Time to honour America’s debt to the retired

[flashl]

Time to honour America’s debt to the retired

The first American baby boomers have now become eligible to retire and start drawing on Social Security, the government pension programme. Many politicians are telling us that the resulting rise in Social Security “entitlement” payments will break the budget, so we have to cut benefits to retired people. But the politicians do not want to mention that the Social Security system has been compiling a huge surplus. Why? Because they have been using that surplus for years to hide the real size of the current federal budget deficit, allowing them to spend more and justify tax cuts for the wealthy.

US Office of Management and Budget data show that while government’s reported deficit averaged about $300bn a year from 2002 to 2006 – roughly $4,000 per household – the real current deficit was actually more than 50 per cent bigger. The government just “borrowed” about $165bn from the Social Security Trust Fund every year – under the table.

In 2007, the real deficit was $449bn according to the OMB. However, the “official” deficit widely reported is only $257bn, because it is government policy to add the borrowed Social Security Trust Fund surplus ($192bn in 2007) to revenues before calculating the “official” deficit that has to be borrowed publicly. The recently passed economic stimulus package of $160bn is reported to raise the 2008 official deficit to about $400bn. But the real deficit in 2008 will be about $600bn.

...

Politicians understand that, with the Social Security Trust Fund surplus declining, they will no longer be able to borrow from them under the table while announcing fictitiously smaller deficits to justify continued expenditures and tax cuts. And they will have to generate funds from other sources of revenue to redeem the bonds after 2017. Rather than admit too much was borrowed recently, and must now be repaid, they want to reduce Social Security benefits. This puts much of the burden on the middle class, who created most of the surplus that has been used to hide the real size of the deficits.

Fundamentally, the Social Security issue is not one of “entitlements” but of the obligation of our government to honour its debt and not reduce Social Security benefits.

FT

[SharonAnn]

1. Basically, they stole the Social Security $$ we saved and they want to keep it.

[OllieLotte]

7. Uh...no.

It's been pretty much spent.

[lumberjack_jeff]

2. Their intent is plain.

The social security trustees are setting the panic button date at 2027. This isn't the point at which the trust fund is exhausted, it is the point at which the federal government has to pay the first dime of repayment to retirees.

[slipslidingaway]

3. Exactly...

from you link

"...Baby boomers, and all others who have worked since 1983, paid in more than needed for Social Security retirement payments. They saved and created the trust fund surplus, which now amounts to more than $2,000bn and must be invested in US Treasury bonds. It is projected to reach nearly $3,000bn in 10 years. Then Social Security will stop generating a surplus to subsidise the rest of the budget and will begin redeeming its bonds to help make payments..."


Approximately One Trillion surplus added during the Clinton years and another 1.2 Trillion added to the trust fund under Bush, see table at link below.

http://www.ssa.gov/OACT/STATS/table4a3.html

[fasttense]

4. The Social Security Trust Fund was suppose to be temporary anyway.

It was specifically designed to get Baby Boomers to pay not only for their parent's retirement but their own as well. Before Raygun, Social Security was designed so that the working generation paid for the retiring generation's Social Security. But Raygun decided we Baby Boomers should pay double and put the additional taxes paid by the Baby Boomers into a trust fund. Then Greenspan decided to borrow it and keep it off the books.

The gubermint thinks we should continue to have a trust fund so they can hide the trillions more they borrow. What a scam.

Add to this the fact that inflation has been continually under reported by the gubermint since Raygun. That way Social Security payments are way below the actual cost of inflation. So in effect they have lowered benefits anyway.

Don't you just love all this smoke and mirrors?

[spin]

5. I start social security in July when I turn 62...

It looks like I'll get something back after all I put in...at least for a while.

Fortunately, I have a 401K and a pension as a backup. Another plus is that I own everything that I have and pay my charge card off every month.

As an example of how the government makes promises and doesn't keep them check out:

http://www.enquirer.com/editions/2003/05/25/loc_VAhealthcare.html

[Joanne98]

6. I was just going to post this. K&R!

[2Design]

8. when they cut their pay, benefits, and give up retirement - then they

can go after the peasants