Let's Just Raid Social Security

Out of one side of its mouth, our political system talks about reforming Social Security to preserve it for a few more years, and out of the other side of its mouth, it proposes to expedite its demise. As rational observer, you'd just like to get a big roll of duct tape and close off all these orifices for a while.

There are rumblings everywhere about a one-year extension of the "temporary" payroll-tax cut. Effective for all of 2011, it reduces the employee portion of the Social Security tax from 6.2% to 4.2%, thus giving us a little extra spending money. And collectively, it's more than a little: $100 billion [9] for the year. The idea is that we'd spend this extra money, which would nudge up GDP and create jobs somehow somewhere. Yep, GDP and consumer spending are up a bit, despite dropping real wages and sagging consumer confidence. Yes, the inexplicable American consumer [10].

However, the mind-boggling U.S. trade deficit [11], particularly in consumer goods, sees to it that much of this extra money is going overseas. And it certainly hasn't created many jobs in the U.S., as we know from our dismal jobs reports.

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