August 13, 2007

One of the most useful tools for analyzing the current job situation is the amount of payroll taxes collected monthly. Nobody else uses these figures, but everyone who works (legally) in this country pays the same rate of payroll tax unless they are illegal alien immigrants. Therefore, the amount of money the federal government receives in payroll taxes, particularly for Social Security, is a direct reflection of the job situation in America.

Of course, these payroll tax figures do not tell us the exact number of people working, but they do tell whether the group of workers is rising or falling and the general trend. It’s much more reliable than what you hear from much of what passes for news today.

For instance, we heard that jobs had increased by some eighty thousand in July. The media pumped it up, trumpeted, and told us it was wonderful. The truth is that we lost seventy thousand jobs. It requires approximately 150,000 additional jobs per month just to break even or keep up with the number of young people entering the market and those retiring or dying. In other words, whatever we get over 150,000 are the only true additional jobs.

What’s more, when we look at the accumulated amount of our retirement money that the government has stolen so far this year, we find ourselves in roughly the same position as in fiscal 2005. Does that look like a “booming” economy? Not for workers.

Notice the pattern here. In government parlance the end results have not varied much in four years. In 2004 the Beltway Bandits stole $71.1 billion of our supplemental retirement money. In 2005 they stole $86.5 billion. In 2006 it was $78.2 billion. And this year looks like it’s following the same path without much variation. Since taking office the Bush administration has taken $505 billion (one half trillion) from Social Security. Who’s paying for the invasions and occupations in the Middle East?

In terms of jobs, it’s quite possible that variations have been caused by things like normal salary increases, layoffs and salary cuts. In numbers or in reasons why, it’s certainly not what the propaganda is telling us, is it?

Here’s what these same stolen surpluses look like when annual interest is added:

An important thing to understand here is that the Interest compounds yearly while the surpluses are static reports of each year. As this interest goes to higher and higher multiples, it will become enough to support Social Security forever without any help from us. The pirates could stop stealing our payroll taxes right now.

Too bad this isn’t real money. The surplus has been spent and substituted by nonmarketable bonds so we can eventually pay these taxes again. And the annual interest is thrown in with the same sort of paper.

Any private sector insurance company that spent its premiums without building a real liquid reserve would be in the slammer in no time, but not Congress or the administration. They are truly above the law. No question about it.

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