The compromised payroll tax cut sounds good on paper, but this wasn't really a tax cut.
Real tax cuts are offset by lower government spending, fewer bureaucrats and smaller government — and result in economic growth as capital is redirected into investment. This so-called "tax cut" for pizza money is nothing but a fresh raid on Social Security.
The effect will be yet another $200 billion drain on the trust fund, which is nothing but an accounting fiction given the bad shape it's in. The 12.4 percent payroll tax from today's workers — which will now be lowered for two months to 8.4 percent — goes into the Social Security pot and, like a Ponzi scheme, gets paid out to today's retirees until the money runs out.
But Congress, both Democrats and Republicans, aren't thinking about that. They're both thinking about the next election.
Benedict Frederick, Jr., Pasadena