How the GOP plans to permanently steal the $2.2 trillion SS Trust Fund, & slash your SS w/o "cuts"

[Faryn Balyncd]

(updated and annotated)




The enemies of Social Security have both a PROBLEM and a PLAN :

The Problem:


- - - For years Republicans have financed multiple wars & corporate welfare while simultaneously slashing taxes on the uber-wealthy.

- - - They have accomplished this by running federal deficits financed by bonds, $2.2 trillion of which is from the Social Security Trust Fund.

- - - While the $2.2 trillion surplus in the Social Security Trust Fund is sufficient to pay benefits in full through 2037 with no changes in payroll taxes, doing so would require that the Trust Fund DRAW DOWN & PAY OUT its $2.2 trillion surplus, invested in U. S. Treasury bonds.

- - - But the unprecedented low tax rates for the uber-wealthy has been possible only because of deficits financed, in large part, by the surpluses in the SS Trust Fund. Drawing down the SS Trust Fund to pay SS benefits (that is, using the SS Trust Fund to pay for the benefits for which is was created) would require that either deficits be paid by selling more bonds to foreign investors (which would be a difficult sell, & would probably only be possible with increased interest rates), or by raising income tax rates.



In other words, the uber-rich are ADDICTED to artificially low income tax rates made possible ONLY BY MEANS OF BORROWING from the SS Trust Fund....And like any addict, they don't want to give up their addiction.

The Plan:


- - - NEVER PAY BACK the $2.2 trillion surplus that the Social Security Trust Fund has built up over the 4 decades that baby boomers have been faithfully paying payroll tax contributions

- - - Instead, reduce benefits (how to do this "without cuts" will be explained later) so low that the SS Trust Fund can pay benefits out of current receipts WITHOUT EVER DRAWING DOWN the $2.2 trillion surplus. . . . Perhaps even reduce benefits so far that the SS Trust Fund not only doesn't draw down the surplus, but actually continues to build up an INCREASING SURPLUS which is required by law to be loaned to the Treasury.



This plan requires that Social Security benefits be slashed much lower that promised. . . . much lower than benefits possible through appropriate use of the surplus and current payroll tax rates. . . . in fact, so low that the SS Trust Fund surplus would continue to be a PERPETUAL CASH COW for the general revenue fund, allowing the non-SS portion of the budget to continue to run deficits, and, most importantly (for Republicans), never touch the system that unfairly bequeaths to the uber-wealthy LOWER total federal marginal tax rates than middle class Americans. (Footnote 1*)

The Perverse Truth:



Multiple pending "deficit-reduction" plans (including that of the Simpson-Bowles Commission) contain, obscured by esoteric language and definitions, provisions which do exactly that. . . . . which ensure that the SS Trust Fund will continue to provide a PERMANENT subsidy to general revenues. . . . that is, which enable perpetual tax cuts to the wealthy, cuts which would be impossible without this subsidy extracted from the payroll taxes of working & middle class Americans.

Impossible, you say? Was not the Social Security Trust Fund specifically designed so that surpluses could build up FOR THE SPECIFIC PURPOSE OF BEING DRAWN DOWN LATER to fund the earned benefits of those who contributed, and NOT to provide a slush fund so that the general revenue fund could avoid taxing the politically powerful? Moreover, did not Republicans once talk about a "Lock Box" for the Social Security Trust Fund?

Well, SURPRISE! . . . . They now HAVE actually designed a "Lock Box" . . . so to speak.

Unfortunately for working Americans, it's not designed to work the way you might think it should...... The new Republican "Lock Box", it turns out, is designed to PREVENT the Social Security Trust Fund from:

- - - EVER DRAWING DOWN ITS OWN SURPLUS

- - - from EVER DRAWING DOWN the $2.2 trillion surplus in the Trust Fund for the purpose of paying benefits.




Believe it or not, this new "Reverse Lock Box" is designed to force the Social Security Trust Fund to continue to do much MORE than stay simply solvent (that is, able to pay benefits in full without exhausting the Trust Fund).

This "Reverse Lock Box" is designed to ensure a perpetually INCREASING balance, a balance that must by law be invested in U. S. Treasury bonds, in other words, to insure a PERMANENT, EXPANDING LOAN to the general revenue fund, a cash cow that will allow general revenue deficits, enabling continued tax discounts to the uber-wealthy at the expense of the payroll tax-paying working and middle class.

How can such a scam exist, virtually unreported.....hidden in plain sight?




