What does Social Security have to do with the Deficit, Debt, Debt Ceiling?

[sabrina 1]

Why is it even being mentioned in this debate over the Debt Ceiling as 'something to cut' or 'something to slash' or better question, why is it even 'on the table' during this debate?

Social Security had absolutely zero to do with the deficit.

I'd like someone to explain how cuts to SS will contribute anything to reducing the deficit.

By 'cuts' I mean:

1) Raising the Retirement Age

2) No COLA (Cost of Living Adjustment) for Seniors

3) Obviously any kind of cuts in benefits earned regardless of age of retirement.

4) Chain-weighted CPI

Or any other deceptive plans to take away money from those who earned the benefits they are receiving or will receive in the future.

The Social Security Fund belongs to those who paid into it. Anything 'saved' by any kind of cuts, goes into that separate fund. The only way it would help pay down the debt would be if it is taken out of the fund and 'borrowed'. Raided is probably a better word. Is that what they have in mind? I hope not.

It should not even be mentioned in the same paragraph, speech, sentence as the words 'Deficit' 'Debt' 'Debt Ceiling'.

So, why do we keep hearing about Social Security?

Why are we not hearing more about creating jobs?

Why are we not hearing a lot more about the Bush Tax Cuts which contributed 2 Trillion $$ to the Deficit?

Why are we not hearing a lot more about the other major cause of the problem, the Wars/Military Spending?

And has anyone even mentioned The Economic Meltdown, the Bailouts etc. as a major cause of the current fiscal problems and/or starting investigations into those who caused it, as recommended in the recent findings of the bi-partisan Senate Committee to the DOJ?

Iow, why is it even being considered that the most vulnerable Americans pay the debts of the most corrupt, the most wealthy who are actually responsible for them?

'Shared Sacrifice' 'Austerity'! This sounds like the US is being subjected to the same programs implemented in Greece, in Ireland and elsewhere by Global Entities whose main goals appear to be to protect those who created the problems from taking any responsibility for them.


Franklin Roosevelt signs the Social Security Bill in Washington on August 14, 1935.

Anyone who ties Social Security to the current problems with the Debt Ceiling should be ashamed of themselves.

Edited to add:

And regarding the President's statement that 'SS is not a major driver of the deficit'. Someone needs to tell him that it is not any kind of driver of the deficit.

In fact, someone has: Obama: WH deficit meeting constructive

But Rep. Jan Schakowsky, D-Ill., said she would "absolutely" vote against any package that included savings in Social Security spending. "Social Security has zero to do with the deficit. Nothing. It is a completely separate discussion," she said.

She said she opposed "the very idea of having these essential programs on the table, being forced to put them on the table by Republicans who want to protect the wealth of the wealthiest Americans."

The President however has not been clear at all on this subject:

Obama ignored a question about Social Security during a photo session at the beginning of the meeting. Carney also declined to discuss options before the negotiators.

I think we need clarification on this from the WH and from Congressional Democrats since only a few so far have made clear statements such as the one above from Rep. Jan Schakowsky. It's not that hard.

[Cleita]

1. Nothing.

The Republicans are trying to undermine these programs so they can privatize everything and not pay taxes into the programs. A win, win for them.

[SharonAnn]

109. It's a pool of available money and can be used instead of the rich paying taxes.

That's how it fits.

End of subject. Period.

They want to continue stealing it "fair and square".

[indurancevile]

2. Nothing. I take it your question is rhetorical.

[sabrina 1]

7. Well, is should be rhetorical as it should go without saying

that SS should have no part in these discussions, but as I point out in my edit to the OP, the WH has not been clear at all about what their intentions are regarding SS. And statements from the president such as 'SS is not a major driver' of the deficit, are not very encouraging. It implies that he does not understand that SS has zero to do with the deficit.

[Name removed]

9. Deleted message

Sub-thread removed by moderator. Click here to review the message board rules.

[Sgent]

3. Because no one cares about a "trust fund"

or anything else.

Money in < Money out = increasing debt. The fact that the government divides that into different pots makes no difference to the Chinese or any other investor.

[Big Blue Marble]

26. You do understand that we, the people who paid into SS,

are as much creditors of the US government as the Chinese are?

Our money was borrowed without our permission by Congresses and Presidents who wanted to reward their
rich benefactors with easy tax cuts while spending like wild.

Now that the loans are coming due, the current Congress does not want to have to face those same
benefactors for the missing money.

Viola, somehow it has become our fault and our problem, when in fact it is the greatest heist in history.

[sabrina 1]

33. + 1000 n/t

[woo me with science]

42. +10000 nt

[Sgent]

45. No we aren't

The money owed to social security recipients is not a debt of the US -- this has already been litigated.

[Big Blue Marble]

61. Not us individually,

the SS Trust Fund holds the bonds. These bonds are backed with the full faith of the US Government who issued them.

"...the Social Security trust fund is invested in special U.S. Treasury bonds, which are used to fund the general operations of the federal government.
There is a legal mechanism and obligation to pay back the interest and principal on these bonds, just like any other U.S. Treasury bond."

http://moneywatch.bnet.com/retirement-planning/blog/money-life/3-big-myths-about-social-security/2486/">Link

In fact, the Social Security trust fund is invested in special U.S. Treasury bonds, which are used to fund the general operations of the federal government. There is a legal mechanism and obligation to pay back the interest and principal on these bonds, just like any other U.S. Treasury bond.

Even Alan Greenspan concurred:

At a Senate hearing in July 2001, Federal Reserve Chairman Alan Greenspan was asked whether the trust fund investments are “real”
or merely an accounting device. He responded, “The crucial question: Are they ultimate claims on real resources?
And the answer is yes.”

http://en.wikipedia.org/wiki/Social_Security_Trust_Fund">Link

[sabrina 1]

73. Thank you.

It's interesting that people are often willing to accept that the US Govt doesn't have any obligation to pay back the SS fund, but would rail against the idea that there is no obligation to honor its commitment to say, China.

And it's because of this that they can get away with the ridiculous notion that cutting SS will somehow help reduce the deficit.

Politicians rarely, other than people like Bernie Sanders, explain to the public that any cuts would only increase the SS fund, and would NOT reduce the deficit since the US Treasury and the SS Fund are two separate funds.

However, making SS cuts an even more stupid idea, once the fund is replenished, by cuts, the Fed. Govt will go on 'borrowing' from it which will only serve to RAISE the deficit as the Govt will still have to make good on those bonds.

[JDPriestly]

113. Basically, the Republicans under Bush raided the Social Security

funds to fund their Iraq War. They hid their heist by raising the debt ceiling over and over. Now they are coming to dig up their loot. That is the real meaning of their refusal to raise the debt ceiling.

Remember all that cash shipped to Iraq on pallets -- and then LOST. Well, that was just a small part of the theft in action.

Never, ever, ever, ever trust a Republican. They want one thing -- the money in your wallet.

[originalpckelly]

129. And the Democrats under Clinton did the same thing too. There was no government budget surplus...

the surplus was money from the Social Security Trust Funds that automatically goes to the government.

[Big Blue Marble]

139. You are so correct.

It is a myth that Clinton had surpluses. The deficits were masked by the excess Social Security Funds being
paid in to trust funds then borrowed out. So few have ever understood this.

Still Clinton did a hell of a lot better than Bush when it came to responsible government.

[JDPriestly]

142. Clinton was no friend of Social Security.

But he did try to balance his budgets in the short term. He did not do what Bush did, which was to intentionally run up huge deficits so that the money borrowed from the Social Security funds would be difficult to replace without huge tax hikes.

[indurancevile]

132. I think that's not quite right. I think every administration uses any social security excess monies

as I understand it, all excess FICA taxes are loaned to the government in exchange for US securities. So anytime more is collected in FICA than is spent, the excess funds the general budget. So it's not really an issue of anyone "raiding". The issue is when FICA taxes collected vastly exceed what's being paid out for Social Security. I believe it was Reagan that started this trend of over-collecting.

[JDPriestly]

141. Bush purposely ran up huge deficits.

He fought two wars. The Iraq War was completely illegal and unnecessary. It was just and excuse to try out war material and machines and to hand out money to Bush's cronies in the defense industry. Then, instead of raising taxes to pay for the wars as previous presidents had done, he gave tax breaks, mostly to the very rich. So, it was through those policies that Bush raided the Social Security trust fund. He tried to spend it down as fast as he could during his reign. Disgusting crook. That's what he was.

[indurancevile]

146. i agree that he purposefully ran huge deficits, but no matter who was president, the

surplus collections would have been there and would have gone into the general budget, by law.

