Free Republic
Browse · Search
Topics · Post Article

Skip to comments.

Who's taking away you Social Security
e-mail | Robert Dowd

Posted on 07/16/2004 8:36:44 PM PDT by redangus

Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program. He promised: 1.) That participation in the Program would be completely voluntary,

2.) That the participants would only have to pay 1% of the first $1,400 of their annual incomes into the Program,

3.) That the money the participants elected to put into the Program would be deductible from their income for tax purposes each year,

4.) That the money the participants put into the independent "Trust Fund" rather than into the General operating fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other Government program, and,

5.) That the annuity payments to the retirees would never be taxed as income.

Since many of us have paid into FICA for years and are now receiving a Social Security check every month -- and then finding that we are getting taxed on 85% of the money we paid to the Federal government to "put away," you may be interested in the following:

Q: Which Political Party took Social Security from the independent "Trust" fund and put it into the General fund so that Congress could spend it?

A: It was Lyndon Johnson and the Democratically-controlled House and Senate.

Q: Which Political Party eliminated the income tax deduction for Social Security (FICA) withholding?

A: The Democratic Party.

Q: Which Political Party started taxing Social Security annuities?

A: The Democratic Party, with Al Gore casting the "tie-breaking" deciding vote as President of the Senate, while he was Vice President of the U.S.

Q: Which Political Party decided to start giving annuity payments to immigrants?

A: That's right! Jimmy Carter and the Democratic Party. Immigrants moved into this country, and at age 65, began to receive SSI Social Security payments! The Democratic Party gave these payments to them, even though they never paid a dime into it!

Then, after doing all this , the Democrats turn around and tell you that the Republicans want to take your Social Security away!

And the worst part about it is, uninformed citizens believe it!

Perhaps we are asking the wrong questions during this 2004 election year!

If enough people receive this, maybe a seed of awareness will be planted and maybe good changes will evolve.

How many people can YOU send this to?

Keep this going clear up through the 2004 election!! We need to be heard

TOPICS: Culture/Society
KEYWORDS: democrats; retirement; socialsecurity; your
I can't vouch for the accuracy of all this, but I know some of it is true. If it is all true then as many people as possible need to know this, so pass it around.
1 posted on 07/16/2004 8:36:45 PM PDT by redangus
[ Post Reply | Private Reply | View Replies]

To: redangus
Who's taking away you Social Security

Nobody takin' my sociael Sekurity dog! Word man!

sorry, it's FRiday nite man, an I be toasted...word, man.


2 posted on 07/16/2004 8:42:20 PM PDT by nothingnew (KERRY: "If at first you don't deceive, lie, lie again!")
[ Post Reply | Private Reply | To 1 | View Replies]

To: redangus

Don't you think the relatively comfortable geezers should pay tax on their half of their benefits, if they otherwise have more than 35K or so in taxable income? (The half bit is a good approximation of what their tax basis is of what they paid in, and what represents the interest factor over time of what they paid in.) I don't know about the annuity thing for those who never paid in. It sounds bogus to me, but I could be wrong.

3 posted on 07/16/2004 8:46:07 PM PDT by Torie
[ Post Reply | Private Reply | To 1 | View Replies]

To: redangus

I'll tell you who else: illegal aliens. Unless it gets derailed, we've just made an agreement with Mexico to give SS benefits to people who work here illegally. This at a time when the system faces bankruptcy some years down the road.

4 posted on 07/16/2004 8:47:16 PM PDT by John Jorsett
[ Post Reply | Private Reply | To 1 | View Replies]

To: John Jorsett

Well, but they paid in. If they didn't - no benefits.

5 posted on 07/16/2004 8:48:45 PM PDT by Torie
[ Post Reply | Private Reply | To 4 | View Replies]

To: redangus


6 posted on 07/16/2004 8:52:36 PM PDT by tubebender (If I had known I would live this long I would have taken better care of myself...)
[ Post Reply | Private Reply | To 1 | View Replies]

To: redangus

You failed to mention that no senator/representative receives soc. sec., as they have their own fund. Wonder why.

7 posted on 07/16/2004 8:56:47 PM PDT by combat_boots
[ Post Reply | Private Reply | To 1 | View Replies]

To: redangus
Well, for just one thing:

Q: Which Political Party took Social Security from the independent "Trust" fund and put it into the General fund so that Congress could spend it?

A: It was Lyndon Johnson and the Democratically-controlled House and Senate.

    " The proceeds of both [employee and employer] taxes are to 
    be paid into the treasury like other internal revenue 
    generally, and are not earmarked in any way."  Helvering v 
    Davis 301 US 619, 635  (1937). 

