Just five days before April 15, Rep. Ron Paul, R-Texas, blasted conservatives at the Southern Republican Leadership Conference for their big spending and love of empire, saying, "They like embassies and they like occupation. They like the empire; they like to be in 135 countries and 700 bases. . . . [W]e're running out of money. No matter how badly you'd like to have them, all empires end not because they're defeated militarily. All empires end for financial reasons and that is what the markets are telling us today." Paul criticized military spending, but if you take a look at your W-2, you'll find hints of a larger problem.
I make an average wage. Reviewing my W-2, I realized I paid $10,807 into the Social Security and Medicare programs last year if I count my employer's unseen contribution. I should feel good about the federal government making me put away so much money for my retirement days, right? Not really.
Last year, unfunded liabilities for the nation's Social Security and Medicare programs increased by $5 trillion, according to the National Center for Policy Analysis (NCPA). Worse, the total projected funding shortfall for current employees and retirees totals $107 trillion. To make good on its promises to future retirees, taxes will have to increase dramatically. The NCPA says that the 10 percent tax bracket would have to increase to 26 percent, the 25 percent marginal bracket would jump to 66 percent, and the top rate of 35 percent would skyrocket to a whopping 92 percent. "The Social Security and Medicare deficits are on a course to engulf the entire federal budget," reports the NCPA. "If our policymakers wait to address these growing debts until they are out of control, the solutions will be drastic and painful." Eh, hem, I'm not feeling so good about dishing out $10,807 to these black holes.
Looking at my W-2 again, I see that I paid another $2,167 to the Commonwealth of Pennsylvania. The Declaration of Independence and the U.S. Constitution were birthed in Philadelphia, so I should feel good about those taxes, right? No, Pennsylvania, like several other states, faces California-like budget deficits beginning in 2012 due to state employee pension, healthcare, and non-pension liabilities.
Ron Paul may run for president again in 2012. He has reason for concern: We're running out of money, our W-2 withholding isn't keeping up with expenditures, and history demonstrates that empires collapse quickly. Yes, we spend a lot on our military, but unfunded Social Security, Medicare, Medicaid, and state liabilities will be the root cause of America's demise if we don't have the political will to cut or fund these programs soon.