President Bush faces two tests on Social Security (the US government pension scheme).
The first test is whether he agrees to the deal US government officials have made with Mexico. This deal would allow Mexican illegal immigrants to the United States to collect Social Security benefits whilst having only paid 18 months worth of Social Security tax to the United States government – as long as they had paid at least eight years two months worth of Mexican payroll tax to the Mexican government (the Mexican government would keep this money, not hand it over). As this is an ‘equal’ deal should any American sneak into Mexico and pay Mexican payroll tax for 18 months, having paid Social Security tax to the United States government for at least 18 months, they will get a Mexican government pension, unlike Mexican citizens who have to pay far longer to get anything like a full pension – even a full pension paid at the Mexican rate.
Libertarians might object to illegal immigrants being deported as Eisenhower did in the un-PC named ‘Operation Wetback’ in the 1950’s, but paying them a government pension seems a bit odd to start with. Even ten years of ‘contributions’ is not sustainable… a illegal immigrant with documents claiming he is 55 years of age comes illegally into the United States, pays the payroll tax for ten years and then gets a government pension till he dies. Indeed government pensions are part of the reason that free migration just does not work in a Welfare State, and make no mistake, that is what the United States has evolved into.
If a poor person can enter the country and say “I have children, pay for their education”, “I am sick give me health care – Medicaid or emergency State and local medical care” and, after a while, “I am old, give me a pension and …” then tens of millions of come and indeed about 12 million already have come illegally, and the system will collapse a lot quicker than it would otherwise. “Good, we want the system to collapse” – no, you may want it to collapse but I do not. I do not support the system, I hate it just as I would have hated the mega-government of the last period of the Roman Empire. But this does not mean I want a 5th century AD style ‘solution’ to the problem of overgrown government in the West. What I want, absurd though such a hope may be, is reform, a rolling back of the government, not collapse – for fear that the chaos will not just undermine government, but will also undermine civil society as well.
“The people will not stand for this” – like they “did not stand” for judges imposing taxes? The American Revolution may have been fought with such slogans as”no taxation without representation”, but judges rather than legislatures in many States have imposed tax increases that no one has voted for, in order to spend more money on education and other such – and these judges have not been tarred and feathered, or even ignored – they have been obeyed.
“Congress will not accept it” – perhaps not, the deal may be ruled a treaty and the Senate may not ratify it. But it would be foolish to rely on that.
“Bush is not a moron, he will not sign the deal” – perhaps not, but he is desperate to “win back the Hispanic vote” and he has never shown much interest in limiting government spending. Still I agree that he is not a moron although he is not very wise either, whatever his education was – neither qualifications or IQ are the same as wisdom – so we will have to see.
The second test on Social Security is a deal on ‘reform’:
The Treasury Secretary is very interested in making a deal with the Democrats who control Congress, and by their blocking of Bill after Bill showed that they really controlled Congress even before the last election, on reforming Social Security, perhaps even allowing people to spend some of their Social Security tax money on, government approved, private investments, and the Democrats have hinted that they will consider reform – in return for the lifting of the cap on the payroll tax.
As in Britain after a certain level of income has been subject to the payroll tax (called the ‘National Insurance’ tax in Britain) it is considered that the future government pension has been ‘paid for’ and income above this level is not subject to the pay roll tax (it ‘just’ gets hit with the 40% income tax).
The Democrats do not like the idea of ‘the rich’ having income on which they do not pay the Social Security tax – and so will hint just about anything in order to the get the Bush Administration to lift the cap.
It is rather like the deal that President Bush’s father (George Herbert Walker Bush – or ‘Bush 41’) made with the Democrats – agree to a tax increase (i.e. break your “read my lips, no new taxes” promises to the people) and all things are possible.
If President George Walker Bush (or ‘Bush 43’) falls for this deal, he will be politically dead, his last conservative supporters being already sick of trying to defend a man responsible for “No Child Left Behind”, the Medicare expansion, and the lack of vetoes of bloated budget after bloated budget, will give up on him once and for all.
But it is more than a political matter. If there is a Social Security tax increase, which is what “getting rid of the cap” would be, an economic downturn is inevitable. Certainly it may happen anyway – but it will be much worse with the tax increase.
