Monday, February 14, 2011

A Few Words About Social Security

You hear it on the news almost every night, particularly if you happen to watch Moneyline or any show that deals with the economy, and/or provides investment advice. It's a mantra that is repeated over and over again, that Social Security is not a viable entity and will be bankrupt within 30 years (depending on the rate of inflation). The Congressional Budget Office estimates that Social Security with be just fine until 2037, based on an estimated inflation rate of 2.8%. The problem, detractors say, is that inflation will probably hover over 3% or more, creating a bankrupt Social Security system within years, not decades.

There is a big, fat hairy omission in this analysis.

The money that is deducted from your paycheck, and met by your employer, is placed ever-so-gently into the Social Security trust fund. But it's not as if your money sits there waiting for you to retire. After current beneficiaries are paid, surplus dollars are used to buy bonds from the US Treasury. While the trust has the bonds, the money is then in the Treasury, where Congress can use it for any purpose.

So the same Republicans (and some Democrats) bitching about the health of Social Security are borrowing from it to pay for whatever they like, and complaining about the cuts necessary to make good on the money owed.

This is the first year that Social Security has had to cash in one of those bonds in order to make good on it's obligations. This is going to keep happening, and Congress is going to have to pay the IOU's it never should have borrowed from the trust fund in the first place. And every time Congress has to pony up on an IOU, senators and representatives of a certain ilk are going to complain that they are "bailing out" Social Security, when all they are doing is paying money back into the trust fund that was borrowed.

It's not unlike borrowing money from a friend, and then acting as if you're giving him or her your hard-earned money out of charity when you pay back the loan. The money you owe your friend.

Social Security is a total, absolute and complete success. That doesn't mean it doesn't have problems, but none of them are fundamental. And millions of Americans are fed, provided with necessary health care, and kept off the streets solely because of this program. Those who want to chip away at Social Security, to privatize it in part or entire, don't give a flying fuck about the people it helps. And if they get their way and take us back to a time when the elderly and disabled lived on the streets, in doorways, in parks...they won't care. It's a game to them.

It's not to people like me. It's life and death.

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