The Unpopular 15% Social Security Tax

There are obvious reasons for young people to oppose the social security tax.  #1 in line is that the U.S. Treasury spends your tax payments on projects other than social security.

Not one dollar of your S.S. taxes are saved for you in any way, shape or form.

Harry Browne explains there is also reason for retirees to feel uncertain about collecting future social security taxes....

To find out more about where your social security taxes have gone check out "The Largest Lender to the U.S. May Surprise You".

Going In Debt to Buy Water

In response to nearly half of their residents falling behind on water bill payments The City of Detroit has resorted to extreme measures.  This week they announced plans to shut off water service to 420 customers.

Why is the cost of water out of reach for so many people in Detroit?

DEBT.

The city's water system has run up an incredible $6,000,000,000 of debt.  These debts are backed by revenue from the city's water system.

Lenders to Detroit expect (perhaps unreasonably) to be repaid.  The city's bankruptcy efforts notwithstanding don't expect a decrease in the cost of water as long as extreme levels of debts are outstanding.

In the meantime do current water customers of Detroit have an obligation to make interest payments on money borrowed by city officials decades ago?

More on the story from the AP.

The Largest Lender to the U.S. May Surprise You

No one should be surprised to hear that the U.S. is in debt.  The average wage earner pays $2,800 per year just in interest payments to U.S. Treasury bond holders.  It's important to know how this stuff works.

So who is the primary lender to the U.S. Treasury?

You've probably heard that it's China.  Or maybe you read somewhere that it's Japan.  These are both incorrect.

Well then it's got to be the central bank of the U.S. (aka The Federal Reserve).  Close but not quite.

The largest lender to the U.S. would be...Social Security.

The United States is in debt to the tune of $2.6 Trillion to the Social Security and Disability Trust Fund. 

How did this happen?

Social Security Taxes go to Upgrade Air Force One
(Photo: Rex Features)

For three decades the United States has been collecting social security tax payments and spending them on programs other than social security.  These include overseas military bases, banker bailouts and fancy conference rooms on the Air Force One jet.

This means that in addition to the 15% social security tax working people already pay, these same workers "owe" $2,600,000,000,000 to social security.  This equates to $20,000 in additional tax payments from each worker to repay the SS trust fund.

Will the politicians be able to squeeze another twenty-grand out of everyone in order to make good on their promises to former tax-victims?