Suspend Social Security Taxes for One Month
In a blog post to the Wall Street Journal’s website, Amitai Etzioni has offered a proposal which he feels could stimulate the economy without increasing the federal deficit.
The plan proposed by Etzioni is simple: Social Security taxes should not be collected for a month by the government. Collect the taxes of this one month only after the economy shows signs of improving. To lend credibility and avoid vagueness, legislation can be passed by the administration which dictates this one month’s tax to be collected only after the GDP grows consistently at a rate of 3% or more for an entire year. This measure of not collecting the taxes should be repeated until a favorable outcome in terms of GDP is achieved.
One of the main merits of this proposal is its revenue neutrality approach. Also, it can be implemented at a short notice due to which the funds will immediately reach all the classes of people.
However, certain precautions have to be exercised while implementing this program. Payroll taxes especially those collected for Medicare should be spared, as Medicare is even more endangered than Social Security.
Also, the Social Security fund will stand to loose the interest it collects on Treasury bonds which it could have otherwise purchased. Nevertheless, considering the potential gains of this program and the current dismal short term interest rates, this flaw should be overlooked.
The need of the hour is therefore a tax cut or government outlay which can automatically be recaptured when the economy starts growing healthily.
Social Security Disability: On The Record Appeal and Decision
Thanks Harold for another great video!
HAROLD: Well greetings YouTube subscribers and YouTube friends, I want to talk to you briefly about a policy that the Social Security Administration implemented that I think you need to know about, especially if you’re filing for Social Security disability and have been denied and you are going to have a hearing before an administrative law judge.
The wait time from the time that you’re denied your claim to the time that you appear before an administrative law judge can be a year, up to two years, I mean it’s a long time.
And many of you, many people who are trying to get their disability benefits, are struggling with this process and struggling waiting for the hearing.
If you have compelling new medical documentation, compelling medical information, something to share that’s new or that’s different from when you originally applied, or you want to have another review of your disability claim before it goes to a hearing, there is something called an on-the-record appeal and decision.
It’s called on-the-record appeal and decision. Now, according to Social Security policy, this should be done without the claimant or without a claimant’s attorney asking for this.
And I have a wonderful, wonderful positive feeling about the good folks at the Social Security Administration and with the folks that work at the DDD and the DDS offices across the country, the state offices where these decisions are made. Read more
Social Security Disability: Your Tax Dollars at Work
JUDGE JUDY: What do want disability for?
CHRISTOPHER CASEY: Learning disability. When I’m out on a job, I can’t properly be as quick as normal people can. That’s when all this bicker backer started. I’m slow.
JUDGE JUDY: But you just worked and you want money. You can’t do that. How much money do you collect from Social Security?
JUDGE JUDY: $762, your Honor.
JUDGE JUDY: A month?
CHRISTOPHER CASEY: Yes.
JUDGE JUDY: And how long have you been collecting $762?
CHRISTOPHER CASEY: Since June 13th of 2003. That’s when all this bicker backer started.
JUDGE JUDY: How old are you?
CHRISTOPHER CASEY: 28.
JUDGE JUDY: What did you do before that?
CHRISTOPHER CASEY: Before I got on Social Security?
JUDGE JUDY: Yes.
CHRISTOPHER CASEY: I had jobs.
JUDGE JUDY: Doing what?
CHRISTOPHER CASEY: I worked at Burger King, and I worked for a temp agency. I worked for them for quite a while.
JUDGE JUDY: And you worked him in semi-construction, whipping up carpet, doing manual labor, right?
CHRISTOPHER CASEY: Yes, your Honor.
JUDGE JUDY: Does your Social Security disability permit you to make money on the side?
CHRISTOPHER CASEY: They don’t care. If you get it in a check –
JUDGE JUDY: They don’t care?
CHRISTOPHER CASEY: If you get it in a check, then they take it from your Social Security check for what you make.
JUDGE JUDY: But if you get it in cash?
CHRISTOPHER CASEY: If you get it in cash, then they’re not worried about it.
(LAUGHTER)
CHRISTOPHER CASEY: I had… I had…
JUDGE JUDY: No, it’s not that they’re not worried about it. If you get it in cash, they don’t know about it.
CHRISTOPHER CASEY: That’s when all this bicker backer started.
SPEAKER: Judge Judy continues in a moment. Read more
The Social Security Trust Fund: A Dangerous Illusion?
Not only will the federal budget register a $1.75 trillion dollars deficit in 2009, but the Obama administration is going to add to the public debt another $4.9 trillion over the next years. Furthermore, the recession brings about an even worse entitlement crises. Darren Gersh, Washington, D.C. bureau chief for the Public Broadcasting Service (PBS), finds that early retirements, cost of living adjustments and lower payroll tax receipts will bring an end to Social Security surpluses.
