Skip to comments.Debt crisis punctures Social Security myth
Posted on 07/15/2011 12:53:54 PM PDT by SmithL
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Editorials Print Comments 3 Debt crisis punctures Social Security myth By: Examiner Editorial | 07/14/11 9:00 PM
"I cannot guarantee that those checks go out on Aug. 3, President Barack Obama warned CBS Evening News viewers about Social Security on Tuesday night. There may simply not be the money in the coffers to do it.
But how can that be? Havent Washington, D.C.s professional politicians been telling us for decades that Social Security is in no danger of bankruptcy because of those trillions of dollars supposedly just sitting there in the Social Security Trust Fund? Why cant Obama use the money in the fund to cover the Social Security checks due to be sent out Aug. 3?
The reality is that the Social Security Trust Fund is, and always has been, an accounting fiction. For nearly the entire history of Social Security, the amount of money the program received from payroll taxes has exceeded the amount of money it paid out in benefits. The excess revenue, by law, is then invested into special-issue, nonmarketable U.S. Treasury bonds. These bonds are marked on the governments balance sheet as assets of the Social Security program, but they also are counted as debts owed by the U.S. government. In fact, $2.6 trillion of our $14.3 trillion debt is made up of bonds owed to the Social Security Trust Fund.
So what did the professional politicians in both parties do with the trillions of dollars lent to it by Social Security over the years? They spent it. That money is long gone. In order to pay off its Social Security obligations and fund benefit payments, the federal government must either use general tax revenue or borrow more money. The latter option, however, will soon no longer be available thanks to the debt-limit crisis.
In past years, the Social Security system was a net positive for our nations bottom line. As mentioned previously, it almost always took in more money than it paid out. Not anymore. Thanks to the recession, Obamas payroll tax holiday and the flood of retiring baby boomers, Social Security has become a net contributor to our federal deficit. According to the Social Security board of trustees 2011 annual report, Social Security added $49 billion to last years budget deficit and is projected to add another $46 billion to this years deficit. And those numbers will only grow.
So will the Treasury Department have enough money to cover Social Security checks that are supposed to go out Aug. 3? American taxpayers will dispatch an estimated $200 billion to the Treasury Department in August. Instead of scaring millions of American seniors, Obama could simply instruct his Treasury secretary to pay Social Security benefits from that $200 billion. But Obama and the Democrats wont do that because they would rather use the prospect of no Social Security checks to scare seniors into pressuring Republicans to raise taxes.
RATS...gotta let em down easy. Someone unlocked the lockbox. It was BUSH!
“So what did the professional politicians in both parties do with the trillions of dollars lent to it by Social Security over the years? They spent it. That money is long gone.”
All you need to know about Social Security - it’s a Ponzi Scheme - just another tax by a different name.
Darn! I should just take all of Rush Limbaugh’s comments nearly word for word and make them into an article the next day like this author did. Great work!
I’m feeling a little bit vindicated. Been telling people this for years, and have had some people call me everything from an egg-sucking dog to a Rethuglican liar and worse.
The truth is often hard to accept: the Democrats have been telling bald-faced lies about the SS issue for years. There is no contract. It isn’t a pension. The US doesn’t “default” if the SS checks don’t go out. There is no contractual obligation, written stone, sand, the water or in the air. There is no trust fund. That cute little account statement the SSA sends you every year is NOT “your account,” and there is no “sacred trust” - it is only a welfare program. And Congress can both increase and decrease the benefits any time they’d like.
BTW, the pivotal case as to whether SS is a pension fund or a contract with defined benefits or a welfare scheme was decided in the SCOTUS in Fleming v. Nestor in 1960:
As I like to tell liberals: “Hey baby, it’s decided case law.... just like Roe v. Wade. And you guys love to talk about how Supreme Court cases are the law of the land, right?”
You and me both.
How many freepers will defend their “right” to SS because it was earned? Many on this forum believe that since they were “promised” they are now “owed” especially because they “earned’ it. Others defend it because its is “all I have”.
Then there are the ones who believe its just a matter of not wasting money elsewhere and giving it to them instead.
Bottom line...SS is the program that turns conservative, small government limited government freedom loving Freepers into welfare queens.
But don’t worry Obahmmy will preserve you benefit. You will just have to give up a strong defense, some liberties, and tax your children and grand children into oblivion.
When I heard him say that I turned to my husband and asked, “did he just admit that there is no SS trust fund? That we have to borrow the SS payments from China? that everytime a democrat congress critter is asked they almost shout that it is solvent for 25 years, were they lying?”
Did you ever see my thread where Peter Schiff gets the Trustee of SS to admit its a ponzi scam ?