Raiding the Lockbox: The hypocrisy of Obama’s tax “cuts”

posted at 3:00 pm on January 6, 2009 by Ed Morrissey

Anyone who follows politics will recall the hue and cry that greeted President Bush’s 2005 proposal to allow workers to save a portion of their Social Security payroll taxes in personal accounts. But even many who follow politics today could be forgiven for failing to realize that the incoming Barack Obama administration is, in its stimulus proposal, suggesting something far more radical for Social Security.

For those who don’t recall the specifics of the 2005 debate, let’s refresh the memory. Workers could have saved four percent of their wages, up to a cap of $1000 (rising each year), in Social Security personal accounts. The money would have remained within the broader Social Security system and the accounts administered by the federal government. The money could only be used to fund future retirement benefits, in effect replacing part of an unfunded benefit promise with a funded reality.

Because participation was to be phased in, the amounts of money proposed in 2005 appear modest by the standards of the current economic debate: $30 billion in 2009, $61 B in 2010, and $95 B in 2011. None of this money could have been spent, or diverted to purposes unrelated to funding Social Security benefits.

This 2005 proposal was greeted in superheated tones. The AARP ran television ads comparing even this modest sheltering of payroll taxes with the destruction of someone’s home. The Center on Budget and Policy Priorities warned of dire fiscal consequences, alleging a loss over two decades of $5 trillion from Social Security. Such eye-popping figures were arrived at via a number of assumptions and extrapolations well beyond the specifics of the President’s actual proposal.

Fast forward to 2009. To sell an economic stimulus package, the incoming Obama Administration has urged the passage of what has been termed $300 billion in “tax relief,” including a tax cut for “95% of workers and their families.” When during the 2008 campaign it was pointed out that far less than 95% of Americans actually even pay income taxes, the Obama campaign asserted that there would nevertheless be tax relief in the form of a refund against payroll taxes — in other words, Social Security.

The use of the preposition “against” is a classic example of Washington-speak that confuses the reality of what is being proposed. In this case, the terminology blurs the answer to the question: will workers be receiving a refund of payroll taxes, or not?  This bothered me enough to contact an expert on Social Security policy, a friend of mine, who had the same grave concerns about this proposal.

If the answer is “no,” then the proposal is for a spending program, not tax relief, and should be understood as such. If the answer is “yes, workers are receiving a refund of their Social Security payroll taxes,” then a new problem arises.  We cannot simultaneously send this money back to taxpayers and deposit it in the Social Security Trust Fund at the same time. One can’t do both without double-counting the money.

Again, hearken back to the 2005 Social Security debate. Then, the Bush Administration did not paper over the reality that money could be invested either in personal accounts, or in the Social Security Trust Fund, but not both. The Bush administration accompanied the proposal with the public release of a memorandum from the Social Security Chief Actuary showing its impact on the Trust Fund.

Critics of Social Security reform had not hesitated to charge the administration in advance with double-counting. In a December, 2004 conference call outlining pre-emptive opposition to President Bush’s anticipated proposal (featuring economic experts who would later advise President-elect Obama), the suggestion even that money would be borrowed to pay for the transition to personal accounts was greeted with derision, including the flippant charge, You’d go straight to jail, and deservedly so if such a dastardly thing were tried in the corporate world.

What a difference a few years makes. Now we are talking about potentially diverting far greater annual amounts of payroll taxes, not as a transition to lower Social Security obligations but to induce stimulative consumption separate and apart from Social Security — and, by the way, to increase borrowing far more in the interim. This has been greeted by a singular lack of curiosity about the effects upon Social Security’s finances and accounting integrity.

It may well be that relief from payroll taxes is indeed the right medicine for our economy, in the midst of a deep recession. It would provide broad-based relief to a wide spectrum of Americans with a minimum of economic distortions. It would be far more stimulative than the various pork-barrel infrastructure initiatives that have been rumored in press discussions, although this appears as an addition to those initiatives and not as an alternative to them.  Further, this kind of shell game would not just postpone our eventual reckoning on entitlement reform, but actively make it much worse.  Maybe we need to do that, but it sounds a lot like the hair of the dog that bit us.

