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July 12, 2010

Deficits: Get The Money From Where The Money Went

-- by Dave Johnson

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

McClatchy news story, No full Social Security benefits until age 70?

Young Americans might not get full Social Security retirement benefits until they reach age 70 if some trial balloons that prominent lawmakers of both parties are floating become law.

Don't fall for it. Social Security did not contribute to the deficits or debt, it ran a huge surplus. That surplus was supposed to be set aside. Instead it was handed out to the very wealthy as tax cuts. Now the country needs to start paying it back to the elderly, and to prevent us from getting it back from where it went -- the wealthy few -- they're instead talking about making people wait until age 70 to retire, cutting benefits, etc.

Every one of us knows that the budget deficits come from the tax cuts and military spending increases of recent decades. But every one of us also knows that the beneficiaries of those tax cuts and military spending use their wealth and power to corrupt the political system, preventing us from restoring sanity to our governance.

Before the tax cuts on the top rates and military spending increases we didn't have these deficit/debt problems, we maintained our infrastructure, provided educations, we even spent enough on our military to oppose the Soviet Union globally. The country worked better then. When top tax rates were cut from 90% the result was immediately deficits, then under Reagan came the really big cuts that led to the "structural" deficits and the huge debt increases and resulting interest load.

Since those tax cuts we have seen so many transformations for the worse. The wealthy now dominate every single part of our politics. Instead of having to build a fortune over time people can now reap a windfall from quick buck schemes -- so that is what people focus on. When upper income was taxed at a high rate people built equity over time that, when sold, was taxed at only half that rate, and people became wealthy. When it took time to build a fortune companies had long-term strategies that depended on serving customers, solid surrounding communities with solid infrastructure, supply chains, experienced workers, etc. Now you can make your fortune selling off those things and pocketing the proceeds.

Those tax cuts were the direct cause of the deficit and debt problem. The military increases are a second cause of the problem. Social Security was never a cause of the problem. The clear way to fix the problem is to restore those tax rates and cut the military budget to pre-Cold War levels. The Soviet Union is long gone.

So what do we do about it?

What can we do about this? Learn the facts. This is a strategic assault on Social Security that has been underway for a long time.

Spread the word. Tell everyone that Social Security did not contribute to the deficit, tax cuts for the wealthy and military spending are the reason we have these deficits and raising taxes at the top and cutting military spending will do much more than cutting Social Security to help solve the problem.

Start calling members of Congress and telling them we will not tolerate Social Security cuts. Tell everyone you know, family members, friends and everyone else to call.

Join Social Security Works.

Sign up here for the CAF daily summary.

Posted by Dave Johnson at July 12, 2010 9:50 AM


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