[JDPriestly]

150. The surpluses were used to buy Treasury Bonds.

It's the bonds that are now coming due and have to be paid out of the general budget just like other bonds. That's where the Republicans are balking. They do not want to raise taxes on the rich back to the level of the Clinton era in order to repay the bonds to the Social Security recipients.
.
If you want an explanation, Congressman Xavier Becerra gave an interview which is available on his website, I think it was to KPCC here in Los Angeles. It was with Pat Morrison.

Here is the link.

http://becerra.house.gov/index.php?option=com_content&view=article&id=620:kpcc-rep-becerra-talks-budget-social-security-immigration-and-more-40-min&catid=18:podcasts

Excellent explanation. He was one of the few progressives on the Cat Food Commission and really knows what he is talking about. Stanford Law School graduate. Great Congressman.

[indurancevile]

151. Any surplus Social Security collections must be invested in US securities, by law.

There has been no 'raiding'. The issue is collecting the huge excesses. As I understand it.

[JDPriestly]

153. Here is more on that issue.

The FICA taxes that go into the Social Security fund are imposed on the lowest part of incomes. Even if you earn $300,000 per year, you pay FICA or Social Security taxes only on the first $106,000. That top amount used to be even lower.

That means that the FICA or Social Security taxes are a regressive tax. So if Congress refuses to pay them back, it is actually an accounting trick to force the poorest people, those who pay the greatest percentage of their paycheck in FICA or Social Security taxes to carry a heavier burden of the general tax load in terms of the percentage of their wages.

If this doesn't make sense to you, imagine a person earning $24,000 a year. Every cent he earns is taxed to pay into Social Security.

Then imagine the guy across town who is the manager of the first guy and is earning $200,000 per year. Only the first $106,000 of his money is subject to the Social Security tax.

So, when the Social Security Trust Fund bonds are not repaid, everybody's taxes go up, but the person earning only $24,000 is suddenly having to contribute much more to the general fund in terms of the percentage of his earnings than intended by the Tax Code. It is far more than he should contribute if you believe in progressive taxes. The share of his salary that he pays in taxes becomes very high, much higher than a fair tax code should require.

And the sleaziest part of all is how sneaky Obama and the Republicans are about this. They are doing it retroactively. That is, the taxes have been paid over a long period of time under a certain understanding as to how they would be disbursed.

And now, many years after they were assessed under that understanding, the understanding, the contract so to speak is being rewritten so that these payments are re-characterized as general revenue rather than as special funds dedicated to Social Security.

This is an account trick that makes Enron look saintly.

I am so disgusted that I cannot tell you. This makes me furious -- obviously. It is just such a cheap trick, and most people don't see through it at all.

[indurancevile]

154. We seem to be talking past each other. I agree with you that the contract is being rewritten.

However, the root of the problem is that reagan/greenspan rejiggered rates to produce accelerating excess fica collections. Prior to that collections were kept roughly in balance with payouts -- a year's surplus or less.

I'm saying that was the original sin. No excess collections = nothing to "borrow". But when there are excess collections, they must, by law, be put into the general budget in exchange for US securities. Thus it's incorrect to characterize this mandatory borrowing as a "raid".

In my opinion reagan/greenspan accelerated rates in order to produce precisely this situation, and also as a stealth tax on labor to reduce rates on the rich. There was no legitimate reason to increase social security taxes over the amount needed to pay for current retirees in a pass-through. That was the only "raid" there was. Once the surplus collections existed, the money HAD to be borrowed.

[JDPriestly]

155. "a stealth tax on labor to reduce rates on the rich"

That is what I have been saying. We agree on what happened. But I say that if the Reagan and subsequent administrations continuously represented to working people that the money they were paying in Social Security taxes would be saved for the Social Security of the demographic bump that the baby boomers' retirement will bring, then that is what that money must be used for.

And I think you will agree that Bush's tax cuts for the rich were intentionally awarded to use up the Social Security surplus and give Americans the false impression that the system would go bankrupt. In fact, Wall Street wants the money given to them instead of to the government. As one who paid all that tax and is now retired, I feel as though a thief had entered my bank and stolen from my bank account or even entered my home and stolen from my possessions. That money is for retirees and should not have been handed over to Halliburton in overpayments for services in the bogus Iraq War.

[mike_c]

87. wish I could rec your response....

:thumbsup:

[polichick]

4. That's on the President - even Republicans knew better.

[bahrbearian]

105. Its funny,why is Obama trying to one-up Paul Ryan.

[OwnedByFerrets]

5. Nothing, absolutely Nothing

[Autumn]

6. Not one damn thing

For the Democrats and Obama not to say that is shameful.

[Major Hogwash]

8. Because the mainstream media hates liberal Presidents!!!! They didn't say shit when Bush was in!!

And that asshole started 2 fucking wars!!!!!!!!!!!

[Raine]

10. Absolutely NOTHING!

:grr:

[lib2DaBone]

11. K/R No one even mentions the $2 Billion yearly give-aways to Pakistan Military..

Billions flushed down the toilet all over the globe.


Yet they insist that giving Granny $700 a month to survive is the cause of the deficit?

Total media failure in the United States.

[sabrina 1]

13. Or total media collusion?

Maybe with the hoped for collapse of the Global Murdoch propaganda machine, a return to real journalism will begin the process of restoring democracy, not just here, but in Europe and everywhere else where, not elected officials, but tabloid moguls decide how countries ought to be won, as has now been noted in Britain as more and more is revealed about just how much influence Murdoch and his minions have had on the British Parliament up to and including the Prime Minister.

[Hawkowl]

78. It isn't to the Pakistani Military...

It is a giveaway to US DEFENSE CONTRACTORS!!! See the US loans/gives the money to Pakistan et al. with the express condition that they use this money to buy weapons from US manufacturers!!

It is corporate welfare on the grandest scale imaginable!

[soryang]

12. Actually, the Treasury obligations in the "trust fund" are paid...

...or to be paid with general revenues. Thom Hartmann laid this out a few weeks back on his radio show.

Of course the principal won't be needed to begin refunding to recipients until 2037. I don't know about interest. In any case, the ideological rejection of Social Security by corporate and financial elites merely awaits the opportunity to schedule its destruction. By abandoning the payroll tax as long as possible (Obama recommended extending it in the budget talks along with fast tracking more "free trade" deals, the same kinds of actions that got us into the jam we're in) and sabotaging COLA, they reduce the stream of pay back obligations and increase financial insecurity of recipients and prospective recipients. A lot of people have abandoned 401Ks and IRAs after all the financial misconduct on Wall Street. As the major alternative behaviors, the financial industry and the corporate establishent, which cannot escape the payroll tax, has to attack social security and medicare.

[sabrina 1]

47. Thank you for a clear explanation of what is happening

It is so disingenuous for anyone calling themselves a Democrat NOT to state the facts clearly about SS. And yes, it was totally incomprehensible to, on the one hand, claim there won't be enough principle to keep paying out SS benefits, while on the other, doing such stupid things as the 'tax holiday' and, as you said, 'sabotaging COLA'.

[TexDevilDog]

14. What? There is no social security lockbox in Washington?

I am shocked.

:o

[Curmudgeoness]

15. I am shocked too. I thought it was under a mattress. nt

[slipslidingaway]

16. Nothing, but the Dems put it on the table :( n/t

[chill_wind]

17. And it isn't the first time they tried. Ted Kennedy got it off the table

with the help of Dean Baker.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=103&topic_id=612538&mesg_id=612634

[slipslidingaway]

29. Thanks for that, did not know. n/t

[sabrina 1]

38. Thank you, I didn't know that. Those Republicans have

hated helping the must vulnerable Americans since these programs began and if it were not for Democrats throughout the decades, fighting them off, I wonder what life might have been like for millions of people who would have been left to fend for themselves. They would turn this country into a third world country if they could.

Good for Ted Kennedy, he is missed.

[chill_wind]

49. Baker makes that same great point. Whether they know it or not

to this day that decision had impacts for tens of millions of current and future retirees.

The other thing he talks about in that piece is that the Greenspan idea had considerable appeal in both parties (and the Clinton White House) and (or perhaps because) "the great thing was that Congress could do this cut by claiming it was just a technical adjustment."

It feels a bit like deja vu to hear Nancy Pelosi say what sounds somewhat similar-- about the way some lawmakers want to frame it again now:

"As negotiations over deficit reduction and raising the debt ceiling continue, Pelosi reiterated today that Democrats are opposed to making cuts to Social Security benefits.

When asked if changing the Social Security formula for cost of living adjustments was a de facto benefit cut, Pelosi did not directly answer.

"No. Cutting benefits is exactly that. Cutting benefits," Pelosi said. "There's concern in my caucus about what would happen with the CPI (consumer price index). Some think it is a benefit cut, others do not."

http://www.cbsnews.com/8301-503544_162-20077942-503544.html

Not her own framing necessarily, but just that she's already encountering this.

