Kiss your Social Security goodbye

[question everything]

http://www.nctimes.com/articles/2004/03/11/opinion/3_10_0418_29_20.txt


If Congress heeds the advice of Federal Reserve Board Chairman Alan Greenspan on Social Security, we may recall 2004 as the year our government moved from taxation to outright thievery.

(snip)

The trust fund does not hold cash in such large amounts ---- it holds special-issue interest-bearing treasury notes. The interest, which varies monthly according to a formula, has never been less than 4 percent and accumulates along with the surpluses. It is estimated that by 2011, when the baby boomers are retiring in droves, the Social Security Trust Fund will hold $3.2 trillion ---- enough to keep the program solvent until long after Martha Stewart is out of prison.

(snip)

To fund the difference between revenue from the payroll tax and obligations to retirees in the future ---- that is, to redeem the notes in the trust fund ---- the government will have to run surpluses in the rest of its budget or else be capable of absorbing additional budget deficits equal to the difference.

However, the Congressional Budget Office projects deficits as far as the eye can see. Making the Bush tax cuts permanent will compound the deficit problem. No room will be left in the budget for meeting the full obligations of Social Security.

This is where Greenspan's recent recommendations come in. He suggests the best course is to cut Social Security benefits enough to let the government off the hook. In other words, all the accumulated surpluses in the Social Security Trust Fund would simply be forgotten and the Treasury be let off the hook. The government would have robbed its citizens of trillions of dollars in income to fund benefits they will never collect.

(snip)

Allan H. Clark of Carlsbad is a retired university administrator.

[Deja Q]

1. Then why is the younger generation putting money into it?

It's as much of a sham as "corporate america" is!

[Martin Eden]

2. because to stop putting money into it...

...would mean the complete collapse of the Social Security system.

In other words, a complete victory for Bush, Norquist, and and all the right-wingers whose only hope for destroying Social Security was to "starve the beast" by making it unaffordable.

All the money deducted as payroll taxes from your paycheck during your entire working life (for some of us that's quite a few years) would not be there for your retirement. It would be in the coffers of the rich and the corporations, where Bush is currently redistributing it.

I'm not particularly happy with this arrangement, and would like to see the trend reversed (as opposed to accepting what Greenspan is presenting as a fait accompli).

[The Zanti Regent]

10. Social Security is Survivors and Disability payments too

Those who advocate privatization never talk about those facets. The "Club for Growth" types love to lie about black men being cheated out of retirement benefits, but they ignore the survivor payments made to their children.

the probability is 1 in 6 that YOU will be disabled for a calendar year or more. What will you do when Disability benefits are terminated? Remember what happened when President Poopy Pants threw thousands of people off of disability? Do you remember how many people committed suicide because they could not survive? And what did Poopy Pants do? That's Right, Mr Right To Life turned his back and ignored them. I hope that is why Poopy Pants has full blown Alzheimer's.

Social Security is the equivalent of an average $300,000 annuity for your children and spouses if you die. Do you have the money to go to Met Life or Prudential to buy a policy like this on your own?

Also, Maher, Stossel and their libertarian friends point out how good the privatized Chilean system is. Do you know the average amount of $$$ in a privatized Chilean account? It's 7,000. Can YOU retire on the interest from that account? Are you aware that most Chileans are 5 years delinquent in their retirement account payments? Now, what happens if they get sick, well they have to buy a private disability policy, which generally costs 10% of their income. And if they want survivor benefits for their children and spouses, well, they have to buy that $300,000 annuity. To get the same coverage we do, they pay over 40% of their income. Is that right? is that fair?

BTW--if the Chilean privatized system is SOOOOOO goooood, why did Pinochet stay with the old state-funded system?

I sure wish Milton Friedman would tell me!

[forgethell]

3. This has been known for decades

can't blame it on Greenspan, or *. Previous generations of politicians, both Republican and Democrat were too damned cowardly to fix it. Even when it was first initiated, it was known to be a giant Ponzi scheme.

