Government borrowing trillions against Social Security surpluses

[MissWaverly]

Did you all catch this, I realized that George W. Bush, Commander in Chief, was spending at
record levels, he and his Dad had the highest budget busters on the books, but did you all
realize that he's also borrowing against the social security money?

Democrats and many independent budget analysts note that overall revenues have barely climbed back to the levels reached in 2000, and that the government has borrowed trillions of dollars against Social Security surpluses just as the first of the nation's baby boomers are nearing retirement.

http://www.nytimes.com/2006/07/09/washington/09econ.html?_r=1&oref=slogin

[liberal N proud]

1. That bastard is going to make sure that SS is broke

Just to get back at the American people for blocking his little agenda of giving it to his buddies.

[MissWaverly]

2. I had no idea they were busting Social Security

I thought this money was all coming out of general fund, what a smirk, give tax break to big oil, big money and steal from the old people, what a class act.

[deaniac21]

4. Social Security has NEVER been in a trust. It's been spent EVERY

year since it's inception.

[MissWaverly]

6. great, what a good idea

convince the suckers to invest in their retirement, then party with it.

[deaniac21]

8. People started living too long.

[MissWaverly]

12. that's not true

I know so many of my generation that either died in Vietnam, died of heart attacks or died
of cancer. Why is it that people say everyone is living longer instead of everyone is paying more taxes longer. When I was a kid, most families survived with 1 wage earner, now most families have 2 wage earners that is a double whammy going into social security and they are having problems because of reckless spending not the life process or the social security idea.

[lumberjack_jeff]

29. Much the way that the bank's money...

... was "spent" on your house. That mortgage "is just a worthless IOU", right?

Social security funds are invested in US treasury bonds, backed by the full faith and credit of the United States. Bush wants to eliminate social security to avoid this debt that the federal government owes us.

[MissWaverly]

32. Excellent

this is more vulture capitalism, voodoo economics, in the old days they just call it stealing.

[sandnsea]

34. The excess is put into T-Bills

It CAN be used to pay down our national debt, which is what Al Gore wanted to do with it. That way, when it comes time to pay out on those T-Bills when the boomer retire, the money would be available to do that. Instead, Bush cut taxes and ran up the deficit, creating the social security "crisis".

[MissWaverly]

36. of course

I saw him going to another photo op today, when does he actually "work"

[sandnsea]

38. It's like the mafia

They call stealing from people a "job" too.

[MissWaverly]

39. well, I don't know where the Congress was the last 6 years

while they were passing tax cut after tax cut knowing that the money was coming out of the social security surplus to run the government.

[sandnsea]

41. Some complicit

Some were dancing on the head of a pin, trying to figure out how to explain that we needed to pay down the deficit after telling people we had a surplus and how social security did not need reforming even though we need to be prepared to pay huge amounts of money from the general revenues in a few years.

Easier to just cut taxes and screw the people than have an honest dicussion about how our budget really works. *sigh*

[MissWaverly]

42. don't lose hope

There's plenty of money out there; instead of buying obsolete planes that will sit in a warehouse let's put the money back into our society. Heck nobody did more for social programs than Franklin Delano Roosevelt and he had the Great Depression, World War II which was a major war and not this occupation for oil.

[Iowa]

51. Anyone who believes there is nothing in trust, PLEASE READ THIS...

What you're saying is what the repukes want us to believe, but it's false. It is nothing but propaganda designed to undermine faith in the system in an effort to soften us up for the destruction of the system.

The trust fund holds treasury securities - approximately 1.8 trillion dollars worth. The credit quality of the bonds in the trust fund are exactly the same as those investors buy for their individual accounts. The bonds in the trust fund carry the full faith and credit of the US government, which guarantees that interest and principal payments will be paid on time. In the investment world, US Treasury securities are considered to be the safest investment available - and the bonds in the trust fund are no different.

The national debt is roughly 8.4 trillion. The SS Trust fund holds approximately 1.8 trillion of that. I don't know about you, but I invest in treasury securities, and when I do, I fully expect that I'll be repaid. The SS Trust Fund is making essentially the same investments we're making - yet the spinmeisters would have us believe that the treasury securities we buy for our personal accounts are sound investments, while the securities the trust fund buys are "sticky-notes" or "IOU's" (the message being that they're worthless - that the trust fund doesn't really contain assets). And that's a lie. If it were true, the wealthy Republicans would be dumping their treasury securities. They aren't. It's all spin.

