I have to admit that it's been a lot of fun watching the Republicans senselessly tie themselves up in knots over extending the payroll tax cut for mere two months. It's just more proof that the party has collectively completely lost its mind.
That doesn't mean the Democrats are much better. President Hopey-Changey originally pushed for the payroll tax cut last year at this time to provide a temporary economic stimulus at the expense of accelerating the insolvency of the Social Security program, which is supposedly his party's signature accomplishment.
The public, of course, largely excoriated the Republicans for "raising their taxes," by initially scuttling the deal to extend the cut. In the face of overwhelming outrage, the Republicans then ran scurrying away with their tails between their legs, in the process essentially guaranteeing that the payroll tax cut will never be rescinded. At the height of the debate last week, this story from Bloomberg was pretty telling:
Some say they'll spend less on groceries. Others expect to cut back on travel. For many, there would be fewer meals out.The article then continues on for about another two-dozen paragraphs. I could have posted the rest of it, but you get the idea. It was basically one long screed about how "raising" the payroll tax would "hurt" American consumers in hard economic times. There was not one single sentence included about how the lost tax revenue is going to harm the Social Security program or increase the federal budget deficit.
Across the country, Americans are bracing for another financial hardship: smaller paychecks starting in January, if Congress doesn't break a deadlock and renew a Social Security tax cut.
The tax cut, which took effect this year, benefits 160 million Americans -- $1,000 a year, or nearly $20 a week, for someone making $50,000, as much as $4,272 or $82 a week for a household with two high-paid workers.
The tax cut is set to expire Jan. 1. If lawmakers don't renew it for 2012, analysts say the economy would slow as individuals and families looked for ways to spend less.
"Of course, it changes my plans," said Craig Duffy, an information-technology worker from Philadelphia and new father of twins. Duffy said his family already has tightened spending, so "we'll have to find a way to cut back."
That might mean canceling a planned trip to visit the twins' grandparents in Wisconsin, Duffy said.
The tax cut is part of legislation that would also renew benefits for the long-term unemployed. If the unemployment benefits aren't renewed, starting in January nearly 6 million people would lose weekly checks averaging about $300 -- the main source of income for most of them.
The reason the payroll tax cut is causing bigger deficits, of course, is that all of the money in the so-called Social Security "trust fund" was placed into government securities, i.e. debt, meaning that money has already been spent and the trust fund itself is nothing more than an accounting gimmick. So now, having already raided the retirement system's piggy bank, we've decided to reduce the amount of money we're putting into the piggy bank in the first place. All of this in a desperate attempt to try and prop up our consumer economy. Having already saddled future generations with more than $15 trillion in debt (and rising) they will never be able to repay, we are now rapidly bankrupting our own retirement system just so people can buy more shit they don't need like the latest Air Jordan basketball shoes, or maybe some Kardashian products made in Chinese sweatshops, and keep the game going a little longer. We are truly a spoiled rotten nation.
Selfishly, I guess, I should hope that Obama does get his way and the payroll tax cut is extended indefinitely. I won't be eligible to collect Social Security benefits for another 16 years, and fully expect the system to be completely bankrupt well before then. Every dollar I don't pay in payroll taxes now is another dollar in my pocket that I can invest to prepare for what's coming. But as a lifelong believer in the idea of the common good, I will take absolutely no joy in doing so.
Bonus: We have truly become a nation full of Veruca Salts