Thursday, May 12, 2011

Next Step in Class Warfare

The Paul Ryan crusade (all hail Ayn Rand) takes a slight turn away from "looters and moochers" of poverty to the real villains of our time--the old leeches who hold onto life beyond their span and suck future generations dry of their heritage.

The Wall Street Journal opens its paywall for an attack on "The Millionaire Retirees Next Door," those who live it up on Social Security and Medicare, refusing to go willingly onto the ice floe that would release trillions for future generations:

"Many of the million-dollar couples believe they rightfully deserve the benefits they have been promised. They have, after all, spent all of their working years paying into Social Security and Medicare. And true enough, the typical 66-year old couple and their employers, on their behalf, have contributed nearly $500,000 in payroll taxes (in today's dollars) toward these benefits during their working careers.

"But regardless of how much they have contributed, the hard reality is that the federal government has already spent it. No matter how deserving they are, it is younger generations of workers who have to come up with the money."

As to the "today's dollars" calculation, does it include compound interest on contributions held by the government for decades accumulating money for the Social Security Fund rather than beneficiaries? I doubt it.

But more to the point, as taxpayer money bails out banks to make billionaires out of their executives, those retirees with even modest savings watch as their IRAs and pension funds wither at near-zero interest rates to the benefit of the GOP's favorite taxpayers, those with eight-digit incomes.

Before heading gracefully for the ice floe, generations of millionaire retirees may want to express themselves on this issue at the 2012 ballot box along with younger generations being robbed by the GOP on behalf of its friends.


Blakenator said...

One bone to pick, and that is the "employers" contribution is part of your compensation package. The deceit is wording it as if it were not. Of course, presenting the FICA tax as "only 7+%" makes it look better. Ask anyone who is self employed who pays for their "other half of the FICA tax."
The other point is when the government says "we spent the money we collected, so we can't pay," that smells an awful lot like fraud to me. My outrage is that the money was confiscated, there was nothing voluntary about it.

Anonymous said...

Shorter Wall Street Journal-
"Why should young people take care of old people? What have they ever done for us?"

Anonymous said...

Damn Straight!

Solomon Kleinsmith said...

Of course it doesn't include compound interest... because the money was spent as it was coming in. How can interest compound in a system where today's workers pay for today retirees?

The trust fund is a bunch of numbers on paper, which is why Al Gore wanted to create a lock box so many years ago. The government spent the surpluses, and handed over IOU's, which they are now spending from... can you guess?


There is no trust fund, it's all debt.

Everyone needs to sacrifice, given how irresponsible both parties have been for so long. We need to accept higher taxes AND slower growth in payouts in Social Security (outright cuts don't need to happen, just slower growth).

The Dems are just as much to blame as the GOP for this. They've been the ones pushing for the most upping of benefits we couldn't afford for over a generation, while the GOP has been cutting taxes we couldn't afford. Put them together and you have a government that has nearly been doing all it could to push us towards the kind of situation Ireland is going through right now.

Solomon Kleinsmith
Rise of the Center

Bob Munck said...

When I entered the workforce in 1967, I began paying about $20/month into a TIAA/CREF retirement account; my employer -- Brown University -- was matching it. We were paying a somewhat smaller amount in FICA taxes. I left after six years and completely forgot about that account, never contributed another dime. When I retired five years ago and looked it up, the account balance was $250,000. The Recent Unpleasantness knocked it down to $200K, but it has since recovered most of that loss.

I believe it was Einstein who said that the most powerful force in the Universe is compound interest. It's quite certain that the "today's dollars" calculation did NOT include compound interest.