In the best Orwellian tradition, this scam has the benign name of "sustainable solvency", a name which so resonates with the sound of responsibility that no one could object. (At least no one who does not know how this term is defined.)

Who could possibly object to "sustainable solvency"? Isn't that simply the permanent maintaining of "solvency"?

In fact, “Sustainable Solvency” is defined distinctly differently than the permanent maintenance of “Solvency”. . . Moreover, the differences have profound (and opposite) impact on the purposes for which the which funds will be used:

Simple "solvency" (which is what the SS Trustees use when they forecast that all benefits can be paid in full until 2037 without cuts) allows the use of the accumulated surplus of the SS Trust Fund to be used for payments to beneficiaries. To enable the SS Trust Fund to maintain “solvency” through 75 years, or indefinitely for that matter, requires relatively simple changes, since the Trust Fund surplus would be used for the purpose for which it was intended. (An example of the type of change which could be made to ensure simple "solvency" through 75 years, or indefinitely, would be raising or eliminating the cap exempting income over $106,800 from FICA tax, simultaneously addressing our current inequity discussed in Footnote 1*.)

But "sustainable solvency", defined as existing "when the program has positive trust fund ratios throughout the 75 year projection period and these ratios are stable or rising at the end of the period" will have the effect of creating ever growing trust fund balances, which, since these are by law invested in U.S. Treasury securities, will create an ever-growing PERMANENT "LOAN" from the SS Trust Fund to the Treasury.

That is, the SS Trust Fund will be prevented from ever drawing down its balance in order to pay the benefits for which it was created (benefits for which the recipients have paid with a lifetime of payroll contributions), but will be required to become a permanent slush fund for financing continued federal (general revenue) deficits, as an alternative to ending the artificially low tax cuts to the richest Americans.

There is a simple reason why the various plans to slash Social Security (including Simpson-Bowles) recommend measures much HARSHER than required to achieve "solvency". And that simple reason is that they ARE NOT DESIGNED simply to guarantee future "solvency", but are designed instead to guarantee an ever growing permanent loan from the SS Trust Fund to the general revenue fund, so that low income tax rates for the rich can be subsidized using the payroll taxes of working and middle class Americans.




That is what is, in fact, the result of the loftily-titled "sustainable solvency".

The harsh reality is that this is defined in such a way that what it "sustains" is the perverse addiction of robbing (by permanently "borrowing") the surpluses of the regressive payroll tax (which exempt all income over $106,000) to pay for general revenue expenses which, morally and legally, should be paid by income taxes (or at least by a tax which does not explicitly exempt most of the income of the rich).

Which brings us to....

The Big Lie:

(or...)

How the enemies of Social Security plan to SLASH your Social Security WITHOUT "cuts":





The American people do not need economists to tell them that the current government CPI statistics are a joke.

Americans may not have heard of the Boskin Commision, and the subsequent rigging of the CPI in the 1990’s, but they can see with their eyes that the “no inflation” CPI statistics (which have resulted in no COLA in SS for at least 2 years) have already been manipulated to understate real inflation.


While critics of the Boskin Commission, and of current official statistics, estimate that current methods already understate real inflation by between 1% and 7%, the enemies of Social Security are again plotting to slash promised SS benefits by use of even more flagrantly fraudulent CPI calculation methods.


As a result, the largest and most consequential slashing of Social Security benefits, to all current and future recipients is being promoted not as "cut" at all, but as a "more accurate measure of CPI".

This supposedly "more accurate" measure of CPI, in fact will de-couple the calculation of CPI so that CPI will no longer compare "apples to apples".

Specifically, what is now being promoted as "Chained CPI" will allow substitutions of lower priced goods for goods which were formerly used but have become unaffordable.




This is how "Chained CPI" re-defines reality:

Suppose, over a given time period, prices rise 100%. And suppose that you, and others, have been purchasing rib eye for $5/lb, and rib-eye rises to $10/lb. Because of this inflation, you switch from rib-eye to hot dogs, which formerly were $2/lb, but rose to $4/lb. Now, you might be tempted to assume that the CPI has risen by100%, since that is what individual items rose. But "chained CPI", by allowing for a "substitution effect", says, in effect, that "Hot dogs are the new rib-eye", and that your meat expense actually went down from $5/lb rib-eye to $4/lb hot dogs, and that therefore there has not been 100% inflation, but has been 20% deflation.

