Skip to comments.The 'Geezers' Are Right This Time
Posted on 05/29/2012 8:33:35 AM PDT by upchuck
Alan Simpson let loose at a group of Californians who charged in a brochure that he and Erskine Bowles were "using the deficit to gut our Social Security." The former Republican senator from Wyoming sent the California Association of Retired Americans a characteristically colorful response, which I quote: "What a wretched group of seniors you must be to use the faces of the very people (the young) that we are trying to save, while the 'greedy geezers' like you use them as a tool and a front for your nefarious bunch of crap."
I can't not like Simpson, but he is wrong this time, and the activists are right. The plan named for him and former Clinton Chief of Staff Bowles bravely confronted soaring deficits with balanced spending cuts and tax hikes. Upon its release, the tax-a-phobic Grover Norquist called Simpson "old and grumpy." Simpson fired back with "old Grover Norquist and his happy band of goofy warriors, all they do is make money off of people." And I, too, have made past reference to "greedy geezers."
But Simpson-Bowles had no business dragging Social Security into the operating room, and here's why: Social Security is an independent, self-funding program. It is not welfare. The workers and their employers pay for all of it.
About 25 years ago, Social Security taxes were raised above that needed to support current retirees and the surplus put in a trust fund. The goal was to create a buffer to keep the program healthy as the number of retirees grew and lived longer. Left alone, Social Security can pay all promised benefits for the next 20 years, and can continue doing so with some minor adjustments, such as raising the cap on income subject to payroll taxes.
Conservatives and "centrists" who call for compromise on the Social Security Trust Fund still don't get it, so let's bang the gong again: The trust fund represents real money taken out of workers' pockets, and the money it loaned the Treasury is really owed.
Simpson-Bowles did fine calling for a curb on projected entitlement spending. That, of course, includes Medicare, the health-insurance plan for the elderly. Unlike Social Security, Medicare is not self-supporting. Medicare payroll taxes and payments by beneficiaries cover only some of it.
The Social Security Trust Fund is a big piece of change, and by declaring the Treasury securities sitting in it "worthless pieces of paper," our right-wing politicians can throw the obligations overboard in the service of more tax cuts for the rich -- with the added bonus of killing off a program they never liked much. Often citing some scuzzy accounting methods applied to the surplus, they tell us, "Whoops, the money has been spent."
Well, duh, all the money the Treasury borrows has been spent. That's why it borrows money. Every bond it issues to investors across the globe represents a debt. And if the Treasury hadn't been able to borrow that money from the trust fund, it would have had to borrow more from the public.
Then-Federal Reserve Chairman Alan Greenspan was asked in 2001 whether the trust fund investments were real or not. His response: "The crucial question: Are they ultimate claims on real resources? And the answer is yes."
The California Association of Retired Americans was overenthusiastic but correct in its assertion that Simpson-Bowles envisioned using Social Security to balance budgets that the program is not supposed to be part of. They were perhaps unfair to imply that the intention was to gut Social Security. Some politicians might like that, but the more realistic explanation is that many simply don't know what they're doing.
AMEN! I am so sick and tired of being accused of receiving an "entitlement*" via my Social Security check.
* a right granted by law or contract, especially to financial benefits from the government. Source.
If I could have every penny I ever paid into social security right now, I’d take that in a heartbeat over what it will pay me. I could easily retire quite comfortably on it. Much more comfortably than with what SS would actually pay me...
The claims for disability are really hurting the system. I would not be surprised if the whole system needs another percent increase to fund everybody leaving on disability or living off of SSI.
Any Sonuvabi7ch who served as a Senator sucking on the Government Teat for 20 years, sucking up the perks, and now collecting his full salary as a Pension and doesn’t have to be on Obamacare, who calls me Greedy can kiss my greedy old ass.
” Any Sonuvabi7ch who served as a Senator sucking on the Government Teat for 20 years, sucking up the perks, and now collecting his full salary as a Pension and doesnt have to be on Obamacare, who calls me Greedy can kiss my greedy old ass.”
