Those paper IOU's in the Social Security Trust Fund are U.S. Treasury Bonds earning interest. The radical conservatives have convinced people that the Trust Fund is worthless paper because they want to privatize Social Security. Why? Think 20% commissions and a belief that the free market is better than government. If you want to trust that your retirement won't be stolen or lost (think Madoff and stock market crashes and fund managers who churn accounts for the commissions and financial advisors who don't have to have a fiduciary responsibility), then by all means support privatization.
BTW, the Trust Fund has $2.8 trillion because the retirement of Baby Boomers was anticipated. So when Social Security runs deficits, it only means that Treasury Bonds are being sold to make up for more being paid in benefits than is being collected with payroll taxes. It does not mean Social Security is broke. Would you be broke with $2.8 trillion in the bank?
Also, raising the retirement age or cutting benefits has absolutely no impact on the federal budget or the National Debt. It only affects the date at which time the Trust Fund is drawn down to zero, which is currently the year 2034. A very small increase in payroll taxes or raising or eliminating the salary cap would give Social Security a 75-year solvency. Currently, only the first $127,200 in regular income is subject to Social Security payroll taxes. This means that someone earning $1 million pays the same amount as someone making $127,200. Make less and your whole income is taxed for Social Security, unlike the income of the wealthy.
Stop believing all of the lies by those radical conservatives. Social Security will always be there. Unless politicians take it from us.
One more thing. When a Treasury Bond is redeemed from the Trust Fund, the Treasury simply sells another bond to someone else (like the Chinese). No money is paid from the Treasury. Also (okay, two more things), Social Security is by law separate from the federal budget. It is not the federal government's "biggest expense." It is not even an expense. It has its own revenue stream (payroll taxes plus interest on bonds). Politicians lumped Social Security in with their budgets because the surpluses made their budgets look better. Some even hid the payroll taxes in the figures for general revenues, making Social Security look like an unpaid entitlement. And now with expected Social Security deficits and the drawdown of the Trust fund, they want to reduce benefits or raise the retirement age to keep the surpluses going and their budgets look better. Don't be fooled.
BTW, the Trust Fund has $2.8 trillion because the retirement of Baby Boomers was anticipated. So when Social Security runs deficits, it only means that Treasury Bonds are being sold to make up for more being paid in benefits than is being collected with payroll taxes. It does not mean Social Security is broke. Would you be broke with $2.8 trillion in the bank?
Also, raising the retirement age or cutting benefits has absolutely no impact on the federal budget or the National Debt. It only affects the date at which time the Trust Fund is drawn down to zero, which is currently the year 2034. A very small increase in payroll taxes or raising or eliminating the salary cap would give Social Security a 75-year solvency. Currently, only the first $127,200 in regular income is subject to Social Security payroll taxes. This means that someone earning $1 million pays the same amount as someone making $127,200. Make less and your whole income is taxed for Social Security, unlike the income of the wealthy.
Stop believing all of the lies by those radical conservatives. Social Security will always be there. Unless politicians take it from us.
One more thing. When a Treasury Bond is redeemed from the Trust Fund, the Treasury simply sells another bond to someone else (like the Chinese). No money is paid from the Treasury. Also (okay, two more things), Social Security is by law separate from the federal budget. It is not the federal government's "biggest expense." It is not even an expense. It has its own revenue stream (payroll taxes plus interest on bonds). Politicians lumped Social Security in with their budgets because the surpluses made their budgets look better. Some even hid the payroll taxes in the figures for general revenues, making Social Security look like an unpaid entitlement. And now with expected Social Security deficits and the drawdown of the Trust fund, they want to reduce benefits or raise the retirement age to keep the surpluses going and their budgets look better. Don't be fooled.
No comments:
Post a Comment