Letters for Tuesday, July 19, 2011

 • Blame wars and banks, not social programs •

Bill pill needs swallowed

 Blame wars and banks, not social programs

Mr. Burns is kind of right (“Top 10 percent pays 70 percent of taxes,” Letters, July 6).

According to the Heritage Foundation (a Koch Brothers-funded organization) the top 10 percent of income earners do pay 70 percent of federal income tax (not all taxes as Mr. Burns stated). However, Politifact reports that the top 10 percent paid only 52 percent of federal income taxes.

Since the top 10 percent take in about one-third of all income and has the most disposable income, they pay the highest total amount of income tax because “that’s where the money is!”

Mr. Burns said “all taxes” so let us look at Social Security. The top 20 percent contribute about 5 percent of their income while every other income bracket contributes nearly 10 percent of their paycheck (according to the Tax Policy Center).

Social Security has not contributed one cent to the federal deficit and is solvent (meaning it can pay all benefits) through about 2035. But George Bush started two wars which he, and the Republican Congress, refused to pay for.

Bush “borrowed” from the Social Security Trust Fund to pay for his wars. (Now does everyone understand why Al Gore wanted to put Social Security into a lock box?)

Now it is time to pay that borrowed money back, but Mr. Burns claims the U.S. is bankrupt. Our country is not bankrupt (at the current low interest rates we can easily service the debt) but it is true the bill cannot be paid without raising the debt ceiling (or a minor increase in taxes on the super-rich can cover it).

Wasn’t it Dick Cheney who said in 2002 that “Reagan proved that deficits don’t matter.” Is this only true when a Republican is president?

Instead Social Security benefits are going to be reduced. Our Social Security insurance premiums are being stolen. This is the same trick the banksters have used over and over again. Buy a company, refuse to fund its pension plan, plunder the corporate assets diverting millions to their own accounts then declare the company bankrupt, leaving the employees without a retirement plan or a job. (Ask Mitt Romney how he made his millions.)

Mr. Burns is also right that there are several countries in southern Europe which are on the verge of default. I am not so sure that one could describe these countries as “socialist” any more than America is “socialist.”

In any case, countries in Northern Europe are doing just fine even though they also have many “socialist” programs. The reason Greece is now failing to service its debt has more to do with the U.S. mortgage crisis (remember how TARP funds were used to “socialize” the banks’ losses) and Goldman Sachs than with any social programs.

John Zwiebel, Kalaheo

Bill pill needs swallowed

John Zwiebel makes some interesting points regarding the negative prospects of raising the Social Security benefit age, however, placing the blame primarily on the Republican Party is somewhat misleading (“Take action …,” Letters, July 13).

Presidential economic advisers for presidents of both parties have stated the need to raise the age requirement, with Bill Clinton’s administration vigorously backing the change.

The fact remains that Social Security is in trouble, and “perceived fairness” may have to be compromised to secure its payment to our older citizens in the future.

Mr. Zwiebel is correct that we all pay into the system, however, our money is quickly used to support those currently collecting the benefit as we pay it in. The basic idea of current workers paying into the system which in turn provides those funds to older Americans was flawed from the start because it didn’t take into account the possibility that the percentage of old versus young would begin skewing so dramatically.

In 1935 when the Social Security Act was passed the collection age was 65. White American life expectancy back then for both sexes was 61 years of age and 51 for black Americans, so setting the collection age at 65 seemed safe. Today it’s 78 for whites and 74 for blacks. People of all races are simply living longer, and at the same time birth rates have been declining, resulting in fewer younger workers to pay into the system.

The initial act allowed for payment only to the worker who paid into the system, and there were only 53,000 recipients (today there are 55 million recipients). In 1939 benefits were changed to include the wife and children of the worker in case of premature death, so payments had to increase.

Then in the 1950s another amendment allowed payments to all disabled workers and their disabled children, again increasing the payout. In the 1960s the age of collection was lowered to 62, increasing the payout once again. In the 1970s and ‘80s there were more “I want to get re-elected give-aways” straining the system.

It seems politicians of every era just can’t help but give more and more Social benefits to the people because votes are the goal, and fiscal responsibility is the sacrifice. The formula simply no longer works.

Democrats and Republicans alike recognize that we do have a problem, and it’s getting worse. Raising the age of collection has been championed by members of both parties as one of the ways to help solve the problem.

The fact that a problem does exist and needs to be fixed is an absolute. It’s also a fact that there have been more Social Security “give-aways to get votes” over the past 70 years under Democratic administrations than Republican. S

o Mr. Zwiebel’s singling out of Republicans to attack for this mess is absurd. Increasing the age of collection even back to what it was in 1935 is one potential ingredient for a solution, and a bitter pill, but it may just have to be swallowed.

Gordon Oswald, Kapa‘a

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