"Fear mongering garbage" from Third Way on Martin O’Malley’s Social Security Plan

[Samantha]

36. Social Security is NOT in crisis -- but Uncle Sam is for borrowing against the Trust Fund

Last edited Fri Sep 4, 2015, 12:40 AM - Edit history (1)

Let's keep this picture clearly in focus. Uncle Sam borrowed against the Trust Fund Baby Boomers built up. This Trust Fund accrued as a result of the agreement reached in the early 80s (perhaps 1983) to buttress the Plan against the onslaught of the huge number of people retiring as the Boomers reached retirement age. Part of that agreement was to double the FICA withholding. As a result, Boomers became the first generation to pay for not only the retirement of those who retired before them as well as financing their own future retirement. That agreement also raised the retirement age.

And so we were set -- until Uncle Sam started borrowing against our Fund, as well as the retirement funds of Federal Government employees. Uncle Sam backed its debt by issuing Treasury Notes. When the time arrived that Uncle Sam needed to withdraw monies from the Fund for the Boomers' retirement, the Federal Government had to sell a like amount of the withdrawal of Treasury Notes. As Geitner himself publicly explained, "in this economy that is not easy to do." (loosely quoting from memory). So the Federal Government has to pay Social Security benefits to Boomers out of the general fund. This prompts politicians to go around saying, "Social Security is broke. It is nothing but a Ponzi scheme!" They want the debt forgiven at the expense of current and future recipients!

And then there are those billionaires who want to abolish Social Security because they do not think the Federal Government should be involved in programs such as this (the nanny state), as well as the corporations who want it abolished because they do not like having to pay that matching FICA tax for each employee. The sum total of those matching taxes adversely impact their bottom profit line. Get rid of it!

So I say raise the cap and fix the problem. Quit lying to the general public about the cause of this problem.

Sam