We have room for honest disagreement about the right medicine for our economic woes, but no room for misrepresentation. If we are in fact returning payroll taxes to working Americans, then this loss of revenue should be reflected transparently in the Social Security Trust Fund account.

There are only two other options, neither of them desirable: indefensibly double-count the money, or replace the revenue lost to Social Security from general revenues (read: income taxes) – that is, end Social Security’s self-financing ethic.

Turning to general revenue financing of Social Security is a severe step that warrants acknowledgment and debate before being taken. At the very least, its accounting implications should be confronted head-on. For starters, such a step would render meaningless – if not outright deceptive – the amounts reported to taxpayers as having been contributed to Social Security on their W-2s.

Whatever is decided, truth in budgeting must be observed. Proposals to spend should be acknowledged as proposals to spend. Proposals to refund payroll taxes should acknowledge their effects on Social Security. Anything else falls short of the transparency that Americans deserve at this critical time.


Related Posts:

Breaking on Hot Air

Blowback

Trackbacks/Pings

Trackback URL

Comments

Sorry for being off topic, but just wanted to let everyone know HOT AIR is in the lead with 21.1% of the vote for Best Blog 2008 over at The 2008 Web Blog Awards! Get over there and vote people!

silenced majority on January 6, 2009 at 3:03 PM

Ed, SS is going out.. and fast. I am not going to worry about it as if/when/ever I retire.. it won’t be there.

upinak on January 6, 2009 at 3:05 PM

Whatever is decided, truth in budgeting must be observed. Proposals to spend should be acknowledged as proposals to spend. Proposals to refund payroll taxes should acknowledge their effects on Social Security. Anything else falls short of the transparency that Americans deserve at this critical time.

I wouldn’t hold my breath Ed…. Mazel Tov, by the way :)

beththebaker on January 6, 2009 at 3:07 PM

We cannot simultaneously send this money back to taxpayers and deposit it in the Social Security Trust Fund at the same time.

Yes We Can!

H. R. 7309

To amend the Internal Revenue Code of 1986 to suspend employment and income taxes for the first two months of 2009, and for other purposes.

SECTION 1. SUSPENSION OF EMPLOYMENT TAXES.
SEC. 2. SUSPENSION OF INCOME TAXES.
`SEC. 139C. WAGE AND SELF-EMPLOYMENT INCOME.
SEC. 3. FUNDING OF SOCIAL SECURITY TRUST FUNDS WITH REPEALED TARP FUNDS.
SEC. 4. IMMEDIATE TERMINATION OF TARP PURCHASE AUTHORITY.

Rae on January 6, 2009 at 3:08 PM

‘Tax relief’ my arse. That’s like claiming you give renters mortgage relief by paying their electricity bill.

LimeyGeek on January 6, 2009 at 3:10 PM

Don’t worry. The MSM will line up behind this “innovative and bold move forward” which will only be opposed by “conservative Republicans.”

perroviejo on January 6, 2009 at 3:11 PM

Stripped of all of the political gingerbread, what The One’s proposal really means is that middle class workers and below will now have their retirements funded by the evil “rich.” Those who get “middle class tax relief” will simply not have to pay their Social Security taxes anymore, just like they don’t have to pay federal income taxes.

Somebody will have to make up the loss of those taxes. That would be, um…me.

BHO, spreadin’ the my wealth around!

Cicero43 on January 6, 2009 at 3:12 PM

Tax revolt.

Time to close our checkbooks.

LimeyGeek on January 6, 2009 at 3:15 PM

Oh come on, like anyone is going to complain about debt in 2 weeks. That was so 2001-2008

Chuck Schick on January 6, 2009 at 3:15 PM

I need a fist bump.

bloggless on January 6, 2009 at 3:16 PM

I say we all quit and get on the receiving end.

bloggless on January 6, 2009 at 3:17 PM

Tax revolt.

Time to close our checkbooks.

LimeyGeek on January 6, 2009 at 3:15 PM

And move to Galt Gulch

thomasaur on January 6, 2009 at 3:18 PM

You need to use your specially designed Obammunism calculator and it will all work out.

Why work when the money is free.

tarpon on January 6, 2009 at 3:18 PM

You need to use your specially designed Obammunism calculator and it will all work out.

