by Dale Coberly; CORONA VIRUS AND SOCIAL SECURITY, ANOTHER GRAND BARGAIN?
Republicans are showing what they are made of. After claiming that the Corona Virus was not serious, or was well contained, or was Democrat fake news; they are now admitting it is serious and calling it a Chinese virus.
Fox News explained to a reporter they don’t expect “turning the ship around” to cause any problem with their viewers. They did not say that is because their viewers will believe anything they tell them to believe. Nor did they tell the reason for their turnaround of their seeing how to make money out of the pandemic. Even more so, they have seen how to use it to destroy Social Security.
These guys are akin to inviting your boss to dinner and noticing he couldn’t take his eyes off of your teenage daughter. Well, you think, at least he has kept his hands off her. Then your daughter comes over and says, ”Dad, Mr Peterson has been telling me about his house on the beach. It sounds so cool. And guess what, he said I could come and spend the weekend there if I want to. Can I? Can I? Please.”
So Trump has said he will spend some money fighting the epidemic, but he wants to get the money from Social Security. He wants a “payroll tax holiday.” The government won’t collect the payroll tax, and people can keep the money and spend it to help stimulate the economy.
This is a very bad idea. In the first place, why Social Security? If they are going to have to pay the money back to the Social Security Trust Fund, why not eliminate the middle man and just borrow the money the usual way and give it to the people directly? Well, here is what is so dangerous about their scheme . . . er, plan: If they borrow money from the Trust Fund, the law says they have to pay it back. But if they never put the money into the Trust Fund in the first place, there is no law that says they have to make up the shortfall that this will create. SS will run out of money sooner than it would have, and without a payroll tax increase it will not be able to pay benefits promised to the people who have already paid for their benefits. Neither will they be able to pay benefits going forward for people who are going to need them badly.
Nancy Altman discusses how Donald Trump Is Using the Coronavirus Crisis to Attack Social Security and the problems (idiocies) associated with his scheme. Essentially his plan would put about a hundred dollars a month into the hands of people who have high incomes, about twenty dollars a month into the hands of people with low incomes, and nothing into the hands of people who have lost their jobs. Since high income people can, and will, save more of the money they get than poor people will, this “tax holiday” will do little to ease the damage the epidemic is doing to the economy.
But all the Republicans can think of is “tax cuts for every reason,” and of course killing Social Security. With, I am afraid, the help of at least some Democrats.
Probably NO tax cut will help the economy. Taxes are paid by people who are making money. They won’t enable people who are not making money to spend more.
But hey, that’s not the point: the point is to get more money into the hands of people who already have too much, so that when the economy recovers, they will have the means to make even more money out of the recovery.
As for paying “back” the money they withheld from Social Security, Trump has never shown any willingness to follow the law, or the intent of the law, if he can get away with it. And the Democrats have not shown the ability, or much intention, of keeping him from getting away with it.
Oh, the “grand bargain”? The first time we heard that phrase it was Obama’s offer to Republicans: “we will cut Social Security if you let us raise taxes a little.” That was a DEMOCRAT offering to sell your grandmother for ten bucks. Fortunately, at the time the R’s decided to keep their ten bucks.
And remember, that Social Security has NOTHING to do with the deficit, yet this was the centerpiece of Obama’s “Deficit Commission” proposal to fix the budget, Worth pondering.
“Donald Trump Is Using the Coronavirus Crisis to Attack Social Security,” Our Future, Nancy Altman, March 12, 2020