    "The proceeds of the tax imposed on employers by Title IX of 
    the Social Security Act, supra, go into the Treasury of the 
    United States without earmark, like internal revenue 
    collections generally."  Steward Machine Co. v Davis  301 US 
    548  (1936) 

8 posted on 07/16/2004 8:58:08 PM PDT by William Terrell (Individuals can exist without government but government can't exist without individuals.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: redangus


9 posted on 07/16/2004 8:58:26 PM PDT by jamaly
[ Post Reply | Private Reply | To 1 | View Replies]

To: redangus


Q: Which party took Social Security from an independent fund and put it
in the general fund so that Congress could spend it?

A: It was Lyndon Johnson and the Democratic-controlled House and Senate.


These articles should help to clear up the misconceptions.

From the Cato Institute SSP Report No. 24
p. 6

"All of those proposals reflect a fundamental misunderstanding of the
nature of the trust fund. Social Security payroll taxes are currently
bringing in more revenue than the program pays out in benefits, a surplus
that is projected to continue until approximately 2016. Thereafter, the
situation will reverse, with Social Security paying out more in benefits
than it brings in through taxes. The surplus is used to purchase special
issue Treasury bonds. The Social Security surplus used to purchase the
bonds becomes general revenue and is spent on the government^Òs annual
general operating expenses. What remains behind in the trust fund is the
bonds, plus an interest payment attributed to the bonds (also paid in
bonds, rather than cash). Government bonds are, in essence, a form of IOU.
They are a promise against future tax revenue. When the bonds become due,
the government will have to repay them out of general revenue."
"The Social Security Trust Fund is an accounting fiction.

The Social Security tax has been raising more money than is needed to pay
for current benefits, in order to build up a surplus to help finance the
retirement of the Baby Boom generation. All of this surplus is lent to the
U.S. Treasury when the Social Security Trust Fund buys bonds from it. The
money is then used to finance the federal deficit, just like any other
money the government borrows. The bonds held by the fund pay the same
interest as bonds held by the public. These bonds are every bit as real
(or as much of a fiction) as the bonds held by banks, corporations, and
individuals. Throughout U.S. history the federal government has always
paid its debts. As a result, government bonds enjoy the highest credit
ratings and are considered one of the safest assets in the world. Thus the
fund has very real and secure assets."
"Trust Funds: A Healthy Picture

Although "trust fund" is the term generally used, there are actually four
trust funds - two for Social Security and two for Medicare. At the last
accounting, they held assets totaling almost $1.3 trillion. The
Congressional Budget Office projects they will grow by $2.5 trillion over
the next decade. Their holdings consist of U.S. securities currently
earning 6.9 percent."

These are the 4 Funds: It is in Public Law No: 104-121.

Contract with America Advancement Act of 1996 (Enrolled as Agreed to or
Passed by Both House and Senate)


(a) IN GENERAL- Part A of title XI of the Social Security
Act (42 U.S.C. 1301 et seq.) is amended by adding at the end the following
new section:


`SEC. 1145. (a) IN GENERAL- No officer or employee of the
United States shall--

`(1) delay the deposit of any amount into (or delay the credit of any amount to) any Federal fund or otherwise vary from
the normal terms, procedures, or timing for making such deposits or

`(2) refrain from the investment in public debt
obligations of amounts in any Federal fund, or

`(3) redeem prior to maturity amounts in any
Federal fund which are invested in public debt obligations for any purpose
other than the payment of benefits or administrative expenses from such
Federal fund.

`(b) PUBLIC DEBT OBLIGATION- For purposes of this section,
the term `public debt obligation' means any obligation subject to the
public debt limit established under section 3101 of title 31, United
States Code.

`(c) FEDERAL FUND- For purposes of this section, the term
`Federal fund' means--

`(1) the Federal Old-Age and Survivors
Insurance Trust Fund;

`(2) the Federal Disability Insurance Trust

`(3) the Federal Hospital Insurance Trust Fund;

`(4) the Federal Supplementary Medical
Insurance Trust Fund.'.

(b) EFFECTIVE DATE- The amendment made by this section shall
take effect on the date of the enactment of this Act.

Lyndon Johnson had a profound affect on the benefits received. He pushed
and signed the legislation for Medicare benefits. He went to Independence
Missouri, Harry Truman's home town, to sign it. LBJ signed Harry's card as
the first recipient. These are some of his words:

Remarks With President Truman at the Signing in Independence of the
Medicare Bill--July 30, 1965

"PRESIDENT TRUMAN. Thank you very much. I am glad you like the President.
I like him too. He is one of the finest men I ever ran across.