Why work when the money is free.

tarpon on January 6, 2009 at 3:18 PM

No No. You’ve got it wrong. The answer is to go into politics, and then stop working. Then you get to be rich, and not work. If you just stop working, you’ll be poor and on welfare, and not working.

samuelrylander on January 6, 2009 at 3:21 PM

OK, just so everyone is clear: The social security trust fund buys treasury bills, and the government uses the cash received to pay their other bills. I don’t want anyone to be under the false impression that there is actually a lockbox or anything.

Vashta.Nerada on January 6, 2009 at 3:21 PM

S.S. “Trust Fund” isn’t secure, Trillion-dollar deficits don’t matter, CIA leader who’s qualified because he’s read the briefings before….

This is not the change I’m looking for!

cs89 on January 6, 2009 at 3:23 PM

OK, just so everyone is clear: The social security trust fund buys treasury bills, and the government uses the cash received to pay their other bills. I don’t want anyone to be under the false impression that there is actually a lockbox or anything.

Vashta.Nerada on January 6, 2009 at 3:21 PM

No Sh!t

thomasaur on January 6, 2009 at 3:23 PM

Ed, SS is going out.. and fast. I am not going to worry about it as if/when/ever I retire.. it won’t be there.

upinak on January 6, 2009 at 3:05 PM

I just consider it another tax, as I don’t expect to benefit from it, ever.

Count to 10 on January 6, 2009 at 3:23 PM

Vashta.Nerada on January 6, 2009 at 3:21 PM

Y’know that scene in “Dumb’n’Dumber’ at the end, where the bad guy looks in the briefcase to find a kajillion IOUs…

LimeyGeek on January 6, 2009 at 3:24 PM

I just consider it another tax, as I don’t expect to benefit from it, ever.

Count to 10 on January 6, 2009 at 3:23 PM

I consider it as ‘yet more extortion’

LimeyGeek on January 6, 2009 at 3:25 PM

The answer is to go into politics, and then stop working. Then you get to be rich, and not work.

Pretty soon, the only ‘rich’ Americans will be the privileged political class. Every one else will be working for them.

SeniorD on January 6, 2009 at 3:26 PM

just trying to cook the books the way their buds at Fannie and Freddi taught them

jp on January 6, 2009 at 3:26 PM

If anyone here really believes there are any funds left in Soc Security you are a RUBE of the first magnitude! The idiots we have been electing for years and years and years including the Republicans have been raiding these funds and leaving behind IOU’s for at least 30 years…

sabbott on January 6, 2009 at 3:27 PM

And move to Galt Gulch

thomasaur on January 6, 2009 at 3:18 PM

Just read the book. Galt Gulch is where it jumps the shark. The ending sucks.

Count to 10 on January 6, 2009 at 3:27 PM

Bend over. Pelosi and Reid and Obama are going to cram it in.

marklmail on January 6, 2009 at 3:27 PM

Rae on January 6, 2009 at 3:08 PM

Thanks for that link – I see an accounting nightmare in the works here…

Ann on January 6, 2009 at 3:28 PM

Vashta.Nerada on January 6, 2009 at 3:21 PM

There actually is a Social Security trust fund? I thought Social Security was the world’s biggest Ponzi scheme in which the deductions from a worker’s paycheck went right out the door again as benefits to pay a retiree’s benefits.

Wethal on January 6, 2009 at 3:28 PM

GOP needs to point out Obama is redefining “tax cuts” often to people, and how shameless and dishonest he is being.

Him bastardizing the term could hurt the GOP politically for years to come if voters start to ignore the tax cut proposals of candidates after getting hoodwinked like this.

jp on January 6, 2009 at 3:29 PM

There actually is a Social Security trust fund? I thought Social Security was the world’s biggest Ponzi scheme in which the deductions from a worker’s paycheck went right out the door again as benefits to pay a retiree’s benefits.

Wethal on January 6, 2009 at 3:28 PM

It is. What doesn’t go out to retiree’s goes into the general fund, leaving treasury bonds in its place.

Count to 10 on January 6, 2009 at 3:30 PM

GOP needs to point out Obama is redefining “tax cuts” often to people, and how shameless and dishonest he is being.