Currently, promoters of "chained CPI" are grossly UNDERESTIMATING the effect such a change will have. Alan Simpson and others salivating at the prospect of such a statistical tool are making ridiculously low estimates of the actual impact of this change will have on CPI, saying that its impact will be a fraction of 1% per year.

The reality is that such forecasts are notoriously inaccurate: The manipulations of CPI following the Boskin Commission resulted in much greater suppression of CPI and of COLA’s than was forecast. (Footnote 2**)

But “chained CPI” is a much more suppressive potential:

The implementation of “chained CPI" will, for the first time, de-couple CPI (& SS COLA’s) from measurement methods which compare apples to apples. Such de-coupling in tight economic times in which people go without, or accept a lower standard of living by substituting cheaper alternatives, will have a cascading effect, in which such substitution causes lowered "CPI", which causes lower or no COLA's, which in turn cause even more impoverishment and more downward substitution.

The reason the enemies of Social Security are salivating over the prospects of "chained CPI" is because they KNOW its effect will be much, much greater that the marginal effect of the numbers they are quoting.

In the fight over the slashing of Social Security, the enemies of Social Security will not have the honesty to say they are "cutting" anything. Instead, they will say they are just going to calculate CPI "in a more accurate way". Any other changes they propose (none of which will have as much consequence as gutting COLAs through "chained CPI", will be promoting in equally disingenuous fashion.

And the ultimate goal will be the continuation of our decades long addiction of subsidizing low income tax rates for the rich, by raiding the surpluses of the Social Security Trust Fund built with the payroll and self-employment taxes of working and middle class Americans.







:kick:

Footnote 1. . . That the highest federal marginal tax rates are paid, NOT by the wealthiest Americans, but by middle class Americans making under the FICA cap (currently at $106,800 IN 2011), is elegantly and decisively demonstrated by Allen, Vaidyanathan & Sarbaum in "Introducing the Effective Marginal Tax Rate in Introductory Macroeconomics", Journal of Economics & Finance Education, Volume 6, Number 1, Summer, 2007.. . . . Amazingly, their study significantly understates the degree in which the very wealthy pay lower marginal tax rates than the middle class, in that they demonstrate that to be true even if all of the income of the wealthy were taxed as REGULAR INCOME (which is never the case), and ignores the effect of the markedly lower tax rates on capital gains, tax exempt interest, etc.

http://www.economics-finance.org/jefe/econ/Allenpaper2.pdf



Footnote 2. . . Frederick Sheehan, author of Panderer for Power: The True Story of How Alan Greenspan Enriched Wall Street and Left a Legacy of Recession:
“The changes have lopped off far more than 1.1% in most years since 1997. From the time the changes were instituted through 2008, the compounding of an artificially low Consumer Price Index reduced payments to social security recipients by about half (according to John Williams, author of the newsletter Shadow Government Statistics). . . . . . How the CPI calculation was changed is not important here. (Chapter 12 of my book Panderer to Power is devoted to the Boskin Commission.) One adjustment may help to understand Boskin’s contribution to the impoverishment of older Americans. “Hedonic adjustments” by government number crunchers substitute imaginary prices for prices actually paid. Hedonic adjustments (purportedly, the “quality improvement” of an item) reduce the CPI. (Hedonic adjustments had been employed before the Boskin Commission, but sparingly. Afterwards, even the prices of textbooks – if they had color graphics – were adjusted for quality.). . . . Steve Leuthold, founder and chief investment officer of the Leuthold Group, calculated the price of a new car in the U.S. had risen from $6,847 in 1979 to $27,940 in 2004. Using hedonic adjustments, the government calculated the price of a new car had risen from $6,847 in 1979 to $11,708 in 2004.. . . . . . . The Boskin Commission was one scandal that economists actually denounced. Greg Mankiw, chairman of George W. Bush’s Council of Economic Advisers from 2001-2003, said at the time “the debate about the CPI was really a political debate about how, and by how much, to cut real entitlements.”
http://www.ritholtz.com/blog/2010/01/economists-serving-their-political-masters/


Further readings on the current flawed CPI calculation methodology:

Denying Inflation: Who, Why, and How?
http://commonground-usa.net/gaffney_1205.htm

Feds tweak data to keep inflation low, hurting seniors and investors, critics say
http://www.investmentnews.com/article/20091129/REG/311299976

On Fictitious Government Statistics
http://www.nakedcapitalism.com/2007/11/on-fictitious-government-statistics-49.html

CPI understates inflation
http://www.creditwritedowns.com/2008/04/cpi-understates-inflation.html
“All of which is to say: We have a very distorted view of inflation. As a result, we have a very distorted view of the real growth rate of the economy. If the CPI were measured today as it was in the 1970s, we would have seen a much deeper recession in 2001-2002 and we would see that we were clearly in recession today. Like it or not, the present measure of inflation has deceived the general public into believing the economy has been more robust over the past 15-odd years than it actually was.”

