What Social Security Trust Fund?
Aug 7, 2010 Political
Social Security is in the red this year meaning that it will pay out more than it takes in in payroll taxes. The system was already unsustainable but was expected to have money for at least a few more years. However, the economy has millions of people who are not working and when they are not working they are not paying into Social Security.
That, of course, is only part of the problem. The bigger problem is that the federal government has spent all the Social Security money collected over the years. We have been told for years about the Social Security trust fund as if there is actually a fund with money in it. There is not but that myth continues as evidenced in this article:
The deficit will last through 2011, then an improving economy will put it back into balance for three years, then it will dip back into the red in 2015, the actuary said. The program has enough money in its trust fund to cover the annual deficit for two decades beyond that. Washington Times
This is an actuary perpetuating the myth. If the uninformed were to read that paragraph the assumption would be that there is a trust fund full of money that will fund SS for two decades.
In reality there is nothing more than a drawer with a bunch of IOUs. The federal government requires SS to send the money it collects (above what it needs to make payments) to the Treasury and in return the Treasury issues a Treasury Bond. It is basically a piece of paper like a bank deposit slip. It tells the Social Security Administration that it deposited a certain amount of money into the Treasury.
The problem is, once the money hits the Treasury it goes into the general fund and is spent by Congress. In other words, Congress is using Social Security money to pay for other things under the guise that it will pay the money later. The only fault in the plan is that the government does not have the money to pay back. We are trillions of dollars in debt and there is no way that we can afford to pay our bills without borrowing even more money. Social Security money has been spent and will not be replaced. We will either go deeper and deeper in debt borrowing money or burden people with tax increases to pay back what should have never been spent in the first place. Keep in mind, the special bonds purchased are supposed to be redeemed later but as the Office of Budget and Management states:
These [Trust Fund] balances are available to finance future benefit payments and other Trust Fund expenditures – but only in a bookkeeping sense…. They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. The existence of large Trust Fund balances, therefore, does not, by itself, have any impact on the Government’s ability to pay benefits. (from FY 2000 Budget, Analytical Perspectives, p. 337)
[note]If the money had been put aside then there would be no need to raise taxes or anything else. If they tax us we will have paid for SS twice. Once when they took it from our paychecks and once when they collect taxes to pay the benefits.[/note]
If the money collected over the years had been invested in precious metals or placed in interest bearing accounts there would be no worry about the solvency of SS. We would have more than enough money to pay people and things would be good.
But the greedy politicians in DC could not keep their grubby little hands out of the till. They have committed malfeasance and bankrupted the socialized retirement system that was established long ago. SS should never have been created but if they had to do so then they should have ensured it would be protected from the greed and corruption that permeates our government.
Face it. If a private company did this with retirement funds the people responsible would be in jail and the dolts in Congress would be attacking them mercilessly. You can bet that no CEO would be able to get away with saying that he would simply borrow the money to fund the system.
And no company could remain in business being run by such people. This might explain why we are on our way to financial collapse.
The Treasury bonds Social Security holds in place of its money are backed by the full faith and credit of the US Government.
Given how the OBM described the bonds (quoted above), that should comfort absolutely no one…
Cave Canem!
Never surrender, never submit.
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Tags: bankrupt, lies, social security, socialism, theft
Social Security Reaches The Tipping Point
Mar 25, 2010 Political
It was not expected to happen until no sooner than 2016 but Social Security will pay out more this year than it takes in.
This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office. The New York Times
Officials say that Social Security has 2.5 Trillion dollars in the “trust” fund so they can pay retirees (and the myriad of others who have become eligible over the years) for some years to come.
The problem is, there is no real trust fund. A trust fund would be a place where they put the money and can get to it when they need it. Instead, Social Security is forced to buy government bonds and the money it collects goes into the general fund where politicians, instead of saving it for Social Security (as it was intended) spend it on other things.
We have no money in the bank for when the government bonds are cashed. The government paper is not worth the ink that is on it because we have no money to honor the commitment.
We borrow a lot of money from other countries to pay our debt and the interest on the debt is astronomical.
There is no way that government will be able to honor the commitment it made because it did not keep our money safe like it was supposed to. If the money had been put away we would be in good shape.
So if they are going to be collecting money for the next four years to pay for health care what are the odds that they will spend it one something else and there will be no money when it comes time to deliver Christmas to all the serfs?
Never surrender, never submit.
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Tags: bankrupt, health care, lies, Obama, social security
Personal Responsibility- What’s That?
May 20, 2009 Political
Movie history was made this week, as the Governator was slapped down regarding the ballot measures that would have allowed the California Budget to be “reduced” from a staggering 21.5 billion dollar deficit to a mere 15+ billion dollar deficit. Okay- this is where it gets a little strange, because if I have a -21 dollars in my pocket, I can just SAY I have a -15 dollars in my pocket. It’s all the same NOTHING that I have (or not, depending on whether you are Democrat or Republican, I guess) in my pocket. It’s all a shell game, performed unconvincingly by the politicians, first in California, and soon to come to a Capital Dome near you.