Mr. President, Mrs. Johnson, distinguished guests:

You have done me a great honor in coming here today, and you have made me
a very, very happy man.

This is an important hour for the Nation, for those of our citizens who
have completed their tour of duty and have moved to the sidelines. These
are the days that we are trying to celebrate for them. These people are
our prideful responsibility and they are entitled, among other benefits,
to the best medical protection available.

Not one of these, our citizens, should ever be abandoned to the indignity
of charity. Charity is indignity when you have to have it. But we don't
want these people to have anything to do with charity and we don't want
them to have any idea of hopeless despair.

Mr. President, I am glad to have lived this long and to witness today the
signing of the Medicare bill which puts this Nation right where it needs
to be, to be right. Your inspired leadership and a responsive
forward-looking Congress have made it historically possible for this day
to come about.

Thank all of you most highly for coming here. It is an honor I haven't had
for, well, quite awhile, I'll say that to you, but here it is:"

THE PRESIDENT. "The people of the United States love and voted for Harry
Truman, not because he gave them hell--but because he gave them hope.

I believe today that all America shares my joy that he is present now when
the hope that he offered becomes a reality for millions of our fellow

I am so proud that this has come to pass in the Johnson Administration.
But it was really Harry Truman of Missouri who planted the seeds of
compassion and duty which have today flowered into care for the sick, and
serenity for the fearful.

Many men can make many proposals. Many men can draft many laws. But few have the piercing and humane eye which can see beyond the words to the
people that they touch. Few can see past the speeches and the political
battles to the doctor over there that is tending the infirm, and to the
hospital that is receiving those in anguish, or feel in their heart
painful wrath it the injustice which denies the miracle of healing to the
old and to the poor. And fewer still have the courage to stake reputation,
and position, and the effort of a lifetime upon such a cause when there
are so few that share it.

But it is just such men who illuminate the life and the history of a
nation. And so, President Harry Truman, it is in tribute not to you, but
to the America that you represent, that we have come here to pay our love
and our respects to you today. For a country can be known by the quality
of the men it honors. By praising you, and by carrying forward your
dreams, we really reaffirm the greatness of America.

It was a generation ago that Harry Truman said, and I quote him: "Millions of our citizens do not now have a full measure of opportunity to achieve
and to enjoy good health. Millions do not now have protection or security
against the economic effects of sickness. And the time has now arrived for
action to help them attain that opportunity and to help them get that

Well, today, Mr. President, and my fellow Americans, we are taking such
action--20 years later. And we are doing that under the great leadership
of men like John McCormack, our Speaker; Carl Albert, our majority leader;
our very able and beloved majority leader of the Senate, Mike Mansfield;
and distinguished Members of the Ways and Means and Finance Committees of
the House and Senate--of both parties, Democratic and Republican.

Because the need for this action is plain; and it is so clear indeed that
we marvel not simply at the passage of this bill, but what we marvel at is
that it took so many years to pass it. And I am so glad that Aime Forand
is here to see it finally passed and signed--one of the first authors.

There are more than 18 million Americans over the age of 65. Most of them
have low incomes. Most of them are threatened by illness and medical
expenses that they cannot afford.

And through this new law, Mr. President, every citizen will be able, in
his productive years when he is earning, to insure himself against the
ravages of illness in his old age.

This insurance will help pay for care in hospitals, in skilled nursing
homes, or in the home. And under a separate plan it will help meet the
fees of the doctors."

Q: Which party put a tax on Social Security?
A: The Democratic party.

Actually, it was Ronald Reagan, a Republican, who signed a bill taxing
Social Security benefits.
"The 1983 Amendments

In the early 1980s the Social Security program faced a serious short-term
financing crisis. President Reagan appointed a blue-ribbon panel, known as
the Greenspan Commission, to study the financing issues and make
recommendations for legislative changes. The final bill, signed into law
in 1983, made numerous changes in the Social Security and Medicare
programs, including the taxation of Social Security benefits, the first
coverage of Federal employees under Social Security and an increase in the
retirement age in the next century."

Q: Which party increased the tax on Social Security?
A: The Democratic Party with Al Gore casting the deciding vote.


Since the statement does not mention any specific bill that Al Gore cast
the deciding vote, it led to an exhaustive search. As a Vice President,
he could have exercised his constitutional powers to break a tie vote in
the Senate.

