Social Security Nonsense

The latest attack on the tax proposals in Congress comes from a group that believes that the proposed temporary 2% reduction in the payroll tax which funds Social Security will be the beginning of the end of that program. The nice response to that position is “hogwash!” Anyone who thinks that the 2% reduction is anything other than a way to send stimulus funds back to those who are working in this country does not understand the proposal. Simply put, Each worker legally employed in this country will have his or her tax reduced by up to about $2100 per year. Money will be put into the pockets of employees who participate in the social security system. Thus, everyone other than the government employees who have their own separate retirement systems will get some extra cash. In order to make up the difference for the social security program, the government will need to borrow just like it did with the first stimulus program. The difference this time, however, is that the manner of spending the stimulus funds will be up to millions of individual Americans rather than the government. There will be no cost to administer the stimulus expenditures. There will be no favoritism, graft or waste with regard to the funds. All the funds will go directly into stimulus as is always the case with a tax reduction. For those who worry that borrowing to pay for social security will hurt the program, I suggest that they think of the new plan as no more than the government collecting the full tax and then borrowing in order to give back 2% of the amount.