Tag Archives: Dependency

Young workers are paying Social Security taxes but will they ever collect benefits?

What if we had no money for anything except entitlement spending?
What if we had no money for anything except interest and entitlements?

The way Social Security taxes work is that you pay 12.4% of your salary, and another 2.9% for Medicare. That’s 15.3%, before any federal, state and local taxes. So, what are you getting for this 12.4% contribution to the Social Security welfare program? You’re supposed to be able to withdraw that money when you retire, but that money isn’t being stored in an account with your name on it. It’s being spent right now on people who are already retired. Will there be money available for you to withdraw when you retire?

If you’re a young person who retires in 2035 or later, the answer is absolutely not.

The Daily Signal has the numbers:

The American people need to know the state of finances of the Social Security program so they can better understand why reform is not only necessary, but absolutely essential. Here are five takeaways from the most recent financial report:

  • $66 Billion Cash-Flow Deficit in 2016

Social Security is still considered solvent and able to pay full benefits because it has accumulated a $2.8 trillion trust fund, but since the entirety of its trust fund consists of IOUs, cash-flow deficits must be financed by general revenue taxes or new public borrowing.

Since 2010, the Old-Age and Survivors Insurance program has taken in less money from payroll tax revenues and the taxation of benefits than it pays out in benefits, generating cash-flow deficits.

  • $14.3 Trillion in Unfunded Obligations

However, this figure assumes that the $2.8 trillion in trust fund reserves are available to be spent. The problem is that these reserves represent liabilities for the U.S. taxpayer. The payroll revenues have been spent and the trust fund was credited with U.S. bonds, which represent claims on the American taxpayer. This is why the actual unfunded obligation is $14.3 trillion.

The trustees report that Social Security’s unfunded obligation has reached $11.5 trillion. That is the difference between what the program is expected to receive in income and what is expected to spend over the 75-year horizon the program’s actuaries consider for projections.

  • Insolvent by 2035

Based on current projections, the Social Security Old-Age and Survivors Insurance trust fund will be depleted by 2035, reducing Social Security’s expenditures automatically to what the program will receive in revenues, regardless of benefits due at that time.

Social Security is only legally permitted to spend funds in excess of its revenues until its trust fund is depleted.

  • 25 Percent Automatic Benefit Cut

What this means for beneficiaries is that in the absence of congressional action, benefits could be delayed or indiscriminately reduced across the board by 25 percent.

Once the Social Security trust fund is depleted, the program will only be able to pay 75 percent of scheduled benefits, based on payroll and other Social Security tax revenues projected at that time.

  • High Costs to Delaying Reform

The trustees highlight that if Congress waits until the trust funds become exhausted, the cost of making the program solvent will be as much as 40 percent higher, meaning significantly greater benefit cuts and/or tax increases for workers and beneficiaries.

There are several key reforms Congress could pursue to preserve benefits for the most vulnerable beneficiaries without increasing the tax or debt burden on younger generations. However, the longer Congress waits the act, the larger the changes that will be necessary to address Social Security’s combined financing shortfall.

Young people working today who retire in 2035 or later will never see a dime of their Social Security contributions. What’s more likely is that the taxes on their income will go even higher. Take a good look at your paycheck, and you will see money being deducted for this entitlement program. This is money you will never see again. It is being used now, to buy the votes of elderly people who vote against reform when they vote Democrat.

The only person to try to do something about these Social Security problems was George W. Bush – a Republican. But his effort to set up private savings accounts was stopped by Democrats, who depend on the votes of the people who collect from Social Security.

These problems are even worse when you realize that Social Security is only one of the entitlement programs that is going bankrupt. There are others – as well as interest on the $20 trillion debt. ($10 trillion of which was added by Obama in his 8 years as Welfare President). Young people: you are paying taxes for programs that will not be there for you when you need them. Stop voting Democrat, because money matters!

Welfare program usage drops 85% after work requirement reinstated

This story is from National Review, and it really made me think about where all the money that I’ve paid in taxes over the years has gone.

Excerpt:

After Alabama reinstated food-stamp work requirements for able-bodied adults without dependents, the rolls dropped by 85 percent.

[…]According to the Alabama Department of Human Resources, between January 1 and May 1, 13 counties in the Yellowhammer State saw their food-stamp rolls drop by a combined 85 percent. The reason? At the beginning of the year, those 13 counties joined the rest of the state in ending a years-long exemption from work requirements for ABAWDs — able-bodied adults without dependents — participating in the federal Supplemental Nutrition Assistance Program.

On New Year’s Day, there were 5,538 ABAWD enrollees across the 13 formerly exempted counties; by the beginning of May, there were 831. That mirrors a sharp statewide decline, which began on January 1, 2016, when the same exemption ended in Alabama’s 54 other counties. At the beginning of last year, the state had 49,940 able-bodied adults without dependents on its SNAP rolls; by May 1 of this year, that number was 7,483 — a drop of 85 percent.

The article notes that work requirements on welfare programs were dismantled at the federal level by the Obama administration in 2009.