I did find as part of the Omnibus Budget Reconciliation Act of 1993, the
VP did cast a vote in the Senate to break a tie. This Act was a huge bill
that covered everything from agricultural commodities, licensing of radio
spectrum, luxury automobile taxes, fuels, banking, medicare, etc., etc.
The bill passed in the House by a vote of 218-216 and in the Senate by
H.R. 2264 Latest Major Action: 8/10/1993 Became Public Law No: 103-66.
This is section 13215:



(1) IN GENERAL- Subsection (a) of section 86
(relating to social security and tier 1 railroad retirement benefits) is
amended by adding at the end the following new paragraph:

`(2) ADDITIONAL AMOUNT- In the case of a
taxpayer with respect to whom the amount determined under subsection
(b)(1)(A) exceeds the adjusted base amount, the amount included in gross
income under this section shall be equal to the lesser of--

`(A) the sum of--

`(i) 85 percent of
such excess, plus

`(ii) the lesser of
the amount determined under paragraph (1) or an amount equal to one-half
of the difference between the adjusted base amount and the base amount of
the taxpayer, or

`(B) 85 percent of the social
security benefits received during the taxable year.'

(2) CONFORMING AMENDMENTS- Subsection (a) of
section 86 is amended--

(A) by striking `Gross' and

`(1) IN GENERAL- Except as provided in
paragraph (2), gross', and

(B) by redesignating paragraphs
(1) and (2) as subparagraphs (A) and (B), respectively.

(b) ADJUSTED BASE AMOUNT- Section 86(c) (defining base
amount) is amended to read as follows:

this section--

`(1) BASE AMOUNT- The term `base amount' means
`(A) except as otherwise provided
in this paragraph, $25,000,

`(B) $32,000 in the case of a
joint return, and

`(C) zero in the case of a
taxpayer who--

`(i) is married as
of the close of the taxable year (within the meaning of section 7703) but
does not file a joint return for such year, and

`(ii) does not live
apart from his spouse at all times during the taxable year.

`(2) ADJUSTED BASE AMOUNT- The term `adjusted
base amount' means--

`(A) except as otherwise provided
in this paragraph, $34,000,

`(B) $44,000 in the case of a
joint return, and

`(C) zero in the case of a
taxpayer described in paragraph (1)(C).'


(1) IN GENERAL- Paragraph (1) of section 121(e)
of the Social Security Amendments of 1983 (Public Law 92-21) is amended by--

(A) striking `There' and

`(A) There';

(B) inserting `(i)' immediately
following `amounts equivalent to'; and

(C) striking the period and
inserting the following: `, less (ii) the amounts equivalent to the
aggregate increase in tax liabilities under chapter 1 of the Internal
Revenue Code of 1986 which is attributable to the amendments to section 86
of such Code made by section 13215 of the Revenue Reconciliation Act of

`(B) There are hereby appropriated to the hospital insurance trust fund amounts equal to the increase in tax
liabilities described in subparagraph (A)(ii). Such appropriated amounts
shall be transferred from the general fund of the Treasury on the basis of
estimates of such tax liabilities made by the Secretary of the Treasury.
Transfers shall be made pursuant to a schedule made by the Secretary of
the Treasury that takes into account estimated timing of collection of
such liabilities.'

(2) DEFINITION- Paragraph (3) of section 121(e)
of such Act is amended by redesignating subparagraph (B) as subparagraph
(C), and by inserting after subparagraph (A) the following new

FUND- The term `hospital insurance trust fund' means the fund established
pursuant to section 1817 of the Social Security Act.'.

(3) CONFORMING AMENDMENT- Paragraph (2) of
section 121(e) of such Act is amended in the first sentence by striking
`paragraph (1)' and inserting `paragraph (1)(A)'.

(4) TECHNICAL AMENDMENTS- Paragraph (1)(A) of
section 121(e) of such Act, as redesignated and amended by paragraph (1),
is amended by striking `1954' and inserting `1986'.

(d) EFFECTIVE DATE- The amendments made by subsections (a)
and (b) shall apply to taxable years beginning after December 31, 1993.

Q. Which party decided to give money to immigrants?
A: That's right, immigrants moved into this country at 65 and got SSI
Social Security. The Democratic Party gave that to them although they
never paid a dime into it.

Public Law 92-603, enacted October 30

"Other Eligibility Provisions Citizenship and Residence

The individual must reside within one of the 50 states or the District of
Columbia and be a citizen or an alien lawfully admitted for permanent
residence or permanently residing in the United States under color of law.
Persons living outside the United States for an entire calendar month lose
their eligibility for such a month."
The SSI (Supplemental Security Income) and the automatic annual COLA (Cost
of Living Adjustments) based on the Consumer Price Index were pushed,
signed, and implemented during the Nixon administration. So immigrants
first received SSI under the Republican administration of President
Richard M. Nixon.