But not to omit this:

"But she reiterated that any savings from changing the CPI would have to go back to the Social Security Trust Fund."

[sabrina 1]

52. 'Would have to go back to the SS Trust Fund.'

Where else would they go though? Isn't that what they want? To keep a surplus in the Fund so that they can continue to use it as a Slush fund, for wars, for bailouts etc. And the way to do that is to find ways to 'cut' benefits without making it look like 'cuts'. Paying out less, builds the surplus.

But, here is my question which I would like to ask Congress, IF they succeed in building up the surplus and they continue to use the funds as they have been doing, won't that only INCREASE the deficit? It will raise the Govt's debt to the SS fund.

Nancy would have to add to her condition that the money go back into the fund, that it cannot be used for anything other than to pay SS's obligations to those entitled to benefits. To do that they would have to change the law. So, it seems like more smoke and mirrors to me.

[PoliticAverse]

18. Paying back the $2.6 trillion in the trust fund has to come from somewhere.

There are about $2.6 Trillion in special issue securities in the trust funds.

Whenever they need to be redeemed the government has to come up with the money.
As the government runs at a deficit any redemptions will require the government to
borrow money thus increasing the deficit (the government could always sell assets
like land it owns instead of borrowing money).

If Social Security got increased revenue (by say raising the payroll tax or raising
the payroll tax cap) the trust fund securities might not have to be redeemed.

Additionally since the amount of revenue Social Security gets is not directly related
to the amount Social Security outflows and any amount in excess of outflows is used to
'purchase' special issue securities and flows back to the government and so a decrease
in outflow from Social Security gives the government more cash and has the effect of
reducing the deficit.

http://www.ssa.gov/oact/progdata/fundFAQ.html
http://www.ssa.gov/oact/progdata/assets.html

[sabrina 1]

19. Thank you. I understand that, and that makes the American

people CREDITORS of the US Government. The Govt has other creditors, are they going to try to take money from THEM to try to bring down the deficit?

I think they can do it easily. End the wars, end the Bush tax cuts. Raise the cap on SS. Create jobs. And there are several other ways to deal with the problems we have.

But taking money from Seniors, the disabled, dependent children cannot help at all since any money taken from them, must stay in the Fund, and if they borrow from that fund, if that's what they have in mind, then aren't they RAISING the deficit even more?

[Name removed]

20. Deleted message

Message removed by moderator. Click here to review the message board rules.

[robinlynne]

22. Bullshit.

[SDuderstadt]

24. Bullshit, yourself...

Please explain how the government is trying to take money from the American people.

[girl gone mad]

27. By refusing to meet its Social Security obligations in full, when it clearly has the capacity..

to do so, the government is forcing SS bondholders bear unnecessary haircuts, which amounts to "taking money" from workers who paid into the system. This is a choice that our political leadership is making; a choice motivated purely by politics, not by financial necessity.

[Name removed]

28. Deleted message

Sub-thread removed by moderator. Click here to review the message board rules.

[sabrina 1]

34. Thank you, saved me the trouble! n/t

[PoliticAverse]

30. Yes, in a sense Social Security recipients are creditors of the government...

the difference is that the government has the ability to control how much those
creditors are paid without defaulting.

Since no one is contractually guaranteed to receive any specific amount of
Social Security benefits (affirmed by the Supreme Court in Fleming v. Nestor:
http://www.ssa.gov/history/nestor.html ) Congress can reduce Social Security
benefits, change COLA formulas, raise the retirement age etc. without technically
'defaulting'. It could for example eliminate Social Security entirely and never
have to redeem the securities in the trust fund.

Because the amount of revenue Social Security gets is not directly related to the amount
of Social Security payments and any amount in excess of payments is used to 'purchase'
special issue securities and flows back to the government any decrease in payments by
Social Security gives the government more cash and has the effect of reducing the
deficit.

Note that the $2.6 Trillion in the trust fund that has built up since the 1983 Social
Security reform has been reducing the effective deficits of the federal government in
the years since 1983.

So the answer to the question of why are they trying to take money from Social Security
recipients is:
1 - Because they can, because Social Security Payments aren't legally binding contracts.
2 - Because any amount of reduced payments causes the government to have to borrow less and
makes the deficit look better.

Ultimately Social Security is a political issue. How much are you willing to tax people
and how much are you willing to pay people.

[slipslidingaway]

37. And politicians know they'll get your vote anyway, so they can take from the poor and give ...

that money to weathy, the MIC, the drug companies.

:(

"...So the answer to the question of why are they trying to take money from Social Security
recipients is:

1 - Because they can ..."

In edit - do not mean your individual vote, people in general.

[sabrina 1]

63. Interesting. But the US Govt could default on any of its

debtors, for that matter. And if it did default on the American People regarding SS, and it would be viewed as a default, the consequences would be so immense that I doubt even the most rabid rightwing Republican would not fear them. First, what would it look like to its other debtors, what kind of confidence would they have in a country that cannot or will not meet its obligations to its debtors and especially when those debtors are its own people.

Aside from it would do to millions of America's most vulnerable citizens, I think it would prompt other debtors like China eg, to start calling in their debt out of fear of being defaulted on themselves.

As for as there being no contract with the American, I think there absolutely is. We hand over a % of our earnings on the understanding that it will be returned in the form of benefits at a later time. If they decided to end SS, I think they would have to compensate all those who have paid into it. I'm sure the lawsuits would fill up their court calenders for years to come.

But since it is one of the most fiscally successful programs ever, there is no reason why the US Govt should want to end it, and I doubt even Republicans will try to do that, although they will continue to try to privatize it.

[Devil_Fish]

121. Your forgetting... With what money would the people sue the gov?

Lawyers cost money. SS recipients have none. the gov will only appeal any un favorable ruleing, and the plantiff will simply run out of $$.

[robinlynne]

21. taxes. Clinton era tax-rates. Remember a country in prosperity?

[girl gone mad]

25. The government doesn't have to borrow or sell assets.

First of all, there is no need for a sovereign government to save its own currency so the idea that anything other than bonds should be held in the Trust Fund is silly. Saving is an act performed by entities which are financially constrained and therefore must consume less in the short term in order to be able to consume more (or merely at an an adequate level) later. A sovereign government never has to relinquish spending in the short term in order to acquire the capacity to spend more later.

At the point of redemption of a bond, there is a transfer of funds to the bondholder in return for rescinding the bond. This reduces government debt by the redeemed amount and increases bank reserves by the same amount. The bond functions like a savings account and the bank reserves like a non-interest bearing bank account.

What's more, the Trust Fund can be supplemented by Congress at any time, as was done in 1982, when the assets of the Trust Fund were near depletion and Congress transferred money from the general fund.

[slipslidingaway]

32. Yes it does, but it is not a SS problem and most Dems are silent on that point. n/t

[Recursion]

92. Why not? It's a Pentagon problem to pay for weapons systems

Why isn't it an SS problem to pay for benefits?

[slipslidingaway]

137. Why should we look to the SS system for funding when it was not spent by SS ...

some people would be paying twice, while the tax rate on the wealthiest Americans declines and we're spending billions on wars of agression.

Take from the working people and give more to the Pentagon and wealthy.

:shrug:

This was the post I replied to ...

"Paying back the $2.6 trillion in the trust fund has to come from somewhere.

Edited on Sun Jul-10-11 10:25 PM by PoliticAverse

There are about $2.6 Trillion in special issue securities in the trust funds.

Whenever they need to be redeemed the government has to come up with the money.
As the government runs at a deficit any redemptions will require the government to
borrow money thus increasing the deficit (the government could always sell assets
like land it owns instead of borrowing money).

If Social Security got increased revenue (by say raising the payroll tax or raising
the payroll tax cap) the trust fund securities might not have to be redeemed..."

[lumberjack_jeff]

51. In other words, not stealing from people who invested in "the full faith and credit of the US"

will cost money.

Pretty amoral way of looking at the world.

I think we're all pretty clear that stealing $2.6 trillion from workers would improve the financial outlook for Goldman Sachs.

[johnaries]

23. According to Obama: nothing.

But he {Obama}also made very clear {in the SOTU} that we do not believe -- and a lot of independent economists back up our contention -- that Social Security is an issue in the near- and medium-term deficit. So when you talk about deficit reduction, dealing with the issues that have been before us in these negotiations for these many weeks, Social Security is not a factor.

WH Press Briefing, 7/7/11

[sabrina 1]

44. Do you have a link for that? It doesn't

seem clear whether he said this recently or in the SOTU address.