The decline in the economy and the rise of unemployment and poverty would be the result of President Bush failing this second test.
“If President George Walker Bush (or ‘Bush 43’) falls for this deal, he will be politically dead, ”
He is already politically dead. Whatever deal is struck – it will be struck by Republicans in Congress, not Bush. Bush is irrelevant, his only power remains the veto he never used… It’s a pity, because despite all his faults, the congresscritters are worse.
But the Democrats will never accept any form of private accounts, that would be blasphemy for them, so – no deal.
“As in Britain after a certain level of income has been subject to …’National Insurance’ tax…it is considered that the future government pension has been ‘paid for’ and income above this level is not subject to the pay roll tax…”
That used to be the case in Britain – but it isn’t any more; Gordon Brown abolished this “concession” recently. There is now no upper limit on income for NI contribution purposes.
“There is now no upper limit on income for NI contribution purposes. ”
Of course, what you pay to the NI isn’t no “contribution”, it’s a tax. When your’e forced to pay, the name is “tax”. “Contribution” implies – voluntary donation.
What was noteworthy about life under communist regimes was the pervasiveness of lies. Everything, but EVERYTHING, that the government said, or wished to disseminate was a lie. Almost everything anyone said to strange persons (who could be informers) was a lie.
Everyone knew perfectly well that it was all lies.
You cannot have a communist regime without the lies.
Seems the same goes for the welfare state. You cannot have a welfare state without it being based upon lies.
This little concession to illegal immigrants wouldn’t have anything to do with the rumoured melding of USA, Mexico and Canada into one state under one currency would it? There is a lot of talk about large freeways being planned to link Mexico through the USA to Canada. Coul all be bunkum but I keep an open mind until I see facts.
First I must apologize (as so often) for my typing errors.
I should have typed “eight years six months” for the amount of time that a Mexican had to have paid payroll tax to the Mexican govenment before their 18 months of “contributions” to the U.S. government will (under the proposed deal) get them a pension.
Where my tired brain and clumsy hands got “eight years two months” from I have no idea.
Also I should have typed “not” in the line about not wanting a 5th century A.D. “solution” to the problem of big government.
Of course (as I stated) even ten years “contributions” (which is all an illegal immigrant has to pay now) to the U.S. government is not sustainable.
On the United Kingdom:
Is there really no cap on National Insurance tax now? I admit that I do not follow the news of my own country with great care (I find it too depressing), but this would mean a top tax rate (income tax and N.I. tax) of way over 50%.
Well – not too far off 50% at least, Paul. http://www.timesonline.co.uk/article/0,,2087-2092829,00.html
I am on the low rate of income tax and I still see 23% of my income gone which means that the NI costs me about the equivalent of my non-taxable income allowance. Overall, it is my largest monthly “expenditure” just pipping my rent by a whisker.
It all depends on how you read between the lines: I suspect {he said, peering craftily around} that this is really a so-far-unleaked (and brilliant, at that) secret program in support of the War on Terror.
It’s obvious what the result of this legislation will be. Mexicans will flood across the border into the U.S. in ever-increasing numbers. Come on now, be reasonable – why should they work fourteen-hour days for a pittance in Mexico, when they can get it all for free in the U.S.? And “getting it all for free” is exactly what the U.S. wants them to do, because the U.S. in return gets the ultimate result – their children.
Muslim immigrants in Europe are steadily salting the populace with their birthrate, which will if unchecked, eventually give them plurality. But Mexicans are more fecund even than Muslims, and considerably less hung-up over the whole tribe/religion thing. An explosion of Hispanic babies is in the offing, all of whom will be American citizens and none of whom will be particularly sympathetic toward Muslim religious goals.
Bush therefore reasons that try as they will, the Muslims cannot out-populate the Mexicans. So Muslims will never be in a position to vote-in Shari’a in the U.S., and the U.S., alone among the industrialized nations, will retain a positive birthrate. Eventually, they’ll be able to export hordes of money-worshippers to all the old bastions of religion, and vote THEM out.
Clever – wickedly clever! And they call Bush a moron……
Just a minor technical question. Where did you find this info? How does an illegal immigrant pay social security taxes? Under a false ID? I don’t get it. After all the PC name for illegal immigrant is undocumented worker. How are their taxes “documented.”
