Tuesday, July 17, 2012

This printed in ChiTrib Wed 21 Sep 2011

Chicago AM Tuesday 13 September 2011
Voice of the People, Chicago Tribune

The Chicago Tribune editorial “Perry's Ponzi point: (Tuesday 13 September) does a public service opening with the rarely stated fact that Ponzi investors “had a choice about participating” but Social Security is compulsory.

Any discussion of Social Security must recognize four undeniable facts:
1) No wage earner has ever sent in a penny to the Social Security system. All such money has come from employer bank accounts.
(Would 100 million wage earners dutifully send in a personal check 
every month for 1% of every pay to DC?) It has been a tax on 
employers from the beginning. The Commerce Department's 2011 
Statistical Abstract of the United States says that in 2009 this was 
36% of all the taxes the Federal Government took in that year.
2) If employers don't remit this tax every month, they go to jail, never 
the wage earner. Employers did get to deduct it from the employees' 
first checks after implementation, and every time there was a 1% 
bump in the rate, but 99% of all the money that's been credited to 
wage earners has come from Employer bank accounts, not wage 
3) Employers have an out: since all employers must do this, they 
have no competitive advantage to do anything but add it to the cost 
of their product, thus converting 'worker contributions' to a silent 
national sales tax. This fractured the crucial link between taxpayers 
and voters. Instead of voters writing monthly checks to support the federal government, they have drawers full of statements saying “you earned and your employer paid.” The government owes it to you!
4) No one is suggesting fixing this by stopping payments to current Social Security recipients - there is no need to: There are 40 million 
people over 65 in the US receiving $683 billion every year, but 2.5% 
of them are dying every year, so in 40 years, the problem solves itself. 
And what's $683 billion anyway? Barely a healthy stimulus.
There are alternatives. Companies like Prudential, New York Life, 
John Hancock. etc sell products called 'annuities'. Some say these 
companies are big, thus greedy. Yet you work thru an agent down the 
street. Are they big and greedy?
If they stopped requiring employers to send in money, would they give 
it to employees? Or would they use it to hire more people. Create jobs, anyone?
The Supreme Court has never been asked to decide the Constitutionality of the Social Security Act, but its 1961 Fleming vs Nestor decision (deciding a single individual's right to benefits) said: “The non-contractual 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.”
We must stop pretending that current workers are covered by a legitimate retirement system.
Arnold H Nelson ah_nelson@yahoo.com

1 comment:

Steve Finnell said...

you are invited to follow my blog