It was actually Bill Clinton that signed legislation barring immigrants
from receiving SSI as part of The Personal Responsibility and Work
Opportunity Reconciliation Act of 1996. This changed the following year
with the signing of the Balanced Budget Act of 1997.

In the 1970s, SSA became responsible for a new program, Supplemental
Security Income (SSI). In the original 1935 Social Security Act, programs
were introduced for needy aged and blind individuals and, in 1950, needy disabled individuals were added. These three programs were known as the
"adult categories" and were administered by State and local governments
with partial Federal funding. Over the years, the State programs became
more complex and inconsistent, with as many as 1,350 administrative
agencies involved and payments varying more than 300% from
State to State.

In 1969, President Nixon identified a need to reform these and related
welfare programs to "bring reason, order, and purpose into a tangle of
overlapping programs." In 1971, Secretary of Health, Education and
Welfare, Elliot Richardson, proposed that SSA assume responsibility for
the "adult categories." In the Social Security Amendments of 1972,
Congress federalized the "adult categories" by creating the SSI program
and assigned responsibility for it to SSA.

SSA was chosen to administer the new program because of its reputation for
successful administration of the existing social insurance programs. SSA's nationwide network of field offices and large-scale data processing and
record-keeping operations also made it the logical choice to perform the
major task of converting over 3 million people from State welfare programs
to SSI."
"The Personal Responsibility and Work Opportunity Reconciliation Act of

This "welfare reform" legislation, signed by the President on 8/22/96,
ended the categorical entitlement to AFDC (Aid to Families with Dependent
Children) that was part of the original 1935 Social Security Act by
implementing time-limited benefits along with a work requirement. The law
also terminated SSI eligibility for most non-citizens. Previously,
lawfully admitted aliens could receive SSI if they met the other factors
of entitlement. As of the date of enactment, no new non-citizens could be
added to the benefit rolls and all existing non-citizen beneficiaries would eventually be removed from the rolls (unless they met one of the
exceptions in the law.) Also effective upon enactment were provisions
eliminating the "comparable severity standard" and reference to
"maladaptive behavior" in the determination of disability for children to
receive SSI. Also, children currently receiving benefits under the old
standards were to be reviewed and removed from the rolls if they could not
qualify under the new standards.

The Balanced Budget Act of 1997

This bill passed the House on 7/30/97 by a vote of 346 to 85, and passed
the Senate the next day on a vote of 85 to 15. This law restored SSI
eligibility to certain cohorts of non- citizens whose eligibility
otherwise would be terminated under the "welfare reform" of 1996. It also
extended for up to one year the period for redetermining the eligibility
of certain aliens who may ultimately not be eligible for continued

These are the present requirements for SSI eligibility:

Applicant Eligibility: The eligibility of an individual who has attained
age 65 or who is blind or disabled is determined on the basis of an
assessment of the individual's monthly income and resources, citizenship
or alien status, U.S. residency, and certain other eligibility
requirements. In determining a month's income, the first $20 of Social
Security or other unearned income is not counted. An additional $65 of
earned income ($85 if the person had no unearned income) received in a
month plus one-half of the remainder above $65 (or $85) also is not
counted. If, after these (and other) exclusions, an individual's countable
income, effective January 2002, is less than $545 per month ($817 for a
couple, both of whom are aged, blind or disabled) and countable resources are less than $2,000 ($3,000 for a couple), the individual may be eligible
for payments. The values of household goods, personal effects, an
automobile, life insurance, and property needed for self support are, if
within limits set out in regulations, excluded in determining value of
resources. Burial spaces for an individual and immediate family and burial
funds, up to $1,500 each for an individual and spouse, are excluded from
resources. The value of a home which serves as the principal place of
residence is also excluded in resource valuation.

Beneficiary Eligibility: Individuals who have attained age 65 or are
blind or disabled, who continue to meet the income and resources tests,
citizenship/qualified alien status, U.S. residence, and certain other
requirements. Eligibility may continue for beneficiaries who engage in
substantial gainful activity despite disabling physical or mental

Credentials/Documentation: Proof of age, marital status, income and resources, establishment of blindness or disability, proof of residence in
the U.S. and citizenship, or alien status is required."

The implication is that if one did not pay much into the system, they
should not be entitled to receive benefits beyond their contribution.
Certainly, many of the retirees over the past couple of decades have
received much more than they ever put in. A case in point is the first
recipient of a monthly check.

