Your Opinion: Payroll tax cut reduces Social Security
Sunday, September 18, 2011
In the president’s speech to the joint houses of Congress he attacked the retirement money of all people who are retired or are about to retire. The president drew great applause when he said that he would continue the payroll tax cut.
What does this mean for the Social Security System? This means that less money goes into that system. To an individual this means that you will have less money going into your account reducing your monthly income at retirement.
To the system as a whole what does it mean? The system is set up now so people put money in the system which is directly paid out each month to the Social Security recipient. The excess money from the past was placed in treasury notes. With less money coming into the system and when there is no excess money coming in, treasury notes must be sold to make up the difference. The government has spent the money from the treasury notes on many different programs. There is no money in the Social Security trust fund unless we borrow it or tax the United States citizens to replace the money that has already been spent. The reduction in payroll tax attacks every retired person receiving a check or going to receive a check in the future.
The president received great applause from the Democrats in the audience when he attacked the rich corporations that were making obscene profits. Companies that make a profit pay a dividend and/or capital gain to its share holders. Anyone receiving a private or public pension will be affected because many pension plans use the stock market to receive those capital gains and dividends to pay the pension that people receive. In the late 1970s the steel workers pension plan went bust because the capital gains and dividends were non-existent. They had to start selling off off the stocks to pay the beneficiaries of the plan because it could not sustain itself. They went bankrupt. At that time all pensions stopped. Today the government will pay half of what the pensions would receive. If that happens the government would have to borrow or tax citizens at a higher rate to pay for this promise.
The financial advisers to the president who advocate these policies need to be replaced. Any politician that advocates these policies need to be replaced. Retired people wake up to what this president and the Democratic Party is trying to do to you.