Consumer Price Index - Payments to Social Security Recipients Should be Double Current Levels
http://www.shadowstats.com/article/consumer_price_index
“Inflation, as reported by the Consumer Price Index (CPI) is understated by roughly 7% per year. This is due to recent redefinitions of the series as well as to flawed methodologies, particularly adjustments to price measures for quality changes.”

http://www.usatoday.com/money/perfi/columnist/waggon/2004-11-25-inflation_x.htm
“Both Gross and Strickland think the CPI understates inflation by 1 percentage point a year, albeit for different reasons. They're not the only people who think inflation is rising faster than the CPI…”


And an eerily prescient analysis from 1997:

How to Re-Write Economic History – The Atlantic, April, 1997
http://www.theatlantic.com/past/docs/issues/97apr/econhist.htm
“Given the questionable intellectual foundations of the Boskin Commission's findings, the commission's high standing in Washington requires explanation. Both Democrats and Republicans have been keen to see its recommendations adopted, because they provide a potentially uncontroversial way to achieve deficit reduction. Raising taxes is unpopular, and little discretionary government spending is left to be cut. Restating the CPI as a measure of cost-of-living inflation offers an easy way to lower Social Security payments through reduced COLAs and raise tax revenues through reduced exemptions. The hope is that the CPI can be presented as an apolitical and boring technical issue that voters won't notice.

“Revising the CPI would get the Republicans off the hook of deficit reduction, while simultaneously advancing the interests of business. This, however, would occur at the expense of working Americans and the elderly. Revising the CPI would get the Democrats off the same hook, but at the cost of another shameful desertion of the constituencies they claim to represent.”

:kick:

[Hannah Bell]

1. kr

[Enthusiast]

2. K&R

I hate these fucks.

[sabrina 1]

8. They really ARE evil!

[StarsInHerHair]

146. the wealthy feel ENTITLED to our Social Security, say it straight

tell it like it is

[populistdriven]

157. this is why obamas tax cut was the final straw

[woo me with science]

163. So when they've been calling him a "wealth redistribution guy,"

they were serious.

They just didn't mean it the way we thought they did. :sarcasm:

[pinboy3niner]

3. K&R

[emsimon33]

K & R

[Initech]

4. George Carlin was right.

[jannyk]

5. k&r!

[cutlassmama]

6. Over the next two years the price of food will double again so if SS doesn't

up then it is cutting payments you're right. I don't know how people will make it.

[Zax2me]

35. The price of food will double - in next two years?!

Please.
Explain.

[barbiegeek]

70. Food & gas will both go up, because the U.S. dollar value is going down

[peacetalksforall]

122. double again - already underway - to rise fast

[sabrina 1]

7. Excellent post. Everyone should read this and remember it

so that when we start hearing the lies, we know how to refute them. 'Consumer Price Index'! They have for two years now, cheated retirees out of increases for inflation, so the SCAM is working perfectly FOR THEM. There has been not a whimper over that fraudulent claim that there was no inflation.

This post explains it very simply and really should be printed out and carried around to explain it to as many people as possible.

To think that they spend so much time and effort and money to find ways to cheat the most vulnerable members of society out of the little they have, is detestable! They truly are EVIL.

So, what are we going to do about it? When do we take to the streets?

I can't wait to hear Obama's speech on 'the deficit' and the deceptive language that will be used to 'cut' SS benefits.

We need to start demanding an INCREASE in SS and SSI benefits. The money is there, or it should be.

I am still trying to absorb the fact that the man we supported for president EXTENDED the Bush Tax Cuts adding hundreds of billions of dollars to the deficit and cheating the SS fund out of revenue they owe.

How much more will it take before people realize that it is up to US to stop them? They are not on our side and that includes far too many Democrats who will go along with this.

[customerserviceguy]

74. You might be surprised at what I'm going to say

The OP is so well researched and written, that I'm going to agree with 98% of it. The only thing I have to quibble about is letting congresscritters (of our party, too) off the hook for what's happened by saying that it's the uber-rich who did this. Of course, it's a quibble over whether the principal or the agent is responsible, but I do hold the agent responsible for telling us that he/she is 'working for all of us'.

