Steve Chapman's 'consistent budgetary restraint' ?

Chicago AM 29 June 2010

Voice of the People, Chicago Tribune

Gentlepeople:

The Chicago Tribune's Steve Chapman opened his Sunday June 20 column “An end to spending excess?” with the uncontestable statement: “One of the reasons the federal budget is chronically in the red is that most people ... couldn't care less.” The best he can do to explain this conundrum is thotless statements about the national debt being “an unfathomable abstraction” and “few people” lose sleep worrying if the budget will ever balance.

The reason no one cares about the federal budget is clearly stated in the 2010 Statistical Abstract of United States, table #468, page 311 that shows in 2008, 62% of the total federal government receipts of $2.745 trillion was withheld from wages. So nearly 2/3 of all the actual dollars that came into the US general fund were from employer bank accounts, not employee's . Employers can pass all of this on in price increases, so the federal government is 2/3 funded by a silent national sales tax. Because of a regularly expanding national economy, it's all but painless to voters.

This could be fixed by changing paragraph 3402 of USC Title 26 — 'Internal Revenue Code' Subtitle C 'Employment taxes' Chapter 24 'Collection Of Income Tax At Source On Wages'... from "every employer making payment of wages shall deduct and withhold upon such wages a tax..." to "every employer making payment of wages shall pay all of those wages to the employee...." The employer would still calculate the tax, replacing the reassuring (but thoroly misleading) note "you earned and your employer paid" with "here is how much the feds are expecting you personally to send in within 30 days"

Would this be inefficient? Certainly for an insatiable federal bureaucracy. But after a few months writing checks to the Federal Government for 20% of their take-home pay, tax payers would start showing considerable interest in where that money is going, and react at the ballot box.

Mr. Chapman continues listing various signs and opinions that might lead to the public's coming to their senses on the spending, concluding his coloumn with “We have not reached a new era of consistent budgetary restraint. But it looks like the age of excess is over.”

Had he done more research on just the Bush/Obama administrations' budget records, he might have skipped that optimistic close. Treasury Department figures show that the first six years of the Bush admnistration ran up deficits of $20 billion dollars a month, but included 25 months with surpluses. With a Democrat House of Reps in the last 2 years, that average went up to $35 billion a month, but even here there were nine months with surpluses. But now just the first 16 months of the Obama administration the monthly average debt increase is $122 bullion a month, and not a single month with a surplus..

Arnodl H Nelson

Is Social Security 'insurance'?

Chicago PM 7 June 2010

Editors, The Wall Street Journal

Gentlepeople:

The Wall Street Journal letters headline of Monday, June 7 “Can Social Security still be thot of as Insurance?” has a definitive answer in the 1961 Supreme Court Fleming vs Nestor Decision, which says:

“The noncontractual interest of an employee covered by the [Social Security] Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits are based on his contractual premium payments.

“To engraft upon the Social Security System a concept of "accrued property rights" would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands and which Congress probably had in mind when it expressly reserved the right to alter, amend or repeal any provision of the Act.”

The word 'insurance' more commonly describes private health insutance, fire insurance, or life insurance, each of which is based on the fact of bad things happening to some people, but not everyone. So if you get enough people to contribute to a pool, you will be able to cover the relatively few who suffer the losses, and everyone is happy.

Social Security has no such pool. Its funding is solely a tax on employers (no wage earner has ever sent in a personal check to cover his 'contribution.') The only pool this money has ever gone into is the US general fund.

This same scam was also applied to income taxes with the Current Tax Payment Act of 1943, resulting in the 2010 Statistical Abstract of US, table #468, page 311 showing in 2008, 62% of the total federal government receipts of $2.745 trillion was withheld from wages. So nearly 2/3 of all the actual dollars that came into the US general fund were from employer bank accounts, not employee's . Employers can pass all of this on in price increases, so the federal government is 2/3 funded by a silent national sales tax. Because of a regularly expanding national economy, it's all but painless to voters.

This could be solved by changing paragraph 3402 of USC Title 26 — 'Internal Revenue Code' Subtitle C 'Employment taxes' Chapter 24 'Collection Of Income Tax At Source On Wages'... from "every employer making payment of wages shall deduct and withhold upon such wages a tax..." to "every employer making payment of wages shall pay all of those wages to the employee...." The employer would still calculate the tax, replacing the reassuring (but thoroly misleading) note "you earned and your employer paid" with "here is how much the feds are expecting you personally to send in within 30 days"

Would this be inefficient? Certainly for an insatiable federal bureaucracy. But after a few months writing checks to the Federal Government for 20% of their take-home pay, Americans will start voting tomake an honest country out of us.

Arnold H Nelson

How many times can the US Constitution be ignored?

Chicago Thursday AM 4 June 2010

Editors, The Wall Street Journal

Gentlepeople:

The Wall Street Journal “Justice Needs More Time” editorial of Thursday 4 June clearly shows the contempt for the Constitution held by the current executive and legislative departments of the Federal government: “Frivolous," and "More to do with politics than with policy." But now they are being asked to show how even further grotesque twisting of the Commerce Clause “gives the government the power to compel all private citizens to buy insurance."

Obamacare is clearly unconstitutional, but no more so than Medicare, and Social Security. After the Constitution is ignored three time in 75 years (each by the same political party) how many more hits can it take before it has no more meaning than a Soviet Russia 'constitution'?

Arnold H Nelson

5056 North Marine Drive Chicago Illinois 60640

773-677-3010 ah_nelson@yahoo.com

WSJ: Herbert Hoover's contractionary fiscal policy?

Chicago Tuesday PM 1 June 2010

Editors, The Wall Street Journal

Gentlepeople:

A letter in the Tuesday June 1 Wall Street Journal sussinctly points out the all too common conventional wisdom displayed in Alan Blinder's May 20 "Return of the Bond Market Vigilantes" op-ed that Herbert Hoover was an "oracle" of "large fiscal contractions," by comparing federal spending and deficit figures for 1929 and 1932.

Another less well known but also definitive demonstration of this fallacy is an FDR speech in Pittsburgh, PA, Wednesday evening, October 19, 1932 when he said "I shall approach the problem of carrying out the plain precept of our party, which is to reduce the cost of the current Federal Government operations by 25 per cent."

You can look it up.

Arnold H Nelson