Him bastardizing the term could hurt the GOP politically for years to come if voters start to ignore the tax cut proposals of candidates after getting hoodwinked like this.

jp on January 6, 2009 at 3:29 PM

Either that or popularize the term “tax rate cut” quickly.

Count to 10 on January 6, 2009 at 3:31 PM

BTW, Excellent article Captain

Ann on January 6, 2009 at 3:32 PM

Just read the book. Galt Gulch is where it jumps the shark. The ending sucks.

Count to 10 on January 6, 2009 at 3:27 PM

With our education system in its current dismal state, you’ll probably ace your book report with that.

LimeyGeek on January 6, 2009 at 3:32 PM

Just read the book. Galt Gulch is where it jumps the shark. The ending sucks.

Count to 10 on January 6, 2009 at 3:27 PM

It’s a fun fictional concept though. I concur on the ending, I spent alot of time reading the beginning for such disappointment.

thomasaur on January 6, 2009 at 3:34 PM

What the heck!?!

Go straight to jail? What kind of idiots are these?

Does anyone connect the dots with the Madoff guy and Social Security? Madoff paid off past “investors” with current “investors” money, even though no income was being generated.

Well gee, isn’t that what the whole Socialist Security Ponzi scheme is ALL ABOUT?

Its MY MONEY you idiots.

DavidM on January 6, 2009 at 3:35 PM

Last year’s stimulus package included a refund for 23 million people who pay payroll taxes. Didn’t seem to be a problem then.

Tom_Shipley on January 6, 2009 at 3:35 PM

This has been greeted by a singular lack of curiosity about the effects upon Social Security’s finances and accounting integrity.

Gee, that can’t be. I remember how scrupulous the Democrats were when they were pushing their massive amnesty plan last year. They assured us that they had crunched all the numbers and figured out exactly how those 12 – 40 million (or however many) unskilled, minimum-wage workers and their eligible-to-tag-along family members would not have any deleterious effect on Social Security and Medicare/Medicaid.

We all know how careful our Democratic overlords are when it comes to safeguarding our country’s fiscal health. I can’t believe anybody would even think of questioning them.

AZCoyote on January 6, 2009 at 3:36 PM

Bend over. Pelosi and Reid and Obama are going to cram it in.

marklmail on January 6, 2009 at 3:27 PM

I smear myself with vasoline daily to be ready on a moments notice.

thomasaur on January 6, 2009 at 3:36 PM

The Obama plan is a refundable tax credit for $500/1000. I assumed that all wage earners would still be paying their payroll taxes, but that some would be reimbursed via the tax credit through the IRS. The net outcome is that low wage earners pay no income or payroll taxes. Those paying taxes who are not “rich” would be subsidizing their own credits and those of earners that pay no taxes.

For low wage earners, it is welfare disguised as “tax relief.” The Dem’s could waive the payroll taxes on those earners, but instead are giving them a check and avoiding the hassle of changing the funding method for social security. Social security retains its revenue stream, but some people become “straw donors.” It’s just wealth redistribution.

rw on January 6, 2009 at 3:37 PM

I smear myself with vasoline daily to be ready on a moments notice.

thomasaur on January 6, 2009 at 3:36 PM

I’m eating lots of corn.

LimeyGeek on January 6, 2009 at 3:38 PM

Last year’s stimulus package included a refund for 23 million people who pay payroll taxes. Didn’t seem to be a problem then.

Tom_Shipley on January 6, 2009 at 3:35 PM

The return of our money helped us add a nice addition to the armory.

thomasaur on January 6, 2009 at 3:38 PM

For low wage earners, it is welfare disguised as “tax relief.” The Dem’s could waive the payroll taxes on those earners, but instead are giving them a check and avoiding the hassle of changing the funding method for social security. Social security retains its revenue stream, but some people become “straw donors.” It’s just wealth redistribution.

Isn’t this exactly what Bush’s tax rebate did?

Tom_Shipley on January 6, 2009 at 3:38 PM

I smear myself with vasoline daily to be ready on a moments notice.

thomasaur on January 6, 2009 at 3:36 PM

Whoooaaa…Dude. The line is way back here, and you’re way out there. That’s way too much information.

samuelrylander on January 6, 2009 at 3:40 PM

I’m eating lots of corn.

