About Social Security being 'on the table

[Dog Gone at Penigma]

I wrote this originally back in 2011, but in view of the negotiating over the 'grand bargain', it is worth cross posting here from penigma.blogspot.com,
because the GOP and the Tea Party are still trying to do the same thing at the end of 2012 that they were doing after the 2010 election cycle. That we note their failure to come up with anything new, different, or better is important after the latest election cycle, if we don't want a repeat of the last 2 years from them. It's time to tell them to move on, or move on without them or in spite of them. Some things become old and quaint and charming with age, some things become better with age, and some things simply become tedious, like the GOP thinking.


Who Spent the Social Security Trust Fund Money?
Social Security should have a surplus. Republicans and Tea Partiers, like Rand Paul, tell us the money was spent, and they want to change benefits and the retirement age. They hate what they like to call 'entitlements'; they never liked them. Like unions, they have been looking for pretexts to get rid of it.

So..........where is the money, and who spent it? Having spent it, why the hell do they think it is acceptable to simply say, so sad, too bad, and for the government not to pay it back?

Lets take a look at when the money started being spent. That would take us back to George H.W. Bush. It continued under the next president, Bill Clinton; but to his credit, Clinton presided over a booming economy, and handed over a surplus to the Shrub, George 'Dubya' Bush. And that appears to be where the spending went nuts, blowing the balance of the Social Security money with his wars and most of all, with his ill-conceived tax cuts ---- the ones that benefit the wealthy very few, so very, very much more than anyone else.

Let me remind you how much the Democrats had a different taxation program than do the Republicans - and Tea Partiers:


So lets take a look at the money, the missing money, and who paid in that money. Because the people who paid in that money to Social Security have every right to be angry, and to demand that the money be repaid rather than be told they are out of luck.

That would be........the baby boomers. There are quite a lot of baby boomers, they are no small demographic. They are aging, and as they do, they are a force to be reckoned with at the ballot box.

To reprise the history:

Social Security is Short of Funds Because Politicians Spent It

Fund should have $3.7 surplus in 2018 from what baby boomers have paid

"The baby boomers have contributed more to Social Security than any other generation," says economist Allen W. Smith. "They have prepaid the cost of their own retirement, in addition to paying the cost of the generation that preceded them."

Smith points out that the baby boomers have kept their end of the bargain, which was proposed by the Greenspan Commission and enacted into law in 1983. "The higher taxes that were part of the 1983 'solution' to the baby boomer problem have generated the annual Social Security surpluses anticipated so far, and they will continue to do so until 2018," Smith said.

According to Smith, by 2018, the baby boomers will have paid enough extra taxes to have generated a $3.7 trillion reserve in the trust fund, which would be sufficient to pay full benefits until 2042 when the youngest of the boomers would be 78 years old.

"Despite these promises, President Bush has been raiding the trust fund since he took office," Smith said, "and he no longer tries to conceal what he has done. In an effort to muster support for his privatization proposal, he has been openly admitting to the raiding of the fund."

"There may be 'no trust' when it comes to Bush's handling of Social Security money," Smith argued, "but there most certainly is a trust fund. That fund is empty today because President Bush has used the money to pay for tax cuts, the war in Iraq, and many other programs. So, instead of trying to blame the baby boomers for Social Security's current problems, Bush should stop spending Social Security money on other programs and repay the money he has already spent."

As one of those who has been contributing those higher tax contributions into that trust fund, I want that money. I will not accept being told "too bad we spent it, you are S O L" by Republicans and Tea Partiers like Rand Paul. Pay it back, pay it back NOW, and if that means you have to end the damnable Bush Tax Cuts to the wealthy to do that, I don't care. The wealthy may try to keep you on a short leash, Rand Paul, but that is your problem, and your cronies problem.

Don't even think about making it my problem. I vote. I write. I am willing along with the baby boomers to go boom on your behind.

