Throughout most of this fiscal year it seemed that payroll tax surpluses were going to bring in at least as much booty as they did in 2005 when the government reaped $85.9 billion from our supplemental retirement system, Social Security. Last month, this changed.

Payroll taxes, excluding Medicare, fell an unprecedented $27.2 billion in August, $5.5 billion from disability insurance which is only slightly worse than other months and $21.7 billion from Federal Old Age & Survivors insurance which hasn’t had a shortfall since 1983. This surplus Social Security money is an immediate reflection of earnings and/or employment for the month of August and we can be dead certain that the government and its lackeys have been lying to us.

The U.S. Department of Labor reported that “the number of unemployed and the unemployment rate held at 7.1 million and 4.6 percent, respectively, in August. The unemployment level and rate were little changed from a year earlier.”

Losing jobs and a severe cut in wages for the nonfarm labor market are the main causes of a decline in payroll taxes. If the unemployment rate held steady in August, then millions of workers must have had their wages severly cut. How else can you explain a $27 billion drop in these tax receipts?

The question is whether this precipitous decline is yet another sign of the approaching depression or is the government making up things and keeping us in the dark because they don’t want to cause a run on the banks? It is certainly not because of the "baby boomers" who are not going to begin taking early retirement until 2009 and there aren't many of them anyway.