Monday, April 11, 2016

Social Security in the Crosshairs

Anyone trying to include Social Security in debt negotiations is doing so either out of ignorance, or as part of a partisan agenda, either as a tactic to scare Social Security recipients, or in an effort to privatize (think huge administrative fees) or eliminate Social Security. Social Security is the reason (along with living wages) that we no longer have huge numbers of seniors and disabled people in poorhouses and in poverty. Private retirement plans are subject to theft, bankruptcies, stock market crashes, bank closings, and incompetent or unscrupulous administration. In contrast, Social Security will always be there. Unless, of course, our politicians take it from us.

Raising retirement ages or cutting benefits will only have an impact 17 years from now, and would still only affect Social Security benefit payouts, not the National Debt.

How does Social Security work? The Social Security Trust Fund holds special Treasury Bonds, bought whenever there is more collected in Social Security payroll taxes than is paid out in Social Security benefits. Those bonds fund part of the national debt, to the tune of $2.8 trillion. When benefits paid exceed revenues, Social Security's special Treasury Bonds are redeemed. At the time of redemption, new regular Treasury Bonds are sold. Money given to Social Security for redeeming the special bonds is offset by money from the sale of regular bonds, and there is no change in the national debt. Understand this, and you will see through politicians' lies.

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