The chained CPI is a concept I was unaware of, and while it's diabolically brilliant, it may have its eventual limitations. The rib-eye-down-to-hot-dogs example is a fine one, but how far can that go on most market basket commodities that would be used to calculate a CPI? Eventually, we'd have to get down to the basest items, and could really go no further, other than to remove them. Maybe that's part of the strategy, too.

The OP sets forth what I've been saying to you for many months now, that the incentives to keep the scheme going by constantly collecting more than is paid out are massive, and fundamentally irresistable. I absolutely do not expect any future Congresses to do away with the cash cow that has been created.

I completely expect FICA taxes to rise, and benefits to be cut, all for the reasons the OP has laid out before us in a very well documented post. It's a matter of how that happens. If a surgical cut is better than the swing of a meat cleaver, then I'm for surgical cuts. It's not enough to demand that no sharp instruments approach the Social Security System, because that simply isn't going to happen.

My ideas on reform try to selectively raise taxes where they will hurt the least, and apply cuts where they will do the least damage. In case you might have forgotten my suggestions, they're located here:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=9021996&mesg_id=9029588

[sabrina 1]

156. I remember our conversations about this ~

The OP sets forth what I've been saying to you for many months now, that the incentives to keep the scheme going by constantly collecting more than is paid out are massive, and fundamentally irresistable. I absolutely do not expect any future Congresses to do away with the cash cow that has been created.

Yes, and they can do that by denying inflation and not raising benefits accordingly and by raising the retirement age, among other things. It's become increasingly clear that they do NOT want that fund to dry up, not for the people, but for them. A 'cash cow' as the OP says.

The chained CPI is a concept I was unaware of, and while it's diabolically brilliant, it may have its eventual limitations. The rib-eye-down-to-hot-dogs example is a fine one, but how far can that go on most market basket commodities that would be used to calculate a CPI? Eventually, we'd have to get down to the basest items, and could really go no further, other than to remove them. Maybe that's part of the strategy, too.

I was not aware of it either. What I don't understand is how they got away with not increasing COLA payments for two years without any outrage from those representing the elderly and disabled. There was barely a whimper, if that. Even though it made no sense to say that there has been no inflation over the past couple of years.

That part of the OP imo, is the most important point made. And it's critical that people understand what they are doing in order to be able to fight back effectively.

This reminds me of Wall St. coming up with language that most people cannot understand, deliberately. As Michael Moore emphasized in 'Capitalism, A Love Story' in a scene where he had a conversation with a Wall St. genius during which he asked him to explain 'derivatives'. As he listened to the explanation, his eyes glazed over and he finally asked 'do they pay guys like you to come up with words most of us never heard of before so that we won't be able to know what you guys are up to'? And the Wall St. guy admitted that this is exactly what they do.

Imho, that kind of pre-meditated effort is a blatant attempt to deceive the public and should NOT be allowed. As Marcy Kaptur, or maybe it was Elizabeth Warren said, 'most of Congress didn't understand what they were agreeing to regarding the bail-outs as the language was so foreign to them. All they knew was that some people who they viewed as experts, were telling them how to vote, and most didn't question beyond that.

I will check out your link, thank you. I don't think we disagree all that much :-)

[customerserviceguy]

188. Those discussions sharpened my skills

yet, I pale in comparison to the OP, who seems to have figured out how to effectively get the message across about what is happening.

The 'chained CPI' is something different than what happened the last couple of years, the zero COLA resulted from an anomaly. The measurement for the 2009 COLA was taken right before the economy tanked, in part due to the inflation in fuel prices in the middle of 2008. As you may recall, the national average price for a gallon of gasoline was over $4, and the price of the diesel fuel needed to bring most every commodity to market by truck was even higher.

The rapidly colapsing economy took the wind out of the sails of fuel price inflation, and we still haven't hit the heights seen in the summer of 2008. I predict that we will in 2011, and there will be a renewal of the COLA in the 2012 Social Security checks, but the people receiving them will not feel like they've gotten much. It really is better to have no inflation and no COLA, than to have double-digit inflation and a COLA that does not feel adequate. Sadly, I believe the latter situation is the course of the near future.

There has been inflation in some parts of the economy, but when you take into account the deinflation of others, it balances out. Perhaps that's not obvious if you buy the things that seniors buy, but overall, it has worked out that way.

