When 9/11 hit, the Bush management saw that the terror lawsuit could conduct maintain serious ramifications on the economic scheme every bit people naturally would line dorsum on spending out of fright of farther geo-political in addition to domestic crises. And inwards the wake of this the President non only went on the air encouraging people to pass using the guise of 'Don't allow the terrorists win', but he besides got Congress to approve a taxation rebate to filter billions of dollars into consumer's pockets thus they would prime number the take in to choke on spending.
Then next the 2008 Financial Crisis in addition to subsequent Great Recession, that decade of spending that was additionally fueled yesteryear close zip involvement rates in addition to a housing bubble which gave homeowners a virtual 'equity checkbook' came to an sudden stop every bit chore losses, foreclosures, in addition to the realization of massive consumer debt pose the economic scheme into its worst environs since the Great Depression.
So the Fed in addition to thus embarked on a novel plan called Quantitative Easing where they pumped $10's of trillions of dollars onto Wall Street in addition to the Federal Government to facilitate the creation of non exactly i property bubble, but multiple ones inwards housing, stocks, educatee loans, automobile loans, in addition to the bond market. And this provided the illusion of recovery, but only sustainable every bit long every bit the increased printing of coin did non accomplish the betoken of diminishing returns.
But alas, that happened during 2015 where it takes at to the lowest degree $4 novel printed dollars to equal $1 novel dollar inwards gross domestic product growth.
As nosotros accomplish the terminate of the start quarter of 2017, the information is signalling the tipping betoken of all of these bubbles, in addition to an terminate to consumers beingness able to borrow in addition to pass beyond their means. Retailers are closing stores in addition to filing for bankruptcies at accelerating rates, in addition to before this calendar month credit carte du jour debt for Americans crossed over $1 trillion for the start fourth dimension since prior to the 2008 crash.
So alongside consumer in addition to authorities spending making upward 80-85% of the nation's GDP, what is left for Congress and/or the Fed to scheme upward to choke on the economic scheme from 'officially' spinning dorsum towards an e'er greater recession than ix years ago?
One proposal suggested yesteryear a Congressional lobbyist to legislators would live on to cutting or eliminate the Social Security taxation paid yesteryear workers in addition to concern owners inwards favor of getting that coin into the pockets of consumers thus they tin choke on the ponzi scheme going for a few to a greater extent than years.
according to Fox News, is i that would consider the payroll taxation drastically cutting or eliminated entirely.
In 2015, Social Security generated $920.2 billion inwards revenue, in addition to the payroll taxation accounted for 86.4% of that revenue. The payroll tax, which besides funds Medicare, is a 15.3% aggregate taxation on earned income. Overall, 12.4% goes to fund Social Security, in addition to 2.9% funds Medicare. However, roughly workers are only responsible for one-half of this amount, alongside their employers roofing the remainder. Thus, your responsibleness every bit a worker is oftentimes 7.65% of your earned income (6.2% to Social Security in addition to 1.45% to Medicare). Only the self-employed current of air upward paying the total 15.3%.
Even then, Social Security's payroll taxation has added exemptions. Earned income is taxed betwixt $0.01 in addition to $127,200, every bit of 2017. Any additional income higher upward in addition to beyond $127,200 is costless in addition to clear of taxation, which is a big practice goodness to the wealthy.
Under the Republican proposal, the payroll taxation for Social Security (the aforementioned 12.4% tax) would live on eliminated, piece the Medicare taxation of 2.9% would rest inwards place.
Why eliminate this absolutely critical origin of funding? Removing the Social Security payroll taxation would add together $3,100 to the pockets of the average Americans menage earning $50,000 a year. Republican lawmakers conduct maintain long believed that putting coin dorsum into the pockets of Americans is the best way to cause our consumption-driven economy. - Madison
With the authorities already borrowing over $1 trillion inwards deficit spending each twelvemonth to exactly brand ends meet, the concept of borrowing the additional divergence to encompass Social Security payments should the taxation live on cutting or removed from workers is non only inwards of the realm of possibiities, but has already been done dorsum inwards the 1990's when President Bill Clinton replaced the $3 trillion cash surplus that was inwards the Social Security trust fund alongside USA Treasuries (debt) thus they could pass the coin elsewhere on the way to edifice the start cracking bubble, that of the Dot Com variety.