Hernando Today
Social Security Letter Is Fear Mongering At Its Finest
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Published: August 7, 2008
Jim Gries's letter about Social Security is unnecessary fear mongering. Social Security is simply an income transfer program. Workers today pay a tax to support retirees and disabled people. In exchange, workers get the promise that when they retire, a new generation of workers will support them. As Gries notes, the program has a substantial surplus. By law, that surplus is invested in bonds issued by the U.S. government.
The idea is that these bonds will be used to help pay for the baby boom retirement without raising payroll taxes.
The government does, in fact, spend the money. But the government has an obligation to repay the Social Security system just as it repays its other debt.
The right wing Trustees of the Social Security Trust Fund - which is the government entity that owns the bonds - claim that the Trust Fund will be exhausted 30 years or so in the future. But that is based on a scenario that can best be described as a multi-decade recession. Even then, the current payroll tax could cover 78 percent of benefits. But, given even weak economic growth, the Social Security system will be solvent indefinitely.
Of course, there is the concern that the U.S. government itself will become insolvent and not be able to repay its debts. In that case, payroll taxes would have to be raised or benefits reduced.
There really isn't anything we can do now to deal with this hypothetical threat to Social Security. It's popular for "deficit hawk" politicians to claim that we need to "cut entitlements," meaning Social Security.
The implication is that working Americans are greedy parasites for wanting to live in the developed world. But cuts to Social Security, meaning later retirement or smaller benefits, do nothing but create a larger Social Security surplus for the politicians to squander. The other right wing dream, privatization, doesn't make the system any more solvent. It just routes the stream of payroll tax income to Wall Street, meaning that the government will have to find another revenue source, i.e. higher taxes or borrowing from someplace else.
Social Security is not a problem now. It's very likely that it won't be a problem in the future. If there is a problem in the future, we can't do anything about it right now. But I have faith that Americans in the future will be smart enough to deal with whatever comes up.
Dallas Dunlap
Brooksville
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Reader Comments
Posted by ( MYManners ) on August 7, 2008 at 1:04 a.m. ( Suggest removal )
"Social Security is not a problem now. It's very likely that it won't be a problem in the future. If there is a problem in the future, we can't do anything about it right now. But I have faith that Americans in the future will be smart enough to deal with whatever comes up."
Dallas Dunlap should run for office. He seems to have all of the qualifications. A pair of rose colored glasses and the desire to shove our problems off on to our kids. Never do today what you can put off until tomorrow (or later).
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Posted by ( dallasdunlap ) on August 7, 2008 at 8:43 a.m. ( Suggest removal )
TO MYManners: There is no problem with Social Security and it is unlikely that there will be. It is running a SURPLUS. The US government itself is heavily in debt to the Social Security system. What's your plan? Do you want the government to default on its debt?
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Posted by ( resqme ) on August 7, 2008 at 1:40 p.m. ( Suggest removal )
As long as Social Security pays out pittances like $400.00 a month, I don't see it running into problems. One of the things we should do, is force our Senators to pay into the thing. What makes them so special that they don't have to???
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Posted by ( pappyg ) on August 7, 2008 at 4:13 p.m. ( Suggest removal )
Mr. Dunlap, Here's an unedited quote from a current U.S. Congresperson. “For too long, congress has gambled with Social Security and its surpluses. Lawmak-ers have engaged in an accounting shell game to pay other debts with taxpayers' hard earned retirement dollars. This practice is irresponsible and should be stopped immediately”, and you say Social Security is not a problem now!! That's exactly what Mr. Gries was referring to in his letter. "kabuki dancing"
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