As I used to be a tax accountant, I'm aware of how it is possible to lie with numbers, as well as words. Truth needs to get out there, but the inconvenient truth underlying it all is that pain is coming. I would hope that the congresscritters who are so often easily baffled by the 'experts' are armed with alternative proposals that have a chance of helping to keep the system afloat. I believe that if they have access to ideas that would solve the problem intelligently, they will be less likely to just rubber stamp whatever the financial sharpies tell them to vote for.

[dkf]

199. The decline in housing is also disguising inflation.

Meanwhile food, healthcare, energy, and education are going up like crazy

[jtown1123]

208. COLA is based on the CPI-W. No one purposefully denied seniors a COLA.

COLA is determined by an automatic formula according to law. However, some seniors groups want COLA to be based off a seniors index, CPI-E, which more accurately reflects seniors expenses than the CPI-W, which does not take into account the high medical costs seniors have.

[jtown1123]

207. There is absolutely zero evidence any cuts should be made

Read Bruce Webb from the Angry Bear Blog. He breaks things down quite nicely. Some of these predicted shortfalls may never actually happen.

[customerserviceguy]

210. I've never been there before, and it's a jumble when you go to search

Perhaps you have some links to his thoughts on the matter, I'd be happy to read them.

[pecwae]

9. Highly recced.

I wish there was a way to pin posts such as this. It should be required reading, but will get lost in the sea of meaninglessness. Great work F&B.

[TBF]

10. Business as usual and why the fuck do we put up with this? nt

[cate94]

11. K & R

[malaise]

12. You should be a guest on radio and TV

and explain this reality simply.

[hay rick]

13. K&R

[Hubert Flottz]

14. K&R

The people in the top 1% want to suck every drop of wealth from the middle class. The poorer the masses become, the more possible the master and slave system will become.(poppy Bush's "New World Order")

[BlueJac]

15. Looks like an Egypt moment is coming soon

[Sancho]

16. an worse, they are doing the same on the state level!!

it's a plan to steal all the money saved in state pension plans also!!!

http://www.wtsp.com/news/topstories/story.aspx?storyid=173592

To do that he says he'll streamline some state agencies, make cuts and require state employees to contribute 5% towards their own retirement.

"We cannot ask Florida taxpayers, most of whom have no pension at all, to bear all the costs of pensions for government employees. By modernizing the Florida Retirement System, we will save taxpayers $2.8-billion over two years."

[customerserviceguy]

76. While I did see the thing about the 5%

I didn't see the line where he proposed to 'steal' (or even borrow) money in any state pension plan system. Perhaps you can point that out. I was at least expecting to see something reneging on state-issued bonds to the pension plan, but I didn't see that, either.

Isn't it true that most state workers are not covered by the Social Security System, or am I thinking of something that happened decades ago? If that's the case, 5% into one's own pension is less than the 6.2% that non-state employees are kicking in to Social Security.

[Sancho]

191. In Florida we contribute to SS also...

as part of contract negotiations there is usually a trade off for salary and benefits and retirement. A lot of folks took lower salaries in return for pension plans or health insurance starting with contracts in the 70's. Florida produces less than half the teachers it needs for example. For decades Florida has depended on hiring teachers moving here from other states. One part of a lower salary (than Ga for example) is a retirement contribution instead.

Now that there are billions in the fund and the state doesn't want to raise taxes (there is no state income tax), Scott wants to have the employees give up a 5% cut; while Jeb and friends have been playing with the retirement fund for years...mostly illegally according to the auditors. There have been bunch of articles about the GOP raiding the retirement money over the last few years. Read the background here:

http://politifact.com/florida/statements/2010/sep/23/republican-party-florida/gop-says-alex-sink-gave-bonuses-state-pension-work/

[madrchsod]

17. we have a president that is rigorously defending the social security system

he`s following in the footsteps of fdr and lbj and all the other democrats that helped social security and medicare/medicaid become the lifeline for tens of millions of americans. with his firm commitment to increase the funding of the social security so the future retirees do not have to worry if they can pay for the food on their table or the trip to the doctor.

[chervilant]

23. Wow...

I must have been sleeping through the past two years! I am so very glad to know that our current Prez is committed to the welfare of the hoi polloi!

[Jakes Progress]

26. Keep telling yourself that.

I will help you sleep since reality doesn't seem to agree with you.

Ahhh. Sleep now. Shhhhh. Sleep now.