LimeyGeek on January 6, 2009 at 3:38 PM

still laughing…..

thomasaur on January 6, 2009 at 3:40 PM

Isn’t this exactly what Bush’s tax rebate did?

The original Bush proposal was $800 for tax payers, but the house Dem’s forced a change to $600 and the inclusion of people that pay no taxes, if I remember correctly.

rw on January 6, 2009 at 3:40 PM

Shipley, Congress still controls the purse strings.

Please start accepting who controls Congress.

Yes Bush signed it, but I doubt you would find a lot of conservatives on board with it. (Hint: Bush isn’t one)

DavidM on January 6, 2009 at 3:40 PM

Isn’t this exactly what Bush’s tax rebate did?

Tom_Shipley on January 6, 2009 at 3:38 PM

Some similarity, but I think he steered clear of the “Social Security/payroll taxes” quagmire.

cs89 on January 6, 2009 at 3:40 PM

For all the people not complaining, or at least looking into this now, who were up in arms eight years ago – HYPROCRISY is alive and well.

DuctTapeMyBrain on January 6, 2009 at 3:41 PM

rw on January 6, 2009 at 3:40 PM

The Dems wanted people who pay payroll taxes included, and Republicans added 23 million as a compromise (thanks Google!).

Everything I’ve read about Obama’s tax refund plan is that it’s basically the same as Bush’s, so I assume they’d treat the refund to those who pay payroll taxes the same as the Bush plan did.

If that’s the case, Ed’s “hypocrisy” charge falls kind of flat.

And I’m still not sure how a refund to those who pay the payroll tax is the same as Bush’s proposed Social Security overhaul. It kind of seems like apples and oranges to me.

Tom_Shipley on January 6, 2009 at 3:44 PM

Some similarity, but I think he steered clear of the “Social Security/payroll taxes” quagmire.

As I just wrote, 23 million Americans who pay payroll taxes received a refund.

Tom_Shipley on January 6, 2009 at 3:45 PM

Isn’t this exactly what Bush’s tax rebate did?

Tom_Shipley on January 6, 2009 at 3:38 PM

Bush reduced income taxes, not payroll taxes.

Chuck Schick on January 6, 2009 at 3:48 PM

so I assume they’d treat the refund to those who pay payroll taxes the same as the Bush plan did.

Some similarity, but I think he steered clear of the “Social Security/payroll taxes” quagmire.

As I just wrote, 23 million Americans who pay payroll taxes received a refund.

Tom_Shipley on January 6, 2009 at 3:45 PM

It did not originate, and was not presented, as a refund of payroll taxes.

I haven’t waded through all the details of the Obama plan, but I’m gonna remember your track record for accuracy on this site and “assume” you’re wrong again.

cs89 on January 6, 2009 at 3:49 PM

In 2013, when you look up the word obama in the dictionary you’ll find the definition .. shell game.

His plan is to create a situation that will force his desired solution.

Worsen insolvency in SS = raise the salary cap and the benefit age.

Eliminate coal energy = levy environmental penalties

Curtail gun rights = tax ammunition

Encourage alternative fuels = raise the tax on gasoline

Get it?

Texas Gal on January 6, 2009 at 3:50 PM

Hey, I just retired and filed for SS. If hopey changey screws it up my wife’ll have to work extra hard.

Onager on January 6, 2009 at 3:52 PM

Just read the book. Galt Gulch is where it jumps the shark. The ending sucks.

Count to 10 on January 6, 2009 at 3:27 PM

With our education system in its current dismal state, you’ll probably ace your book report with that.

LimeyGeek on January 6, 2009 at 3:32 PM

I have more, but I didn’t think anyone wanted me to clutter up the thread.
I was actually writing down my thoughts on it until part 3.

Count to 10 on January 6, 2009 at 3:52 PM

Isn’t this exactly what Bush’s tax rebate did?

Tom_Shipley on January 6, 2009 at 3:38 PM

It’s still a bad idea, either way. Set rebates or credits do nothing to encourage work, and that is what actually stimulates the economy. Increased spending just causes inflation.

