Youtuber's Social Security Question

[durrrty libby]

I was working and only caught bits of the debate

I thought I heard a youtuber say, This administration has

taken 2 trillion dollars from Social Security, how are you

going to pay it back?

Can someone shed some light on this? If this is true, that is some

nasty pillaging going on. :wow:

[Bitwit1234]

1. It's true....since Reagan gave the tax cuts and the bottom fell out

of our economy every republican president has raided the Social Security Fund. Since there was so much there why do you think Wall Street was chomping at the bit to get hold of it and bush was willing. The whole damn fund, what bush's administration left of it would have disappeared. This is why social security is going broke.

[durrrty libby]

2. But 2 trillion? Why aren't the dems going crazy over this and

did you happen to catch the response?

[Yupster]

3. In the 1980's there was a summit in Washington

which came up with a deal to "save" social security from the coming retirements of the baby boomers who would put a great strain on the system.

It was decided that social security taxes would be raised to their current levels (You put in 6.4 % and so does your employer). This would mean that social security would take in far more money than was needed to pay out to then retirees. That would start to build a huge surplus of money that could be saved up for when the baby boomers started to retire.

Good plan. Even Mr No Taxes himself Ronald Reagan signed it and "Social Security Was Saved."

The problem was what to do with the surplus which would quickly grow to a huge amount of money.

That's where the mistake was made. It was decided that the money should be lent right back to the US government in the form of Treasury notes and bonds. Then once it was lent back to the government, it was spent just like any other money in the budget.

So, now that the money will be needed soon, it's not there. It's been spent, looted, pillaged, whatever you want to call it. It was used to buy missiles, pay government employees, pay hospitals for medicaid patients, and whatever else the government does with its money.

You'll hear politicians say we need to pay back the surplus which is fine except the government just doesn't happen to have a couple of trillion dollars and isn't likely to find it. It's gone. Pfft. It's a dead parrot.

So what was the mistake the government made in the 80's?

They should have taken the surplus away from the government and put it in corporate bonds, insurance fixed accounts, even cd's. Then the money would still be there so we could draw on it when we start to need it in 8-10 years.

Anyway, that's where things stand.

[durrrty libby]

5. Thanks for the explanation. I remember people laughing

at Gore and his "lock box" I guess George laughed harder than anyone

at that preposterous idea

[Yupster]

6. The lockbox deserved the laughter

It was a truly meaningless proposal.

It would make absolutely no difference at all.

Currently, we have a computer file full of government bonds saying that the general fund owes the social security trust fund two trillion bucks.

That's nice. Unfortunately the general budget doesn't have two nickels to rub together to repay the bonds. The borrowed money has been spent and isn't coming back.

So should we put a lockbox on the computer file? I guess if we want to. It wouldn't hurt. Wouldn't help any either. It's not like the money would magically reappear.

Now if Gore had proposed to start sending the surplusses out from government control, then that proposal would have been meaningful.

Incidently, if anyone's interested about how this will all be played out, here's my guess.

In about eight years the social securty syatem will start taking in less than it's paying out. At that point the trust fund will no longer disguise the size of the defecit. It will actually make it look worse.

Therefore, at that point the social security trust fund will be blended into the general budget and the trust fund will cease to exist. With that simple accounting procedure the $ 2 trilion of government bonds will disappear as you can't owe money to yourselves.

Then the congress will pass a new law changing the benefit formulas so they ed up paying out what they can afford.

That's why the whole crap about the social security trust fund and lockbox is all nonsense.

The congress is in charge of how much to pay out and they'll pay out what they want to, what they feel they can afford to, regardless of any trust fund or lockbox.

[rurallib]

4. Remember that strange scene a few years back when W

went up to someplace in Virginia and opened the file on Social Security and said there is nothing there? That SS is nothing but a bunch of IOUs? Well he wasn't kidding.
When Bushco announces that they are getting closer to ending deficit spending, like this year they were 'only' $200 billion in debt it is because they are spending taxes + SS every year.
Remember that $300 rebate Bush gave out when he started? That was your SS. Hope you enjoyed it.
This is why the Repugs can legitimately claim SS is going broke. They spent it. Either the government renege on the SS promise or someone is going to get taxed fairly heavily.

[durrrty libby]

7. Indeed they are a shameless bunch. Hopefully a dem pres

would at least stop the bleeding