An interesting blog on SS, the Boomers and Harry Reid

[BlueInRed]

I was Googling Reid and the 1983 Social Security commission and ran across this very interesting explanation of the problem:
http://www.marketocracy.com/cgi-bin/WebObjects/Portfolio.woa/ps/ReadTopicPage/source=BaKnFpMnEbOfPmKoMaKiAbDc/from=40

<snip>
"Economist Allen W. Smith, Ph.D from Indiana University . . ., author of several books including "The Looting of Social Security, How the Government is Draining America's Retirement Account" and "The Alleged Budget Surplus, Social Security, and Voodoo Economics" . . . stated that the baby boomers contributed more to social scurity than any other generation. They not only prepaid the cost of their own retirement but also paid the cost of the previous generation. The baby boomers' extra social security tax dollars have generated approximately $1.5 trillion in social security SURPLUSES since 1983 and continue to generate SURPLUSES of more that $400 million each and every day.

Mr. Smith says the trust fund should contain a large enough reserve to pay full benefits until 2042 when the youngest of the baby boomers will be 78 years old. The quoting of worker-to-retiree ratio is the calculation in 1983 when the taxes were raised to take care of the worker-to-retiree imbalance that would occur with the retirement of the baby boomers.

The government has been borrowing and spending ("embezzling")(Smith's words) all the baby boomers' surplus for the past 2 decades. . . . Senator Harry Reid referred to the raiding of social security as "embezzlment" and "thievery" in a Senate speech on October 9, 1990. The money has been taken from the trust fund and replaced with worthless IOUs that Senator Fritz Hollings has referred to as "a 21 century version of confederate banknotes".
. . .
So - it seems to me the responsibility for the social security defecit should be placed on the shoulders of the government instead of the baby boomers. The baby boomers had full confidence that the government would fulfill its commitment to them. Taking history into account, do you really think your "private social security account" won't be raided by YOUR government? After all, once your representatives are elected, whatever they promised you or will promise you is just hot air. That is what the baby boomers are being asked to take - just hot air."
<snip>

[CindyDale]

1. Yeah, the temptation to steal it was too much for them

Too many of us, too much money.

I have faith that they will be forced to pay it back with interest, though.

[Warpy]

2. They had to cover up the real cost of giving the rich a free ride

and the cost of letting many corporations completely off the tax hook.

They had to cover up the real cost of keeping an imperial military with bases in over 100 countries worldwide.

They've been robbing us for over 20 years. It's high time to remove that earnings cap and to have SS apply to ALL income, no exemptions for fat cat donors.

They stole it. Let THEM pay it back.

[sandnsea]

3. We have to be accurate on this

First, the money that we baby boomers did pay in excess went to treasury funds. That's the law. It MUST go there.

The only way it becomes "worthless IOU's" is if the federal govenment doesn't pay off on the treasury funds.

If we let them frame this as "worthless IOU's", they've won half the battle. If they government doesn't pay up on these treasury funds, then they will be embezzling the money from the baby boom generation. If we repealed the tax cuts, much of the money would be there to pay off. They've essentially taken FICA tax money excesses from working Americans and handed it over to the wealthy.

This is another one of those cases where people (the writer) who think they're helping are actually hurting.

[dweller]

6. here's how they pay off the Treasury funds

http://www.csmonitor.com/2005/0127/p09s01-coop.htm

of course i've been told there is no congressional record of the 'fix' in raising taxes...and i've yet to find one (in 1983 legislation).

dp

[sandnsea]

8. Here

SS shortfall, $3.7 trillion; Bush tax cuts $11.6 trillion. Social security was fixed, if we had put the money in Al Gore's lock box. Bush stole it and gave it to the wealthy. My own Congressman harped on this all the time back in 1999 and 2000.

http://www.cbpp.org/1-4-05socsec.htm

[CWebster]

11. Imagine the potential class war should this get out---

Compounded with the Bush tax cuts they are robbing OUR savings just like Enron looted their employees pensions:


"This is where the second twist comes in. Because the surplus payroll taxes were handed over to the federal government (in return for Treasury bonds), this meant ordinary income taxes could be kept low. After all, the federal government has a fixed need for money, and if it gets excess money from payroll taxes it can afford to keep income taxes lower than they'd otherwise be.

But the payroll tax is a flat tax, paid disproportionately by low and middle income workers. The income tax is a progressive tax and is paid disproportionately by high earners.

So this was the implicit bargain in the reforms recommended by Greenspan and signed into law by Reagan: From 1983 to 2018, low- and middle-income earners would pay excess payroll taxes. This allowed income taxes to be kept low, and primarily benefited high earners.

"Then, beginning in 2018, instead of raising payroll taxes to pay for baby-boomer retirement benefits, Social Security would begin selling its bonds back to the government.

To pay for those bonds, income taxes would be raised - high earners would begin paying higher income taxes.

In other words, the fact that income taxes will eventually need to be increased in order to cover Social Security benefits was part of the Greenspan/Reagan plan from the start.

That's the real meaning of the trust fund: It's an implicit promise that high earners will keep their part of the bargain and begin paying their share of Social Security's costs when the baby boomers retire."

http://www.csmonitor.com/2005/0127/p09s01-coop.htm


Everyone should bookmark this one.

[dweller]

12. well, i have it bookmarked

and keep popping it back into these threads.

sadly i was informed earlier there is NO congressional record that taxes would be raised in 2018 as introduced in that article to make up the needed funds. Although that's what the article clearly states, it might have been just smoke and mirrors to bring about the 1983 changes to Soc Sec. signed by Raygunz.

doesn't mean i'm not still looking for an amendment all the same...just not having much luck.
I would really like Kevin Drum's email contact to inquire on this.

dp

[BlueInRed]

7. much of the information is accurate and could be helpful

The worthless IOUs part reflects what a Democrat said, albeit one no longer in office. It's important to know who said what when you go into an argument like this which involves 20 years of history. If we throw stuff in their face, we can expect they'll do the same. :)

I think it also makes several good arguments which should be incorporated into the general attack.

As for their decision to buy T-Bills, I would put it back on the Republicans and Reagan, who proposed this in the first place. Remember that many of the people now making the arguments for Bush were in the Reagan administration, which of course decided to purchase the T-Bills. If they are worthless (as Rs claim), why did decide they buy them with our money. That'll shut them up pretty fast on the "worth" of the T-Bills.

Lastly, I think it's important to point out that what they promise (ie personal accounts) won't necessarily be delivered, as the Boomers can testify to first hand.

The T-bill issue is really not what this article is about at all; it's just an aside added in. This is about the history, the process, the theft, and the believability of their current arguments.

[sandnsea]

9. The good news is

I don't think the Dem leadership is going to go down this "worthless IOU's path" anyway. But I don't care who said what when. Democrats often say very stupid shit that hurts our own cause, I said that already.

See my post above. The tax cuts are a big reason they can even talk about a crisis in social security. They gave my money to the wealthy and I want it back. That's the money that would have been used to pay back the T-Bills. When people in other countries buy T-Bills, do you think we'd ever call them worthless IOU's????

[Bryn]

4. What if

The Baby Boomers get together and start a massive class action suit against the Bush Administration/Federal Government if Bush gets his bogus SS Plan passed?

[abbiehoff]

5. I love it.

Are there any class action lawyers out there?

[BlueInRed]

10. I do wish we could sue for fraud, but sadly, not possible