Dumb question on attacks on Social Security

[yurbud]

Since Social Security has banked that big trust fund, what is the goal of those who want to cut benefits?

Do they think they can somehow wave a magic wand and make people forget the trust fund exists, that it was borrowed for other spending, and therefore they don't have to pay it back?

I was glad to hear Obama say that Social Security doesn't add to the deficit, but he should have gone two or three sentences longer and explained why, and why those who mention it as a way to reduce the deficit are not just wrong but lying.

I would also have concluded those comments with: "We borrowed from American workers retirement to pay for tax cuts for the rich, wars, and bailouts. I take that debt to the American middle and working class at least as seriously as money borrowed from banks or foreign countries like China. If your senators or congressmen says otherwise, you should fire them in the next election.''

[Scuba]

1. I endorse YOUR closing comments. nt

[Poboy]

2. He cannot say that! There's no wiggle room in admissions of GRAND THEFT.

No, this extortion game and good cop/bad cop is much more effective for them. Thats why he plays like he will hold the line, but those meany R's just made him do it (when he caves).

[Search4Justice]

3. BIG K & R

[alc]

4. SS doesn't add to the deficit

Paying back the SS trust fund does add to the deficit (or cuts other programs). While the trust fund itself has enough money to last almost 30 years, the money to pay it back has to come from somewhere and that somewhere is the federal budget every year.

The SS trust fund did not purchase "normal" treasury bonds that are on the books along side the bonds that China, Japan, pensions, and other lenders bought. If they had, they could sell the bonds on the open market and not be dependent on the yearly budget. While we may care whether or not the Treasury defaults on SS bonds, other lenders don't. If we default on normal bonds it's a BIG deal in terms of selling more bonds at a decent rate. If we don't pay back the SS "special bonds" it's an internal bookkeeping issue to the rest of the world.

So, like it or not, paying back the SS trust fund is in the class of other budget items like running wars, education, planned parenthood, public broadcasting, not in the class of paying back treasury bonds owned by China.

[gratuitous]

5. Their goal is to get away with it

When the Republicans bumped the withholding in 1983 to create the surplus, they immediately started plundering it. Every now and then, someone notices that all that "spoken for" money isn't really there (through financial legerdemain and not a few shenanigans, it's invested in government bonds and other securities), and "deficit reduction" becomes a talking point. This usually happens when a Democrat is in the White House.

There are two ways to remedy the situation: Make those who took the money put it back, or pretend that the trust fund is a drain on the budget. Putting the money back would cost the Republicans and their fatcat welfare queen benefactors some of their ill-gotten goods. So they work overtime to pretend that the social security beneficiaries are really the reason for the "drain" on the Treasury. Don't pay out any benefits, or delay paying benefits, and voila! Nobody has to pay back the money Republicans "borrowed" to finance tax cuts for themselves and their wealthy pals.

[alc]

6. where do they "put it back" from?

The money doesn't exist - it's not a pile of gold at Fort Knox or in a bank account. From here out, every year's budget will need a line item "Pay back SS trust fund bonds" until the trust fund is gone (around 2037) and then the line item changes to "give loan to SS". And unless we have a surplus that year it means borrowing more (and probably cutting other programs).

The only way that paying back SS doesn't come out of the yearly budgets is if they are hiding something else. They could probably arrange some accounting tricks with the Fed printing up money that magically appears in the SS books. But accounting tricks and hiding things is why there is an issue in the first place and I don't want more.

[gratuitous]

7. Well, quit spending on tax cuts for the wealthy, for one

Raise taxes on the wealthy folks whose tax cuts for the last 10 years were financed by the trust for another, and set aside some of that revenue to fund the obligation. There's a lot of money going in and out of that box all the time. Stop the leak labeled "tax cuts for wealthy fatcats," and current contributions from working people will more than finance that ongoing obligation.

[alc]

8. I agree

Raise taxes & stop wars.

It seems that a lot of people think SS is completely separate from the budget and has no impact on it. The trust fund is there and separate from the budget, buy paying it back is in the budget and must be funded.

[yurbud]

9. we would never have to give a loan to SS if we raised the cap on income subject to the tax