And, heck, it's the only retirement I've got. What to do?

[Martin Eden]

5. It's not a Ponzi scheme, it's a covenant

It's a covenant between generations, with current workers funding current retirees and the government keeping the account. And it's been working quite well since the 1930's thank you very much.

Payroll taxes were pretty much keeping up with benefits paid, and when the retirement of the boomers loomed as a future problem they fixed it in 1983 by raising payroll taxes (which are separate from income taxes).

As a separate account, Social Security is running a huge surplus and should remain solvent for another 30 years. The problem -- the scheme -- is that rather than putting this pension fund in a "lock box", the government borrows from the Social Security account when it runs deficits like it is now.

Only now, they want us to accept the notion that the money borrowed from Social Security -- from future retirees who created that surpuls through increased payroll taxes -- doesn't have to be payed back. That our benefits will have to be cut, and that the funds transferred to the rich and to corporations are a separate matter entirely.

It's nothing less than thievery on a massive scale in broad daylight, and it looks like they're getting away with it.

[forgethell]

7. There isn't a separate fund

and never has been. The govenrment has always borrowed from SS to hide the real extent of the deficit. Democrats are equally to blame with the Republicans. As for a 'covenant' between generatations, the younger generation was never given a choice as to whether to enter into it. The older generation raised the taxes on the boomers to keep their own benefits high. Now, however, there is nobody to pay for the boomer's retirement.

It was known at the time that there was no way to keep Congress, controlled for most of the time by Dems, from spending this money. If politicans suffered the same penalties that private individuals do for so abusing the trust placed in them by others, there would be a lot of famous names in prison this very minute.

SS IS a Ponzi scheme, always has been, has always been known to be one. It can only grow as long as there are more paying in than taking out.

But you are right, it is thievery on a massive scale. But why are you shocked?? You did know that you were going to be robbed, didn't you? If not, why not?

[Martin Eden]

9. Social Security IS a separate account

That's why payroll tax and income tax are separate lines on your pay stub.

A Ponzi scheme by definition cannot be sustained, whereas SS has been in relative equilibrium since the 30's. The 1983 increase in payroll tax was implemented to sustain SS, and it has been working as planned -- except the government has "borrowed" that money and now apparently does not plan to pay it back.

I am not "shocked", for as you say, this has long been the practice. But at the end of the Clinton administration the situation was looking pretty good. In three short years it has crashed, due in no small part to the tax policies of the Bush administration.

We are being robbed in broad daylight, and I'm not going to sit idly by and accept it without raising a fuss. If retirement benefits are to be severely cut for Americans who've paid into it their entire working lives, the least that can be done is to expose the crime and try to stop the bleeding.

[forgethell]

11. The Social Security Fund is a fiction

all the money goes to the US Treasury. It is only an accounting gimmick. From day 1, SS has been a 'pay-as-you-go'scheme to fleece the sheeple. It worked because there were enough workers to support the retirees. Now there are not. 'Relative equilibrium' does not require constant new infusions of new money (higher rates). Equilibrium, bu definition, means as much is coming in as is going out. This has never been the case, hence the continual rate hikes. Nothing whatever to do with *, I'm not saying that his policies haven't made it worse. I am saying that it would have happened anyway.

If the scheme wasn't a total con-game by the federal government, why do they have to keep raising the rates? If the money was in a separate fund, it could be invested and grow. And so it was, lent to the federal government. Now, the feds are NOT, to my knowledge, considering reneging on its other debts, just this one.

However, I don't know that benefits will be cut. The baby boomers are the largest population group in US history. We will vote it down. So, it looks like tough luck for you younger fellows.

But Alan Greenspan is not the President, is not Congress, and is, I think rapidly losing influence. Not rapidly enough, considering what he has done over the years to cramp the economy.

By the way, I totally agree with you that we are being robbed. Of course we are. Still, the money is spent, and gone. what are you gonna do?

