Monday, February 14, 2011

Letter to WSJ explaining Social Security

Monday AM 14 February 2011

Editors, The Wall Street Journal

The Wall Street Journal's Tuesday 8 February Rand Paul “Modest $500 Billion Proposal” to solve our out-of-control federal spending binge is as calm and thotful a solution to a serious problem as has been offered by anyone.

But then in only the 13th sentence he comes back to the inevitable: “It would... not touch Social Security....”

Social Security, no less unconstitutional than Medicare or ObamaCare, is what started this whole mess 76 ears ago.

No wage earner has ever sent in even a nickel of contribution to Social Security. Oh sure, you get a pay stub that says: “You earned, and your employer paid....” but the actual $ that went to the feds came from the employer bank account, never the wage earner's. If the feds don't get the check, the employer goes to jail, never the wage earner.

It has been a tax on employers from the start. Because all employers must pay the tax, there is no competitive advantage for any employer to do any more than add it to the price of their product, thus becoming no more than a silent, painless national sales tax. In 2009 this tax was 36% of total federal income.

But no one wants to take away the entire income of retired citizens subsisting on $1400/month Social Security. And no one is proposing that we do so, becaue it alone is a problem that will solve itself. In 40 years they will all be gone.

Right now, how about a little meanse testing. The President ius so intent in taxing people who mae more thatn $200K/year. Certainly if that $200K includes $1400/month from Social Security, you can sure stop that.

What must be done is to stop adding people to the system. A step in that process would be making sure potential enrollees are made aware of what Social Security is. It has never been better defined than by these 87 words in the 1961 Supreme Court Fleming vs Nestor decision:

'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 Congressional Budget Office was recently quoted saying that Social Security will pay out $45 billion more this year than what it takes in. Isn't that what Bermie Madoff got caught doing? He got 150 years in jail, and we are afraid to just put Social Security out of business?

Arnold H Nelson

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