Unemployment is a major contributor to lower Social Security revenues. Jobless people don't pay payroll taxes.
Wage stagnation in the middle class also cuts into revenues. It's caused by a range of factors including runaway CEO pay and a declining minimum wage. (Middle- and lower-income workers with lower salaries pay less into Social Security.)
Bank recklessness. Financial institutions therefore cut into Social Security's revenues when they inflated the housing bubble, engaged in massive fraud, and gambled on a massive scale, leading to the financial crisis of 2008 and its aftermath.
Solutions
Here are some of the practical, real-world solutions we're offering -- solutions which Americans want, and which will work to protect and expand Social Security's benefits:
- Expand Social Security's benefits through bills like those introduced in the House and Senate by elected officials such as Sen. Tom Harkin, Sen. Mark Begich, and Rep. Linda Sanchez.
- Finance these increased benefits by lifting the payroll tax cap as proposed in these bills. (Sadly for Fix the Debt, that will lead to the slight tax increase for billionaires such as group patron Pete Peterson, whose leading spokesperson is Fix the Debt CEO Maya MacGuineas.)
- Explore ways to offer additional benefit enhancements by increasing the payroll tax very slightly for everyone, which polling shows most Americans would support.
- Provide additional funding for benefits through a financial transaction tax on each Wall Street trade. While the individual tax assessed would be miniscule, the massive trading conducted on Wall Street -- including computerized trades -- would lead to a significant amount of money. This would have the added benefit of discouraging idle gambling, which reduces the likelihood of further bank-caused disasters.
It's Your Turn, Fix the Debt
One of the most insidious effects of Fix the Debt and its many sister groups has been to shift the national conversation from our real crises -- massive unemployment, poverty (especially child poverty), and the wage stagnation which is killing our middle class. Now that we've answered your question, Fix the Debt, we have a few of our own:
22 million Americans are looking for full-time work, and long-term unemployment is at record highs. Your proposed spending cuts will only make things worse. What's your solution -- do nothing?
Your kind of austerity economics has devastated Europe. It's even made deficits worse. Yet politicians in your camp are about to impose more cuts. What's your solution -- do nothing?
Wealth inequality lowers Social Security revenue as more income is above the cap. What's your solution -- do nothing?
Unregulated Wall St crashed the economy, increased government spending and unemployment. What's your solution -- do nothing?
If Fix the Debt is serious about finding "solutions," its leaders should open a dialog with those of us who represent the majority's views on Social Security. We have real solutions, and we're willing to share them.
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