As part of the American Recovery and Reinvestment Act, signed into law by President Obama that February, Congress “temporarily” suspended the conditions on ABAWD SNAP enrollees nationwide. The suspension was supposed to extend only through 2010, but no government initiative is temporary. Eight years later, ABAWD time-limit waivers are still in effect in at least part of 36 states; ten states remain entirely exempt.

The article also notes that Kansas (in 2013) rejected Obama’s federal waiver. The result? Welfare program usage fell 72%.

The article concludes:

The overall food-stamp population remains large: Forty-four million Americans — about one in seven — at a cost of $71 billion to the federal government last year. Compared to other categories of recipient, that of able-bodied adults without dependents is small. But more than savings is at stake in removing clingers-on from the dole. A free people does not depend on the government for its daily bread. Those who can work, should.

People who have jobs don’t need welfare, but these people were literally choosing not to work so that they could collect welfare. They could have worked if they wanted to, but they chose not to.

How do you think that people who are dependent on government vote? Do they vote for smaller government and lower taxes? All that Obama achieved by attacking welfare reform was to buy hundreds of thousands of votes from dependent people. But he didn’t use his own money to do this – he used mine. I could have used my money for my own life priorities, but Democrat politicians know better than me, apparently. My job is just to work to earn the money, but I’m too stupid to know how to spend it. Other smarter people who are better than me know best about how to spend it. And they spend it on buying the votes of lazy people so they can get re-elected.

Trump signs bill to allow states to drug-test applicants for unemployment benefits

Ted and Heidi Cruz have a plan to simplify the tax code
Ted Cruz and and his supportive wife Heidi

I liked this story, because not only did it talk about Ted Cruz, but it also shows a major difference between Republicans and Democrats.

The story is from the far left Dallas Morning News.

Excerpt:

President Donald Trump on Friday signed legislation backed by two Texas Republicans that will allow states to expand the pool of applicants for unemployment benefits who can be drug tested.

The bill, sponsored by Sen. Ted Cruz of Texas and Rep. Kevin Brady of The Woodlands, nullifies a Labor Department rule that went into effect in September limiting drug tests to applicants who had a job that does regular drug screenings.

“Under the previous administration, the Department of Labor undermined the ability of states to conduct drug testing in their programs as permitted by Congress,” Cruz said in a written statement. “This rule was yet another example of executive overreach by the Obama administration, and I commend President Trump for signing this resolution into law.”

The measure traveled down a partisan path in Congress, passing through the Senate earlier this month with a party-line vote. Four Democrats in the House voted in favor of the bill in February, but no Texans.

“After 5 years of battling with the Obama Department of Labor, states like Texas will now be allowed to drug test folks on unemployment to ensure they are job ready from day one,” Brady said in a written statement. “This is a win for families, workers, job creators, and local economies.”

[…]“We are not helping anyone by leaving them in a position where they are dependent on and addicted to drugs,” Cruz said.

I find this law so reasonable that I cannot believe that anyone who has a job and pays taxes could oppose it. Now, it’s true that a lot of Democrats either don’t work or get money from government salaries, government spending, or welfare. But even so, I would expect them to see that it is wrong to waste the taxpayer dollars of honest workers and their entrepreneurial employers on people who are addicted to drugs.

I hope that this bill will clear the way for conservative governors to get people off of welfare and into the workplace.

My favorite governor is Scott Walker, and he is discussed in this recent article from the center-left The Hill.

Excerpt:

Wisconsin Gov. Scott Walker (R) on Monday said he would ask the state’s Republican-led legislature to undertake one of the most aggressive welfare reform packages since a wave of new measures passed in the mid-1990s.

Walker’s plan, “Wisconsin Works for Everyone,” would impose new work requirements on both able-bodied adults with school-age children who receive state food assistance and those who receive housing assistance. Both work plans, which would be tested on a pilot basis, would require recipients to be employed for at least 80 hours per month, or to be enrolled in job training programs. Those who do not meet work requirements would see part of their benefits cut.

“We believe our public assistance programs should ask able-bodied adults to take steps toward self-sufficiency through work, while also providing comprehensive tools to help them get and keep a job,” Walker said Monday.

The Wisconsin Republican has made welfare reform a key element of his second term in office.

“In 2017, we are going to push the federal government to allow Wisconsin to go even further, to be a leader once again on welfare reform,” Walker said last week during his State of the State address.

The plan proposed Monday would expand job training programs and employer resource networks for those who receive government aid. It would create an earned income tax credit specifically aimed at getting younger Wisconsinites into the workforce, and it would require existing business license requirements to be reviewed by a state panel in hopes of reducing red tape.

 

I also expect that Walker’s plans will get no Democrat support.

It really says something about how differently Republicans and Democrats view the money they take from taxpayers. Republicans want to be responsible in how they spend taxpayer money, whereas Democrats want to waste it so they can feel generous and preen in front of crowds about how generous they are. But you can’t be generous with someone else’s money.

The best way to help a person who is dependent on government is not to keep them on drugs, and keep them on welfare. They need to guided out of drug use, and into a job. Forging your own success makes you happier than being dependent anyway.