Let that spending of the Social Security Trust Fund become part of the George W. Bush failed presidential legacy. Let the Boomers take the lead in condemning him to history; I'm sure we won't be the last, or the only ones to do so. And Tea Partiers, like Rand Paul? Be on notice, about that missing money? Better start coming up with ways to pay it back, not change the goal posts on us.

[orpupilofnature57]

1. All great reasons to stick 1% with the tab, leave that on the table .

[Dog Gone at Penigma]

3. don't leave it on the table so much as

hand it to them, or pin it to them like pin the tail on .....the elephant!

[orpupilofnature57]

5. K&R !!!

[MannyGoldstein]

2. I believe that the Trust Fund was loaned, not spent.

The Trust Fund holds trillions in treasury bonds, just like the Chinese and other investors hold, in terms of needing to be repaid. But for some reason, there's a bipartisan fetish for paying back other bond holders, but not the Trust Fund.

It's very, very sick. Old people should suffer but bankers are made whole.

[Dog Gone at Penigma]

4. loans taken without the permission of those who contributed the funds

and which are spent by people who have not intention ever, then or now, or paying it back........

I think this sums up the essence of the situation. And then we need to make those funds separate from the general funds so that they cannot be used again the way they were, without some provision made to repay them at the time. THAT should be part of any Obama grand bargain.

[RC]

9. The very definition of theft.

oans taken without the permission of those who contributed the funds
and which are spent by people who have not intention ever, then or now, or paying it back........

If you or I steal a loaf of bread to keep from starving, we go to jail. The rich openly steal the national treasury and want more.

[Jackpine Radical]

27. I have a great idea--we could put the segregated funds in a "lockbox."

Why didn't anybody think of this before?

[Pharaoh]

10. loans which Bush actually calle Worthless IOU's

he actually really said that.

And Cheney said "deficits don't matter"

Where the fuck is any media reminding the morons what happened.

Not to mention the poisoned pills fed to medicare and the Post office!

[Dustlawyer]

6. I am almost 50 and have been paying in since I was 12. That is MY MONEY!

Better pay it back!

[silhouete2]

7. The fund is NOT empty

What's in there are T-bills(IOUs) and when they mature the fed. govt. pays those T-bills off. No worries. The problem isn't that we cannot fund SS, or Medicare or any other social program. The US is monetarily sovereign, and a currency issuer, so it can pay any of its debts, no matter how large (unlike EU nations on the euro because they are currency users, not issuers). The problem has always been, and will always be, a political one. The GOP hates social programs--so they claim we cannot fund them in the long run--which is patently false. People (incorrectly) scream that SS money is gone--it isn't gone--its all there in T-bills--and they will be paid back with the full faith and credit of the US govt. If foreign countries flock to our T-bills with confidence, why aren't they good enough for us?

[xtraxritical]

12. "The GOP hates social programs" is only half of it,

what they really hate is businesses having to pay any share of Social Security or Medicare. Another thing to consider when thinking about T-bills repaying the Social Security fund is that T-bills have a "market value" and are not redeemed at face value unless they are held to maturity and by maturity inflation may possibly render them worthless. At the present time most of the world considers T-bills, bonds, and notes a most secure investment but this is not likely to be carved in stone, especially when other economies surpass ours. We, the bond holders, might demand to be repaid in gold bullion. That would be the only "sure" thing, other wise it's all a "speculation" with the SS trust fund. I suspect civil war is on the horizon and if I had the means I would start hording gold. The only hope is returning all three branches of government to Democrat control.

[silhouete2]

23. Well

the gold bullion won't work--there isn't enough gold in the world to back it up. PLUS--the gold standard is a LIMITED standard. The gold standard limited central banks from printing money when economies needed central banks to print money, and limited governments from running deficits when economies needed governments to run deficits. If we were on the gold standard when the economic meltdown occured, we'd be in a depression unlike any we have ever seen,. THe govt. wouldn't have bene able to stabilize the banks or do the stimulus. We'd be screwed. Going off the gold standard gives us flexiblilty to what we need to do --particularly in times of need. Need a further example? Just look at what is happening to EU nations who are on the euro. The euro is like a de facto gold standard--and see what is happening to those economies because the govts. are limited in what they can and cannot do--like defecit spend. We'd be EXACTLY like Greece and Spain if we were on the gold standard. One of hte few things I can say posiitively about Nixon's legacy is that he was the one who took us off the gold standard.

