Social Security Bailout Bill
By: Christopher M. Barra
Well, that is what I call it. Based on current chatter in congress, it appears they are amassing troops to attack retirement plans, 401(k)s, IRAâ€™s Keogh plans – anything saved for retirement is now in jeopardy.
Here is the problem.
Social Security is nearly bankrupt; we all know that. It is a Ponzi Scheme for which the government will never be prosecuted, because, well, they are the government. They take money from current workers to pay benefits of retirees, routinely raid the funds for other reasons, increase the retirement age, and just keep increasing the rate on those still paying to make up the difference.
We have gotten to the point that it is becoming more clear that it canâ€™t last much longer. What do we do when Social Security canâ€™t pay any more. Do we arrest Treasury Secretary Tim Geithner for the operation of a Ponzi Scheme like we did Bernie Madoff? Well, considering the fact that the Treasury Secretary got away without paying his own taxes, I think he is pretty safe taking over control of it.
So what then?
Well, there are trillions of dollars in Americanâ€™s retirement plans. Donâ€™t forget, these are the evil Americans, you know the ones, those contemptible successful ones who sacrificed some and saved money. Why shouldnâ€™t they kick in something? After all, they got an unfair tax deduction for most of those contributions, and then the money accumulated tax free. Avoiding all that tax just isnâ€™t fair to the rest who never contributed to their own retirements and depended on Social Security.
In the mid-nineties, there was a Democratic proposal for an excise tax to be leveled against retirement plans in the amount of 15%. Thatâ€™s right. Take 15% of the plan right off the top and send it to the feds. There wasnâ€™t enough support for it and it never made it.
The reasoning was that those who contributed got at least that much in tax savings and so that wasnâ€™t fair to those who didnâ€™t contribute – you know the ones who spent all their money. So it was felt that to just take away 15% would be more than fair.
Fast forward about 15 years. Democratic President, Congress and Senate. Social Security is in even worse shape than before as it is another decade deeper in debt. The Bush proposal to privatize some of it was not passed so all of it is still under governmentâ€™s direct and complete control.
Argentina has already moved to nationalize all pension pans for the good of the people to be distributed more â€œfairlyâ€. Is our current government all that different?
Here is what I expect to happen.
We will have a Social Security Bailout Bill proposed. It will be for the good of the people to preserve and protect the retirement income of every American, a noble cause indeed. It will consist of:
1 – ANOTHER INCREASE IN RETIREMENT AGE
Look for another increase in the retirement age of workers so payments will not have to begin until later. The hope here is that if more wonâ€™t just please die before any payments commence, at least they will receive less over their remaining lifetime.
2 – A SURTAX ON PENSION PLANS OF 15 – 20%
Expect to see some kind of one time tax grab on all pension plans, likely in the 15 – 20% range – right off the top. Maybe there will be a minimum amount of assets in a plan to be looted ($100,000??) so not to bother too many voters who might make a difference. They will settle about there after some suggest complete nationalization.
The reasoning being that it is only fair to remove the tax benefit the evil pension plan holders received when others didnâ€™t receive that benefit. In fact, most even received more tax savings than that because their tax bracket was higher, which in many cases it was. People who never contributed, never got any tax break at all. This will be promoted as just a removal of the tax break that the rich unfairly received. It will be said to be a correction of an injustice. Fairness is IN.
3 – HIGHER TAX ON SOCIAL SECURITY
For those in that netherworld of partially taxable social security benefits, the maximum taxable portion will undoubtedly be increased to 100%. Currently 85% of benefits can be taxable. Whatâ€™s another 15%? They can certainly afford that.
4 – NEEDS BASED SOCIAL SECURITY
Social Security will become â€œNeed basedâ€. Of this I have no doubt. This is a natural progression in a socialist country. Those who donâ€™t need government payments, donâ€™t get them. Social Security is not our money; it belongs to the government. When we put it in, we were told that it was for our retirement. Our retirement contributions will soon fund someone elseâ€™s retirement and not our own.
It does not matter that we paid it under the rules of getting it back at least to some degree, what matters is that someone else needs it more. Many won’t receive any social security income at all because it will be determined based on a combination of assets and income, that they do not “need” it.
It is still for â€œourâ€ retirement, no real change there, it is just that we will use the word â€œourâ€ in the collective sense.
How much will it matter to national financial stability?
By most guesses, there are about 15 trillion dollars in pension plans in the United States. 20% of this is 3 trillion dollars. More than the current bailout suggested. Lets assume this figure drops to only 10 trillion dollars, the tax on that would be 2 trillion, or roughly twice the amount of the current bailout of about 1 trillion dollars. There will be plenty of support from those who have no pension plans as they rationalize that social security is more important than the pension plans of rich people who donâ€™t even need the money and who should be ashamed if they object. After all, they should share.
Most of this money is held by a large group of unrelated wealthy people whose combined vote may not even be able to get an Alaskan U.S. Senator elected. So if they canâ€™t vote anything, what right do they think they have to be able to keep their money? Who cares about them anyway? Those bastards.
Just imagine how many socialist programs can be funded with a couple of trillion dollars? Of course then they will need more in the future to continue the new and increased programs we canâ€™t even envision now.
Some will rail against the injustices of it all. They will cite broken promises, corrupt anti-American practices, wasteful spending, irresponsible money management, deception, even outright lies and corruption. Maybe even the dreaded â€œCâ€ word (communist) will rear its ugly head, but like the bully in the schoolyard who steals lunch money from the rich kids, the government will be unfazed and to those complaining will respond:
Hold on to your hat â€“ better make that your wallet.