As Other Income Sources Shrivel, Social Security Is Even More Indispensable

[Donnachaidh]

http://www.huffingtonpost.com/merton-bernstein/as-other-income-sources-s_b_848113.html

This is no time to reduce Social Security benefits. Nor will it be tomorrow. Private defined benefit pension plans are disappearing. Savings devices like 401(k)s and Individual Retirement Accounts (IRAs) lose value whenever the stock market hiccups or plunges. The principal savings of most people, their own homes, decline substantially in value or are lost entirely when the market falters. These misfortunes can and do repeat themselves.

Social Security has proven to be the one program we can rely on to provide income when other income sources dry up because of job loss, age, disability or death. Most people probably didn't know or notice, but Social Security was the first program to deliver cash benefits to families who lost a wage earner in the 9/11 attack. It also is the most readily available income source to those aged 62 and over when they lose a job. It is the most readily available income source to families who lose a wage earner to death and retirement.

Some seek to trim Social Security as part of an effort to tame federal deficits and the federal debt. But Social Security has not contributed a dime, not a nickel, not a penny to them. Social Security's three income sources pay the program's way in full. Since 1937, working people and their employers have paid a modest monthly amount of their earnings to the program pursuant to the Federal Insurance Contributions Act (FICA). Since 1983, the program has derived ample support from those contributions and two other dedicated sources of revenue -- income tax on the Social Security benefits of high earners and interest credited to the Social Security Trust Fund for tens of billions of dollars that Social Security lends to the Treasury. Treasury issues interest-bearing debt obligations in return. Some disparage those obligations as "worthless IOUs." But they are regarded as among the most dependable and valued bonds in the world. Some decry the bonds in the hand of China as a source of U.S. vulnerability. That's absurd because, as a large creditor, China has a huge stake in maintaining our ability to pay interest on those bonds and repay their principal. Moreover, the Social Security surplus makes huge amounts readily available for Treasury borrowing and thereby lowers the cost of borrowing for business, consumers and state and local government.

Some pooh-pooh the value of those bonds to the Social Security Trust Fund because it is one government agency owing money to another. But Social Security stands on an equal footing with all other creditors. A default to any would discredit our economy. It's not going to happen.

More at the link --

[OHdem10]

1. Great Post. If SS is so bad why has Wall St. been lusing after

it for years?

[dkf]

2. Well that depends on the solvency of the US doesn't it?

Personally I'm pretty sure the IMF will be on our doorstep one day demanding we cut entitlement programs and the safety net in general.

We can cut it ourselves or the IMF can demand we do it, but it looks like the same sorry ending to me.

[MadHound]

3. Or gee, would could cut the needed fat out of that five ton hog in the room nobody dares talk about,

The military.

Gee, cut that 1.2 trillion dollar military budget in half, so it isn't sucking down half our annual budget, and we can continue to fund SS, and other social services while still bringing down our debt load.

[n2doc]

5. The IMF has no power over us

We don't borrow from them. Figure it out, your boogymen aren't going to scare anyone who knows how international finance works.

Hell, we can confiscate their headquarters if we want to, and toss all their asses out on the street.




and

[Cassandra]

6. How about...

we tax the super rich and cut the Pentagon. Why is the centrist way always the Republican way?

[Starry Messenger]

4. k&r