Here is what Carney said this week:

"There is no news here — the president has always said that while Social Security is not a major driver of the deficit, we do need to strengthen the program," Carney said, providing that any such effort "doesn't slash benefits." His statement did not directly address the possibility of reducing annual Social Security increases by changing the inflation adjustments.

SS is not a driver of the deficit, period. So, that was not encouraging to hear, a suggestion that it is. If he has been clear that it is not, that would be a very good thing.

[Karmadillo]

31. The same thing Iraq had to do with 9/11?

nt

[GOPBasher]

36. LOL n/t

[hay rick]

39. Perfect. nt

[GOPBasher]

35. "What does Social Security have to do with the Deficit, Debt, Debt Ceiling?" --Answer: Nothing

It has nothing, zero, zip, zilch, nil, nihil, nada, niente, rien, niets to do with the deficit/debt. (I love playing with google translate.)

[sabrina 1]

41. Lol, maybe you could send that to the President

as he seems to be having some difficulty making the point the you just made so clearly and succinctly!

[Marr]

40. That's what people have been asking since Obama appointed his "Deficit Commission", and

staffed it with opponents of Social Security. The answer, of course, is "nothing", and anyone who pretends otherwise is out to undermine the program.

[defendandprotect]

43. N O T H I N G -- !!!! In fact, it provides a SURPLUS OF $250 BILLION TO BUDGET!!

Which has been sued year after year as a slush fund -- !!

[sabrina 1]

60. Yes, and even last year it still ran a surplus despite the

high unemployment rates because it doesn't just depend on payroll taxes, it has two other sources of revenue. The payroll taxes were down of course. But we know that even if nothing is done to SS until 2075 it will still be able to meet all of its obligations, unless of course the Fed. Govt defaults on its obligation to the Fund.

[Name removed]

64. Deleted message

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[Name removed]

67. Deleted message

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[mike_c]

90. "...unless of course the Fed. Govt defaults on its obligation to the Fund."

Did you not read that part?

[SDuderstadt]

102. Yes...

Duh.

[mike_c]

104. are you always this insulting or are you just having a bad day?

Duh? That's rather rude, don't you think?

At any rate, it seems to me that you and the previous DUer misunderstood one another in that you and she were discussing two different sets of propositions-- one in which the SS administration foresees problems if no action is taken to insure that the government doesn't default on its obligations to workers and another in which those problems do not occur because the government met its obligations. They're two sides of the same coin, mutually exclusive only in the sense that if it's heads, it isn't tails. But both perspectives are equally true, just like a coin still has two sides.

[SDuderstadt]

106. Maybe you should try educating the other...

DUer.

I understood it just fine.

[sabrina 1]

110. Maybe you should read my previous OPs on this subject. It

would save you a lot of time misrepresenting them.

[SDuderstadt]

117. Sabrina...

I have never misrepresented a single thing you have said here. Not once. If, in fact, I had, it would be easy for you to produce an example of where I had done so. Even when I confront you with your exact words, you undertake this tortuous, strained effort to deny the plain meaning of your own words. It's really quite comical to behold.

There's a real simple two-word (hyphenated) remedy to our "clash". It's called fact-checking. Why not give it a try? BTW, I'm still waiting for those court cases in which you claimed "security cheackpoints" had been found "unconstitutional".

[Name removed]

140. Deleted message

Message removed by moderator. Click here to review the message board rules.

[SDuderstadt]

148. Unintentional irony n/t

[sabrina 1]

112. Hi Mike, thank you!

:hi:

[Name removed]

46. Deleted message

Message removed by moderator. Click here to review the message board rules.

[SDuderstadt]

48. "ask Obama who hates boomers and has said as much"

Aw, jeez. Not this shit again.

[lumberjack_jeff]

50. Imagine if your friend Mary loaned you a whole shitpile of money.

Let's also imagine that you have no self control whatsoever. You promise "cross your heart, on your mother's grave, your full faith and credit" that you'll put it in the bank so that you can repay Mary when she needs it... but instead you buy drugs for all your party friends.

It's looking like any day now, Mary is going to come asking for that money to pay for a nursing home for her grandma Pearl.

Grandma Pearl contributes to your future financial picture (and your ability to buy drugs for your friends) because Mary intends to support her by calling in your debts... but you do have a gun and you can simply kill Grandma Pearl and thus improve your financial projections. In this way, you control the conditions in which Mary can ask for payment.

It's not really stealing or murder when you're really big and powerful.

[sabrina 1]

53. Excellent analogy.

[girl_interrupted]

54. +1

[Rex]

107. It is the govts inability to care for the needs of the most vulnerable

and those that scoff and kneejerk all over the place when you mention that. They kill the debate, the govt kills grandma indirectly from neglect...repeat a thousand times and nothing changes we all still pay taxes and fight the wars for the rich. Nothing changes...the system broke in 2000 and now the most vulnerable in society that were protected 10 years ago are about to be thrown under the bus...just what the GOP wanted all along. Sad.

However, it is ONE thing to say you will do something and another to actually do it.

We shall see.

[girl_interrupted]

55. K&R Nothing

Absolutely, positively nothing.

[slipslidingaway]

57. Someone needs to tell the American people the truth! n/t

[Hawkowl]

79. I think the vast majority KNOW the truth

The fact is, are "elected" representatives don't give a shit what the vast majority wants. Our government is failing.

[slipslidingaway]

56. October 13, 1989 Senator Hollings on Social Security ...

few from either party have made this an issue in the last two decades and that is when most of the surplus was being built.

:)


PART III

The Looting of Social Security

http://www.allenwsmith.com/id15.html


“…The most reprehensible fraud in this great jambalaya of frauds is the systematic and total ransacking of the Social Security trust fund in order to mask the true size of the deficit…

The public fully supported enactment of hefty new Social Security taxes in 1983 to ensure the retirement program’s long-term solvency and credibility. The promise was that today’s huge surpluses would be set safely aside in a trust fund to provide for baby-boomer retirees in the next century.

Well, look again. The Treasury is siphoning off every dollar of the Social Security surplus to meet current operating expenses of the Government…

…The hard fact is that, in the next century, the Social Security system will find itself paying out vastly more in benefits than it is taking in through payroll taxes. And the

American people will wake up to the reality that those IOUs in the trust fund vault are a 21st century version of Confederate bank-notes.”

[sabrina 1]

59. 'jambalaya of frauds ' ~ nice phrase!

So, nothing has changed, except maybe, there won't be the same resistance they have always had from Democrats in the past. I would like to hear strong statements like this all of the Democrats, especially from the WH and from the Senate where they have control of things.

Btw, is that the same Sen. Hollings who is still in the Senate? If so, he can just pull out that old speech and deliver it again.

[slipslidingaway]

65. The WH needs to tell the American people the truth about what has happened to ...

the Trust Fund instead of pretending that SS contributes to the deficit. SS does not have a problem, the general budget does because it now needs to honor the SS bonds.

But he will not as the Dems let this slide for years, neither party has been honest. They used the TF each time they voted for war funds.

Hollings is gone, but he did try and highlight this issue.

[sabrina 1]

85. Yes, they should tell the truth, but politicians rarely do..

But where on the media are the economists explaining it all to the people? That is where people turn to try to understand what is going on?

Never mind, it was rhetorical question as I know the media is not in the business of informing Americans sadly.

Maybe if the Murdoch Empire collapses we can start returning to real journalism. If we had had that, none of this could have happpened. Which they knew and which is why they worked so hard to consolidate the media and place it in the hands of Corps. The media, the government and now even the SC all are controlled by Corps. We the people don't have much power, but we can regain it now that we know, imo.

[sabrina 1]

86. Yes, they should tell the truth, but politicians rarely do..

But where on the media are the economists explaining it all to the people? That is where people turn to try to understand what is going on?

Never mind, it was rhetorical question as I know the media is not in the business of informing Americans sadly.

Maybe if the Murdoch Empire collapses we can start returning to real journalism. If we had had that, none of this could have happpened. Which they knew and which is why they worked so hard to consolidate the media and place it in the hands of Corps. The media, the government and now even the SC all are controlled by Corps. We the people don't have much power, but we can regain it now that we know, imo.

[slipslidingaway]

134. We can hope! Thanks for the thread :) n/t

[roomfullofmirrors]

145. There was a farmer who had a dog and Bingo was his name-o....

B-I-N-G-O

[slipslidingaway]

149. Yes he was right! And welcome to DU :)))

now I just heard Rep. Andrews on CNBC say he would approve of raising the Medicare rate to 67.

