In the latest attack on Trump, critics have, for once, focused on one of the former President’s policy proposals rather than the usual litany of smears and name calling.
Pundits are now claiming Trump’s tax plan, including exempting Social Security income from taxes, will end Social Security as we know it by 2033, effectively killing the golden goose.
https://twitter.com/mattyglesias/status/1850223942146912471
The claims are unsurprising given Social Security is the traditional stick with which politicians and media assail older voters.
But what critics have failed to mention is that Social Security was always headed for insolvency, and while required to pay the money back with interest, Congress already borrows from the Social Security trust fund.
During the second Bush administration, for instance, Congress had already milked $1.7 trillion from the fund.
And, critically, the concept of Social Security itself assumes people continue to have children, effectively minting new workers each year to pay for retirees’ benefits. No one foresaw declining birth rates or life expectancy beyond age 65. In other words, Social Security itself faces enormous demographic headwinds.
As for Trump, the straw man Trump tax plan under assault, as often misleadingly framed by critics, could indeed deplete the trust fund — but three years sooner than it was already slated for zero.
In that scenario, payroll tax revenues are currently enough to cover 79% of Social Security benefits. But would that be the end of the line for Social Security benefits as we know them?
Commonly floated options to fund the SSA trust fund include raising the retirement age to keep workers paying retirees benefits, raising payroll taxes, or cutting Social Security benefits. Each presents an unpopular scenario.
Trump’s platform pledges no cuts to Social Security or Medicare. How will he get the job done?
One element critics have failed to mention are the enormous benefits currently paid to illegal immigrants and migrants.
https://twitter.com/WallStreetApes/status/1850706546399076697
But what’s also missing from analysis of Trump’s tax plans, which could include cuts that would eliminate income taxes for 93 million Americans, cutting corporate taxes, ending taxes on tips and Social Security income, or even doing away with income tax entirely, is the tapestry of economic and energy policies required to put America on track.
Tariffs
As for taxes, Trump has said funding the government with tariffs could pave the way for reducing, or even eliminating income taxes.
Critics have characterized tariffs as a tax on the consumer. But if past performance is an indication of future returns, Trump doubled tariff revenues in his first term while the Consumer Price Index didn’t budge.
The current tax environment, and lack of tariffs, which China imposes on U.S. goods, chases the physical capital of U.S. manufacturing overseas, also posing a security threat — even the Biden-Harris administration seems to grasp this, eyeing the Strait of Taiwan and passing the CHIPS Act in a flailing attempt to onshore semiconductor manufacturing.
The threat of further tariffs as a negotiating tool may net the desired economic results. The enactment of those tariffs could even the playing field and bring critical capital and jobs back to U.S. shores, as well as additional revenue to fund the government.
Immigration
The border represents an enormous burden to the taxpayer — according to testimony before the Senate Budget Committee, low- and medium-skilled immigrants represent $12.5 trillion in net fiscal costs to the taxpayer in the form of wage suppression and welfare benefits.
The International Monetary Fund acknowledged U.S. wage stagnation during the roaring inflation of the Biden-Harris administration was due to immigration. The hit to the taxpayer strikes twice. In taxes, and in the suppression of wage growth. In that sense, the border wall, for instance, is effectively a tariff on foreign labor.
Government Waste
Largely missing from the debate is the absolutely bloated government and the glaring need for cuts in federal spending. Meanwhile, Elon Musk, whom Trump has tapped to spearhead a ‘Government Efficiency Commission’ has said he thinks the $6.2 trillion U.S. budget could shrink by $2 trillion.
For perspective the current annual social security budget shortfall runs about $100 billion, projected to increase to $332 billion were the trust fund to be depleted in 2035.
Energy
Coupled with tariffs on imports, and the likely resultant boom in U.S. manufacturing and jobs, a return to oil drilling limited under the Biden-Harris administration and reemphasizing nuclear energy offers a tailwind both to consumer energy prices and manufacturing costs alike.
In sum, the debate about the date of the demise of social security misses the forest for the trees, in a fumbling attempt to pin the social security trust fund’s perpetual problem on a convenient scapegoat. Behind the hand wringing is a rejection of the strength and the capacities of an America that prioritizes its own security and economic interests.