The measures, which would have prolonged tax increases, capped state spending, earmarked money for education and involved the state in a complex borrowing scheme against its lottery, were rejected by roughly 60 percent of those who voted. The failure of the measures, combined with falling revenues since the state passed its budget, leaves California with a $21 billion new hole to fill, while foreclosure rates and unemployment remain vexing problems here.
The Pols take non- money, and make more of the non- money to pay for these programs they want so desperately. It is no longer a question of whether the program is even worthy or not. There is just no money to pay for it, or any others either.http://www.nytimes.com/2009/05/20/us/20vote.html?partner=rss&emc=rss
When regular folks run low on money, we all have to tighten our belts, but not so the politicians, as we can see. This continues a long and shameful tradition of “borrowing” from every source of money, including the Social Security program, which was never very robust, earning only around 1.5% per year as it was. Now, however, there is no money. Let me say this again.
THERE IS NO MONEY. All of this spending, all this stimulus, all this tarp money is just an illusion that the present government, as have all the past governments dearly wanted you to believe in.
Money has only so much buying power as the government’s word guarantees- and this one is writing checks with his mouth that noone can cash. That’s unfortunate, but true.
The Chinese, who had been buying our bonds, have ceased doing so, and Barama has been trying to get lines of credit at the nearest branch of Saudi Arabia with little luck.
I’ve got an idea- stop every new program, look at all other programs to see whose we can safely cut, and by the way, rescind all of those raises Congress hasn’t earned. Congressional employees are OUR employees, and I know I didn’t okay a raise- did you?
No new “green” programs until we know of a system that works- it’s way too expensive to go charging off in a direction that holds no true promise.
Health care needs to remain private, but I agree that access and affordability are key to the whole process. Cutting costs has to happen for the Insurance Industry, but one thing that needs to change is our habits. Use the insurance for when you need it not just for any old bruise or sprain- that is a part of the rise in costs. The insurance companies need to begin charging real world prices, and the most onerous part of the whole process, paperwork, needs to end.
I know that there will be those who will say that the government needs to regulate health care, but there is nothing government does well, and I wouldn’t expect them to begin now. If government governs best when it governs least, as Thomas Jefferson once said, government health care should be the smallest component of the whole process, and the least intrusive. If government could smooth the process, well and good, but government doesn’t do smooth very well. This would be a new dance for them.
I know Barama has all these really great ideas he wants to try out, but now is not the time to do this, and yet he goes right on ahead, oblivious to the fact that he is holding monoply money, for all the guaranteed value it really has right now.
Only when we institute fiscal responsibility, will we be truly able to do things socially that might or might not need to be done.
I have an idea- Why don’t ALL members of Congress- both parties, and the President too- turn their pockets inside out, just so that reminds them just how broke we really are.
Perhaps then they will get the picture.
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Tags: bankrupt, california, china, health care
Who Worries About Objectivity In The Press?
Jan 1, 2009 Political
It looks like two Connecticut newspapers might be out of business as soon as next week. The Bristol Press and The Herald have millions of dollars in debt and the slow economy is hurting them. They obviously do not have the circulation or ad revenue to sustain the business so they are headed for the recycle bin.
Or are they? A Connecticut lawmaker named Frank Nicastro wants to have the state bailout the newspapers. He believes they are vital to the community and that the people would be best served if the government used taxpayer money to keep them afloat.
He views it as his duty but there are others who think this is a dangerous move because it puts government in bed with the press. Some seem to think that the press is a watchdog over the government:
Relying on government help raises ethical questions for the press, whose traditional role has been to operate free from government influence as it tries to hold politicians accountable to the people who elected them. Even some publishers desperate for help are wary of this route.
Providing government support can muddy that mission, said Paul Janensch, a journalism professor at Quinnipiac University in Connecticut, and a former reporter and editor.
“You can’t expect a watchdog to bite the hand that feeds it,” he said. al-Reuters
I can understand where those with traditional views of government would have a problem with this whole idea much for the reasons stated. But one would have to be a complete lunatic to believe that the modern day press (all media for that matter) are objective and view it as their job to hold politicians accountable. None of them held Obama accountable.
The New York Times is a storied newspaper but it is only a watchdog over half of the government. If it is Republican they watch it and report anything (even national secrets) but if it is Democrat they ignore the story.
As a matter of fact, some in the media think it is their job to make Obama successful. These would be the same who worked tirelessly to harm the current president every chance they got.
There is nothing objective about most newspapers and none of the major ones are watchdogs over government.
When it comes to the press and Obama calling the newspapers guard dogs would be more appropriate.
Government does not belong using tax dollars to bail out ANY business including newspapers. That is the reason this should not happen.
If we actually had a press that acted like watch dogs over politicians then the arguments presented in the article would be valid but since they lost objectivity a long time ago there is no sense in pretending that this is an issue.
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Tags: bailout, bankrupt, government oversight, newspaper
Obama Will Bankrupt The Coal Industry
Nov 2, 2008 Political
Swing States Beware
There are a lot of states that rely on the coal industry. Barack Obama says he will bankrupt that industry.
When Joe Biden told people in the rope line that he and Obama were against coal, he was telling the truth regardless of what spin they put on it afterward.
Source:
Newsbusters
The West Virginia Record
I am the Big Dog and I approve this blog post.