Trump’s Plan to Save Social Security and Medicare Is Right, Ryan and the Establishment is Wrong!

DC Elitist Consider Breaking their Contract With You as Being “Conservative

Social Security and Medicare Is Paid For by Its Beneficiaries

This is Not Welfare or an Entitlement!

IT WAS A PROMISE MADE TO THE AMERICAN PEOPLE!

Now You Hear:

It is Conservative to SAVE Social Security and Medicare for the Elderly (By cutting it!)

It is Conservative to Cut Social Security and Medicare to pay down the debt (After they ran the debt up!)

It is Conservative to Change the Social Security Contract as the Social Security Trust Fund will Run Out of Money by 2033.  (After 2033, income will still cover 77% of scheduled payments.)

Blah, Blah, Blah!

2 Different Approaches-Establishment Versus Donald Trump

The “CONSERVATIVES” in the Republican Party want to “Deal with Entitlements” (read, CUT) in order to SAVE Social Security, Medicare and the Federal Budget!  They include Social Security and Medicare in their word, Entitlements

Donald Trump wants to Ramp up our Economic Growth and Create Lots of Jobs to Save Social Security and Medicare WITHOUT Changing our Contract!

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Does the Trump Solution Work?

trump 1

Social Security and Medicare are paid for by Employees and Employers.  Each payroll dollar, up to $118,500 in 2016, is taxed 12.6% for Social Security and 2.9% for Medicare. 

So, the more people who are working, and the better paying the jobs, the more money that goes into both funds. This is the Trump Solution!!!

Today, Social Security reserves are $2,807 billion ($2.8 trillion) as of the end of March 2016.  The Social Security Fund will remain solvent until 2033, when revenues still cover 77% of the payments.  This is based on TODAY’S LOUSY ECONOMY! 

Coal Minors-West Virginia Example

Take the 140,000 coal minors in West Virginia who have lost their jobs in the past 8 years.  If the average salary of the coal minors is $50,000 per year, the gross payroll would be $7,000,000,000 ($7 Billion!).  This would add $868,000,000 ($868 Million) to the Social Security fund and $203,000,000 ($203 Million) to the Medicare fund!  And that is just one set of job gains in one State for one Group of abused US employees! 

Under Employed Workforce Example

We currently have 95,000,000 (95 Million) people who have given up looking for a job and are out of the work force.  IF Trump’s economy can re-employ 10% (9,500,000) of these citizens at an average annual salary of $50,000, this would equate to a total payroll of $475,000,000,000 ($475 Billion) and provide the Social Security Fund with $59,000,000,000 ($59 Billion) in additional revenue and Medicare with $13,800,000,000 ($13.8 Billion) in additional funding. 

Donald Trump “gets” finance and certainly the economic factors facing our nation.  He has had to traverse his businesses through multiple recessions and even the 2008 “Depression” and has done pretty well.  He understands the plight of senior citizens and their reliance on Social Security and Medicare, especially since many of the senior’s retirement nest eggs were decimated by the 2008 Depression.  Why not try to make these funds solvent by increasing the health of our economy!  Maybe if the economy heats up, the middle class may even see a real increase in their wages!

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So, If a Better Economy can Create Solvency for Social Security and Medicare, Why Does Ryan and the Establishment Want to Cut Social Security and Medicare?

Pushing Granny Off of the Cliff!

Republicans, ala the DC Elitists, have historically disliked the structure of Social Security and Medicare.  But, historically, the Republicans have not made any real attempts at making these systems more economically viable though good and bad economies. 

Instead, they are now pushing a cuts and changes to the retirement age and other tweaks that do not solve the problems.  Further, if we keep our eye on the economic ball and job creation, the system is much more solvent than advertised. 

The Elitist also reduce payments to recipients by not giving or reducing COLA increases by manipulating the contents of the cost of living criteria. 

The retirement portion could be privatized to a large degree, eliminating the potential budget burden on the Federal Budget and yield higher returns for the beneficiaries. 

There are tons of things that could help these systems but the Republicans have never had the stomach for the fight.  Here are a couple of examples of other inequities in the Social Security/Medicare systems.

Poor Return on Investment:

It is illegal for the trustees of the Social Security Funds to invest the funds in anything but government securities.  But, the Federal Reserve can invest any amount it wants into any investment is accountable to no one.  The rate of return to a Social Security recipient is well below market earnings.  If someone who just retired and made close to the top of the social security wage cut off for a large portion of their life, they would be receiving over $10,000 per month, not $1,236 current Social Security benefit, based on Standard and Poor fund index appreciation over 40 years. 

Congress should change the investment requirements so the interest earned matches the growth in our economy.  The current system forces the Social Security participants to “subsidize” the Federal Government by providing it with an internal source of funds while not having to pay market interest.

Public Employees Are Exempt from Social Security:

Most public employees are not in or have to pay Social Security taxes,  So, while we have a system that is supposed to tax everyone, those privileged in government can opt out to a more lucrative alternative.  Remember, the US Federal Government is the largest employer in the US at over 4 million employees.  So, the largest segment of employees in the US do not contribute to Social Security!

Public Employees, including Congress and the Executive, should not be exempt from participating in Social Security.  Same goes for State employees.  This would provide an additional source of revenue and make the entire system more equitable.

Disability Payments Impact on the Social Security Fund:

Disability benefits were included in the original 1935 Social Security law.  But, since its enactment, Congress has fiddled with the benefit provisions and the disability roles have exploded along with the drain on the fund.

Congress must put back many of the cost controls and beneficiary controls over the disability portion of Social Security.  Since 2008, disability has become a replacement for long-term unemployment insurance and is depleting the funds that should be reserved for retirement and those needing disability assistance.

We need to allow Trump to put his cards on the table relative to “amping up” the economy!  If successful, the results will be HUGE for not only Social Security and Medicare but for our nation as a whole.  It will take a while to revamp trade agreements and restart the US domestic industrial complex, but you need to start sometime. 

No better time than now!

RD Pierini

@RDPierini

 

Hat Tips:

http://www.newsmax.com/Newsfront/Congress-PayrollTax/2011/12/05/id/420014/

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