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The Fiscal Game Continues

By   Follow Me on Twitter     Message Dennis Kaiser       (Page 1 of 3 pages)     Permalink    (# of views)   1 comment

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This year's version of the financial battle in Washington has been coined by the Corporate Media Propagandists (CMP) as "The Fiscal Cliff".

The "game' is going once again in the Good-Cop/Bad-Cop scenario with the Good Cop vowing to lower taxes on all up to $250,000, while increasing the tax rate for those making more than that. Of course one has to look hard and long in order to find any of those making   over $250,000 who are paying anywhere near 35%.   In fact there are more paying far less than the average taxpayer than there are those paying more. Most of the wealthy are paying half of the rate in terms of percentage than are the average taxpayer, primarily because they have tax loopholes that the average payer doesn't have. Therefore, the Good Cops are being given credit for something that means little in the real world.

These Good Cops are calling for lower tax rates while at the same time saying we need more revenues in order to pay down the deficit. They want us to believe that lowering tax rates will increase revenues. Of course the last time we had this discussion remember President Obama did cut F.I.C.A. taxes.   At a time the propaganda line was the Social Security System was bankrupt he proposed we cut the amount going into the Fund, thus speeding up the process of bankruptcy. It was also the first time Social Security   became a bargain chip in negotiations.   Previously it was "hands off".

The Bad Cops, on the other hand, are standing their ground to cut spending in order to pay down the deficit. Their proposal is to attack what they call "entitlements", meaning Medicare and Social Security.

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In order to give somewhat of an idea of where the Bad Cops are coming from I give you a message I received from Senator Rob Portman, Ohio:

" Dear Dennis,


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Thank you for contacting me to express your views on Social Security. It is good to hear from you.


As you know, Social Security faces long-term challenges that demand a lasting solution. This is particularly true as more "baby boomers" reach retirement age. Social Security is too important and too many seniors rely on it for us to ignore the fact that, according to the Trustees of the Social Security Trust Fund, the Social Security program is running a cash deficit of about $53 billion this year, and will be in deficit into the foreseeable future. This means that the payroll tax receipts are less than the benefits being paid out, reflecting the unsustainable financing of the program.


Some background: Social Security is a pay-as-you-go program, meaning that current payroll taxes finance current retirees. This works as long as there are enough taxpayers to finance current retirees.


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Washington had long known that 77 million retiring baby boomers would eventually strain Social Security's finances. So in 1983, lawmakers enacted reforms resulting in Social Security running a large surplus between 1983 and 2009.  This surplus was supposed to be large enough to finance the program's deficits from 2010 through 2033.  However, instead of saving that money in a trust fund for future retirees, Washington simply spent those surpluses each year -- and promised to pay Social Security back later.  No funds were actually saved.


While the promise to repay the raided Social Security Trust Fund is backed by the full faith and credit of the federal government, there is no pot of money available to do so.  Thus, Social Security's current deficits will have to be financed by new spending cuts, tax increases, or increased borrowing -- which is the same situation as if no trust fund had existed at all.

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Dennis Kaiser is an author and consultant focusing on individual rights. As a US citizen Dennis is deeply concerned over how our nation has fallen from being productive and full of hope to one where that hope is being stripped from the majority as (more...)

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