Count to 10 on January 6, 2009 at 3:54 PM

Tom_Shipley on January 6, 2009 at 3:44 PM

Not everything that Republicans to is right, but evidence indicates that everything the Democrats do is wrong.

Count to 10 on January 6, 2009 at 3:57 PM

I think we can all go back to sleep. The bright bulbs at Center for American Progress have it figured out. Just ignore the Soc Sec. debt.

In their latest missive, they explain to us why enormous deficits don’t matter

The U.S. economy is currently estimated to be about $14.5 trillion, which means the $5.8
trillion public debt equals about 40 percent of gross domestic product. That is actually
much lower than it was in the early 1950s—and much lower than the debt held by most
other economically developed countries.

The debt is actually $10.4T, but they don’t include the part that the government owes itself (e.g. SS). So party, be merry, the left has it figured out.

You know, as Keynes said, in the long run we’re all dead anyway.

Oh, and that bit about doing it for the children…Never Mind.

r keller on January 6, 2009 at 3:57 PM

LimeyGeek on January 6, 2009 at 3:15 PM

TAX REVOLT.

TAX REVOLT.

TAX REVOLT.

LibertyBoyNYC on January 6, 2009 at 3:59 PM

Again, hearken back to the 2005 Social Security debate.

I think you probably mean harken (i.e., to turn back to an earlier topic or circumstance), not hearken (which means listen closely and respectfully).

Just another admittedly totally useless factoid.

factoid on January 6, 2009 at 4:04 PM

I think you probably mean harken (i.e., to turn back to an earlier topic or circumstance), not hearken (which means listen closely and respectfully).

Just another admittedly totally useless factoid.

factoid on January 6, 2009 at 4:04 PM

Eh. Whatever the spellchecker swallows.

Count to 10 on January 6, 2009 at 4:06 PM

I have more, but I didn’t think anyone wanted me to clutter up the thread.
I was actually writing down my thoughts on it until part 3.

Count to 10 on January 6, 2009 at 3:52 PM

Sometimes, it’s not about ‘the story’, it’s about what’s behind the story, what it conveys.

Some parts of the book were painful to read, but I always found the actual delivered content to be nutritious.

If you were looking for a story with a neat & tidy ending that summed everything up like a Columbo mystery, you’re out of luck. I found the end to be liberating – like being granted wisdom and then set loose into a fresh wilderness.

LimeyGeek on January 6, 2009 at 4:06 PM

Somebody check my math, but Obama could hit a $2 trillion deficit in his first year- 4-5 times bigger than the worst under Bush and the GOP.

Change like you wouldn’t believe!

Chuck Schick on January 6, 2009 at 4:07 PM

Sometimes, it’s not about ‘the story’, it’s about what’s behind the story, what it conveys.

Some parts of the book were painful to read, but I always found the actual delivered content to be nutritious.

If you were looking for a story with a neat & tidy ending that summed everything up like a Columbo mystery, you’re out of luck. I found the end to be liberating – like being granted wisdom and then set loose into a fresh wilderness.

LimeyGeek on January 6, 2009 at 4:06 PM

It has its moments, but the underlying theme is just an inversion of Marxist/Leninist ideology. It ends up being a James Bond/superhero story, but, in this case, the heroes are the supervillian, and the epilogue is all of the characters safely plotting out their fantasies as the world around them dies.
And Gault’s speech is three hours of mind numbing repetition, browbeating, and self congratulation.
But, yah, sure, the first two parts have some interesting observations that I would recommend to anyone.

Count to 10 on January 6, 2009 at 4:14 PM

Raiding the Lockbox: The hypocrisy deceitfulness of Obama’s tax “cuts”

petefrt on January 6, 2009 at 4:23 PM

And Gault’s speech is three hours of mind numbing repetition, browbeating, and self congratulation.

Galt’s 50+ page monologue requires prescribed cocaine to endure.

LimeyGeek on January 6, 2009 at 4:27 PM

How did you guys get so rich? The only rich folks I ever knew were in Amway. ;) The rest of us have to work for a living. Obama plans to take from all of us. He is an equal opportunity taker.

kanda on January 6, 2009 at 4:31 PM

Gee while we are writing checks, lets just fund the whole country for 5 years at 50k a year? Its all fake money right?