The bonds in the trust fund are as valuable, real, and legitimate as any other government bonds. What the Republicans want to do is renege on the payment of the bonds in the trust fund (while preserving the full faith and credit quality of their personal treasury holdings) and the only way they can do that is if we, the citizens, let them. In short, it's not about the lack of assets in the trust fund, or the quality of the bonds in the trust fund - it's about making good on the promise that the interest and principal payments on the bonds in the trust fund will be paid on time. The republican plutocracy wants to renege on that solemn promise. They want to honor the solemn commitment made to wealthy treasury holders, but renege on the same promise made to elderly workers. They're irresponsible people. They're liars. They're cheaters. They're thieves. They have no sense of right and wrong. They're weasels. That's what this is all about. This has NOTHING TO DO WITH THE TRUST FUND!! The SS Trust Fund itself is rock-solid.

It isn't just you. Many DUers repeat this lie because they believe it to be true. I see it frequently. The repukes have been successful in spreading the lie. Good, well-meaning people believe it. Now that you know the truth, will you please help spread the word? The future of SS depends on people understanding the truth. Please help others know that the repukes are lying when they would have us believe that the trust fund is empty - or that there is nothing held in trust for the future social security payments that our elderly workers must rely upon to survive. The Republican destruction of Social Security depends upon lies like this one.

Thank you.

[MissWaverly]

54. I can't thank you enough, I am bookmarking this for future

[Iowa]

57. And thank you for your kind reply. I'd like to add one more thing...

I think part of the problem is that the general public lacks an understanding of bonds, and not knowing how bonds work exposes the country to the very real risk that the republican lies will succeed.

When the RW says that the trust fund contains nothing but IOUs, what they intentionally fail to state is that ALL BONDS ARE IOUs. That's what bonds are - they are IOUs. When I invest in a bond (and most investors do), I willingly turn over my cash today for a promise that I will receive all my cash back after an agreed upon period of time, plus interest. What the SS trust fund is doing is no different. What the trust fund holds is treasury bonds. It holds enough bonds to cover the retirements of the boomers, and the fund is projected to be solvent for decades to come. There is no crisis - the trust fund is sound, and so are the securities in it.

The problem with irresponsible republican tax reduction policy is that it is conceivable - if not probable - that their gross irresponsibility will create a scenario in the future where there isn't enough money coming in to repay the debt when the government's bonds mature. But the bonds in the trust fund are only a small portion of all outstanding bonds. So what the lying repukes are trying to do is to segregate - if only in the public mind - bonds in the trust fund and bonds in the private sector. If they can do that, it might just enable them to reduce or eliminate SS benefits, and thereby renege on the outstanding bonds in the trust fund. If they can just tell the public that the trust fund is empty except for a pile of "IOUs", the public might just believe that there is nothing that can be done and accept gross reductions in benefits. And expect them to blame the retirees. They will claim that taxes must be raised to cover all the greedy retirees - when the truth is the opposite. The boomer retirees will have ALREADY PAID for their increased numbers - and the bonds earmarked for that sole purpose will be sitting in the trust fund. The truth is, taxes will need to be raised to pay for the irresponsible Bush tax cuts for the wealthy (including estate tax cuts) - money that will have been forever squandered by that time. In other words - the repukes want to take all the bonds in the trust fund and give them not to the workers for whom they are held in trust, but to the wealthy in the form of all of the irresponsible tax cuts that have already occurred. It is treacherous, dishonest, and immoral, but that's what they want to do. But they can't... UNLESS the public falls for it. Understanding the value of the bonds in the trust fund is the key to preventing this treachery.

Sorry to be so wordy, but this is important. Many do not understand it - even here on DU, so we all have reason to be very concerned that they might succeed. Everyone please spread the word. The repukes won't quit. They are on a mission to raid the SS system and the stakes are very high for all of us.

[MissWaverly]

58. thank you, I now understand

my sister had the chance to talk to Alan Greenspan, she asked him about Social Security, he
said that he thought it would remain solvent but that Medicare would be reduced because it
will not be able to sustain costs.