[Vitruvius]

12. Not so. The SS Trust fund owns US Treasury Bonds -- which are just as

real as the Treasury bonds sold to rich Rethugnicans. Nobody claims that Dick Cheney's or George Bu$h's or Alan Greenspan's T-bills are "fictitious" or "just pieces of paper"; nobody says the Federal Gov't should default on them.

So let's see now. Greenspan says the gov't should cut Social Security benefits so it can default on the Treasury bonds held by the Social Security trust fund rather than defaulting on the T-bills owned by the likes of Dick Cheney, George Bu$h and himself -- all to fund a tax cut for the likes of Dick Cheney, George Bu$h, and himself.

I agree with the author of the article that Greenspan should go to prison for securities fraud for his Social Security scam.

How to get the money back? Nearly all the money from the Social Security Trust Fund was used to fund first the Reagan-Bu$h I tax cuts for the rich, then the Bu$h II tax cuts for the rich. A tax surcharge on the rich is the way to recapture what they looted from us.

And -- the Boomers and their kids -- plus everybody else paying Social Security or expecting to collect Social Security one day -- are enough voters to put this thru.

[Chicago Democrat]

13. I Believe that for "Deficit" purposes these T-Bills are not counted

Maybe there are some Governmental Accounting experts, which I am not, but this is how I recall those SS trust fund T-Bills are accounted for....


When we hear the "deficit" for FY 2004 for example is say 575 Billion dollars. That simply means the government will take in 575 Billion less on a 'cash basis' in a certain period. The government borrows based on cash needs.

Social Security Taxes are in effect just like any old revenue. Now right now Social Sec takes in more than it pays out do to demographic reason (baby boomers are still working). Those "Special" T-Bills are simply paper, they are never sold; and represent debt from one part of the government to another. In effect the National Debt is composed of two parts, the external debt part and the internal debt part (those special t-bills).

If the total is 3.7 Trillion that represents an unfunded liability for the furture baby boomers social security benifits. But it was never included in the "Deficits" that we hear commonly reported. Isnt that interesting...yawn

[Vitruvius]

15. Yes, there is an ACCOUNTING fiction -- whereby the publicized "deficit"

figures omit the Social Security Treasury bonds. But -- according to law -- they're backed by the "full faith and credit" of the U.S. Gov't -- same as any T-bill.

Those "Special" T-bills have been sold (sold back to the Treasury) in the past -- most notably when the Social Security Trust Fund was running out of money in 1983 and in the years before; Greenspan, Reagan & Co. then raised the Social Security (FICA) taxes by enough to (a) bail out the system and (b) keep it solvent for the forseeable future -- until after everybody in the workforce today is long dead.

Of course, the Reagan-Bu$h I Rethugs turned right around & used that money to fund the Reagan-Bu$h I tax cuts for the rich. Now they're doing it again. But that does not change the legal status of those Social Security T-bills, which is the same as any other T-bill.

By-the-way, the money in the Social Security T-bills were counted as part of the deficit until LBJ decided to hide the true cost of the Vietnam war; but LBJ's crooked accounting (which was later embraced by the Rethugnican tax-cut-for-the-rich crowd) does not change the legal status of those T-bills, which is the same as any other T-bill.

By-the-way, LBJ was known as "the senator from Brown & Root" before he became president. Brown & Root made a BUNDLE out of the Vietnam war. Today, Brown & Root is part of Halliburton -- which is making a BUNDLE out of the Iraq war -- thanks to "the VP from Halliburton."

[Chicago Democrat]

16. Thank you for clearing this up!

I almost got it right. So while these "Special" t-bills are never sold to the public. They are in theory paid down like any other.

Vitruvius, you seem to have your hands around this subject quite well. I am bothered by the concept of so much debt out there and wanted to bounce this question off you.

What is the difference between a T-Bill and a one dollar bill (other than a T-Bill bears interest)? So is printing debt pretty much the same as printing money? More importantly, should I be buying Euros?

