Elon Musk – who is, let’s not forget, one of these “non -elected bureaucrats” against whom Donald Trump was raging on Tuesday evening – sent Democrats on the Social Society by referring to Social Security as a “Ponzi scheme”, an ancient and waterproof element of the libertarian rhetoric which, although integrating, captures the spirit of the thing. Social security resembles a Ponzi regime insofar as its economic structure requires a constant flow of new taxpayers in the system to finance the advantages promised to those which are eligible to perceive them; It’s different from a Ponzi scheme in that there isn’t really any fraud Involved beyond the loose marketing language of politicians, politicians have used to sell it over the years. Social security is a perfectly ordinary social insurance scheme (“diagram” here in the British non -pijorative sense) very similar to many other programs in the world which are – predictable – for the same reason.
The fraud involved in social security is political rather than financial. Franklin Roosevelt described Social Security as if it were an investment plan, a kind of savings account secured by the federal government for retirement, and its epigones in both parties continued this long and dishonest tradition. It is, of course, nothing of this type: social security is an ordinary social protection program in which the federal government takes money to taxpayers to provide advantages to a class of privileged people, in this case, old people and people with disabilities. There is an income from the production of distinct payroll the federal government claims to set aside for social security and health insurance, which is done to strengthen the myth that social security is a system that people “pay” before receiving payments which are, in a way, a return on investment.
Eating the proverbial wisdom that “a program for the poor is a mediocre program,” insisted Roosevelt – to say the advice of certain economic advisers – to link the program to a payroll tax in order to decrease “the attitude of rescue”, which means the identification of social security as a program to protect well -being as food coupons and payments to the poor. “With these taxes in there, no fucking politician can never remove my social security program,” Roosevelt told his advisers. “These taxes are not a matter of economy, these are a hetero policy.”
(Poetically, we owe the survival of this cynical quote to Luther Gulick, who was a kind of Elon Musk before Elon Musk, an unleashed official who advised the FDR administration on effective administration in government, having sat on the Brownlow Committee, who made recommendations on the effectiveness of the government, and then advised the President on the President on the President ad hoc base.)
The Americans “pour” Social Security in the same way as they “pay” the pentagon budget – and the taxes paid to support the Ministry of Defense do not allow Americans to tanks and aircraft carriers for their personal use. You do not have your social security “contributions” (“contributions” which are collected, in the end, to the threat of the threat of a firearm) that you do not have your contributions to national defense or to the payments of agricultural subsidies which are paid to workers and salt of the land of … Manhattan.
Social security is not in a poor tax situation because the trustee was “searched”. The “trust fund” is, in fact, a speech figure. Tax money comes to the door and the benefits come out, and the difference between what the Americans paid for payroll and what the federal government paid for services is documented and spoke as if it were a trust fund. The “trustee funds” are “invested” in cash securities, which means that the government is more or less currency between different accounts while spending more than it takes and claiming that it is a form of savings or investment. For a few years, the Americans have paid more in the pay tax that the government paid for services, and this difference is the “trust fund”, which is exhausted – again, it is purely a paper exercise – because payments exceed income.
“The democratic product can come from a kind of bull different from that of the republican product, but production is similar in coherence and odor.”
Payments go beyond income because the active workers ratio pays taxes on payroll to retirees receiving services is out of control. In 1940, at the age of the program, there were 159 taxpayers per beneficiary. This ratio was never going to last, of course – it was an effect to start the program – and in 1955, it fell to 8.6 taxpayers per beneficiary. It is not too bad, but the ratio continued to decrease: to 5.1 in 1960, 4.0 in 1965, 3 in 2009 and around 2.8 today. The projections have it more like 2, perhaps less, in a few decades.
As the ratio decreased, the rate of tax on the payroll increased: originally, it represented 2% out of the $ 3,000 in revenues (or about $ 66,000 in dollars today) and, today, it represents 12.4% on the first $ 176,100. Unlike democratic complaints, the lifting of the ceiling and the application of the tax of 12.4% on all income would not cover the unlikely program liabilities – even if we work from modest expectations on the way in which a new income tax of 12.4% would affect remuneration practices (Americans are good enough to minimize their taxes, and the American rich are particularly inventive), eliminating) Probably the cap will probably not cover half of the gaps. (Estimates vary.) The ideas proposed by many Democrats would cover even less, because they would not apply the tax on payroll to all revenues above tax, but only to an income higher than a ceiling inducing the desire, $ 500,000 or 1 million dollars or other.
In the mind of Luther Gulick and Elon Musk, it would probably be better to completely eliminate the tax on pay and stop claiming that we are funding social security other than the tax revenues of the ordinary government. It would be at least an administrative improvement and simplify the tax system a little, which must be welcomed. But that would not solve social security.
There are a few things that legislators could do to improve the finance of the program. We would be to reduce the services, which, according to the wishes of the designers of the program, paid whatever the wealth or income of the beneficiaries: Elon Musk, the richest man in the world, will be eligible for a check like everyone – a high price to pay a marketing fiction.
Another measure would be to increase taxes – if you want benefits and other public spending, someone has to pay for them. Most of the European providents admired by American progressives have relatively high tax rates on middle class employees and those of relatively modest means – they do not finance the government by dipping billionaires because there are not many billionaires and, strangely, they often do not have the kind of income you expect. Billionaires are billionaires because of their assets– in the American context, it is often a great participation in a company they have founded – not because of their income.
A third thing to do would be to expand the population: Musk, who has at least 14 children with at least four different women, does its part. But natalist policies will probably not do much and have largely gassed in other countries where they have been tried. (Williamsons have had four children in less than two years – You are welcome.) Immigration could considerably extend tax roles, but Musk, an immigrant, serves an administration that is generally hostile to immigration when it does not plan to sell American citizenship documents at 5 million dollars per copy or when the boss is looking for a new wife or a seasonal hotel.
Democrats believe that Musk’s loose discourse on the “Ponzi scheme” gives them a political opening, and perhaps this is the case, but: an opening for what? Overall, Democrats are not more interested in testing social security of the means than the Republicans, and do not retain your breath while waiting for Democratic leaders to offer to pay for the Scandinavian social protection state of their dreams with Scandinavian taxes on blue and middle class. The democratic product can come from a kind of bull different from that of the republican product, but production is similar in coherence and odor.
I do not expect the Trump administration to come for social security benefits. Trump won in November on the support of the elderly, who constitute the largest share of the electorate, and the Republicans have long been concerned about the advantages of beneficiaries of social security and health insurance. Medicaid is another story: Trump may have changed the demography of the republican coalition, but most Republicans can find themselves behind the poor, if only to honor tradition. The old wrinkled guys left the 18thth Down hole in Palm Beach is probably sure, for now – Grim Reaper will catch them before fiscal reality does it. But these 45 -year -old men who grew up on the Trump train would better save their own starts, because there are only a handful of things that can be done to straighten social security and, so far, the Trump administration is opposed to everyone.