[fmlymninral]

3. this has been going on

for a number of years. Even when we had a "surplus" we were borrowing from SS. Most of the surplus was in SS revenues.
The budget has been out of whack for years, that is why SS is not going to last. There is no money in the account to pay retirees. Once the balance of SS goes south, the monies will have to be raised from general revenue which will result in drastically higher taxes and less benefits.

[Master Mahon]

5. Well...

The SS trust funds buy US Treasuries.
It is in that sense that general revenues are borrowing against Social Security surpluses.
I don't think the SS trust funds can be touched directly, but the effect is the same. I guess we could say it's better then the Chinese owning these treasuries (I think)

on edit
Question
Do the Social Security Trust Funds earn interest?
Answer
Yes they do. By law, the assets of the Social Security program must be invested in interest-bearing government securities or in securities guaranteed by the government as to both principal and interest. The Trust Funds hold a mix of short-term and long-term government securities. The Trust Funds can hold both regular Treasury securities and "special obligation" securities issued only to federal trust funds. All the securities in the Social Security Trust Funds are special obligations.

http://ssa-custhelp.ssa.gov/cgi-bin/ssa.cfg/php/enduser/std_adp.php?p_faqid=404&p_created=963406743&p_sid=_35tghci&p_lva=&p_sp=cF9zcmNoPTEmcF9zb3J0X2J5PSZwX2dyaWRzb3J0PSZwX3Jvd19jbnQ9MiZwX3Byb2RzPSZwX2NhdHM9JnBfcHY9JnBfY3Y9MS4yOCZwX3BhZ2U9MQ**&p_li=&p_topview=1

[MissWaverly]

7. no, it isn't, when I retire they had better find my money

I am sick of trying to be polite and jump through every hoop while some braying jackass is
in power just because there was dirty work at the crossroads in 2 national elections. When
I retire, I don't care if the government has to run a bake sale, I want my money.

[deaniac21]

9. Well I'll bet they will just hustle right out and fix you up!

[MissWaverly]

11. yes, they will because if they don't I will stand and picket

and embarrass them until they do!

[deaniac21]

23. Good Luck!

[MissWaverly]

25. You don't understand the power of the group mind

when I was a kid and I wanted ice cream, there were tons of kids there, when I went to college
I had to use my social security number and sit in auditoriums full of TV cameras so you could
see the professor because there were tons of people there. All my life, I have been part of a
crowd but there is comfort in this. If we don't get our money, there will be tons of us there.

[sandnsea]

37. You f-n'a right they will

I won't stand for it and I know people of my particular age group won't either. We are NOT our big brothers and sisters who got all the benefits of being on the front end of boomer economics and we are NOT in a position to take the social security loss after they suck it dry too.

[MissWaverly]

40. You pay in, you get back

there's lots going on which is just plain stupid, like why is there not a windfall profits
tax applied to Big Oil.

Page 102 of Armed Madhouse by Greg Palast

"Altogether, the windfall for oil companies taken from U.S. customers totaled $305 billion
over prewar prices since "Mission Accomplished."

[Bridget Burke]

45. So, people getting Social Security will "suck it dry"...

But your benefits are earned! Born in 1948, I'm on the "front end" of boomer economics. It will be years before I collect payments.

Oops. Actually, I did receive SS money after my father's death. How evil of me--I was already stealing YOUR money--from the age of 4 to age 18.

[sandnsea]

56. That was an over-statement

I apologize for that. I didn't mean suck it dry in the sense of taking something undeserved. I meant plain old suck it dry, as in the tipping point of taking out more than goes in will probably hit right about when/if I get to retire in 30 years or so.

I support social security insurance, and constantly remind people that it's also insurance for children should a parent die or become disabled. I have never considered SS a retirement investment, in that I have to get back every penny I pay in. I've always considered it a buffer against complete and total poverty should something happen to me or my husband.

So no, nobody is stealing my SS money. But my particular age group is likely going to be the target of the baby boomer wrath when the tipping point comes. It is just one of those things that is.

[Bridget Burke]

59. Glad you'd rather blame a whole generation....

Than the people who want Social Security to die. Deflect!

[sandnsea]

60. I'm stating a simple fact

It happens every time social security comes up on this board, people blame boomers. It's a constant re-education effort every single time, we paid more into social security in order to create an excess to cover our own retirement. The first generation that ever had to do that. But it doesn't matter how many times we say it, people believe the manipulations they hear on the teevee. So, when that tipping point comes when more money is going out of social security than in, boomers are going to face a backlash. And guess when that is, not when the first set of boomers retire, nope, it'll be when my generation of boomers retire. That's just the way it is.

