1. Sounding the alarm, yet again.
Courtesy of a friend: Social Security: It’s Worse Than You Think
I am on the mailing list of Conservative 50 Plus, and received the article above. This article REALLY SCARES ME! Why? Because of the following statement:
For the first time in more than a quarter-century, Social Security ran a deficit in 2010: It spent $49 billion dollars more in benefits than it received in revenues, and drew from its trust funds to cover the shortfall. Those funds — a $2.7 trillion buffer built in anticipation of retiring baby boomers — will be exhausted by 2033, the government currently projects.
This scares me because I am all but certain that the $2.7 trillion buffer is NOT THERE. Instead, when you open this “Lock Box,” you will find $2.7 Trillion worth of IOU’s because our wonderful Federal Government has SPENT the money that was supposed to have been set aside for our current and future retirees.
If I am wrong, please correct me, but I am 99.9% certain that I am correct. Read the entire article. Scary that the authors are so clueless. Your comments?
2. Some inconvenient facts
Over the decades I’ve heard of several occasions when Congress had to “fix” Social Security, which of course always meant raising the payroll deductions. Johnson and Nixon championed the “unified budget” because the raids on the Social Security funds to balance the general budget became too embarrassing.
I’ve also seen reports from serious analysts in the financial industry who said there never really was a “lock box,” and by the time Al Gore was talking about it we all knew it was a bad joke.
In any case nobody ever identified a bank account or investment account, or its trustee, where the Social Security funds were supposedly kept, yet even today some people claim there is a fund but it only contains promissory notes from the Treasury to replace the money that the government took in from the payroll deductions every year, and have the gall to claim that this practice represents “investing” in treasuries — the same treasuries that have been downgraded under Obama? What will happen when the financial markets do the obvious and demote US debt to junk bond status?
Yesterday I ran across another article that of course Social Security is in trouble again, broke by 2018 or in 18 years (I forget which) but in any case the government needs to raise another trillion before that. That is, hike the FICA deductions again.
Oops, that is a tax hike on the working class and the middle class — another campaign promise down the drain.
I think we should come out and just admit it; Social Security is just WELFARE pure and simple, and always was. Nobody ever had an individual account with a balance accruing in it like in an annuity or pension or savings plan. It was always current tax payers supporting current recipients. Social Security is in trouble because fewer and fewer people are paying into it now and more and more retirees are looking for their only source of income to keep them alive.
If we could admit it is just welfare, them we would not have any trouble means-testing it — meaning that people such as Trump, Buffett, or “regular” people with public or private pensions would NOT get SS. Yes I know there are people bristling at this idea because “it’s my money, I paid into it;” well, no, you did NOT, you paid to support people who were retired when you were still working. There were fewer of them and more of you back then, which is why your deductions were lower than they are now.
But, but,…. if you declare it to be welfare, or in Democrat lingo, entitlement, well then you really put an end to the concept of saving for your own retirement.
Social Security is welfare for current recipients, and should be phased out as the beneficiaries die off.
Workers starting their careers now could be, must be enrolled in a new system where they own the account into which they make their contributions on their own behalf, with maybe a required minimum but no maximum on the amount they set aside, and with considerable flexibility in personally managing the account. The Democrats’ hatred and mistrust of Wall Street notwithstanding, there are historical examples of this system working MUCH better than Social Security or even the government employee retirement plans, both in the US and in foreign countries where they have been tried, and all that money being put to productive use in the private economy works much better than any socialist illusion of “priming the pump” or “stimulus.”
3. I agree that Social Security is actually a welfare program.
What really galls me about that article is the apparent ignorance of the authors – supposedly intelligent and informed people — who still referred to the “Trust Fund” as if there were some real money in there. There simply is none — none at all — nothing but IOU’s.
4. Final question
How much will those IOUs be worth when the dollar collapses to nothing under the weight of all that money the Fed is printing in the name of Stimulus 1, 2, 3, 4, …? What will TODAY’s retirees do with themselves when their Social Security checks will be worth NOTHING — and then stop altogether?