Tom Shipley: Giving people private accounts *lessens* the needs of Social Security. Current SS monies accrue NO interest at all, while SS expenditures are rising constantly.

Calling private accounts a “cost” is Orwellian doublespeak. Letting me keep and control my money doesn’t cost anyone anything, unless you are a rabid Socialist who assumes the money belongs to the Feds in the first place.

DavidM on January 6, 2009 at 4:31 PM

I’m waiting for all of the liberals who roundly condemned the Bush deficits to stick their necks out and declare that the much bigger Obama deficits are also bad.

And before our local moonbats can ask. Yes, the conservatives also condemned the Bush deficits. Those deficits are a big reason why they did not support the Republicans in 2006 and 2008, resulting in big Republican losses in both years.

MarkTheGreat on January 6, 2009 at 4:32 PM

But, but, I was told “Bush’s stimulus” failed! Not enough of the money was wasted on frivolous consumption and some of the rubes even had the gall to use it against personal debt. Very unpatriotic!

rhodeymark on January 6, 2009 at 4:33 PM

Oh by the way, it really wasn’t so long ago that the concept of fractional reserve banking would have garnered the response “You’d go straight to jail, and deservedly so!”

rhodeymark on January 6, 2009 at 4:35 PM

Don’t get me started – an economy that runs so thoroughly on debt that it becomes the major player in GDP is screwed any way you look at it. Tick tick tick – shut off the debt clock. Better to pick a debt implosion number and have it count down instead. A coworker just finally paid off a credit card balance, and they had the nerve to call him at dinner time to ask “why?”

rhodeymark on January 6, 2009 at 4:42 PM

This is how he’ll pay for this perfectly horrible idea which won’t do jack to “stimulate” the economy, but instead will cripple economic growth:

He’ll get rid of all limits on income that is subject to payroll taxes, and for those poor fools who dare to make more than $250,000 a year, they will be taxed on every dime they make – to infinity.

In other words, it’s the greatest wealth re-distribution scheme evah (in the U.S. of A.).

Buy Danish on January 6, 2009 at 4:46 PM

Remember- the latest stimulus package (third or fourth in 2008) barred all but 28% of its $60 billion from being spent in 2009.

So in other words, its worthless.

Here’s how these things work… they pass a huge amount to make it look like theyre doing something to the public. If the economy turns around on its own, they cancel the bulk of the spending and claim fiscal responsibility.

It’s win/win for them.

Chuck Schick on January 6, 2009 at 4:51 PM

Galt’s 50+ page monologue requires prescribed cocaine to endure.

LimeyGeek on January 6, 2009 at 4:27 PM

I get the impression that Rand couldn’t be bothered to go back and proof read it. It is also full of strawman attacks on religion so crude that even I find them insulting–I would wonder and the tenacity of an actual christian that didn’t throw the book across the room.

Count to 10 on January 6, 2009 at 4:54 PM

Ponzi’s Scheme: The True Story of a Financial Legend

As you would expect, not a happy ending with this story either.

BrianA on January 6, 2009 at 5:02 PM

Another huge problem with SS is the small (and getting smaller) base of “donors”, i.e. taxpayers in the private sector. Remember that government employees of all types, including teachers, police, and your run of the mill federal, state, and local employees, are not in the SS system. Because their numbers are growing (govt keeps getting bigger, and BHO proposes adding as many as 600K new federal employees), the SS system is bound to fail. The only solution is to get all govt employees on the SS system, and even that may not be enough to save SS.

Snidely Whiplash on January 6, 2009 at 5:24 PM

Its MY MONEY you idiots.

DavidM on January 6, 2009 at 3:35 PM

Well, actually, no it’s not. Your parents and mine have promised your money to pay off the bills they agreed to starting back in the ’30s or so. And now they want your Grandchildren’s money to pay THEIR wages so that Social Security payments can cover all of their retirement costs.