[AtomicKitten]

10. Their intent was always to bankrupt Social Security

since they consider it an entitlement program.

[MissWaverly]

13. what is entitled about paying in and getting back

this always escapes me and yet farmers can be paid for not growing crops.

[AtomicKitten]

14. me too ...

particularly when I see the bite taken out of my paycheck every month.

This also is an issue that even Republicans part company on with this administration and one that the Dems should hammer home.

[MissWaverly]

15. how many times have they passed a tax cut for the wealthy

in the last 6 years, now I find he was borrowing against our social security money to pay
for it, take away air force one and give him a motorcade escort for his limo, what's the cost
per photo op of air force one, something like 700,000.

[AtomicKitten]

16. and yet they get people to vote against their own self-interests

Brilliant strategy one must admit, wooing people in with hate de jour to the point that they are easily bamboozled and actually adamantly oppose the so-called death - INHERITANCE - tax, something that depletes government monies that affects services for the rest, 99.9%, of the country. And the examples of their retarded rationale goes on and on. Pathetic.

[MissWaverly]

17. Or this war, that goes on an on with no strategy and no reason

Everyone including George Bush admits the intelligence was bad, why are we still there?

[AtomicKitten]

18. And why isn't he being impeached for it!!!

Damn, that really pisses me off. They'd have Clinton's head on a spike for it!!

Aaarrggghghhhh!!!!

[MissWaverly]

19. Yes, indeed

considering what he went through over the Paula Jones case and I thought the Paula Jones
case was a smear.

[liberal N proud]

20. The republicans have always told their followers that it was an entitlement

so they could keep trying to kill it.
They have hated the program since it was first conceived and they could do nothing to stop it at the time.
Ever since they have been trying to kill it, so they tell their faithful that it is an entitlement and they tap into the money to pay everything else including wars and and entitlement programs then they dump any surplus into the general fund, gone never to be seen again.
This then will make sure that the program has a financial melt down when the "baby boomer's" hit peak retirement age.

[fmlymninral]

22. This has been going on for 20 + years

The Government does not have separate accounts . It all goes into one Pot and is spent on all programs. If a business kept books like the Government has for the past 20 year there would be heads on a platter. Surprised that people are just now figuring out this out.

[MissWaverly]

24. I keep getting this paper every year

which tells me what my benefits are, silly me, I believed it was real.

[lumberjack_jeff]

30. "Entitlement" isn't a perjorative.

Social Security is an entitlement to the people to whom it is owed (us), in the same way that your mortgage is an entitlement to the bank.

They're entitled to your mortgage payments. We're entitled to our social security benefits.

[MissWaverly]

33. yes, I would like to see me not pay on my car

it would be gone in a nano second

[ArmchairMeme]

49. Entitlement

Tobacco farmers get federal assistance and the product kills people!

[MissWaverly]

21. Let me correct some bone headed ideas

Many young people see old people as ripping them off by asking for social security benefits
especially baby boomers, the gist of this is, that the baby boomers were no surprise to anyone
who was in the country so they put a huge increase into social security so they would have the
money to pay out when we came into retirement and wanted our benefits. There's 1.2 trillion
dollars a year that the government is spending of our retirement money. The Estate Tax could
help fund social security so you could still buy your lattees when we retire.

Squanders Social Security Trust Fund surplus
The entire Social Security Trust Fund surplus is spent every year - more than $1.2 trillion over the budget's 5 year horizon. Without the Social Security surplus, the deficit under the Bush budget would be $2.8 trillion over the 5 year window, instead of $1.6 trillion shown in their tables.
Under the president's 2007 budget proposal, domestic programs, except homeland security, will face cuts of $182 billion over five years, including cuts to health care, education, nutrition and social services. Now, more than ever, America needs a plan to prepare for an aging nation as the first of 78 million Baby Boomers hit 60 this year. Yet the Bush budget proposes cuts to vital programs that serve our nation's seniors.

