributions' are funded through the Federal Insurance Contributions Act (FICA). Again, the word tax isn't used.
But as is the case with a five legged dog, FICA payroll deductions are in reality what they are--taxes taken from the pay of current workers which are in turn used to pay benefits to Social Security recipients.
In truth, Social Security has become another welfare program, pure and simple. So we should call it that, implement means testing for benefit eligibility, and then pay benefits from the government's general funds rather than pretending that we have enough money previously set aside to pay those promised benefits.
By so doing we would stop claiming erroneously that the people receiving the benefits have previously paid for them. They paid for part of them only.
My complaint about the social security dog's number of claimed legs is bipartisan in nature and includes all politicians, past and present, who have failed to tell the truth since the plan's enactment in the 1930s. Of course, our political class, Democrat and Republican alike, has a long history of saying that dogs have more than four legs.
Calling Obama's Payroll Tax Bluff covers the situation well in saying the following:
"The whole idea of having a dedicated payroll tax that supports a Social Security "trust fund" rests on the notion that you get what you pay for. A worker suffers payroll-tax deductions that the government is supposed to hold onto, separated from the rest of the budget, to fund a large portion of that worker's Social Security and Medicare payments upon retirement.
But cutting the payroll tax while holding Social Security payments steady means there really is no trust fund and Social Security is just another redistribution-of-income program. . . .
Unlike the 2001 bipartisan, marginal income-tax rate cuts, the payroll-tax cut was sold in 2010 as a one-year tax "holiday" with the intention of boosting the economy. Now the president has changed his rhetoric and the cut is about "fairness" and giving middle-income Americans more money. . . .
Make no mistake, if the payroll-tax cut is extended, it will become permanent. Social Security will become another welfare program as the tie between what someone pays and what they receive gets broken. To a large degree, the tie has already been broken. Social Security's trust fund has been raided for years by both parties and Medicare is already significantly financed through general revenues instead of through its dedicated trust fund.
Instead of squabbling over how to extend the payroll tax break, the GOP should concentrate on revising the tax code so it promotes growth and jobs, while reforming our entitlements. . . .
If the payroll-tax cut is extended, the so-called trust fund for Social Security and Medicare will further deteriorate, no matter what bookkeeping gimmicks are employed. If these programs were funded entirely from general revenues, the soon-to-be-annual debate about extending payroll taxes won't take place."
Let's be candid. Everybody knows that we can't responsibly reduce social security taxes and maintain the already unaffordable current benefits structure. Choices have to be made.
Whether we choose to stop paying benefits to those who can afford to forgo the welfare program, or whether we decide to raise taxes sufficiently to fund and pay the promised benefits, or whether we elect to do something else, it's time to tell ourselves the truth. If we don't, the politicians sure won't.
When deciding which road to travel, it's also imperative that we make ourselves see, in addition to the seen, the foreseeable but perhaps now "unseen," as Bastiat pointed out long ago.
The unseen in this instance is the additional debt our nation will be assuming by reducing social security taxes for another year. After $100 billion in foregone taxes and additional debt taken on in 2011, we're headed for another $100 billion in 2012, and each year thereafter as well.
Everybody likes lower taxes, and nobody likes reduced benefits. That's easy to see.
The problem, however, is the foreseeable but often unseen debt explosion we take on in the name of being fair to the middle class, whatever that means.
How about being fair to future generations of Americans?
Isn't that important to the politicians? It sure doesn't look that way to me.
But then, future generations won't be voting in 2012, so I guess they don't count.
Politics sucks.
Thanks. Bob.
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