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Social Security…Fix?

So this just came in as a news bulletin on my computer

AP Economics
”Administration urges Social Security Fix”
WASHINGTON - “The Bush administration said Monday the only way to permanently fix Social Security is through some combination of benefit cuts and tax increases.”

Benefit cuts and tax increases.  This is what I was talking about yesterday.  If you are counting on your Social Security to bail you out, don’t!  You need to start saving now.  The article went on to say that the Treasury paper supposedly said (I say supposedly, because I don’t have a copy of the Treasury paper, go figure) that “Taking no action is thus unfair to future generations,” This I do agree with.  HOWEVER there is something else that they should look at before they start cutting already meager benefits.  I’m talking about this little tidbit that I read in Richard Russell’s brilliant Dow Theory Letters in the remarks section Sept, 12, 2007.  The whole Article he quotes from is in Fortune Magazine and is called,

“Bush Budget Numbers, don’t believe the hype, the deficit is much bigger than you think.” It goes on to say, “We’ll start with the Social Security which will take in about $78 billion more in payroll and incomes taxes than it shells out. The Treasury takes that cash, gives the trust fund IOUs for it, and spends it. That $78 billion isn’t in the budget. Wait, there’s more. The Treasury will fork over $108 billion of interest on the trust fund’s $2.2 trillion of Treasuries—but will give the trust fund IOUs, not cash. They won’t count in the deficit either. Add that $186 billion to the stated budge deficit, and it more than doubles—to $344 billion.

“Now let’s move on. We end up with a total deficit of more than $400 billion after undoing another piece of WAAP legerdemain—the $97 billion increase in Treasury securities held by ‘other government accounts,’ such as federal employees pension funds. Thanks to the magic of Washington math, that doesn’t increase the deficit, even though it increases the government’s overall debt. Don’t you wish you could keep books this way at home?”

Now I agree, the Social Security situation is a nightmare that we only make worse by shutting our eyes and burying our heads under the pillow.  It is most emphatically not fair or appropriate to leave our future generations holding the bag.  HOWEVER don’t you think it would be advisable for the Bush Administration to stop spending the surplus that is coming to Social Security right now?!  Stop issuing IOU’s.  Start investing that surplus so that they can meet at least a little bit more of their obligations and promises to all of us who have been working and paying into this Ponzi scheme since our very first job.  It makes me so mad when I read things like this.  And the sad thing is the average person doesn’t even know that the U.S government is doing this.  It’s an outrage.

Posted by Meg Tilly on Monday, September 24, 2007 in Chewing the Fat


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