"Ida May Fuller worked for three years under the Social Security program.
The accumulated taxes on her salary during those three years was a total
of $24.75. Her initial monthly check was $22.54. During her lifetime she
collected a total of $22,888.92 in Social Security benefits."

10 posted on 07/16/2004 8:59:50 PM PDT by gcruse (
[ Post Reply | Private Reply | To 1 | View Replies]

To: redangus

Q. What causes most PONZI schemes to fail....
11 posted on 07/16/2004 9:01:34 PM PDT by hummingbird ("If it wasn't for the insomnia, I could have gotten some sleep!")
[ Post Reply | Private Reply | To 1 | View Replies]

To: redangus

SS is a Ponzi scheme. It assumes that if you pay for current retirees while you're working, that future workers will pay for your retirement. That may have worked when there were 5-6 workers for every retiree, and the retirees' expectations were modest.
But when there are only 2-3 workers for every retiree, and the retirees expect a comfortable income from SS, it won't work.

SS is a failing system. We really should fix it before some people wind up falling though the holes in it.

12 posted on 07/16/2004 9:03:24 PM PDT by speekinout
[ Post Reply | Private Reply | To 1 | View Replies]

To: Torie

Less than 6% pay any taxes at all, much less SS.

13 posted on 07/16/2004 9:04:11 PM PDT by ETERNAL WARMING (He is faithful!)
[ Post Reply | Private Reply | To 5 | View Replies]

To: Torie

Less than 6% pay any taxes at all, much less SS.

14 posted on 07/16/2004 9:05:12 PM PDT by ETERNAL WARMING (He is faithful!)
[ Post Reply | Private Reply | To 5 | View Replies]


Well then they don't qualify for benefits. It is so simple, isn't it?

15 posted on 07/16/2004 9:05:56 PM PDT by Torie
[ Post Reply | Private Reply | To 14 | View Replies]

To: redangus

Roosevelt lied! He also deliberately used phony intelligence to trick us into entering world war II.

16 posted on 07/16/2004 9:08:03 PM PDT by arm958
[ Post Reply | Private Reply | To 1 | View Replies]

To: redangus
I'd like to take my own Social Security away.

If I could opt out, I would do it yesterday. What a ripoff.

17 posted on 07/16/2004 9:10:49 PM PDT by ovrtaxt (Palm Beach voters: It's not the heat, it's the stupidity.)
[ Post Reply | Private Reply | To 1 | View Replies]

Comment #18 Removed by Moderator

To: Torie
Don't you think the relatively comfortable geezers should pay tax on their half of their benefits, if they otherwise have more than 35K or so in taxable income?

The income test for taxability of social security benefits is not limited to taxable income; recipients must include certain non-taxable income - tax-exempt interest [line 8b on Form 1040].

19 posted on 07/16/2004 9:34:08 PM PDT by Hipixs
[ Post Reply | Private Reply | To 3 | View Replies]

To: Hipixs

Yes, you are correct. As it should be.

20 posted on 07/16/2004 9:35:27 PM PDT by Torie
[ Post Reply | Private Reply | To 19 | View Replies]

To: nothingnew
There are a lot of legitimate issues regarding social security and reasonable alternatives to the present system. What is so frustrating about this as a policy debate is that there is so much misinformation out there. 

There are Social Security Trust Funds - and they take in more in contributions at present than is paid out in a given year. That means there is a surplus of funds in the SSI Trust Accounts. As the demographics of the United States shift (increasing older population, longer spans of retirement income collection) we are reaching a point where the amount paid out in benefits in a given year will exceed the amount collected. At that point there will  be an annual deficit, which will reduce the accumulated surplus until some point (typically estimated at a point in the 2030-2050 range) when the accumulated surplus is erased. That's when the s*** hits the fan.

The trust funds exist, the employer withholdings from wage earners and the employer match are sent to the SSI trust funds and are not spent on general revenue purposes. Since the surpluses are large amounts, the funds are not accumulating as literal cash balances - but are funds invested in government securities.

What seems impossible for many (including Rush Limbaugh - in one of the few errors he repeats regularly) to understand is that in the consolidated budget - the surplus that the SSI accounts run each year is netted out against the budget surplus. In other words a $350B surplus in SSI funds in a given year - as an accounting matter, will mask $350B of general revenue expenditure deficits. That does not mean that the money is spent on dams, missiles, food, buildings, etc. It simply sits in the trust fund accounts until it is disbursed to recipients of SSI. The reduction in the apparent general budget deficit is an accounting artifice.

What seems to feed this myth that there are no trust funds is this accounting maneuver - which is rather dishonest in the sense that it only makes the general budget deficit look smaller than it actually is - since the SSI funds are never spent on general revenue purposes.

