Taxes and Budgets and Wars- OH, MY
This is the story of two generations of Americans during the 20th century. Generation A fought two world wars and survived the Great Depression yet they still had the foresight and
energy to create modern American exceptionalism. Led by President Eisenhower, the greatest American general and statesman of the 20th century, they laid the groundwork for 50 years of American economic and educational success.
President Eisenhower, recognizing the role of infrastructure as a component of national
defense, introduced the Federal Aid Highway Act of 1956 which allotted $25 billion to build the interstate road system we enjoy today. In response to the 1958 Russian launch of Sputnik, Congress passed the National Defense Education Act which provided hundreds of millions of dollars for higher education. Those folks didn’t want to pay taxes, but they understood the importance of keeping America #1.
What have we (Generation B) done? We’ve failed those who came before us and those who follow us. We’ve failed our children by allowing the best educated society in the world to slide down to #14. How will they compensate for our shortcomings with a 14th rate education? And why should they believe anything we promise when we’ve already broken our covenant with Generation A?
You see, they left us a Social Security System with huge surpluses but there was a
flaw in the way the program is funded. The Supreme Court (Halverson v Davis, 1937) held that the Social Security Tax is valid under Congresses general taxation powers (since Social Security taxes go into the general fund). In plain English, that means FICA taxes must go into the general fund and Congress can spend those funds as they please.
So, where did the money go? Since 1950, we have engaged in eight major overseas conflicts and numerous smaller ‘incidents’. These undeclared wars were very expensive, yet there were no “war taxes” and no “war bond” drives like those during WWII. These wars were paid for with a combination of FICA taxes and deficit spending.
Soon, there will be too few workers to maintain a pay-as-you-go system. The baby boom surplus is gone and some advocate raising the retirement age to 70 rather than eliminating the
$115,000/year cap on FICA taxes.
It’s time to remember who we are. The full faith and credit of the United States must be upheld, not only for our creditors but also for our citizens. Register and vote.