[Frisbee]

59. Don't bogart that joint, my friend.

Obama and FDR (or LBJ) should never be used in the same sentence, unless to say, "that Obama is no FDR". Following in his footsteps? Sheesh, gimme an f---ing break.

[bvar22]

62. LOL.

Thanks for the news from Fantasy Land.

[stockholmer]

109. 4 words that prove you dead wrong- 'Obama's Payroll Tax Holiday'

http://www.huffingtonpost.com/2010/12/08/tax-cut-deal-a-hidden-thr_n_793983.html

[grahamhgreen]

143. He already cut SS when he reduced the FICA tax!!!!

[rhett o rick]

151. Did you read the OP? Social Security doesnt need increased funding. We just need the con's to keep

their hands out of the trust fund. Fund wars via taxes.

[somone]

18. Recommended

[H2O Man]

19. Outstanding!

This is DU at its finest. Thank you for this most important contribution.

Definitely recommended, and appreciated far more than a single "recommend" can show.

[FreeStateDemocrat]

20. Thanks, K&R

[Earth_First]

21. Thank you! k&r

I'm sending this to my father...

[Doremus]

22. Only criminal minds can concoct such nefarious schemes. nt

[chervilant]

24. OMG!!!

AWESOME post!!!

I would add Naomi Klein's "Shock Doctrine" to your list of recommended readings. And, I would adjure DUers to understand the macabre sociopathy of Milton Friedman.

Your post tangentially highlights two major issues with our citizenry du jour:

1) the majority of our nation could not READ your post, let alone understand it.

2) a significant percentage of our populace is so eaten up with the dumbasss that they actually support the nefarious few whose personal enrichment and future enrichment have resulted in this convoluted assault on SS and other social safety nets.

[Taitertots]

25. SS Trust fund doesn't exist

At least not in any form that isn't laughably made up. All the money that has been collected is gone, it has been spent.


Inflation is inconsequentially higher than reported unless biased indexes are used.

[Faryn Balyncd]

28. Are you saying that the $4 trillion in Teasury securities held by foreign bondholders "don't exist"?

.... because it's already been spent?

The bonds held by foreign investors represent the very same obligations as the bonds held by the SS Trust Fund..... that is, they are ALL backed by the full faith and credit of the United States.


http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt




Every bond that is purchased by the Treasury is purchased for the explicit purpose of spending the money now, and and repaying later.

To say that the $2.2 trillion in bonds held by the SS Trust Fund "don't exist" (or, "are only paper IOU's") while not saying the same thing about the $4 trillion in bonds held by foreign investors, (or the trillions held by the federal reserve, U. S. mutual funds, or American individual investors), makes no sense.

[Zax2me]

30. Those aren't SS funds.

The poster is correct.
The entire premise here is flawed.
You cannot steal something that does not exist.

[Faryn Balyncd]

37. In all cases (SS Trust Fund, foreign..) bondholders had surplus funds they loaned to the Treasury...

...In all cases the bonds are backed by the full faith and credit of the United States.

[Taitertots]

40. All that means is that it has to be repaid with tax dollars later

Which makes it inconsequentially different from not existing.

[Faryn Balyncd]

48. Income tax cuts to the top 2% were financed by borrowing the surpluses of regressive payroll taxes :

To pay back the SS Trust Fund and honor the obligations to retirees (which are fully funded until 2037) will require eliminating the artificially low, non-sustainable income tax rates for the very wealthy (income tax rates that presently favor the very wealthy with LOWER total federal marginal tax rates than middle class Americans earning under $106K).

When you think about it, I believe you will recognize that the difference between financing federal expenditures with a mildly progressive income tax, versus with a harshly regressive payroll tax is NOT "inconsequential".




:hi:

[Taitertots]

58. You are assuming that those tax cuts wouldn't have been paid for by workers either way

The difference isn't the one you listed. It is between harshly regressive taxation, and harshly regressive taxation now (SS surplus) combined with harshly regressive taxation in the future (2037) when we need to dip into the "trust".


What have you ever seen the government do that would convince you that the 2 trillion wouldn't have been largely off the backs of the working class?

[Faryn Balyncd]

63. Without deficit financing the cuts would not have been possible...

I think you have a good point, though it would be very difficult to find a tax more regressive than one that it flat through $106,800, then non-existent after $106,000, and which exempts 100% capital gains, interest, dividends and other "non-earned income".

The only logic behind the payroll tax is that the benefits were designed to be somewhat proportional to contributions.