Dollar bills dont bear interest, and T-bill's generally don't "circulate" or do they? Still they both seem to be the same thing; simply a promise to pay, one "on demand" and one "at a time certain."

Thanks for the help. The economy and especially the government's effect on it is puzzling for me.

[forgethell]

17. If the SS funds

and the General Fund had been kept separate, perhaps we wouldn't have this problem.

[rfkrocks]

4. The laughed at the lock box

But then * when on a drinking binge and blew all his money on fast Iraqis and cheap wmds. This is really going to tick off the boomers and those that follow-

[Vitruvius]

6. Here's the ending (since the article has already been scrubbed

This excerpt immediately follows yours:

"...The government would have robbed its citizens of trillions of dollars in income to fund benefits they will never collect.

It's the kind of fiscal hanky-panky that ought to get the entire country up in arms and lead to a long prison term for securities fraud for Greenspan, but most people don't understand how Social Security is supposed to work and few remember the solution Greenspan and Congress devised in 1983.

It's been said you can't fool all the people all the time. You don't have to. You just have to fool them once every 20 years on a question of trillions and you're home free.

[LastDemocratInSC]

8. Redistribution of wealth

Conservatives have, for decades, referred to government spending for social programs as a "redistribution of wealth". Of course, they were complaining about money that they viewed as flowing "downhill", in their perspective.

Now, when the opportunity comes up to see the money flow "uphill" to the wealthiest among us, which is what Greenspan's plan will accomplish, conservatives are quiet on the subject of wealth redistribution. And it doesn't seem to bother them that so many of us will be distitute in our later years as a result of this.

I suppose they see it as just compensation, a balancing out of the "loans" they were making to social security recipients by paying taxes for all of those years. Given that I haven't received a dime of that "loan money" yet, I don't think I should see everything that I am due go to paying them off - I've done my part by gladly contributing - they've complained every inch of the way and are robbing us of our futures.

And yes, this has been known for decades, and it should be the stuff from which revolutions are made but I hear not a peep. So strange.

Well, gotta go find some cake to eat now. Later!

[woodstockjimi]

14. Hear me out please!!!

I am not going to try to reply to all the other post..I have been hearing this same thing for as long as I can remember..."social security will not be around forever", "there are to many people relying on the "SYSTem". This has been going on for quite some time.
I cant say that I do not doubt that this is true ... at least for as long as I have been hearing it.

I didn't make many friends bringing this up a few days ago, but i am so glad you did...it feeds right in to the point that I was trying to make...even though, I was called a neocon by bringing it up. I will not go into the details unless you want me to, but if what you are upset about is truly bothering you...you and your family members should check out the following web site.

I WOULD SO LOVE TO KNOW THAT WHAT I WAS WORKING FOR WAS WHAT I WOULD BE BRINGING HOME!! CHECK OUT THE SITE!!!

Americans for Fair Tax Americans for Fair Taxation: FairTax.org - your online information center about the Fair Tax
www.fairtax.org
please let me know what you think

[rfkrocks]

18. This site is a freeper-Heritage foundation and Cato Foundation links-alert

[tkmorris]

19. I don't believe this

In that thread there were many, many people who patiently and at some length tried to explain to you all that is wrong with a consumption tax and you just tuned them out.

Let me boil it down for you to it's simplest form. A consumption tax hurts the poorest people the most while benefitting the richest the most. It isn't even close. It would wreck the economy the way it is proposed. It is a gawdawful idea from the depths of the Neocon notebook. If you want to keep pushing it you should expect your posts to be greeted with the derision they deserve.

What you are proposing is as antithetical to Democratic (big D) ideals as it is possible to be. I strongly encourage you to go read some more about what the actual effects of such a tax code would be, from both sides of the issue. Pushing the idea here is about as useless as hawking KKK memberships at an NAACP meeting.

[DennisReveni]

20. Don't forget

Don't forget the late Pat Moynihan's involvement in the Social Security debate.
Cuts to present recipients will never happen. Too large a voting block.