I am sick and tired of hearing Social Security is broken, that it cannot sustain itself. Lies upon lies.
The American public is not being told the truth by its political leaders. Assuming they know or understand the facts. The media is silent, except to assist in spreading the fear of a broken system.
The first time I publicly heard an impropriety in the handling of Social Security was in the last Republican debate. Mike Huckabee asked in effect at one point…..What about the embezzlement of Social Security Trust funds? I may be incorrect as to the use of the word embezzlement. However, such was the thrust of his inquiry.
I have hit on the issue in the past. My TV show several years ago. A written article three years ago. Occasionally in my daily blog.
The national debt of the United States is the amount owed by the federal government of the United States. It consists of two parts; Intergovernmental debt and public debt.
Intergovernmental debt is monies the federal government has borrowed from the surplus funds of various U.S. agencies. Two hundred thirty agencies to be exact.
Treasury securities given in exchange for the surplus funds are non-marketable. They are in effect IOUs whereby the federal government promises to repay the monies borrowed including interest based on the “full faith and credit” of the United States. Useless collateral. It is nothing an agency can take to a bank and borrow on. It is even questionable whether an agency could sue in a court of law.
Public debt represents monies owed to foreign governments, investors, the Federal Reserve, state and local governments. U.S. Treasury bonds in most instances form the basis of the U.S.’s obligation. The debt can be pursued legally.
The present debt of the U.S. is $18 trillion. It is estimated that by the end of 2016, it will be $22 trillion. The intergovernmental portion of the debt totals $5.1 trillion. Social Security is owed $2.7 trillion of that amount.
$18 trillion is unfathomable. Hard to comprehend how much money it is. I came across two examples. If you were to take $1,000 bills and stack them one upon the other, the stack would be 65 miles tall before $1 trillion was reached.
Another way described is that a trillion dollars is enough money to buy every person in the United States, Canada and Mexico a new car.
The intergovernmental debt is just under 30 percent of the national debt.
It is the intergovernmental portion that is the subject matter of this article.
Here is how the federal government borrows the money. Most federal agencies finish the fiscal year with a balance. Can’t have that. The government immediately borrows the surplus. Never pays it back.
Since 1987, the federal government has borrowed $2.7 trillion from the Social Security Trust Funds. The money representing surplus/non used deposits. The federal government keeps borrowing and never pays it back.
Presidents and Congress then cry out how Social Security is breaking the back of the economy, is broken, cannot sustain itself, etc. What to do? Cut Social Security benefits, raise the eligibility age, eliminate Social Security, etc.
Not one penny has ever been paid back to Social Security since the taking began in 1987. Whores one and all who participate in this scheme that steals our dollars from Social Security.
The intergovernmental debt is in-house debt. It is like you and I invading our child’s college savings if the family has a cash flow problem. It is similar to a person borrowing from pension savings if crisis has befallen a home. It is the family’s money. If not paid back, so be it.
Although the federal government’s taking from Social Security is like family borrowing, it is not in a real sense. The U.S. may be my country. It is not my family.
Most of what I say concerning Social Security likewise applies to the 229 other agencies that the federal government borrows surplus monies from and never pays it back.
None of the 230 agencies has ever pursued the federal government for repayment. Nor would they. It would never occur. A fact of life.
Such being the case, the national debt in reality is not $18 trillion. It is as a practical matter $12-13 trillion. A large number, but one substantially less than the $18 trillion being bandied about. The accounting system used labels it a debt. A different system might not.
How did we get in this position? It starts with Ronald Reagan. Reagan told the people that if elected, he would cut taxes by 30 percent over 3 years. He claimed that in the end the cut would result in more revenue than before the rate cut. It did not work. Reagan had an embarrassing crisis on his hands. He did not want to admit his tax plan failed. He needed a new source of revenue.
The solution was to raise payroll taxes. The people were told it was to strengthen Social Security. A crock. Reagan wanted to use the surplus revenue generated thereby to show his tax plan worked. Taking the surplus funds was a subterfuge. The plan brilliant, however.
Reagan and his advisers were of the opinion that the money being borrowed would not be needed to make Social Security payments for 30 or more years. Let future Presidents worry about it.
The surplus funds borrowed went into the federal government’s general fund. Future administrations spent as desired. Primarily to pay for wars and further tax cuts. Bush 1, Clinton and Bush 2 continued to raid Social Security. Obama is no different.
Obama and Bush 2 raised the national debt big time.
In Obama’s six years, the debt grew $6.1 trillion. A 53 percent increase over what it was when he took office. Monies used primarily to save the economy from the 2008 mortgage crisis and to fund wars.
Bush 2 gave us the second largest increase. $5.8 trillion. Bush 2 doubled the debt in 8 years. He gave us a tax cut and a war.
One last misunderstanding requiring correction. We are told China is the largest creditor of the United States. Not true. China is owed $1.3 trillion. Social Security is the largest creditor. Owed $2.7 trillion.
What more can I say? Digest my words. Social Security is and has been solvent. Surplus most years. It is self sustainable. However, the federal government has been taking and must now start paying back. The fiddler has to be paid at some point.
Several economists have suggested that the government could pay back Social Security over a 30 year period without much difficulty. There has to be a will to do such before there can be a way. Recent administrations have had no such interest.