120,000 per year + HUGE benefits.
It would also be interesting to know exactly how much Mr.Simpson is drawing in overall government pensions. He gamed miltary service to avoid combat in Korea, instead arriving in Germany (after the war) for a nice easy tour with his new bride...I wonder how much his military time added to the senate pension.
How much did you pay over your working career relative to how much you’ve collected thus far and how much more you anticipate collecting over the remainder of your expected lifetime?
If the latter exceeds “the former, plus reasonable market returns on investment”, you’re collecting an entitlement, profiting from those younger than you.
The Social Security Trust Fund is a Myth. Saying Social Security is self Funded is another myth. Whatever is collected in FICA Taxes is robbed by the politicians to pay for other projects.
Actually the same can be said for highways and the postal service. Both have problems but the biggest trouble has come from congress itself.
Well that's the way is SHOULD work at least, if the government set aside every dollar you and your employer paid into social security and put it in an account with your name on it that earned a decent return then you could probably live off what was in the account after your retire without any further contributions from the government. Unfortunately since the government spends the Social Security tax revenue as soon as they get it (usually to pay benefits to those already retired), they never earn anything on what you paid in. So if you pay in $60,000 over 30 years of employment and the government pays you $15,000 a year in benefits when you turn 65. In four years you have gone through everything you paid in during your working years and everything after that is essentially a taxpayer funded "entitlement". Say you live to 85. The government collected $60,000 from you, but paid out $300,000, for a difference of $240,000. Now multiply that by 50,000,000 retires... That's an unsustainable situation any way you cut it.
The saddest part of the coming Social Security / Medicare shipwreck is that the b@stards responsible will skate on any blame.
They are counting on escaping blame. They know they wont be in office when it crashes.
Do they pay into SS in Somalia?
Do they pay into SS in Somalia?
All you have to do is take the SS statement of earnings through the years, mine goes back to 1967. Take the amount of SS withheld that year and “buy” shares of the Dow Jones index at year end.
The data is easily available at Yahoo Finance.
Then “sell” at today’s Dow Jones index, even though it has not gone anywhere in 10 years. Add in dividends of around 3% per year.
In my case, my hypothetical account is worth 1.5 to 2 million. Enough for an annuity of 70K. I’m luck to get 20K from SS.
It is welfare. Your payments went to earlier retirees; current workers pay your benefit.
The Supreme Court decision in Fleming vs. Nestor made it clear that you have no vested rights in your prior payments, there is no contractual right to Social Security benefit. You have no more contractual right to Social Security than to unemployment benefit (also referred to as “insurance”). Social Security is a transfer program, no different from the myriad of other such programs. Your payments have gone, transferred to earlier retirees. The so-called “insurance” aspect of it was just a tactic to get it passed. Social Security, like other welfare programs, takes from one group to subsidize another.
Are you aware that there are parents who are working extremely hard to have their child or children identified with some sort of learning disability (and many who have succeeded) in order to claim SSI benefits from that self-funding program you so ferverently gloat over? So, the children who are getting these SSI benefits, and who have NEVER paid into that system, are reaping benefits that others have paid - that self-funding program is falling apart.
One "curb on projected entitlement spending" has already been implemented. The "payroll tax holiday" will lessen the payout to future retirees. This would be quite apparent if the SSA were still sending out yearly Social Security Statements. Workers would see their "estimated benefits" going down each year the "holiday" is in effect.
Glad to hear this so I can ignore the Trustees of the Social Security Trust fund who claim it's going bankrupt in twenty years time, two years earlier than last year.
Another face palm moment for Frouma. The Supreme Court ruled SS is not what she describes. Joe Blow does not have an "account" with SS where his FICA tax goes into. If SS is an independent program its "trustees" would be thrown in jail for fraud and running a ponzi scheme.