Reality Check: Ask a retired Republican if they support only paying Social Security to those who have no way to pay for food and rent. Go ahead. Today’s retirees had their Congressmen create this mess. Today’s workers are sheepishly allowing it to continue, because they can still buy a big screen TV. Today’s children are scheduled to pay the Big Bills.

Mr Michael on January 6, 2009 at 5:26 PM

Ah, yes. Transparency.

cannonball on January 6, 2009 at 5:58 PM

There really was a lockbox on the SS trustfund and it had enough money for a very long time. Backtrack to the 60’s and I really can’t remember if it was Kennedy or Johnson that saw all this money sitting there and being Dems. had to figure a way to get their sticky fingers on it and decided to make it part of the GENERAL FUND and replace it with IOU’S that is the biggest reason why SS cannot keep up to-day. SS was meant just to pay retirees, not everything the tax and spend dems pay out of it. If you didn’t pay into it you shouldn’t get anything out of it Very simple concept.

concernedsenior on January 6, 2009 at 6:19 PM

Emperor Joseph II: There are too many notes.

W.A. Mozart: But, Sire!

Emperor Joseph II: My dear young man, don’t take it too hard. Your work is ingenious. It’s quality work. And there are simply too many notes, that’s all. Just cut a few and it will be perfect.

Mozart: Which few did you have in mind, Majesty?

Jaibones on January 6, 2009 at 6:46 PM

Y’know that scene in “Dumb’n’Dumber’ at the end, where the bad guy looks in the briefcase to find a kajillion IOUs…

LimeyGeek on January 6, 2009 at 3:24 PM

Hey, spoiler alert! I was waiting to go see that movie!

PatMac on January 6, 2009 at 8:21 PM

So if by liberal logic you can get tax cuts even though you don’t pay taxes, can I get affirmative action even though I’m melanin challenged?

18-1 on January 6, 2009 at 9:03 PM

Mystery Science Theater 3000 Annenberg Challenge One Trillion. It looks like this show will have some damn expensive popcorn.

Mark30339 on January 6, 2009 at 9:44 PM

Mr Michael: If you read my first post you will see I am quite ‘on board’ with the fraud they are perpetrating on us.

At least with partial privatization the greediest generation couldn’t get it ALL.

DavidM on January 6, 2009 at 9:48 PM

It seems that many people just do not understand several of the major components of social security. The first one is that it was not created as a welfare program. It seems that Obama does not understand this basic point. From what little understanding that Obama has shown me that he has regarding how social security collects money, as clearly indicated by his own comments during the last election cycle, I do not think he is even aware of what the various ‘revenue’ changes he has proposed would actually mean.

We will need to see the actual details of this ‘stimulus’ to find out what implications, if any, are in it. For example, if he is refunding revenues that are collected for social security, is he referring to both the employee and the employer contributions? How will this impact the ultimate distribution to the contributor at retirement?

I do not think any of this has been considered by Obama as he is simply not yet aware.

Freddy on January 7, 2009 at 3:36 AM

This commentary is a good example of why Captain Ed is a welcome addition to the Hot Air community.

Thank you for this informative post, Ed.

ColtsFan on January 7, 2009 at 4:55 AM

From GAO report number GAO-08-847T entitled ‘Fiscal Year 2007 U.S. Government Financial Statements […] which was released on June 5, 2008.

[…]

The future costs of Social Security and Medicare commitments are reported in the Statement of Social Insurance in the Financial Report. We were able to render an unqualified opinion on the 2007 Statement of Social Insurance–a significant accomplishment for the federal government. The statement displays the present value of projected revenues and expenditures for scheduled benefits of social insurance programs. For Social Security and Medicare alone, projected expenditures for scheduled benefits exceed earmarked revenues (i.e., dedicated payroll taxes and premiums) by approximately $41 trillion over the next 75 years in present value terms. Stated differently, one would need approximately $41 trillion invested today to deliver on the currently promised benefits not covered by earmarked revenues for the next 75 years.

[…]

Sooner or later, something’s gonna have to give.

Xiphos on January 7, 2009 at 7:54 AM

How about this idea. Get rid of the income tax altogether. Let the govenment get all our money. What they don’t spend at the end of the year they can give back to us…..has that ever been tried?

kanda on January 7, 2009 at 9:01 AM