Reply #14: Well, I think our main disagreement is on whether or not the [View All]

[sabrina 1]

Fed. Govt. can or will honor its debt to the SS Trust Fund. But so far, including this year, they have honored their commitment.

SS has three sources of income, one of them being the interest on the Treasury Bonds. So far that interest has been paid. And because SS is also funded constantly by the workers who pay into it, it will never go broke as long as there are workers.

Regarding the mission of the Commission, this is how it is defined on the Government site:

Sec. 4. Mission. The Commission is charged with identifying policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run. Specifically, the Commission shall propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015. This result is projected to stabilize the debt-to-GDP ratio at an acceptable level once the economy recovers. The magnitude and timing of the policy measures necessary to achieve this goal are subject to considerable uncertainty and will depend on the evolution of the economy. In addition, the Commission shall propose recommendations that meaningfully improve the long-run fiscal outlook, including changes to address the growth of entitlement spending and the gap between the projected revenues and expenditures of the Federal Government

The highlights are mine. The last one is very troubling and I believe many people have addressed it already. It is ambiguous but I think everyone knows what they mean by 'entitlement' programs. They seem to believe that when retirees receive their benefits that is the Fed. Govt. giving them something for nothing. That is how people like Pete Peterson want SS to be viewed. But nothing could be further from the truth. That is the people's money, not the Govt's and no one is getting anything from the Govt. They paid for it.

So when you understand that, why are they discussing the 'gap between the projected revenues and expenditures of the Federal Government' in relation to SS? SS benefits are not an expenditure of the Fed. Govt. SS is a separate fund paid for and continually being replenished by the American workers.

The SS fund could invest in something other than Treasury Bonds and if we are to believe that the U.S. Government may default on its commitment to pay interest on the bonds and repay what it borrowed from the fund, then what we SHOULD be talking about is not investing in U.S. treasury bonds any longer as this would mean they can not be trusted.

And imagine what that means. It means the U.S. Government is a failed Government and other creditors, like China eg, would panic if the American People were to take their money elsewhere out of fear of the Govt defaulting.

And that is why I know that the U.S. Govt CAN make good on its debt to SS. But it cannot do it by cutting the benefits of its creditors. That is ludicrous. Are they going to make China pay for the money they are owed?

Then why are they attempting to do this to the American people? I think, if this argument that the Govt cannot pay SS continues to be used, the American people will have to direct the Trustees to start looking elsewhere to put their money, and definitely to increase their benefits.

This is why this Commission has zero business mentioning SS at all, unless it is to say 'let's see what we can cut from the Fed. Budget so that we can repay our creditors, of which the American People is one of the biggest.

But none of this necessary. Taxes will have to be raised on the wealthy, they've had a free ride for far too long. And we simply cannot afford wars when we are in so much debt.

But do you see how off-the-wall it is to even think about cutting SS benefits and why there is so much outrage over the very suggestion?

I completely agree with you that we should be calling them and I like very much the fact that you are doing something. I just want THEM, Congress and this Commission to know that we are not fooled by their attempt to involve the American People's money in a debt they did not run up. So they need to stop the deception. It isn't working.

Anyhow, as I said I don't think we disagree on much. But I want to hear Democrats slam the very idea of cutting benefits. And while the President was great today, and I am thrilled that finally he is doing what economists have said must be done long ago, I am very concerned that he did not say firmly 'there will be no cuts to SS'. He has mentioned privatization because he knows now, they will cause a revolution if they try that. But he must not think we did not notice that he has not said yet what he needed to say.

And keeping up the pressure is the way to get him and Congress to state strongly that there will not be any cuts to SS because first, that is virtually theft, and second it will do nothing for the economy or the debt.

Thanks for the discussion and I think we all want the same things ... :-)