No SocSec trust fund (nor medicare either)

Chicago PM Monday 30 April 2012 

Voice of the People, Chicago Tribune

Gentlepeople:

The Chicago Tribune Sunday 28 April Editorial “Enough posturing...” says in the 16th of its 20 paragraphs: “... by 2024, Medicare will exhaust its trust fund; the Social Security fund will be empty by 2033.”

There is no “Medicare trust fund” nor a “Social Security trust fund” either, and never has been. The payroll taxes that allegedly go into these funds go into the general fund. That's the fund where all the $trillions the federal government spends comes from, too, but by that time there is no label on a single dollar saying: “this money came from Social Security contributions...”

There's never enough money coming in to pay all these obligations, so they borrow. This has been easy for the world's largest economy, but gets less easy all the time. After 8 years of the Bush administration's average monthly $20 billion deficits, followed by 42 months of the Obama administrations $120 billion average monthly deficits, time is running out on reality.

Also, payroll taxes don't come from employee bank accounts – they come from employer bank accounts. The Statistical Abstract of the United states shows 73% of all federal taxes received in 2010 came from employers' bank accounts. If the employer doesn't send it in, they go to jail.

But the ninety per cent of voters who are wage earners have drawers full of pay stubs saying: “You earned, and your employer paid...” implying if the employer hadn't paid, they would have given the money to the wage earner. So all those voters say: “Hey, I paid in – I deserve Social Security, and medicare!”

The federal government can do nothing to help citizens growing older. But there is a private sector, that includes insurance companies. They hire actuaries who design plans, such that if an individual contributes a fixed amount over their working years, the company will pay them a living wage until they die. What do they do with all these contributions? They invest them, in private and public projects, that return enough interest to support the obligations. Are they reliable? How reliable are John Hancock Insurance, Massachusetts Mutual Insurance, Northwestern Mutual, Metropolitan Life compared to the federal government?

This mess can be fixed. Get a majority of the House of reps, 60 Senators, and a President with backbone enough to change the US Tax code 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 them to the employee...." The employer would still calculate the tax, noting to the employee: "Here is what the feds expect you to remit in 30 days"

Returning the responsibility of writing checks to fund the government to voters would force them to face how much all these entitlements cost, encouraging voting for legislators less likely to support federal vote-buying giveaways.

Arnold H Nelson  ah_nelson@yahoo.com