:puke:

[kath]

58. Well , while they're screwing us, they just want to do it every which way they can...

[chill_wind]

62. And, at the risk of sounding like a totally broken record-

6. Social Security and Medicare "Solvency" Is Not Part of the Commission's Mandate.

I note from Chairman Simpson's conversation with Alex Lawson that the Commission has taken up the questions of the alleged "insolvency" of the Social Security system and of Medicare. If true, this is far outside any mandate of the Commission. Your mandate is strictly limited to matters relating to the deficit, debt-to-GDP ratio, and fiscal stability of the U.S. Government as a whole. Social Security and Medicare are part of the government as a whole, so it is within your mandate to discuss those programs -- but only in that context.

To make recommendations about the matching of benefits to payroll taxes -- now or in the future -- would be totally inappropriate. Within your mandate, the levels of payroll taxes and of Social Security benefits are relevant only insofar as they influence the current and future fiscal position of the government as a whole. Their relationship to each other is not relevant. You are not a "Social Security Commission" and there is no provision in your Charter for a separate discussion of the alleged financial condition of either program taken on its own. Such discussions, if they are occurring, should be subjected to a point of order.

The usual "solvency" arguments directed at the Social Security system and at Medicare as separate entities are in any event complete nonsense. These programs are just programs, like any others, in the Federal Budget, and the Social Security and Medicare "systems" are thus fully solvent so long as the Federal Government is. Further, as explained below, under our monetary arrangements there is no "solvency" issue for the federal government as a whole. The federal government is "solvent" so long as U.S. banks are required to accept US. Government checks -- which is to say so long as there is a Federal authority in the Republic. This point has been demonstrated repeatedly in times of stress, notably during the Civil War and World War II.

7. As a Transfer Program, Social Security Is Also Irrelevant to Deficit Economics.

(snip)

10. The Best Place in History (for This Commission) Would Be No Place At All.

Most people assume that "bipartisan commissions" are designed to fail: they are given thorny (or even impossible) issues and told to make recommendations which Congress is free to ignore or reject. In many cases -- yours is no exception -- the goal is to defer recognition of the difficulties for as long as possible.

You are plainly not equipped by disposition or resources to take on the true cause of deficits now and in the future: the financial crisis. Recommendations based on CBO's unrealistic budget and economic outlooks are destined to collapse in failure. Specifically, if cuts are proposed and enacted in Social Security and Medicare, they will hurt millions, weaken the economy, and the deficits will not decline. It's a lose-lose proposition, with no gainers except a few predatory funds, insurance companies, and such who would profit, for some time, from a chaotic private marketplace.

(...)

There Is No Economic Justification for Deficit Reduction
by James K. Galbraith
Statement to the Commission on Deficit Reduction
by James K. Galbraith, Lloyd M. Bentsen, jr. Chair in Government/Business Relations, Lyndon B. Johnson School of Public Affairs, The University of Texas at Austin, and Vice President, Americans for Democratic Action, June 30, 2010

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x569194

[sabrina 1]

70. That's okay, it cannot be said enough, imo.

They keep talking about SS, because that is what they are most interested in. The Deficit Commission had not business talking about it either, but I think most people came to believe that the main purpose of that Commission, or at least of many on the Commission, was to attack SS.

As pointed out in your link, 'if the Government is solvent, SS will be solvent'.

And I remember how often that Commission was told that it had not business discussing SS.

Thanks for the reminder. Btw, in the campaign, Obama said he was against these kinds of Commissions and would not appoint any as, he said, 'they are an end run around the Constitution' and in his administration, he said, topics like this would be discussed where they belonged, in Congress. Hillary was in favor of Commissions, which is what he was responding to. But so soon after winning the election, he changed his mind.

[dogmoma56]

66. they only want to repeal all th New Deal legisation, the poor are being punished by god so its a sin

to help them, wealth and power is proof of gods favor of a man so it is a sin to tax them.

its Doug Coe's religious cult started by abraham vereide in 1934

the whole GOP has been infected>links

the Tax Cuts for the rich, trickle down economics, the New World Order, Globalism.. but who actually runs the GOP..??

these are all Dominionist Principals..!!

the Dominionists work in the Shadows. in 1934 a Nazi refugee Abraham Vereide started what is now the "C st Family", the Christian Fellowship, A.K.A.the Christian Mafia.. and have taken the Evangelical movement into the Dark Side. THEY ARE BY DEFINATION..the Anti-Christ, don't get me wrong, i am a Buddhist i don't believe in the 'Revelation's', but i did grow up in the Free Holyness Pentecostal church. when i was 6 our Sunday school taught us Revelation's. then Romans, Acts, then Revelation's again, but i have a IQ of 164.. so it didn't stick.

the Dominionists believe that God/Jesus only bless the Rich, Wealth and Power is proof of gods Favor of a man/corporation, so it is a sin to tax them. God Speaks directly to the rich/Powerful, the poor must "Submit" totally to their will, and become a slave to god. the poor/sick are being punished by god so it is a sin to help them, or not to torment them.

Trickle Down doesn't mean money, it means only gods blessings to those who followed gods greatest plan and made the rich richer. the New World Order is the Utopian Paradise created when all the worlds poor submit to gods great plan, and become slaves.. the GOP is Theocratic Cargo Cult of OCD psychotic narcissistic wealth/power hoarders.. in the 30's Depression FDR appointed Abraham Vereide to a Cabinet position to start programs for the poor to bring them out of poverty.. Vereide's plan was to start Dominionist evangelical "Revivals" all over the country, only the Poor who came and prayed thru and totally submitted to the Dominion of the rich and Gods great plan would get help. he was replaced ..he immediately began undermining the New Deal.. still the fundamental purpose of the GOP is to repeal the New Deal, because it is the work of Satan, communists and Socialists, all interchangeable.

this is back ground info

... this is one of the best..especially from Straus to making slaves
http://doggo.tripod.com/doggchrisdomin.html

this is very good
http://blog.buzzflash.com/hartmann/10016

this is older, more is known about them now that Jeff sharlets book is out
http://www.insider-magazine.com/ChristianMafia.htm

http://www.yuricareport.com/Dominionism/TheDespoilingOfAmerica.htm


http://sociology.ucsc.edu/whorulesamerica/power/wealth.html
the top 1% richest hold 42% of Americas Financial Wealth, 6 times that of the bottom 80% who hold only 7%.. so the top 20% hold 93% of Financial Wealth. that is why there is a Recession.. nearly all the available money has been looted by the rich. there isn't enough left to run an economy.


the GOP's agenda is really obvious.. it is simply Dominionism.. they don't care who they hurt, who dies in the process.. they are Elite Favorites of god who hates the poor under Divine orders to control the World.. no Quarter for unbelievers.

the best books on the subject, he lived with them..wonderful writer

http://www.amazon.com/Family-Secret-Fundamentalism-Heart-American/dp/0060560053/ref=sr_1_1?ie=UTF8&s=books&qid=1298244911&sr=8-1

http://www.amazon.com/Street-Fundamentalist-Threat-American-Democracy/dp/0316091073/ref=pd_sim_b_1

the power the dark side has over the government is frightening, both parties

this really sounds conspiratorial and crazy, but read Sharlets book, cheap on Amazon. i have been researching this for a while. they count on people thinking it's tooo crazy to be true. they are organized and spread in secret cells. people who join are often unaware of what it is, and become indoctrinated. but it really explains all the weird stuff they do. they openly admire the Nazis and murderous dictators. it is always rationalized like.. 'yea, the genocide was unfortunate nut they were really well organized'. it was bad enough before leo strauss amped it up with Machiavellian.. economy of perpetual war, a government that lies and spins the horrible things they do. they have studded morally fallen religious leaders to learn how to spin all the criticism away and come out with opinion poles better than they were before they got caught with their pants down with a homosexual Crack whore.

[sabrina 1]

88. Thanks for the links, I will try to read them when I have time.

I do think what has been done, not just here but in other countries, IS evil and I don't think anyone doubts they do not care about people.

We are responsible though for allowing the people we have in power to get there. We have not worked hard enough to get good people into elected office, and for some reason the greedy always work harder. It's always been that way, except for short periods when they go too far and it wakes up the people, they do something, and then relax until it happens again.

As the FFs said, we would have to be vigilant if we wanted to keep the democracy they began. And sometimes we have been, but not enough, obviously.

[dogmoma56]

133. the GOP raised the debt limit 19 times under Bu$h43, raised the debt $ 4 Trillion, but they don't

consider debt caused by tax cuts to be real debt.. making the rich richer is God's Great Plan, Trickle down economics isn't money that trickles down it is god's blessings for submitting to God's Great Plan, according to the religious Cargo cult (Doug Coe's C st)that has taken over the GOP leadership

[Recursion]

68. It will have a lot to do with the deficit, just not the debt

In fact, it will be a deficit driver to the tune of about 3 trillion over the next few decades. What that deficit won't do is add to long term debt, since it will be borrowing to redeem other bonds -- but that borrowing will probably be much more expensive to service than the original 3 trillion was, so it will add somewhat to debt in that sense.

