Part III continues to explore all the implications of the way the so-called "entitlement" programs of Social Security and Medicare are organized. I don't think I was unusual for having assumed until a few years ago that these funds were set up like conventional trust funds which are separate accounts used to store wealth which are increased by investments and decreased by payouts according to trust fund rules all for the benefit of defined beneficiaries. That is the way that media has always presented it, the way our congressional representatives always framed it. It seems like everyone was duped by this perception except, of course, our master-deceivers in the One Percent.
There are many who still do not understand it like blogger, Jim Kavanagh, who insists that “Social Security and Medicare have absolutely nothing to do with the short-term U.S. fiscal problem.” He sees the current attacks on these programs as a giant "con", but that is only because he sees them as conventional trust funds. It's a con alright, but the deception has to do with the way the programs were set up and managed ever since.
It seems like I should have gotten a clue of this when Al Gore kept talking about putting Social Security in a "lock box" during the 2000 political campaign. I had little idea what he was talking about, and he didn't explain it. Also, another clue is that the payments to these programs are worker payroll taxes, not premiums or contributions as you would find in a conventional retirement trust fund. But it was not until I started reading Allen W. Smith's pieces (the first one was this and the last and best one is this) in Dissident Voice in the past few years that I finally understood how these programs worked. It was another giant hoax perpetrated on working people by our masters in the One Percent.
Social Security and Medicare have been very beneficial to workers in that it has provided for retirement income and minimum medical care, but it has been much more beneficial for the One Percent ruling class. Until now. Because the latter didn't want to have their taxes used to pay social benefits to workers, the One Percent made working people save for their own retirement by prepaying taxes on their payroll earnings into a pretended "trust" fund. Until now all this money should have built up huge "trust funds", but instead of earning any interest, they were used like all other tax money to balance the budget; hence around half was to purchase weapons and to invade other countries.
I'm not sure Hudson thoroughly understands this arrangement when he refers to funding of the programs as "pre-saving" or "pre-funding". In any case Hudson contrasts this government spending with all the other types of expenditures where pre-saving for future costs is never required for any segment of the population.
There is no inherent need to single out any particular area of public spending as causing a budget deficit if it is not pre-funded. It is a travesty of progressive tax policy to only oblige workers whose wages are less than (at present) $105,000 to pay this FICA wage withholding, exempting higher earnings, capital gains, rental income and profits. The raison d’être for taxing the 99% for Social Security and Medicare is simply to avoid taxing wealth, by falling on low wage income at a much higher rate than that of the wealthy.Because we are now entering a period where payouts are less than income from Social Security and Medicare payroll taxes, the One Percent no longer benefits from these programs. Hence, they want to severely cut them back or do away with them.
Unfortunately, Hudson, like many academics should have understood this setup all along, but did nothing to expose this grand deception. Notice that in this article, he makes no reference to a deception regarding Social Security or Medicare, but only in reference to the "fiscal cliff". However, one must understand that agents of the One Percent are located at strategic places everywhere in society, and institutions of higher learning are one of the most important. People who are appointed to governing boards of our universities are usually drawn from the highest levels of the One Percent. And, academics who are too critical of ruling class policies or expose their deceptions find their careers very much threatened. The same applies to journalists who work in mainstream media corporations.