Nov 26, 2012
According to the President, the Congress and most of the media, the “entitlements” – meaning Social Security, Medicare and Medicaid – are the main cause of the government’s budget deficit and growing debt.
That’s a ridiculous lie!
Social Security and Medicare pull in their own money through payroll taxes, and pay out benefits from the money they pull in.
Until recently, Social Security and Medicare were both pulling in more money than they paid out. Social Security in particular had huge surpluses. It’s true that during the last several years, Social Security has run a deficit – but it still has a huge “trust fund.”
In fact, Social Security ought to have a much bigger surplus than it has today. Over the past thirty years, worker productivity has more than doubled, while wages have stagnated. If wages had kept pace with productivity, workers would be making more than double what they get right now – and their payroll taxes would also be higher, meaning even more money would funnel in to the Social Security surplus.
Since 2008, Social Security has paid out more than it took in – caused by the lousy economy, pure and simple. The more workers who are out of work, the fewer workers there are paying payroll taxes to support Social Security and Medicare. It’s obvious that putting people back to work is what’s needed to address that problem – not cutting the program! In any case, the accumulated surplus is more than adequate to cover Social Security payouts during recessions like the recent period.
Social Security has not created the government debt. Just the opposite is true. The federal government has been spending the Social Security surplus on other things: all the give-aways to the wealthy and corporations that they’ve been handing out over the last chunk of years. The federal government OWES Social Security, Medicare and other trust funds about five trillion dollars – almost one third of the government’s current debt.
If Social Security ever stopped being a cash cow for the government, the government might have to cut back on some of those give-aways to the wealthy. And the wealthy who call the tune for the government and its two big parties wouldn’t be very happy with that!
That’s what all the talk about cutting Social Security and Medicare to “save” them is all about – taking even more from us to give even more to the wealthy.