I'd rather take the T-bills--which the ONLY way they would be worthless is if we went into hyperinflation, and that ain't gonna happen based on the reality of our situation (which is different from what happened to Zimbabwe and the Weimer Republic). The T-bills are backed the same way our money is backed--by the FULL FAITH AND CREDIT of the United States. T-bills are worth face value when they are paid at maturity--which is how they are used in the SS trust fund. Why do you think everyone flocks to T-bills in this worldwide economic downturn? Because it is safe. We have never defaulted on paying off T-bills. ALl this stuff is a political game--and the Democrats do it, too. Though I do agree--they are better at working to keep social programs intact. Again, all this wailing and gnashing of teeth over our "unsustainable" debt is political gamesmanship--or ignorance on how our money supply is created since we went off the gold standard.

Oh and PS--it doesn't matter who buys our T-bills. IF other countries stop doing it--so what? The biggest holder of US T-bills is the US. Foreign countries like China don't buy them because they are being gregarious. China for example needs to buy them because of how they are paid for trade. We do not need foreigners to fund our budget defecits.

[xtraxritical]

24. Sure, well thanks for the opinion, it's as good as mine.

[Dog Gone at Penigma]

29. because one of the things that has been suggested to deal with the 'problem' of Social Security

is that the right wants to dismantle Social Security as it is now, including changing that arrangement that would require funding it, so that it no longer operates that way. There have been many ways to make those changes proposed by different right wingers, but the intent to end that funding is clear. THAT is where there is a legitimate concern - their stated intent to end this the way it is set up now.

[silhouete2]

30. And that's ALL political

They hate the program, therefore they want to dismantle it--and put that $ into bankers, Wall Street hands so they can make money off of it. They lie and say it is "unsustainable" and "unfunded" or the money is gone. The truth is none of those. That's just pure fear-mongering. And it seems to work for lots of people--INCLUDING politicians. But that doesn't make it true.

[Dog Gone at Penigma]

31. clearly

the program of social security IS economically sound.

But anything that was established through legislation can be changed through legislation. Social Security was changed under Reagan, While it is correct that we need to be careful to tease out the facts from the political fear mongering, which seem to me to be intended to stampede people in a specific direction, instead of encouraging a thoughtful, factual discussion.

However, I DO greatly distrust the determination of the right to undo Social Security, so I think a cautionary assessment of all the possible repercussions to make certain that nothing is snuck in that makes a substantial change.

More than that, whenever an elected person makes the statement that they will not pay back social security (presuming they have a choice) we should push back against that, even if they are making a statement that is not correct or optional currently, to dissuade anyone from trying to bring about a change to that status quo.

[silhouete2]

32. I agree

Politicians can screw it all up with legislation. And they can be sneak. We have to NOT allow them to do that.

[Dog Gone at Penigma]

18. Obama has tried

but he has had a lot to fix, and been hugely been obstructed

[diddlysquat]

11. kick!

[plethoro]

13. This is one of the best posts I've ever read here. However,

I believe we will not get our money back through legislation; we will have to take to the streets. And NOT like OWS. I mean like Teamsters at the end of a contract negotiation that they are losing. If we do not do this, our country is approximately done.

[plethoro]

17. That wasn't taking to the streets. That was being thrown to

the streets. Hostess was a company that can be divided and taken over by other companies. And some of the previous bakers can get jobs, but at a lower wage...also a losing proposition. America is a a country. It too can be taken over by other countries. But that will be the end of more than a job. It will be the approximate end of everything. But better that than become serfs. I compare it to being a man sitting in a courtroom having been charged with first degree murder. Were that me, I would much rather get the death penalty then spend the rest of my life in prison. Now. back to America. I would rather fight to the death than have my wife who has worked all of her life cleaning up people's poop (literally) lose part of her retirement and live in poverty while waiting for emails to congressjerks to work. But, then, you and I have different perspectives. I say: Live free or die. You apparently say: Let the processes work.