A permanent repeal of the estate tax would cost $1 trillion between the years 2011 and 2021. Would you prefer using these funds to shore up Social Security and Medicare?

http://www.retiredamericans.org/index.php?tg=articles&topics=145&new=0&newc=0

[MissWaverly]

26. see this really cool chart on how our money is spent

what spent on social programs is a crumb, a speck in a sea of red ink for bombs, missiles
and every pork item under the sun.

page 47 of Armed Madhouse by Greg Palast

"Lockheed Martin has become top dog among corporate arms dealers. It
became the number one recipient of funds from the U.S. Treasury among
all US companies on the wings of the F-22A, a fighter designed to defeat
the Soviet Union's MiG 29 UBM. The MiG 29 was never built. And the
Soviet Union doesn't exist-proof of the extraordinary effectiveness of the F-22A.
We got 83 of them. Bush ordered 96 more at $130 million per plane.
That's double the old price, but the new price comes with the new name,
the F22-A Raptor. Is that cool or what?"

http://www.deviantart.com/view/9410862/

[Iowa]

52. No, this part is not correct...

"There's 1.2 trillion dollars a year that the government is spending of our retirement money."

When we send in our FICA payments, part of it goes to pay existing retirees. Most of the rest is invested in treasury securities to cover the expected increase in expenditures as the boomers retire. Government bonds are what they are - a debt with a promise to pay principle and interest in a timely manner. I buy them. Many citizens do. Securities in the SS trust fund are no different than other treasury securities in that regard. The government doesn't pay individual/private bondholders first, and then pay the SS trust fund with what's left over. That's not how it works. They would like us to believe that it is our "retirement money" that is being spent, but retirement money (SS trust fund $) is not earmarked in this manner - nor is it more at risk than our personal investments in treasury securities. They would like us to believe that it is more at risk, but that is all part of the propaganda feeding into the notion that the trust fund is empty, or that it holds worthless securities.

[MissWaverly]

53. thanks for the heads up

I appreciate it!

[applegrove]

27. Sick.

[MissWaverly]

28. check out the chart - Applegrove

it's a little bit of a wait but it's worth seeing what they are spending your tax money on.

[Greyhound]

31. You didn't think you were actually going to retire, did you?

Serfs get to work until they drop dead, preferably after finishing their shift.

[MissWaverly]

35. unfortunately I don't have a government job

they probably go in quarterly and inspect for dead bodies, it's hard to determine which are
the active workers and those who are passed on in many of these government bureaucracies
and I include the Congress on that list.

[Mnemosyne]

43. K and R Bastards. n/t

[KKKarl is an idiot]

44. Immigration

Have you noticed how much you pay in every month & how much more those annual statements tell you can get out of it. The fact is that people working today are paying for those who are retired to get their social security. So it brings me to immigration. We really at this point in time need more immigrants to prop up the fund. Skilled workers like engineers are always known to help in not only paying taxes but also helping to create more jobs. Unskilled labor is also needed because we have a lack of them so illegal immigrants, who do not pay taxes, are filling those gaps. It is amazing how congress is letting them go on not paying taxes in waiting for an election to make their decision. How much has this election cost us in lost tax revenue? I have about 30 years before I retire. So I would part of the support function for the baby boomer's to get their social security & I am happy to do that (by the way I am a legal immigrant). But we need more people to come into this country to help be a part of the base because people aren't having enough kids.

[MissWaverly]

55. You are right

and before I get flamed, I believe that outsourcing jobs oversees is what is killing our economy
not immigration. We need sound leadership that will eliminate tax breaks for those who want
to outsource American jobs and will provide money to stimulate the economy and create more jobs.
I also think that aiding the Mexican economy after we busted it with Walmart and cheap corn would help as well. But we have bought into a promise of American as land of the free and turning this country into a post 9-11 police state is not going to answer our problems. Just
because there are a few criminals that hate us for our freedoms doesn't mean that everybody
should be treated as criminals.

[snappyturtle]

46. Born in '47 and I know I'll never......

collect one cent. The reason? It may not be there and/or taking it prevents me, for a period of time anyway, from earning more. Who's bright idea was that? Besides, they want to privatize everything....social security, education, medicare, medicaid, etc. after all, "The president is always right."

[jn2375]

47. Anyone know if their taking money out of the Federal Employees pensions?

Wouldn't put it past them to steal the pension fund money to keep the deficit numbers down. Anyway this can be checked?

[rman]

48. in plain english: they are robbing us blind

[AzDar]

50. Hell NO, Chimpolini..... n/t