If we cannot get past this canard - we cannot get on to serious discussion of alternatives to the present system.

21 posted on 07/16/2004 9:36:53 PM PDT by Wally_Kalbacken
[ Post Reply | Private Reply | To 2 | View Replies]

To: Wally_Kalbacken
Ya, there is a social security trust fund corpus, which is an accounting entry, because it is all "lent" to Uncle Sam, and earns an interest rate tied to treasury returns. The money lent to Uncle Sam is of course spent. So it is really a cash flow matter, and when the cash flow from the inflow of SS taxes and the outflow of paid out benefits, turns negative as it soon will (long before the actuarial BK point of 2035 or whatever, more like 2010), it will cause the federal deficit to increase steadily, unless spending is cut, or revenues increase to cover it. In short, the drawing down of the SS trust fund surplus will require the drawing up of government revenues. It really is a Ponzi scheme, but all other schemes after having spent much time pondering it, are worse.

And there you have it.

Of course, SS is a relatively minor fiscal problem in the scheme of things. Turn the page to the Medicare books, and then you will really suffer fiscal vertigo.

22 posted on 07/16/2004 9:46:22 PM PDT by Torie
[ Post Reply | Private Reply | To 21 | View Replies]

To: John Jorsett; Torie
Don't let mere facts stand in the way of a good hysterical rant.

23 posted on 07/16/2004 9:48:32 PM PDT by Cultural Jihad
[ Post Reply | Private Reply | To 4 | View Replies]

To: arm958
Let me guess. We should have just surrendered to Japan, and fought alongside Adolf Hitler, eh?
24 posted on 07/16/2004 9:51:09 PM PDT by Cultural Jihad
[ Post Reply | Private Reply | To 16 | View Replies]

To: redangus; qam1


25 posted on 07/16/2004 9:52:37 PM PDT by m18436572
[ Post Reply | Private Reply | To 1 | View Replies]

To: gcruse
Remarks With President Truman at the Signing in Independence of the Medicare Bill--July 30, 1965


Harry Truman left office in 1953, he died later that year.

Lyndon Johnson was president on July 30, 1965.

26 posted on 07/16/2004 10:53:58 PM PDT by c-b 1
[ Post Reply | Private Reply | To 10 | View Replies]

To: m18436572; qam1; ItsOurTimeNow; PresbyRev; tortoise; Fraulein; StoneColdGOP; Clemenza; malakhi; ...
A better late than ever

Xer Ping

Ping list for the discussion of the politics and social aspects that directly effects Generation Reagan / Generation-X (Those born from 1965-1981) including all the spending previous generations (i.e. The Baby Boomers) are doing that Gen-X and Y will end up paying for.

Freep mail me to be added or dropped. See my home page for details and previous articles.  

27 posted on 07/16/2004 10:55:20 PM PDT by qam1 (Tommy Thompson is a Fat-tubby, Fascist)
[ Post Reply | Private Reply | To 25 | View Replies]

To: Torie

Look at it this way. Two twins work their entire careers in the same job. Same pay same everything. One puts away money in an IRA, 401K and invests in the financial markets. The other buys a boat, a second home and vacations in Hawaii every year.

At retirement the individual who squandered his money gets SS tax free (he has little income other than SS). The frugal one meanwhile pays tax on his social security benefits.

Is that fair?

28 posted on 07/16/2004 11:18:48 PM PDT by Straight Vermonter (06/07/04 - 1000 days since 09/11/01)
[ Post Reply | Private Reply | To 3 | View Replies]


29 posted on 07/16/2004 11:21:57 PM PDT by Straight Vermonter (06/07/04 - 1000 days since 09/11/01)
[ Post Reply | Private Reply | To 13 | View Replies]

To: Torie
Don't you think the relatively comfortable geezers should pay tax on their half of their benefits, if they otherwise have more than 35K or so in taxable income?

We should not be taxed when receiving it. We have already paid taxes on it when it taken from our paychecks. I for one do not support being taxed twice on the same income.

As for the "earnings", I have ran the numbers on my 30 years of contributing.......even if I was a moron, I would have beat the so-called governments return on my and my employer's investment.