[sabrina 1]

80. That doesn't make SS responsible for the deficit

It still makes the borrowers responsible. How the money is managed has little to do with the Creditors, the American People, and cutting their benefits or anything else that they try to make not look like benefits, will not help lower the debt or the deficit. As you said if anything, it will raise the deficit.

So then, the question remains, why is SS allowed as a topic of discussion by a Democratic administration in any debate about these issues, other than maybe, as something that needs to be protected?

[Recursion]

89. Well you might as well say tax cuts and the Pentagon aren't "responsible" for the deficit

I mean, they just ask for money; it's not their problem how Congress finds it. When 2.5 trillion in bonds are redeemed, that money will have to come from somewhere, and unless Congress suddenly develops foresight it's going to be from more borrowing. So, it will not substantially affect the debt, but it will pretty substantially affect annual deficits.

[sabrina 1]

100. SS is a separate fund from the Fed. Govt, the Treasury.

Nothing done by the owners of that fund, the American Workers, created the huge debt the Fed Govt got itself into. Cutting SS benefits will do nothing to help replenish the Fed Govt's coffers because any cuts will only mean increasing the SS FUND, NOT the Fed Govt's fund.

So, why do they want to increase the SS Fund since it is not going to help reduce their debt?

I can think of only reason. So that they can go back and borrow some more from the American People. Which will only INCREASE the debt. How does this make any sense if we're talking about LOWERING the debt?

[Recursion]

119. You're being obtuse: the one fund has to pay the other

Which is why SS will drive federal deficits up in coming years.

[sabrina 1]

135. No, your are being obtuse.

We, the people, are creditors of the Fed. Gov. like China eg. They, the Fed. Govt ran up a debt that they could not afford and used OUR money to help for it. They borrowed from us and from other sources and wasted that money.

You may as well say that China is driving the deficit, why don't you?

The good news is that the Fed Govt, our debtor, has assets and the means by which to repay us. The problem is they do not want to do that, so someone has to make them. And at times like this, you need strong leadership to make sure that the irresponsible borrower does what is right and makes sure that all creditors are paid.

That means they must sacrifice, they must eg, give up some of their hobbies, like the war games they've playing and their gambling friends on Wall St. will have to start contributing in the form of taxes, like everyone else. Call it 'austerity' for them, although I doubt they'll feel it too much.

But to suggest that the creditor be the ones to pay a debt that is owed TO them is simply ludicrous, it's almost funny.

And, mainly, the American People's fund contributed zero to creating the debt/deficit. That was caused by irresponsibility and corruption and lies amongst other things when they were entrusted with the loans they go and chose to go on a very big spending spree. It's time for them to tighten their belts now and start acting like grown-ups. And I hope this Democratic president is not going to enable them in their attempt to borrow even more from the American people, which they WILL spend and which will only serve to raist the debt even more.

[Recursion]

136. China isn't *scheduled* to redeem 2.5 trillion of its bonds over the next 30 years

Social Security is.

And, mainly, the American People's fund contributed zero to creating the debt/deficit.

We're talking about the next 30 years, not the last 30.

[CrossChris]

69. Close enough for a meme. Meme's don't have to be correct, they just have to be something to say.

As long as they have a catchy phrase that media heads can repeat during that story's brief stay in the news cycle, they can just do whatever they damn well please.

[jtown1123]

71. NOTHING. False choices. They are going to push through cuts.

[sabrina 1]

74. Then they should lose their jobs in the next election.

I think people should be calling now to find out which Democrats are clearly, no weasel words, standing up against this and which ones are not. Those who make any kind of excuses or try to use any kind of weasel words, should be primaried. I only want to hear words like those spoken by Bernie Sanders.

[jtown1123]

81. Agreed 100%

[toddwv]

72. It's a shiny object.

You're supposed to stare at it and ignore out-of-control "defense" spending and the fact that tax cuts do not create jobs.

[Devil_Fish]

122. You should make this point into an OP.

[bobburgster]

75. Nada!

Just another way to screw the average struggling person, and have more money to give tax breaks to the wealthy.

[indepat]

76. What social security has to do is to be eviscerated to fund BHO's tax cuts for the uber-wealthy so

they can continue their 30+ year feeding frenzy slopping (sucking) at the public welfare trough (teat). See, that was so simple. :patriot:

[Name removed]

77. Deleted message

Message removed by moderator. Click here to review the message board rules.

[sabrina 1]

82. There really isn't a nicer way to say it 'liars' is what they are

I agree ~

[econoclast]

83. SS and the debt ---

SS is "off budget". The budget deficit does NOT include SS in any way. ( except perhaps the interest paid to the SSTF on their holdings of US Treasury securities ... I have to check that out ). But if the budget deficit is 500 billion dollars and SS has a 100 billion surplus, that does NOT reduce the deficit to 400 billion dollars. What it DOES do is reduce the amount of the 500 billion deficit that the government has to borrow IN THE MARKET.

Since SS is required by law (and has been since the 1930's) to invest any surplus in US Treasuries, this means that if the deficit is 500 billion dollars and SS has a 100 billion surplus, to finance the 500 billion budget deficit, first the government sells 100 billion in US Treasuries to SSTF and then only has to borrow 400 billion IN THE MARKET. Please note that this is required by law and has been the case since the 1930's. Nobody robbed anything .... the SSTF was not plundered. This is the way the program was DESIGNED to work. You can check for yourself. Go to the SS website. Check out the historian's office. They have one. It is instructive.

FYI. For a period starting in the LBJ administration and ending in the Reagan administration SS WAS "on budget" and SS surpluses WERE put "on the budget" and any SS surplus did reduce the reported budget deficit. They called it the "unified budget". There is a school of thought that thinks LBJ did this to hide the true cost of the Vietnam war. But that stoped in the 1980's and SS was again put "off budget".

OK ... So what about when SS itself has a deficit? IE .... what happens if SS takes in less in taxes than it pays out in benefits. I think this is the first year that will happen. Then, the process works in reverse.

Suppose the government deficit is 300 billion dollars. But suppose SS has to pay out 500 billion in benefits in excess of what they collected on taxes. Where do they get the money? They redeem 50 billion of their treasuries. Ok. Where does the treasury get the money from if the government already has a deficit. They borrow it in the market. So, the budget deficit is 300 billion but they have to go to the market to raise 350 billion dollars. 300 to finance that year's budget deficit and 50 to pay off SS

So, SS doesn't impact the budget deficit per se, but DOES impact how much the government has to raise in the market.

To turn the 2.5 trillion in assets in the SSTF into the cash needed to make future payments, those assets have to be redeemed. Which means that, since the government seems likely to continue running budget deficits, to get that cash the government will have to borrow an additional 2.4 trillion dollars in the market. That is an additional 2.5 trillion on top of what they need to borrow to cover the annual budget deficits.

Question. Can we borrow an additional 2.5 trillion dollars in the market on top of the regular deficits at reasonable interest rates?

[sabrina 1]

84. I appreciate your post and don't disagree with most of it.

I am aware of how SS works. One thing though, this is NOT the first time SS may not be collecting enough in taxes to cover the benefits it pays out. It has happened several times before.

Another point, taxes are one of three sources of revenue for the SS fund. And even when payroll taxes might not cover the payouts, as happened I believe, recently, the Fund still showed a surplus because of its other sources of revenue.

As far as the Govt needing to get its hands on the 2 trillion to put into the fund to help pay out benefits, they do not need to do that right now as there is enough revenue to cover the costs for several decades. Some say until around 2043 IF the economy remains in the condition it is in today, employment etc. And without doing anything.

However, it is more than likely that the economy WILL improve, so the numbers from last year were actually the worst case scenario.

Meantime, many things can be done to secure SS for the future without the Govt having to come up with trillions of dollars. None of which include cutting benefits.

1)End the Bush tax cuts. They cost over 2 trillion dollars over the past ten years and created no jobs.

2)Raise the cap on SS taxes.

3)Cut the military budget, slash would be a better word.

4)Create jobs, do what FDR did eg. Start a huge jobs program and stop firing teachers and other public workers.

5)Rather than cutting benefits, increase them, now. People who rely on SS are the poorest and most likely to spend any increases they receive and they earned that money.

6)Tax the wealthy back to at least the levels they used to be taxed at before the eighties when Reagan began this slide into economic disaster. And let them whine. They get tax breaks ONLY if they keep jobs here.

There are many other things that can be done, but as far as SS having something to do with the deficit, yes, there is a relationship. But SS had NOTHING to do with creating the debt or the deficit. That was done by those mismanaged this country's finances. And the American people should never be asked to help them pay for their corruption or to cover it up.

