Former Vice President Joe Biden stated during the second and final presidential debate that Social Security is facing bankruptcy by 2023. This has been an open secret for a long time, and politicians on both sides of the aisle have refused to address the retirement scheme’s fiscal severity. Biden is attempting to blame President Donald Trump as if Social Security was on sound fiscal footing until Inauguration Day 2017. Anyone who has monitored the black hole knows that the U.S. has been on the event horizon for years. Coronavirus merely accelerated the implosion.
Feeling Insecure in Retirement
The Bipartisan Policy Center recently published a forecast that the Social Security trust fund could be depleted by 2030, five years earlier than previous estimates. Even under the rosiest of economic expectations, the fund could be out of cash by 2034.
The reason? A lousy, rotten, no-good respiratory illness originated from a wet market in Wuhan, a laboratory, or a cave in the Yunnan Province. Authors stated in the report:
“If policymakers fail to address Social Security’s financial imbalance soon, they will be left with only drastic solutions or financing a portion of promised retirement benefits through general revenues. Tax increases will be sharper, benefit cuts will be more severe, and the cohorts of workers who bear these changes will have less time to plan their finances accordingly.”
This was a certainty, and the COVID-19 financial crisis only sped up the scheme’s demise. Some lawmakers have presented remedies, including raising the age of eligibility and performing means tests. But these are not politically feasible since any resolutions will immediately perturb the senior vote.
Public v. Private Sector Salaries
For years, folks in the private sector have lambasted their public sector counterparts for earning more in a myriad of different ways, from salaries to benefits. But this has finally changed, according to new data from the Federal Salary Council. Today, federal civil servants earn an average of 23.1% less money than private-sector workers. The pay gap between these two classes of workers declined 3.6% from the same time a year ago. With bloated budgets and indebted governments, Uncle Sam may no longer be able to afford giving federal employees a raise or lucrative benefits packages. That has not stopped President Donald Trump from proposing giving these people a 1% pay hike in the new year.
Ouch, My Lightfoot!
What do you do when people are fleeing your city, and you are running out of cash? Why, you raise their taxes, of course! Chicago Mayor Lori Lightfoot recently unveiled the city’s “pandemic budget,” a fiscal framework that involves terminating or eliminating up to 1,000 city workers, increasing the gas tax by a nickel to eight cents, and introducing a $94 million property tax hike.
Chicago presently faces a $1.2 billion budget gap. Lightfoot is perhaps learning about the dangerous long-term consequences of hard lockdowns in the fight against coronavirus when she is not too busy pretending to be a Clorox superhero for Halloween.
Her right-hand man, Alderman Gilbert Villegas, has the unenviable task of trying to gather 26 votes to increase taxes at a time when everyone is suffering. But Villegas believes Chicago has no other alternative at its disposal, particularly when Lightfoot spent one-time cash injections last year. He told reporters:
“If property taxes is [sic] not something they can support, then I would welcome them to bring some recommendations that we can talk about and see if we can get votes on that. We’re not getting any help from D.C. We’re not getting any help from Springfield. This is a go-it-alone budget for a city we were elected to represent. These are the levers we have. This is what’s being proposed by the mayor. Ultimately, my colleagues will either support it or not support it.”
Chicago, and the rest of the province of Illinois, had already been entrenched in fiscal disarray before COVID-19 decimated the nation’s economy. Wealthier households were moving away, policymakers turned to bonds to postpone the financial collapse, and the leadership fails to do anything more except maintain the status quo. At least Mayor Lightfoot can achieve the progressive dream: Equal misery for all.
Read more from Andrew Moran.