Eight years ago in 2013, I wrote a column entitled The Theft of Social Security. Five years ago, I retitled the column to The Rape of Social Security. At the same time, updated the column where appropriate and added additional reflections.
Today’s blog is the third time I update and publish the Social Security blog. This time titled The Social Security Lie.
My motivations in rerunning the column a third time.
First, I am sick and tired of hearing politicians continuing to cry for the cutting or privatization of Social Security. I am angered by their cries that Social Security is an entitlement increasing the national debt. They make it sound like the elderly are getting something for nothing.
Social Security is not an entitlement. Not one cent of U.S. monies has ever been spent making Social Security payments. Social Security payments come from the paychecks of working people over the course of their lifetimes, with an equal contribution by the employer added on.
I honestly believe that many of our elected representatives do not even know this. They are unaware. They believe the garbage the American public has been fed over the years that Social Security is breaking the back of the economy.
Second, I am aggravated every time one from a younger generation tells me it is not his or her responsibility to support me in my old age. They are totally unaware of where Social Security payments come from and the theft of Social Security’s surplus funds by the government over the years.
Third, Social Security is a very small part of Biden’s Build Back Better plan. The Social Security portion concerns itself with the treatment of lump sum Social Security benefits.
Fourth, some idiot Congressman made the claim a month ago that Social Security would be broke by 2026. No way. A false fact.
All of which compels me to republish my 2013 and 2016 columns. With what I perceive as a strong title also: The Social Security Lie.
The U.S. Government has stolen significant monies from the Social Security Trust Fund. Legally, of course.
The theft of Social Security is not understood by many. Even elected officials whose business it is to understand a federal program as large as Social Security. Congressional persons have standard talking points which are not true. They erroneously represent to the American public that Social Security cannot support itself, that Social Security is broke, that Social Security benefits must be cut, etc.
These Congressional persons either know not that of which they speak, or are intentionally misrepresenting the facts.
You will find this column interesting. Guaranteed.
The United States is in debt to the tune of $31.4 trillion dollars. Who is the biggest creditor of the United States? To whom does the United States owe the most money?
If you believe Japan or China, you are wrong. The largest creditor of the United States, the entity the U.S. government owes the most money to, is Social Security. Specifically, its Trust Fund. $2.9 trillion dollars and going up each day. The second biggest creditor is Japan, the third China.. The United States borrows money from Japan and China sometimes on a daily basis. The United States owes Japan $1.26 trillion. China is close behind at $1.01 trillion.
The United States owes Social Security more than twice what it owes Japan and China individually. And more than its combined debt obligation to Japan and China.
Social Security is not broken. It has worked well for 81 years. The United States government is broken. Government has been grabbing money from Social Security for years, has never paid a cent back, and from what I can determine, has no plan to pay any money back. It has been made to appear that Social Security is a noose around the neck of the United States economy. The people have been told that Social Security benefits must be cut so the economy may survive. Bunk!
Examine the pertinent facts.
Social Security comes out of every American pay check. An employer contribution added to it. The Government pays not one penny of the monies deposited in the Social Security Trust Fund.
The amount a person pays into the Trust Fund over the course of a working life time is substantially more than the benefit derived. A worker pays into the Fund generally for 40-50 years. The monthly Social Security check received by the senior citizen is peanuts in comparison.
Except for 11 years, Social Security has in every year of its existence taken in more than it has paid out. There is always a surplus. Since 1984, Social Security has taken in more each year than it has paid out.
The monies Social Security pays out include Old Age Retirement Benefits (the monthly check), Temporary Assistance for Needy Families, Medicare, Medicaid, SCHIP, and SSI. All out of the Trust Fund. A surplus left over each year besides. Amazing! A terrific program Franklin Roosevelt put in place!
One problem exists. There should be a hell of a balance in the Social Security Trust Fund. Revenues annually are generally more than what is expended. There is no money in the Trust Fund, however. The Government has taken it all. Continues to do so. And never pays a cent back.
The genius for the legal looting of Social Security had its beginnings minimally with President Lyndon Johnson. President Ronald Reagan and his financial advisor Alan Greenspan jumped in with both feet. As did President William Clinton and House Speaker Newt Gingrich.
Bush 2 made no contribution to the formulation of the plan. He simply took advantage of a program already in place. By so doing, he financed significant tax cuts for the rich, paid for the Iraqi War, and funded the 2008 bank bailouts.
The plunder of the Social Security surplus funds had been legalized. The procedure simple. The United States government was allowed to “borrow” the surplus monies. In return, the United States would give the Trust Fund what were termed “special service non-marketable U.S. Government bonds.”
What are these bonds? Nothing. Non-marketable. They could not be used as collateral for a bank loan. No sane person would buy them. The bonds nothing more than IOUs.
Respectfully stated, good for use as outhouse toilet paper.
It was thought that if and when things turned adverse for Social Security, the government would redeem these bonds. In effect, pay back Social Security. After all, the commitment of the United States and Congress is to meet the country’s obligations.
The Government’s ability to pay depends on its power to tax and/or borrow. Congress reflects neither past nor present desire to pay. The Government refrains from even discussing these IOUs and their payment.
Where did all this surplus money go? How did certain Presidents and Congress spend the money? In four areas.
First, to make up for the reduced taxes on the rich. Thank you Bush 2 and Trump. Second, two unpaid wars. Thank you again Bush 2, Obama, Trump, and to a minimal extent Biden. Third, the 2008 bailout of the banks. Thank you Bush 2 and Obama. Finally, other government programs that needed to be funded and for which there might not be sufficient funding without invading the Social Security Trust Fund.
The process again simple. Surplus Trust funds are borrowed by the United States. An IOU is given to purportedly secure repayment. The money goes into the nation’s general fund to help pay for the tax cuts, wars, etc.
Certain economic experts have suggested a simple 30 year program to repay the IOUs would correct the problem and pay off the $2.9 trillion still growing debt.
The real problem is no one cares about paying back. It is the old story of borrowing from Peter to pay Paul. Except, Peter never gets paid back. The Government takes Social Security surpluses and spends them like a bunch of college kids out on a night on the town.
Social Security and Medicare should not be touched in any fashion. Other than to perhaps increase benefits. Another plan would be for the government to stop immediately removing funds from the Trust Fund. The surpluses would build up rapidly.
This sad scenario makes one wonder whether the Government even cares about the 99 percent. It appears to me that all our elected officials are concerned with are their images and friends. Not for anything or anyone else.
Make the rich richer and the poor poorer.
It seems to be working.
Thank you Lou, this is the sort of thing we need to be constantly reminded.
Republicans are CONSTANTLY twisting this, and other things like this (US Post Office(), for political purposes, mostly using the “something for nothing” smear. They should be corrected and shamed every time they do this and other political scams.
We have enough going on with normal political corruption, we don’t need this extra crap. We could be a good country again if we the people demanded more honesty and were not so willing to accept political nonsense.
GREAT post today Lou, thanks.
A fine blog on one of my favorite topics
I really enjoyed this treatise on Social Security, thanks so much.