Raj Goyle, candidate for U.S. Congress from Kansas, pledges to protect Social Security from changes, including partial privatization and increases in the retirement age. On his campaign website, he says we must work in a “bipartisan, responsible way to adjust Social Security to ensure its long-term stability.” Goyle’s website doesn’t say this, but the only way to make these adjustments is to increases taxes or the deficit — which pushes taxation off to the future.
Goyle’s opponents in the campaign for United States Congress from the fourth district of Kansas are Reform party candidate Susan Ducey, Republican Mike Pompeo, and Libertarian Shawn Smith.
In his pledge, Goyle promises to “work for real solutions that strengthen Social Security for the long term.” Specifically, he pledges to oppose all efforts at privatization and raising the retirement age to 70.
The problem is that after ruling out reforms like these, there’s not much left to do except to raise taxes or borrow more. Evidence of this can be found in an editorial from the Los Angeles Times recently printed by the Wichita Eagle. Titled Ignore fearmongering on Social Security, it mostly looks back at opposition to the formation of the Social Security system 75 years ago.
But the article recognizes that the system needs “minor adjustments” to remain solvent. The authors write: “Economists say that raising the income ceiling on the payroll tax, applying the Social Security tax to nonwage income or adding a modest increase to the payroll tax could add decades to the health of the Social Security trust fund.”
Each of these policy changes is a tax increase. The article lists no other solutions than these.
These recommendations are not Goyle’s. He hasn’t said what he would do to place the system on a sound financial footing, although he uses the same term — “adjustments” — as does the Times editorial.
But the reality is there’s not much that we can do except raise taxes or increase the deficit if we want to keep the current system.
We need to do something quickly. Social Security will pay out more in benefits this year than it receives in contributions from payroll taxes. It had been thought that this milestone would not be reached until 2017 or later.
There are those who cite the Social Security trust fund and its large balance of over $2 trillion as evidence that the system is doing well. Goyle himself recently mentioned that Social Security would be solvent for the next 30 years. Goyle didn’t mention the trust fund, but that is the source of the system’s purported solvency.
The problem is, as Thomas Sowell explains, the trust fund is merely an illusion. The money in the fund has already been spent by government agencies. The only way they can pay back the fund is through tax revenues or additional borrowing, which increases the deficit and pushes taxes to future generations.
It’s not as though most Republicans are confronting the problem head-on. One of the few officeholders willing to do so is Wisconsin Congressman Paul Ryan, who is ranking member of the House Budget Committee. His Roadmap for America’s future is a plan that recognizes the seriousness of the current situation, not only with Social Security, but in other areas of the federal budget.
His recommendations, specific as they are, cause consternation among some Republicans who would rather talk about problems in general terms rather than specifics. A recent Washington Post profile of Ryan referred to “… many Republican colleagues, who, even as they praise Ryan for his doggedness, privately consider the Roadmap a path to electoral disaster. Unlike most politicians of either party, he doesn’t speak generically about reducing spending, but he does acknowledge the very real cuts in popular programs that will be required to bring down the debt.”
That frank talk about the budget and government spending might be an electoral disaster is a bad sign for America. We need Raj Goyle to be specific about his plans for Social Security adjustments, too.
If the government isn’t going to honor the T-Bills in the trust fund does that mean it isn’t going to honer the T-Bills purchased by the banks and China? This is a dangerous game.
The issue is where will the money come from to redeem the Bills (i.e., replace the piece of paper with cash that can be paid to Social Securtiy recipients). Increased taxes or higher deficits?
I urge everyone to read Walter E. William’s articles “What Handouts to Cut” and “Who Cares About Our Future” for the truth about Social Security. As Bob has stated in order to “save” or “strengthen” Social Security a massive tax increase must take place or massive borrowing of more money, neither of which we can afford. It is a truly a “Ponzi Scheme” and must be fully privatized as soon as possible!