U.S. consumers increased their spending in December at a slower pace, while their income grew by the largest amount in eight years, the Commerce Department said. Income surged because companies rushed to pay dividends before income taxes increased on high-earners.
Americans are earning and spending more, but a lot of the extra money is going down their gas tanks. Gas prices have drained more than half the extra cash Americans are getting this year from a cut in Social Security taxes.
For years, policymakers have reassured the public that Social Security will be solvent for decades. But outlay and income data from the Treasury reveal that Social Security is already deep in the red -- by $76 billion in 2010 alone. That's just the beginning.
