In the classic political satire, "Duck Soup," Groucho Marx, as Freedonia's proud leader, Rufus T. Firefly, tries to borrow money from Sylvania, assuring the ambassador from his rival nation that he would gladly give his personal IOU in return. "If I can't pay you back," Groucho quips, "you can keep the IOU." That's the same feeling I get when hearing politicians carry on about the "crisis" in Social Security, after Washington "borrowed" trillions of our retirement fund surplus, with apparently no intention of ever paying it back!
I couldn't help but cringe when I heard Sen. Barack Obama last week pledge to "shore up" Social Security by requiring those with incomes over $250,000 to pay the full 6.2 percent payroll tax. To avoid offending middle-class voters, he would exempt those above the current cap of $102,000, yet falling below $250,000.
This "soak the rich" scheme completely misses the point--which is that no tax increases are necessary if Uncle Sam would simply redeem all the IOUs Washington dumped in the program's trust fund in return for the massive Social Security surplus built up over many years.
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