30 posted on 07/17/2004 6:24:54 AM PDT by Tripleplay
[ Post Reply | Private Reply | To 3 | View Replies]

To: Straight Vermonter; Bigun
You just don't like the income tax. If you can tolerate wading through a rather dry but highly informative and balanced treatment of the various revenue raising alternatives out there, pick up Taxing Ourselves. A consumption tas has a lot of merit, but it is hard to avoid giving high income earners and/or those with considerable wealth a windfall, without going through a lot of complex hoops.
31 posted on 07/17/2004 8:30:05 AM PDT by Torie
[ Post Reply | Private Reply | To 28 | View Replies]

To: Tripleplay

Remember you are only taxed on half of SS income. The half that is not taxed serves as a reasonable proxy for basis. Regards. You may think you can earn a higher rate of return than what you get with SS, and you probably can if you pay the max (leaving out the 2.9% medicare tax, which goes on forever), but most think that, and most do not, because they don't know how to invest, or are scammed. It also entails taking more risk of course, from the equity market. But that is another topic.

32 posted on 07/17/2004 8:34:20 AM PDT by Torie
[ Post Reply | Private Reply | To 30 | View Replies]

To: Torie
You just don't like the income tax.

Well that may be the understament of the year. That really doesn't address the issue here, however. The issue is should one person's income be taxed while another's is not.

Thanks for the book recommendation.

33 posted on 07/17/2004 8:54:28 AM PDT by Straight Vermonter (06/07/04 - 1000 days since 09/11/01)
[ Post Reply | Private Reply | To 31 | View Replies]

To: Torie
Remember you are only taxed on half of SS income.

Please explain. I have done projections on my retirement income and it is 100% taxable. Hence I'm am being taxed twice. SS should have the same treatment as a Roth IRA.

You may think you can earn a higher rate of return than what you get with SS

I think the SS earns a little more than 1% (the rate on one government fund borrowing from another) Even insurance companies pay a higher return than this. Treasury bills have averaged 4 to 5 % over the last few decades. No savvy investment acumen is required for these investments.

34 posted on 07/17/2004 10:11:18 AM PDT by Tripleplay
[ Post Reply | Private Reply | To 32 | View Replies]

To: Tripleplay

Well I was wrong about the percent of SS benefits that are taxable. It is 85%, not 50%, if you earn over the threashold of about 35K. Your 1% plus return figure is a real return adjusted for inflation, not the nominal return. So add about 3% to that to get your nominal return, which isn't bad, since it is risk free. And that return ignores the disability insurance aspects of SS, which part of your SS taxes pay for. It is a complex issue, not doubt about it. The dirty little secret is that somebody has to pay for the actuarial deficit. There is no free lunch.

35 posted on 07/17/2004 10:42:28 AM PDT by Torie
[ Post Reply | Private Reply | To 34 | View Replies]

To: c-b 1
Harry Truman left office in 1953, he died later that year.

He died in Kansas City, Mo., on Dec. 26, 1972.

36 posted on 07/17/2004 11:02:12 AM PDT by dread78645 (Sorry Mr. Franklin, We couldn't keep it.)
[ Post Reply | Private Reply | To 26 | View Replies]

To: hummingbird bump

you beat me to the punch!

37 posted on 07/17/2004 11:05:32 AM PDT by JockoManning (
[ Post Reply | Private Reply | To 11 | View Replies]

To: Torie
SS is simply a redistribution of wealth and not an investment vehicle.


I am single and work 45 years. I put in approx 3K per year and my employer matches it. Invested at treasury bill rates, the pot would be about 500K when I retire. If I die before collecting anything or very little, the Gov. will send my relatives 250 dollars for my funeral and keep the 1/2 mill! If I don't die and do collect for the years I am alive, the government earns 4% on the 1/2 mill (20K) which is about my annual SS. So when I die, they still keep the original 1/2 mill and my relatives get none of the principal.

IMO, that is why both political parties will never change SS. Its a foolproof way to tax people under the guise of a "retirement plan".

38 posted on 07/17/2004 5:18:30 PM PDT by Tripleplay
[ Post Reply | Private Reply | To 35 | View Replies]

To: Tripleplay
Well, as you say, if you assume 1% real return per year, it is a fair game. You end up with $440,000 in real terms in 45 years, and it is exhausted if you get $20,000 a year in real terms for 20 years thereafter. Of course, if you have a non working wife, the deal is somewhat better. At 2% a year real (which is about what treasury inflation indexed bonds earn), you lose about $167,000 in real terms after 45 years. Whether the disability insurance benefit is worth that much actuarily, I don't know.

SS is not as bad a deal as you suggest. The problem of course, is that it is in an actuarial hole, as a hangover from the days when it was a great deal. Someone has to close the gap. You and I have to do our share. We can't just dump it all on children yet unborn.

39 posted on 07/17/2004 5:38:11 PM PDT by Torie
[ Post Reply | Private Reply | To 38 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794 is powered by software copyright 2000-2008 John Robinson