Yesterday as the Pres went on Meet The Press, adding to the constant Media harping about the "Crisis" about Social Security and Medicare's looming deficit. Another in a long list of pointing The People on something to Blame, getting People to vent their anger on another group of People, something, someone/s other than the real culprits and the real problems, very serious ones, since most of the culprits should have been jailed.
its more than amazing, beyond the usual misdirection, making people look at the wrong thing in order to halt them from focusing on the real problems
i can understand Canadians being unaware of the facts and so easy to make Solution, but the sad thing is so are most (probably 99%) of Americans are also unaware. watching as all these people, from the Pres, leaders in both Houses of Congress and all the talking head pundits, continue to talk about this "Crisis" of a Deficit in Social Security and Medicare, referred to as Entitlements, and Not mention such as easy way to eliminate it, makes you wonder...is it possible they're all stupid, unaware, or is it a career killer to utter a word about it on a widely viewed TV News show or written about.
As brief as I can detail it.
On Every American's paycheck, under Deductions, you'll see FICA. The deduction amounts to 7.65% of your Gross Earnings (6.2% of it goes to SS and the remaining 1.45% to Medicare) with the other half, another 7.65%, put in for you by your Employer, for a Total of 15.3%. And unlike Federal Income Tax which a taxpayer can get a refund on, FICA is Not subject to any refund. This Total of 15.3% of Gross wages is taken, supposedly set aside as an Insurance Policy
Its not necessary to watch or read it all, but a view of the current status quo of SS will help to understand where we are. As-Is today Social Security is 100% solvent to 2037, and would then have to be reduced to a payout of 75% of what was expected. ....BUT
this Deduction has a CAP. In 2012 the Cap was set at $110,100. Everyone who makes more than that ceases having the 6.2% and matching 6.2% taken from their wages. Even the 1.45% was Capped until 1993.
Now I would prefer to argue for Removing the Cap entirely, but I won't right now. I'll simply say, doesn't it make sense, Common Sense, if there is really a forecasted Deficit looming in the future, to Raise the Cap. If the Cap was $250,000 not only would a supposed coming Deficit be eliminated, there would be enough of a Surplus to eliminate any supposed coming Deficit in Medicare. Removing the CAP wouls fully Fund both SS & Medicare and have such a large Surplus that would allow this Tax to be Lowered for Everyone.
Its so easy, the same 99% would also say Fair, but they don't know such a Cap exists. They're not supposed to know, and the MSMedia isn't going to tell them about it.
And a very important item to keep in mind, the widening Wage Gap. With such an increasing amount going to the Top 1% to 10% of Earners, this has resulted in about 70% of Total Wages escaping paying into this part of FICA. Does that make sense? How can there really be a looming Deficit and keep a Cap in place as it is?
Imagine the Pres ending this stalemate by saying, "OK, lets forget raising the Tax 4% to 39% on high-end earners, but I'm removing the CAP on FICA"
Social Security Didn't Create the Deficit
Uploaded on Jul 12, 2011
Social Security didn't create the deficit, but America's seniors are being presented with a fake Social Security crisis to try to trick them into accepting reduced benefits. Social Security will be able to pay 100% of its benefits through 2037 without any changes whatsoever.
So, why the panic today? If seniors accept cuts to Social Security benefits today, a surplus cash flow will build in the Social Security trust fund. According to the Congressional Research Service, "Social Security's cash surpluses are borrowed by the U.S. Treasury and can be used for tax cuts, spending or repaying debt."
Social Security benefit cuts are increasing taxes paid to Social Security or extending retirement age will give more money for tax cuts spending or repaying the debt. Except for one thing: Social Security money belongs to those who have paid into the fund, it's not the government's money to use it; it shouldn't be the government's money to play with.
Senior citizens should not have to accept a reduced standard of living to finance tax cuts for the rich. We must take a stand for senior citizens and protect Social Security and protect future generations from this raid on Social Security's funds.
Three months ago 276 experts on Social Security, the federal budget or the economy wrote to President Obama "to correct a commonly held misconception -- that Social Security somehow contributes to the federal government's deficit."
Despite the fact that Social Security has a $2.6 trillion dollar surplus and can pay 100% of its benefits through 2037 without any cuts or tax increases, President Obama declared yesterday that Social Security checks may not go out after August 2, presumably unless there is a deal on the federal deficit - - which has nothing to do with Social Security.
According to today's Washington Post, fifteen years ago Congress passed laws which stated Social Security did not count against the debt limit and gave Treasury clear authority to use Social Security trust funds to pay benefits and administration expenses in the event a debt ceiling is reached.
Nov 30, 2012 – While members of Congress and the administration ponder and propose how they're going to fix the budget and national debt crisis, no one ...
Last 10 years Caps
| 2012 || $110,100 || 3.1% || $4,624.20* || $6,826.20 || $11,450.40 |
| 2011 || $106,800 || 0.0% || $4,485.60* || $6,621.60 || $11,107.20 |
| 2010 || $106,800 || 0.0% || $6,621.60 || $6,621.60 || $13,243.20 |
| 2009 || $106,800 || 4.7% || $6,621.60 || $6,621.60 || $13,243.20 |
| 2008 || $102,000 || 4.6% || $6,324.00 || $6,324.00 || $12,648.00 |
| 2007 || $97,500 || 3.5% || $6,045.00 || $6,045.00 || $12,090.00 |
| 2006 || $94,200 || 4.7% || $5,840.40 || $5,840.40 || $11,680.80 |
| 2005 || $90,000 || 2.4% || $5,580.00 || $5,580.00 || $11,160.00 |
| 2004 || $87,900 || 1.0% || $5,449.80 || $5,449.80 || $10,899.60 |
| 2003 || $87,000 || 2.5% || $5,394.00 || $5,394.00 || $10,788.00 |
| 2002 || $84,900 || 5.6% || $5,263.80 || $5,263.80 || $10,527.60 |
What are the implications of this picture?
I am not an economist, but then again, most likely you aren't either. On the other hand, the economy affects you and me, so we need to come to grips with these issues to participate intelligently in the political process. There needs to be a genuine national dialog on these issues at all levels.