Reply #17: Wage caps

[one-eyed fat man]

That is the other problem, the super rich don't work for wages. The worst of them don't produce anything. They no longer own factories, or railroads or oil refineries like the Fords, Rockefellers or Carnegies of a century ago. When Lehman collapsed some 70% of the GDP was "financial services!" There is no FICA paid on capital gains.

WTF? Credit default swaps, mortgage backed securities, and that crap made up 70% of what the country produces? Half a century ago a guy could make a respectable living with his hands. People made stuff. Stuff you could actually use. Now "tradesmen" and "craftsmen" are looked down upon. A little class warfare in action, those guys who took shop were too dumb for college.

Well, how many unemployed liberal arts majors can a country use? A CDL will get you a job faster than a Masters Degree in music anthropology, or Pre-Columbian basket weaving....and there are a lot more degrees being granted that are possibly interesting, but otherwise useless except for filling arcane chairs in academic departments. I have a niece that discovered her ability to operate a pan and a bulldozer did a lot more to secure her future than a degree in public administration. Her degree was enough to get her a job as a file clerk in a county office. Her ability to operate heavy equipment let her become the head of the county road department.

http://en.wikipedia.org/wiki/Social_Security_%28United_States%29#Implementation

The first monthly payment was issued on January 31, 1940 to Ida May Fuller of Ludlow, Vermont. In 1937, 1938 and 1939 she paid a total of $24.75 into the Social Security System. Her first check was for $22.54. After her second check, Fuller already had received more than she contributed over the three-year period. She lived to be 100 and collected a total of $22,888.92.Text

For the entire history of Social Security, benefits have been paid almost entirely by using revenue from payroll taxes. What made the burden bearable is there was a pyramid, the baby boom and the drop in fertility upset that ratio. That is what dooms every Ponzi.