I know LEGAL immigrants pay social security, but I don’t know how illegal immigrants do and how it could “traced” back to the REAL individual. I don’t really doubt that what you say is true, but I don’t understand how this works. Is this under one of the amnesty deals being proposed? Please explain more.
On the general question, SS “reform” in the US will happen around the same time France votes a libertarian for president.
The Welfare State is indeed the primary fly in the ointment for Open Borders. Personally, I would like to see people be able to freely cross borders whenever they sense opportunity. It’s called Liberty.
However, all those folks coming here illegally are making our welfare state problem worse (schools, hospitals, crime, fraud and identity theft, etc). Yes, their making the welfare state collapse might be a good thing – except – the lefties are truly bitter-enders. They’ll insist on holding on to the welfare state until the entire economy collapses a’la the Soviet Union.
Currently, crossing the border illegally and taking advantage of the freebies, plus behaving as any un-enfranchised servant class inevitably must, is a big problem. It’s a major contributor to the Left’s justifications for initiating further force on legal residents with ever-increasing taxes and social controls.
Before we can address immigration properly, and the myriad other problems current in Western societies, the Welfare State is the most important dragon to slay. It ain’t gonna be easy.
Oh, and Jim, here’s(Link) a fly for your ointment as well.
12 million illegals is the pro-amnesty/Bush number. I estimate it at abot 20-23 million.
I’m a geographer/demographer with experience in estimating/extrapolating population numbers for Census use including government economic & transportation planning.
It might be better if Bush plunges more money into medicare for the time being, otherwise he’ll just give another 86,000,000 dollars to Fatah.
I can not find anything about the upper limit on “National Insurance Contributions” via the link you put in Nic (it seemed to be about the general rise in taxation under Mr Brown).
Gabriel – you know well that (perhaps sadly) 86 million is nothing to the Federal government, although I agree they should not give the Arabs anything.
Of course I do not support government aid to Israel either (although the importance of American government aid to Israel is, as you know, greatly over stated).
Ross Goble asks how can illegal alliens pay anything.
Well they may indeed be operating under false names, but they do not have to (and, of course plenty of “non profit” groups just give the “undocumented” documents). You see (as I suspect you know) the Federal government makes no serious effort to deport the 12 million (and rising) illegals. Just a few stunts every so often – no serious effort.
The law is a joke.
As for the immigrants helping to save the system – errr no they will not.
Red State Americans (it is not P.C. to say “Red Neck” Americans) have no problem with breeding – they do not need Hispanics (or anyone else) to save them from the Muslims (or whoever).
Also the American Welfare State certainly does not need millions more minimum wage people.
After all American government pensions (unlike Mexican ones) pay mimimum wage people as much as anyone else (even though their Social Security taxes have not come to very much).
Education is becomming increasingly centralized – gone (or going) are the days of “the poor people live in X area and pay little in property tax, so little can be spent on schools in X area”.
Everyone must have (or so the media, and the courts, say) lots of taxpayer’s money spent on the education of their children.
And everyone (no matter how little taxes they have paid) must have health care (State emergency treatment and so on), and Social Security and Medicare and ……
HUNDREDS OF BILLIONS OF DOLLARS. It is the Welfare State (not the war in Iraq) that take the bulk of the money.
For better or worse “free migration” (which is what he really is) Bush will help destroy the very Welfare State that “compassionate” Bush loves so much. Free migration can only work where there is not a Welfare State and where the immigrants do not expect there to be one (i.e. they do not expect housing, education, income support, health care and so on to be given to them).
As a libertarian I might be expected to welcome this – but I do not. I want reform, a roll back of the government (however absurdly unlikely it may be), not collapse. Even if we leave aside the violence this is likely to lead to (and things are getting violent already, with the new people finding that the streets of America are not paved with gold – about 1 in 4 of the people in prison for violent crimes are immigrants and they certainly do not make up 1 in 4 of the population).
I do not want tens of millions of the old, the sick and the poor to suddenly find that the government programs they have come to depend on are not there anymore. I want reform – a roll back of government, not a sudden collapse.
Of course it is wrong to say that without the illegals the present system could go on for ever (if unreformed it would still collapse eventually), but the tide of illegals is not putting off the day of collapse – it is bringing it closer.