Tuesday, August 18, 2015

Why Are Most of The GOP Candidates Proposing Cuts In Social Security?

Social Security has often been called the third rail of politics because of its popularity with most voters.  Krugman tries to explain why all of the candidates, with the exception of Trump, are taking the electoral risk by cutting SS benefits.  He argues that 50% of the campaign funds available to GOP candidates come from 130 families, and that cutting SS is part of their plutocratic agenda.  Its hard to understand why they want to cut SS because they do not pay for it through SS taxes.  There is no SS tax on income from capital, and no taxes are paid on incomes above a ceiling which is a bit above $100,000.  The explanation must have something to do with the plutocratic agenda which he does not discuss.  Moreover, they probably realize that other taxes will have to be raised in order to pay future benefits since the SS trust fund only contains IOU's from the Treasury which has "borrowed" money from the trust fund to finance general government spending.  The government must raise taxes or sell more treasuries to other sources in order to fund future payouts.

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