[saidsimplesimon]

15. Dog Gone, I missed your orginal post. Thank you

for re-posting. I agree, almost, completely with your insightful, logical and factual analysis.

It is your last paragraph that gives me a bit of hesitation. The spending of the SSTF could not have been accomplished without the willing consent of some members of the Democratic Party in both houses.

PS: I'm not a fan of Chuck Schumer.

[PATRICK]

16. The GOP

Turmoil. Change in membership. Finger pinched inside the jammed repeat button. But is there a dynamic? leadership wants to continue and for the sake of no further meltdown maybe most want this. So the Tea party is still holding the leadership hostage for a few months. The only help can come from Dems. Do they think they can or want to influence the reconfiguring"new" GOP in the House or as a party?

The GOP only gave a damn about itself and its main panic is that as a party it is not worth a damn. the fiscal cliff is trivial and a bloviating talking point to them, not a crisis of the economy. I'd say the sooner they were broken and house trained to do their real job, the better. The very few signs of that actually happening are encouraging but so far behind the somewhat rational selfish GOP of decades ago that now is not the time to let up on the rolled newspaper to the behind.

That party is spoiled rotten and dysfunctional. The less the doting centrist Dems spend coddling their crap the sooner it might stop.

[bvar22]

19. The very kindest thing I can say about this OP is that it is "misleading".

The money has not been "stolen",
nor has it disappeared.
It has been borrowed by the US Government,
and its repayment with interest is guaranteed by the "Full Faith & Credit of the US Government".
These funds are safer than any money you have on deposit at a bank.

You can not go down to your local bank and demand to see your little pile of money stacked in the vault with your name on it because the bank has loaned it out and is paying YOU interest.
Social Security has also loaned (invested) your money with a very safe and reliable customer, the US Government.

IF the US Government defaults on these loans, we are in much more trouble than just funding Social Security.
The entire country will be in a catastrophic economic meltdown, and everybody, not just "Seniors" will be in deep, deep shit.

These types of fear mongering posts only serve to advance the cause of Privatizing, or doing away all together with the most successful Social Program even implemented in the US.
Social Security is fully funded until 2033 - 2037 (depending on the economy),
and after that, can afford to payout 80% for perpetuity if absolutely NOTHING is done.
If the "cap" is raised (RICH people pay a little more), SS will be fully funded FOREVER,
backed by the Full Faith and Credit of the US Government.

There IS no crisis.
The money has NOT been "stolen".
Stop the Fear Mongering.

If you are interested in actually strengthening Social Security and not destroying it,
target your letter writing demands to Raise-the-Cap on FICA.

[Dog Gone at Penigma]

20. and yet repeatedly, when this question of repayment has been raised

Republican members of Congress have stated, emphatically, that the money from Social Security in the general fund would NOT be paid, that it was gone, and we have to accept that as part of changing our expectations of and from social security.

Further the argument was made that the full faith and credit of the government does not apply to effectively paying it back to ourselves - that we cannot be our own creditor, as that provision applies, so long as the money was in the general fund and not kept segregated.

To his credit Dubya claimed repeatedly, during both of his presidential campaigns that he would separate those funds, with guarantees that the money could not be taken from it for other uses. However in practice, he made little or no effort to pursue doing so, and Republicans in Congress have consistently opposed such efforts.

Therefore, I don't think anything I've written here qualifies as 'fear mongering'; rather it outlines the facts versus the false version from the GOP. Part of revenue raising should be to repay the debt to social security --- IN ADDITION to raising the cap for funding of potential future high costs.