[econoclast]

91. things not that rosy, i'm afraid

According to the 2011 Annual Report to Congress, the Trustees announced:

"The projected point at which the combined Trust Funds will be exhausted comes in 2036 -- one year sooner than projected last year. "

( My note - this means that the 2.5 trillion dollar surplus will need to be redemmed starting NOW and will last until about 2036. Not sure how you are reading the situation to imply that those surplus funds don't need to be accessed until 2043 )


"At that time, there will be sufficient non-interest income coming in to pay about 77 percent of scheduled benefits."

"The point at which non-interest income fell below program costs was 2010. Program costs are projected to exceed non-interest income throughout the remainder of the 75-year period. "

"Over the 75-year period, the Trust Funds would require additional revenue equivalent to $6.5 trillion in present value dollars to pay all scheduled benefits. "

[sabrina 1]

96. Again, those numbers, as always, are based on the current

economy. Unless the economy fails to improve over the next 75 years, those numbers will change, as they have in the past.

Eg, there have been 11 years, a few in the '60s and several in the '70s and early '80s (totalling 11 years since the program began) when the costs exceeded the 'non-interest' income. So this is not the first time by any means when this has happened. However, SS has other sources of income, such as interest on the Treasury Bonds, which has so far, always been paid, which covers that shortfall.

To say that these projections will last for 75 is to say that there will be no improvement in the job situation throughout that period.

Six trillion, much of which will come from payroll taxes and from interest as it always does. And when the economy improves, those projections will change.

I believe my 2043 date was from last year's projection and it could go up or down by next year.

Some economists eg, felt the projection last year should have been 2052. I have not looked at this year's so don't know what economists have had to say about the projections yet.

Iow, these projections are not stable and change from year to year.

But what they do show is that jobs need to be created and as in the past, with a few changes, such as raising the cap on SS, raising taxes on the wealthy etc SS will be fine for a long time to come without doing much other than making some adjustments, which has always been the case. The problem is NOT with SS, it is with the Fed. Govt's spending which includes wars and bailouts and the Pentagon budget. Fixing the Fed. Govt's own problems, will automatically solve THEIR debt problems to SS.

[econoclast]

101. digging into the data

it appears that their long term projections are, in fact, based on some pretty rosey scenarions. The economic assumptions embodied in the 75 year projections include:

Unemployment rate (percent), starting in 2021 between 4.5 & 6.5 %
Average annual percentage change in average wage in covered employment from 2020 to 2085 between 3.6 & 4.4 %
Consumer Price Index (CPI), starting in 2019 between 1.8 & 3.8 %

Doesn't seem particularly doom and gloom to me ... hell I'd sign up for that right now!!!

[TheKentuckian]

131. That is true but the government was not obligated to blow the money on tax cuts and stupid wars

and the money should be recouped from those who made off with the tax cuts and made bucks on the wars.

Nobody told junie that the government must not run a surplus and could give a shit, fuck you pay me is our position.

Don't want to pay? Then we'll replace you until we find someone willing to represent.

[earcandle]

93. Thank you Sabrina, for bringing up this conversation everyone else seems feared to tread. SSA is

paid for out of our payroll tax dollars and so is medicare.
This administration appears to be in cahoots with the IMF and
everyone else in the "new world order" to render
America as a third world collapsed government so that it can
genocide its poor and it elderly.  This is abominable. We need
to kick Obama and anyone else trying to dupe the American
public out of standing up for their own interests in this
matter.

And then, there is the 14th amendment, which Obama
conveniently claims he will not acknowledge so that they can
have this fight. This fight is an illegal unwarranted fight,
and it treasonous to the American people.  We need government
to invest new revenues into government paid jobs to rebuild
our infrastructure.  And our health care system into a
universal health care system that works.  We need to have
standardized high quality education and to stop being told our
higher degrees are worth less than the ones we give to
foreigners.  

Treason, I say.  Ask our military children and our contractor
children to come home to protect the american people from this
coup d etat made up of criminals both corporate and government
so that we can have our dignified country back again.  What
else could we do to defend ourselves?  We certainly don't want
to wait for the international police to invade our country.

And we would appreciate it if HAARP would stop damaging our
environment with their satelite beams melting our glaciers
while they are at it. And warming up the ocean for hurricanes
and tornadoes... what a bunch of psychotic folks making
dangerous decisions while we watch with disbelief and the kind
of doubt that comes from being so severely damaged by the
wrecking of our wage base, our quality of life issues, and our
rule of law.  

We are not holding our officials accountable soon enough. 
Raise the taxes.  Pay the taxes.  Get a life. Where do they
get off thinking we can have a country without raising
revenue.  This is the government's legal obligation. to levy
taxes to ensure the safety nets and programs work for us and
ensure us the pursuit of happiness.  This is shameful and
sinful and just plain illegal.  Have we no power left?  

Meet in DC on Oct 6?  Shut it down ourselves?  Just stop
working.  Our labor on both land and sea and in the military
makes it all happen, or not. 

[sabrina 1]

143. Good post, earcandle.

I used to think it was hyperbole to say that they are traitors, but not any more. They are, they do not care one bit about this country or its people.

And you are correct, we are partially to blame for always reelecting the same people who keep doing the same things, voting against our interests.

I would love to be in DC on Oct 6 but I do think it will take more than one day. We would have to stay there, as the Egyptians did, until they can't ignore us anymore. I would be donate to someone who can be there for a while, who is unemployed eg if I could not be there myself.

[NorthCarolina]

94. Nothing...but it DOES have a few trillion dollars that look really delicious to 1% of Americans. nt

[999998th word]

95. NOTHING. P.E.R.I.O.D.

[econoclast]

97. ss and the debt ( re-visited from above )

SS is "off budget". The budget deficit does NOT include SS in any way. ( except perhaps the interest paid to the SSTF on their holdings of US Treasury securities ... I have to check that out ). But if the budget deficit is 500 billion dollars and SS has a 100 billion surplus, that does NOT reduce the deficit to 400 billion dollars. What it DOES do is reduce the amount of the 500 billion deficit that the government has to borrow IN THE MARKET.

Since SS is required by law (and has been since the 1930's) to invest any surplus in US Treasuries, this means that if the deficit is 500 billion dollars and SS has a 100 billion surplus, to finance the 500 billion budget deficit, first the government sells 100 billion in US Treasuries to SSTF and then only has to borrow 400 billion IN THE MARKET. Please note that this is required by law and has been the case since the 1930's. Nobody robbed anything .... the SSTF was not plundered. This is the way the program was DESIGNED to work. You can check for yourself. Go to the SS website. Check out the historian's office. They have one. It is instructive.

FYI. For a period starting in the LBJ administration and ending in the Reagan administration SS WAS "on budget" and SS surpluses WERE put "on the budget" and any SS surplus did reduce the reported budget deficit. They called it the "unified budget". There is a school of thought that thinks LBJ did this to hide the true cost of the Vietnam war. But that stoped in the 1980's and SS was again put "off budget".

OK ... So what about when SS itself has a deficit? IE .... what happens if SS takes in less in taxes than it pays out in benefits. I think this is the first year that will happen. Then, the process works in reverse.

Suppose the government deficit is 300 billion dollars. But suppose SS has to pay out 500 billion in benefits in excess of what they collected on taxes. Where do they get the money? They redeem 50 billion of their treasuries. Ok. Where does the treasury get the money from if the government already has a deficit. They borrow it in the market. So, the budget deficit is 300 billion but they have to go to the market to raise 350 billion dollars. 300 to finance that year's budget deficit and 50 to pay off SS

So, SS doesn't impact the budget deficit per se, but DOES impact how much the government has to raise in the market.

To turn the 2.6 trillion in assets in the SSTF into the cash needed to make future payments, those assets have to be redeemed. Which means that, since the government seems likely to continue running budget deficits, to get that cash the government will have to borrow an additional 2.6 trillion dollars in the market. That is an additional 2.6 trillion on top of what they need to borrow to cover the annual budget deficits.

Question. Can we borrow an additional 2.6 trillion dollars in the market on top of the regular deficits at reasonable interest rates?

[sabrina 1]

103. Who is 'we' and why would we have to borrow

trillions of dollars in the market, when there are clear ways to get that money right here?

The Bush Tax Cuts, eg, cost this country more than 2 trillion in revenue. Why were they extended? And don't give me the 'we had to bargain with the Republicans for UE extensions please. Had these two issues NOT been taken off the table during the election, they would have been winning issues for Dems and they might have held on to the house. So, why were they 'taken off the table'? Many of us at the time assumed a deal had already been made to extend the cuts and claim it had to be done to 'save the UE extensions'. And we were right.

End the wars. How much would that save, along with cutting, if we're going to talk about cuts, the Pentagon Budget.