The Congressional Budget Office estimates a Social Security surplus of $16 billion this year and of $3 billion in 2010. Overall, the recession is estimated to shave more than $150 billion from Social Security surpluses over the next three years.
Darren Gersh received some positive information from Barbara Kennelly, president of the National Committee to Preserve Social Security and Medicare. Barbara Kennelly considers there’s nothing to worry about as Social Security has a $2.5 trillion trust fund. Heritage scholars David John and Brian Riedl consider this information to be illusory.
David John and Brian Riedl acknowledged the existence of a Social Security Trust Fund that exists since 1930. The trust fund was created to store money and later pay it to baby boomer retirees. But the scholars pointed that since 1939 Social Security is required by federal law to invest any extra funds in Treasury bonds. This means that the Treasury already spent the money and repaying Social Security will be impossible. And so, the taxpayers will be the ones to fund Social Security with enough cash to cover more than 40 million baby boomer retirees.
As the scholars pointed, the situation is similar to that of a family that constantly takes from its retirement fund and pays for expensive vacations. When the family members begin to retire, they will find only paper IOUs instead of retirement funds.
Is the era of large Social Security surpluses over?
REPORTER: Well, as President Obama works to pass his budget, his job will be complicated by a big change in the government’s math. Based on numbers from the President’s budget and the Congressional Budget Office, it appears that the era of large Social Security surpluses is over. Darren Gersh examined the numbers and found that Social Security’s finances are facing the same headwinds hitting the overall economy.
DARREN GERSH: The Great Recession has brought great changes to Social Security with unemployment rising. Analysts say there are fewer workers paying into the system, pushing Social Security payroll tax revenues down.
In tough economic times, disability claims also tend to rise and more workers retire early, driving up benefit costs. And remember those high-energy prices of last year? They raised energy and food costs, boosting payments to beneficiaries in a 5.8 percent cost of living increase. That’s the largest in 25 years.
Chuck Blahous was executive director of President Bush’s Social Security Reform Commission. He says the tend is clear.
CHUCK BLAHOUS: You see, with the higher COLA payments, the higher disability benefit claims, the higher retirement benefit claims, in combination with the lower payroll tax revenue, then most of your surplus is gone.
DARREN GERSH: Last April, the Social Security surplus was projected to be $83 billion this year and almost $90 billion next year. Using figures from the President’s budget and the Social Security Actuary, Nightly Business Report calculates this year’s surplus is now likely to fall to $30 billion and $27 billion next year.
But the Congressional Budget Office is more pessimistic. It expects the surplus will be $16 billion this year, but only $3 billion next year. All together, the recession has shaved more than $150 billion off the Social Security surplus over the next three years. Read more
How Social Security Works
SHANE KILLIAN: I have been making a lot of science ideas because I’ve seen a great need for people to have a greater understanding of science. Once again, like every election year, I started seeing a similar girth of knowledge with political policy.
It’s amazing how may otherwise skeptical people just turn it off when they enter the political arena and completely trust what the government tells them.
No, there’s no conspiracy mongering here. I don’t put up with that. I just wanted to tell the objective truth about how government policies work.
This first video will cover Social Security.
Charles Ponzi was one of the greatest swindlers this country has ever seen. No, he is of no relation to Chris Parilla’s wife; I would just want to make that clear.
In 1918, soon after being released from jail for smuggling and other offenses, he begun running an investment scam. He would take money from investors and just spend it, living the good life. When it came time to pay off the investors, he would get money from new investors and use some of it to pay the old investors and use the rest for himself, and so on. This is the type of scam known as the Ponzi scheme.
Then the other Ponzi schemes had followed including one from the Church of Scientology. Both prosecutors and psychologists have noted the effects of the Ponzi scheme on its victims: Few of them even want to admit that it’s been a scam and often speak out in court in favor of the person who ripped them off.
What does that have to do with Social Security?
Well, Social Security works the exact same way. Government gets the Social Security tax, uses part of it to pay part off current beneficiaries and just spends the rest however they want. Read more
Bizarre Social Security Fraud Puzzles Florida City
Responding to a complaint regarding nuisance cats at the home of a day care teacher Penelope Jordan in Sebastian, Florida, the police chanced upon a totally bizarre discovery. In the bedroom of this 61 year old teacher, they discovered remains of her mother Timmie which had been mummified over a period of over six years just because Penelope couldn’t afford the burial charges.
An autopsy of Timmie’s mummified remains attributed her death in 2003 to natural causes and ruled out foul play. Meanwhile, Penelope in the course of the investigation, admitted to collecting her mother’s Social Security checks worth $60,000 since her death.