NOTHING I have written here favors or contributes to supporting privatization. It does however address that as part of any reforms, Social Security money should be separated out from the general fund for protection and safe-keeping, given the money being used in the past the way it was. This is a widely respected recommendation, as is raising the cap. Repayment, cap raising, and segregation of funds are not pro-privatization, not fear mongering, and darned well not inaccurate or unreasonable OR mutually exclusive actions.

[Dog Gone at Penigma]

21. let me elaborate

In theory - yes, the U.S. government has to pay back the money collected for social security in excess of what is currently needed, which is available to Congress and the general fund, but should be paid back.

Where this becomes an issue is here, as reported by CBS news:

What any bond investor should really be concerned about is the ability of the issuing entity, whether a corporation or government, to pay the stated rate of interest and repay the principal when it matures. With the special U.S. government bonds held by the Social Security trust fund, we should be concerned whether future taxpayers can make good on the interest and principal payments when they come due, or if future bonds can be sold to pay the principal of the maturing bonds.

If the federal debt gets too big, then we might indeed be justified in worrying about the ability of future taxpayers to make good on the special bonds in the Social Security trust fund. So the real issue is the growing level of overall federal debt and whether it can be repaid by future taxpayers. Spreading misleading claims about Congress raiding the Social Security trust fund and spending our taxes just distracts everybody from the real issues. Our leaders need to focus on reducing the budget deficit by reducing spending and raising taxes, so we can feel more confident that those U.S. government bonds will be repaid.

Republicans have expressed an intent NOT to repay that debt, changing the law if needed and forcing us to raise that much additional revenue to make up the borrowed amount, reduce that benefits/ raise age, etc., or some combination of the above as their answer to 'fixing' and/or preserving social security.

I'm sure as heck NOT advocating we privatize social security, but the 'fiscal cliff' presents the possibility that the right will claim the debt and deficit is too large to warrant paying back the debt. I think that's hooey, but it does make sense to me, given the SIZE of the debt this time around, that the time has come to simply keep Social Security funds more fully segregated and not available, much less automatically available, to the general fund, so that no future claims like this can be attempted. Further if we simultaneously raise or eliminate the cap, there should be no need for the general fund to cover any shortfalls in the social security trust (technically two separate trusts, one for old age, one for disability).

Hope that clarifies the above.

[jtuck004]

22. Hope it clarifies that more people don't give a flying rat's ass what the right thinks than do.

And if we would quit assisting and making excuses for the tyrants, put as much effort applied to organizing and leadership as the opposition applies to greed and fear mongering, they would lose the support traitors freely give them and become like tissue in the wind.

[Dog Gone at Penigma]

25. I think at least enough people did pay attention

to what the right has had in mind for social security -- and it is not good for most people, if they got their way.

So the 2010 winners were not the 2012 winners, for the most part. Now we need to take back the house, and take back the state governments as well. It is inconceivable to me that Scott Walker won the recall election, or that the GOP is still in charge in WI, or other states. Voter suppression is a huge concern, given what we saw with the 2012 election, in order to prevent all kinds of terrible legislation, not only on social security.

[Iggy]

26. Assuming Pelosi Will Take SS "Off the Table"

as she did with impeachment of smirky for lying us into invading Iraq, and as she did with health insurance reform; taking single payer off the table during those negotiations.

[JDPriestly]

28. K&R

The banks foreclose on unpaid mortgages.

How can we foreclose on the unpaid Social Security debts?

Republicans need to consider that their fiscal propaganda is a lie and we know it.

The Largest Generation, baby boomers and those of us a little older, will oppose austerity if they try to raise the age for eligibility to Social Security, cut Medicare or other essential social safety nets rather than take the money back from those who got it, the military-industrial complex and the very rich who benefited most from the Bush tax cuts.

[dkf]

33. The "trust fund" is an accounting gimmick that today allows the full payment of benefits.

Without the supposed interest payments from this fund benefits would have to be cut today or rates raised. Already we are taking in less in payroll taxes than we pay out.

So the awesomely indebted general fund pays back the SS trust fund.

It's a joke.