Stop Me Before I Vote Again

Braying jackass of the week award -- in a rich week I must add -- to house majority leader Steny Hoyer, for lumping "reform" of the Social Security retirement system with health insurance.

Here's Chris Bowers on the topic, in paraphrase: "Hey, why not? Let's open the tax books here. Maybe we oughta pop the tax cap on SSI!"

Why is raising payroll taxes the hee-haw answer to everything?

At least this raise is on the better-off jobsters, the merit and hustle crowd. But what if, once the cougar's out of the bag, our beloved corporate-congo morph magic steps in, and on our way to the thousand years of solvency we get something more like this --

"Administration officials said that if Congress were to act immediately, the impending gap could be filled three ways: by raising workers' Social Security payroll taxes by 2 percentage points, from 12.4 percent to 14.4 percent; by reducing benefits by 13 percent; or a combination of the two approaches. The officials briefed reporters on the condition of anonymity on the technical aspects of the trustees' findings."

More fun for pointy-heads. "Do the virtuous sacrificing bit, you wage hogs. An uncap on your betters and craftiers -- don't make us laugh. Its your gray years' dole plan, anyway, right? So you oughta foot the bill -- right?"

Here's EPI elf John Irons. Recently he was reminding our federal senate that there is at least one cap Uncle oughta blow off, not put on -- and that one is now on our two-sided payroll tax. Irons wants to get rid of the cap on earnings taxable for Social Security.

I agree, of course -- though I hasten to add, in Paine's world we'd now be on payroll tax holiday till further notice.

But even in Paine's world, we'd enjoy scheduling a nasty 6% tax increase on all "upper earners" payroll, for the dark day when extraction recommences -- errr umh -- down the road somewhere, when we're flyin' through the endless main drag of hyperemployment city.

Some nice Irons tidbits:

"Due to growing income inequality, the share of earnings above the cap has risen from 10 percent in 1982 to over 16 percent in 2006. This is because incomes have grown strongly at the top while middle incomes have stagnated."

Note the sloppy misleading use of terms here -- "income" and "earnings" -- as if they were interchangeable. But hey. Let's not quibble.

"Including the employee and employer shares of Social Security and Medicare taxes, earners in the middle fifth of the income distribution pay an average effective payroll tax of about 11 percent.

In contrast, the top 1 percent of earners pay just 1.5 percent on average."

Question: should "newly-taxed earnings above the taxable maximum" also raise these folks' benefits?

Paine's world's Solomon-like answer -- hell no!

Note: Yves Smith has called the financial services pay arrangement of “heads I win, tails you lose” looting, and has also argued that our form of capitalism is evolving into Mussolini style corpocracy, meaning fascism. But the label most often pinned on the Obama adminstration is socialism.

Socialists, of course, would argue that socialized gain and privatized loss is not socialism, which tries to “distribute income according to need as well as performance”. Indeed, socialists might call it fascism.

But I don’t put much stock in what socialists might label a system, any more than what fascists or corporate looters would label a system. Whatever you call it, if you have corrupt people running the system, you will have a corrupt system.

Why speculate on what socialists might call it? I think I need to start an "Ask A Socialist" service to handle these occasions. Anyway. It's called actually existing capitalism, it's working just the way it's supposed to, and that is the problem.

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."

Here it comes, ghostbusters, the great pwog crusade to re-free our social security holy land, now in yet another grip of cold corporate steel.

Is this the third or the twelfth of such crusades? Watch out for professional pwog-pols bearing dire warnings...

"The tax deal negotiated by President Barack Obama and Senate Republican leader Mitch McConnell of Kentucky is just the first part of a multistage drama that is likely to further divide and weaken Democrats. The second part, now being teed up by the White House and key Senate Democrats, is a scheme for the president to embrace much of the Bowles-Simpson plan — including cuts in Social Security. This is to be unveiled, according to well-placed sources, in the president’s State of the Union address. "

Yup the POTUS is a vampire too.