Raise the cap on SS.

You keep ignoring the fact that the Fed. Govt has the means to do all these things for some reason.

[999998th word]

108. Quit weakening the program by lowering the contributions

tax the rich,end the wars,.etc...Debt problem is really a revenue problem.This is unnecessary,all of the other years the 'debt ceiling was raised'.
This is just a manufactured 'excuse' to start the process,and 'Get us used to the idea', so they can destroy these programs with impunity.
Let us think 'Gee it could have been so much worse,we're lucky they're doing something-'.......

:puke: :puke:
There is no need to touch SS Medicare, Medicaid...at all.

[Jefferson23]

98. This is Obama's idea. If he wanted to be clear he certainly is more than capable, isn't he?

He decides to be murky for a reason. I don't like his economic approaches as they pose not only serious
damaging consequences for most Americans, but will become extremely difficult to get rid of once implemented.

Some of the most egregious policies that we have are still in place from Clinton and we sure as hell do not
need more of them.

On many levels Obama is a terrible president.

[sabrina 1]

111. Can't disagree with anything you said. But what can be done

to stop them? With Clinton I don't think many people realized what he was doing until much later or the consequences. Now we know, but it seems we do not have the power to stop it.

[Jefferson23]

120. I'm not sure about that regarding Clinton, but I see your point.

I think we both know what we're up against and it's difficult to say the least. Chomsky
actually holds some hope and strategy:

In the past thirty years there has been enormous concentration of wealth in a very tiny part of the population. Noam Chomsky talks about how to fight back.
June 14, 2011

http://www.alternet.org/story/151292/chomsky:_wealthiest_1_rule_our_politics_--_but_there%27s_hope_in_the_fight_against_global_capital?page=entire

[grahamhgreen]

99. However the wars that kill innocent children do relate directly to the deficit.

[louslobbs]

114. I'm pretty busy these days, so I will give my proxy on statements related to this issue to Sabrina1

as she speaks my sentiments exactly. Thank you Sabrina you rock. The deficit has "Nothing" to do with "earned benefits" like social security.
Lou

[sabrina 1]

116. Hi Lou, haven't seen you around, but I was pretty busy

last week myself.

:hi:

[louslobbs]

128. Good to see some familiar names like Sabrina 1 I miss DU when I can't be on, but thankfully I have a

job so I count myself pretty fortunate when so many out there are struggling and suffering while the Repbulicons do nothing about the jobs crisis. They apparently would rather hold the country hostage once again, this time over raising the debt ceiling by calling for draconian cuts on what should be a simple vote on a clean bill like all of the other debt ceiling increases in the past. Thanks so much for your post you really spoke for me. Why Social Security is even being discussed is beyond me, but these are the crazy times we live in. I just thank the universe I don't live in Wisconsin, Florida, Ohio, Arizona, Utah etc. what do the sane people in those states do to keep their sanity? And now, Bachmann and Sanatorium want to take away everyones pornography if they get elected using obscenity laws to prosecute lol. Larry Flynt.......here we go again. Hope all is well.........take care and talk with you soon.
Lou

[Jim_Shorts]

115. Here is what caveman said at his press briefing today

to justify messing with S.S. Quote: "if your going to be taking a bunch of tough votes, you may as well take them all now" Oh really? And as far as I can see Obamawaffle is the only one pushing for the changes.(do you hear any repugs bringing up SS in these negotiations?)

more quotes from today:
" I am ready to take considerable heat from my own party"
"We need to get rid of this debt problem so that business doesn't have uncertainty" - sound familiar
"medicare is going up no matter how much we raise taxes" ie: we need to make changes to medicare also

on jobs:
"we could do trade deals right now that would add 10's of thousands of jobs" - must be he can't hear the giant sucking sound

With friends like these...

George Carlin: http://www.youtube.com/watch?v=acLW1vFO-2Q&feature=player_embedded

[Devil_Fish]

118. Agreed. if the repubs are so intent on cuts, bring the troops home. All of them from every place.

Stop sending aid to foreign countries. All of them.

we can't give what we don't have.

[suffragette]

123. The more I see, the clearer it is that this is about austerity G20 leaders agreed to.

And we've seen how that has devastated the people in the countries that have imposed the austerity measures. They do not fulfill their purported goal of stabilizing economies.
They do, however, end up transferring funds from social programs to the pockets the already wealthy.

edit for typo

[sabrina 1]

138. I have to read more about what the G20 leaders agreed to

suffragette. You've mentioned it before and I know you've been paying more attention to it than I did at the time. But I am not surprised to learn that OUR future is being decided by some Global Capitalists in some backroom somewhere without our consent. After all, that's what they've done now to so many other countries and completely ignored the will of the people.

We need a Global People's movement. They got a head start of several decades, but there ARE more of us than of them.

[suffragette]

147. Here are a couple places to start

I'm really just starting to put this together myself.

As I noted in my posts, the administration and media are mostly avoiding using the "A" word for austerity though proposals such as raising the age and cutting benefits are what is termed austerity elsewhere.

Officials: G-20 to supplant G-8 as international economic council
http://www.cnn.com/2009/US/09/24/us.g.twenty.summit/index.html
updated 10:33 p.m. EDT, Thu September 24, 2009
PITTSBURGH, Pennsylvania (CNN) -- Leaders of the G-20 economic summit will announce Friday that the group will become the new permanent council for international economic cooperation, senior U.S. officials told CNN Thursday.

U.S. Treasury Secretary Timothy Geithner says signs of optimism for a global economic recovery can be seen.

The move comes in the wake of a major push by President Obama, the officials said. The G-20 will now essentially eclipse the G-8, which will continue to meet on major security issues but carry much less influence.


Too much in this next one to capture in 4 paragraphs. Be sure to click through and read it all. It's not long. It also has a link to the G20 communique that strated emphasizing austerity, though again without using the word:

The G20 Has Officially Voted For Global Depression
Marshall Auerback | Jun. 7, 2010, 1:36 PM |

http://www.businessinsider.com/the-g20-has-officially-voted-for-global-depression-2010-6

The Communiqué of the past weekend’s G20 meeting illustrates that deficit hawks have gained ascendancy in global policy making circles. Great Depression II, here we come.

“Those countries with serious fiscal challenges need to accelerate the pace of consolidation,” the Communiqué noted. “We welcome the recent announcements by some countries to reduce their deficits in 2010 and strengthen their fiscal frameworks and institutions.”
~~~
Although, the global economy has revived somewhat from its post Lehman collapse, it hardly merits Trichet’s characterization of “expansion”, given prevailing double-digit unemployment across the globe. And global recovery will be severely hampered if active fiscal policy support — the kind of government stimulus required to sustain higher levels of growth and employment — is completely abandoned, as the G20 discussions suggest. The new remedy for collapsing demand is “budget consolidation” — a weasel term designed to mask more spending cuts in vital social services.

Notwithstanding the US Treasury’s attempts to mitigate the rise of hair shirt economics, the Obama Administration has contributed to this rising type of deficit reduction fanaticism through its own policy incoherence. The President and his main economic advisors — Timothy Geithner and Lawrence Summers — continue to accept the deficit hawk paradigm: they agree deficits are ‘bad’ in the long term. But they argue for the necessity of tax cuts and higher government spending increases in the short term, and deficit reduction later. They also embrace the principle of “sound finance” — the type you read about every day in the papers: balancing the budget over the course of the business cycle and only increasing the money supply in line with the real rate of output growth. They ignore the more crucial consideration: namely, that the government should maintain a reasonable level of demand at all times and that principles of “sound finance” should not be divorced from economic context.




Something I did notice when I started reading these was that many of the articles described a split between the European leaders and Obama, with Obama pushing stimulus while they were pushing austerity. However as noted in the post I linked previously, Obama himself said he agreed with the general ideas of this. Something else is that whole not rushing for the "exits" part from that speech and the article above noting Obama, Geithner and Summers calling for "deficit reduction later."

It is now a year later and here we are.

[sabrina 1]

152. Great, thank you. I will read them when I get home later.

'Global Depression' well, it looks like that is what they are getting.

Thank you suffragette.

[Aerows]

124. I'll reply in the body of the text, since it would be vulgar, otherwise

Fuck-All
Jack shit

That's my interpretation, one shared by economists that have studied the program.

[sabrina 1]

127. Lol, succinct and to the point. Now if only we could get the

President to be as clear as you have been, Aerows!

[Aerows]

130. Agreed

This is horseshit of the lowest kind.

[roamer65]

125. Cut benefits and they get to steal more of the money.

[scarletwoman]

126. I greatly regret that I'm too late to rec this, here's my kick. Great thread, bookmarked. nt

[inna]

144. ditto