Free $250 Recovery Stimulus Check for all SS and SSI Recipients
Vice President Joe Biden and Michael J. Astrue, Commissioner of Social Security, announced today that the federal government will send out $250 economic recovery payments to people who receive Social Security and Supplemental Security Income (SSI) benefits beginning in early May 2009 and continuing throughout the month. No action is required to get the payment, which will be sent separately from the person’s regular monthly payment.
“The Social Security Administration and Commissioner Astrue have been working closely with other federal agencies to get these payments out the door in record time and into the hands of folks who need it most,” said Vice President Biden. “These are checks that will make a big difference in the lives of older Americans and people with disabilities – many of whom have been hit especially hard by the economic crisis that has swept across the country.”
“We have been working diligently to issue the $250 one-time recovery payments as soon as possible,” Commissioner Astrue said. “The legislation requires extensive coordination with other federal agencies and I’m pleased we are on track to issue these recovery payments earlier than the statute requires. Soon more than $13 billion will be in the hands of more than 50 million Americans.”
The American Recovery and Reinvestment Act of 2009 provides for a one-time payment of $250 to adult Social Security beneficiaries, and to SSI recipients, except those receiving Medicaid in care facilities. To receive the payment the individual must be eligible for Social Security or SSI during the months of November 2008, December 2008 or January 2009.
The legislation also provides for a one-time payment to Veterans Affairs (VA) and Railroad Retirement Board (RRB) beneficiaries. The VA and RRB will be responsible for paying individuals under their respective programs. However, if someone receives Social Security and SSI, VA or RRB benefits, he or she will receive only one $250 payment. People getting Social Security or SSI should not contact the agency unless a payment is not received by June 4, 2009.
For more detailed information about the $250 one-time economic recovery payments, go to www.socialsecurity.gov/payment.
To learn more about the American Recovery and Reinvestment Act of 2009, go to www.recovery.gov.
Social Security and the Farmer (1955)
Here’s another great SS infomercial from the 1950s.
Narrator: A day different from all other days dawned on the farms and ranches of the United States late in 1954, when Social Security was extended to cover farm operators for the first time, and to cover many more hired farm workers than before. This was an important day for more than five and a half million people who raise the food and fiber to feed and clothe the nation, who bring forth a living for themselves and their families from farm and ranch, from garden and orchard and field, for people like Jim Peterson. Jim’s been farming for 30 nyears, going it alone most of the time. He’s getting older now, and he’s beginning to admit it even to himself.
Jim was required to pay the Social Security self-employment tax along with his income tax beginning with 1955. What does this mean today for Jim Peterson?
What about Charlie Rogers, a farm worker who follows the harvest from state to state? Just as he’s starting a new job, he finds he’s lost his Social Security card. Why is this so important to him?
And how about Frank Johnson? He owns a large farm, employs a good many workers, some are short term people from nearby. But this year, he’s going to need to hire some migrant workers. Frank knows pretty well what to do about his own Social Security, but how can he be sure he’ll have the records he needs for his hired workers, who also are now covered by Social Security?
And what can Mary Clark look forward to? Her husband was killed in a farm accident a few weeks ago. She knows that she and the children can depend on her parents if she needs help. Her mother comes over to take care of the children when Mary goes to town. Mary is determined that neither she nor the children shall be a burden on anyone. What does Social Security mean for her?
We go, as anyone with questions like these should go, to the Social Security District Office for answers. Read more
Thou Shalt Not Bash Social Security
In a recent article for the U.S. News & World Report, Philip Moeller writes that many working people see the Social Security as undependable. He says most people think that the Social Security program will disappear or will dramatically cut payments in the future.
According to a newly released Sun Life Financial research report, it appears that about half of working people would opt out of paying Social Security taxes even if this means they will receive no Social Security benefits. Not only workers in their 30s and 40s said they would prefer to stop paying into Social Security, but even workers that are only a couple of years away from obtaining Social Security benefits.
Philip Moeller states that though overall pessimism in times of financial crisis is understandable, Americans’ attitude towards the Social Security system is surprising. As Social Security was always reliable and as the benefits it offers are indexed according to the inflation, this is a convenient lifetime rent. If you would consider buying a corresponding product from a private insurer, you would have to pay a very large amount of money up-front.
Moeller argues that, though Social Security faces serious financial difficulties, there are no reasons to attack it. Social Security needs only some minor adjustments to be a balanced and secure program. These minor adjustments involve to the retirement age, which should be increased a few years, the raising of taxes forced on Social Security participants, and some readjustments on Social Security’s inflation policy.
Moeller considers these changes to be a sure way to give satisfactory benefits to contributors. Restoring America’s confidence in Social Security by offering a stable program for the next 75 years is a priority. Both retirees and the general public should be educated about financial responsibility and the importance of Social Security for the success of a retirement scheme.
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