By: Jeffrey Klein
Examiner.com
How many people reading this article have ever had a “debate-like” agreement with a Democrat, who when confronted with any fact the destroyed their position, would then respond by trying to talk over you, not letting a word in edgewise, thinking it would somehow make them right in the end?
This is exactly what President Barack Obama did today, as the expiration date on the payroll tax holiday and long term unemployment benefits looms at the end of the month.
Even though Republican’s, against their better judgment, are willing to grant the President virtually everything he wants, in another childish outburst to the populace, he called on Americans to apply pressure via Twitter and letters to Congress, suggesting a 2-point increase in the Social Security tax could damage the economy at a sensitive time, according to a FOXNews article today.
“No ideological sideshows to gum up the works, no self-inflicted wounds. Just pass this middle-class tax cut, pass the extension of unemployment insurance,” Obama said. “Do it before it’s too late, and I will sign it right away.”
As usual, the only sticking point is how to pay for it.
The payroll tax measure alone represents about $160 billion for a single year. Add in the unemployment benefits and Medicare “doc fix,” and it tips the scales at about $200 billion.
That is 20 percent of our projected annual budget deficit for 2013.
However, as both Social Security and Medicare benefits are “theoretically” paid out to recipients from two different “trust funds,” which are themselves funded by these payroll taxes, reducing the employee side of the tax, and thusly the funding for these two critical “trust funds”–does not add to the annual budget deficit.
But, it does accelerate both trust funds toward insolvency, as the only “assets” they hold are “IOUs” from the federal government, because past Congresses (both parties) have so heavily “borrowed” cash from them to balance federal budgets throughout the years.
Therefore, that is why Medicare, Medicaid and Social Security, at $1.555 trillion, represent the largest percentage (38%) of the annual budget, which has run a trillion dollar-plus budget deficit ever since President Obama took office.
In fact, when you add in the $221 billion per year in [rising] interest payments, it represents nearly half of the $4.082 trillion annual budget–balanced against tax revenue of just $2.5 trillion.
Therefore, if past Congressmen and Congresswomen, aided by past Senators and Presidents, had not been allowed to “plunder” these trust funds, but instead, were forced to reform these entitlement programs to balance against incoming revenue, none of them would even be budget categories at all.
If that were the case, even in this deep recession, the U.S. would be operating at a $194 billion operating surplus.
President Obama devised the payroll tax holiday “carrot” for the populace, because it would not affect his already disastrous performance figures by adding another 20% per year to the budget deficit, creating another group of “dependents” for his socialist regime.
And, former Speaker of the House, Rep. Nancy Pelosi (D-CA), who was personally in command of the purse strings for Obama from 2009 to 2011, is right behind him in trying to camouflage what they are doing, no matter how incredibly vacuous it makes her appear, by declaring … “Democrats have always demanded that we extend the payroll tax cut for 160 million Americans without paying for it!”
Even though Republicans are financially, morally and intellectually on the high ground here, their voices of reason will be no doubt “drowned out,” by the Tweeting sounds of the ignorant populace, blindly following their “Pied Piper”–without realizing they will likely suffer most from his financial shenanigans.
Copyright (c) 2012 by Jeffrey Klein