However, taking everything in context, we now have a system that, when payroll and income taxes are combined, the highest marginal rate is extracted from middle class Americans making under the $106,800 cap, and the wealthiest Americans have lower combined marginal rates, even if all of there income were to be taxes as regular income (which it is not). And now the same folks who have benefited from these low rates at the top want to slash SS so their favoritism can continue.

(By the way, 2037 is the year that, under moderate assumptions, the SS Trustees report that SS Trust Fund will be exhausted {with no changes}, not the year that we begin dipping into it. We dipped into it last year, due to a combination of factors including the recession. It seems no coincidence that the right wing's urgency comes at this time, since they do not want these funds to be used for the purpose they were intended, and thus they have concocted plans whereby the fund will remain a permanent, never-paid-off creditor of the Treasury, allowing continued deficits and continued artificially low income tax rates.)





:hi:

[Taitertots]

69. "Deficit financing", The SS trust isn't deficit financing

It is direct taxation of the working class. They are taking harshly regressive taxes, spending all the money, and promising that workers can repay themselves with somewhat less harshly regressive taxation.

Deficit financing is certainly helping finance the absurdly regressive tax cuts. The key difference is that in real deficit financing the government doesn't get to count the deficit as an asset. It isn't the $2 trillion trust fund, it is also a $2 trillion dollar SS liability, which means they have zero net value.

[Hannah Bell]

78. Rescinding the Bush tax cuts on the top 2% pays off the SSTF nicely

over the period of the boomers' retirement.

[Taitertots]

96. Yes, we should rescind those tax cuts

That is the right thing to do, but it isn't going to turn the SSTF into anything more than an accounting fiction.

[Hannah Bell]

99. It's no more an accounting fiction than your savings account or investment portfolio.

That's a right-wing meme you're propagating. Just in case you didn't know.

[Taitertots]

102. Your analogy is false

If my Bank did what the federal government is doing than it would be committing securities fraud and the people responsible would be imprisoned. If anyone other than the government did, they would be imprisoned.

[Hannah Bell]

105. please explain to me how your bank is committing securities fraud by

loaning out your deposits?

Since that is what they've done since the beginning of banking...

[Taitertots]

111. My bank isn't doing what the government is doing

IF they did than it would be securities fraud.

[Lasher]

113. Do you think your bank isn't loaning out your deposits?

I don't think you understand how money works.

[Taitertots]

168. I don't think you understand how SSTF works? Because my bank does nothing remotely similar

My bank doesn't get to spend all my money and keep counting it as an asset under the guise that they will make more money in the future to repay me.

[Lasher]

187. Wrong, that's just what they do.

This will come as a surprise, but the insides of banks don't look like Scrooge McDuck's money bin.

[Faryn Balyncd]

106. Let's say your grandmother had $220,000 deposited in your bank. And your high-earning, gambler...

...spendthrift brother had, over time borrowed $220,000 from that same bank, and now the note is due for $220,000.

And the bank needed the money due from your spendthrift brother in order to pay your grandmother, since she needed to withdraw some of her savings for a dental bill.

And when the bank went to collect from your spendthrift brother, he said, "This 220,000. . . .'We' just all owe it to ourselves. Your claim on me is not legitimate."





You see, the bank is the U. S. Treasury.

Your grandmother is the faithful American who has paid a lifetime of payroll taxes.

Your high earning, gambler, spendthrift brother is the favored top 1% who have been getting lower marginal tax rates than the middle class for decades, and have been getting a free ride, and don't want it to end.




(Think about it. I think we are really on the same side.)


:hi:

[chervilant]

131. You are such a dear person!

But, I am reminded of one of my fave quotes:

"I learned long ago, never to wrestle with a pig, you get dirty; and besides, the pig likes it." - George Bernard Shaw

(I had to put Mr. Potato Head on ignore...)

[Faryn Balyncd]

135. I'm glad somebody enjoyed the parable.

:hi:

[Caretha]

185. Rofl

please give me a list of those that have been jailed lately for securties fraud......HAHAHAHAHAHHAHAHAHHAHAHHAHAHAHAHAHHAHAHAHA

You are so funny.

[Faryn Balyncd]

103. What that account recognizes is that income taxes have been SUBSIDIZED by the SS Trust Fund for ...

....decades, that income tax rates have been cut to artificially, non-sustainable levels only because of these loans from the Trust Fund, and that the Treasury (with revenue that will have to be raised from income taxes) is obligated to pay this $2.2 trillion back, just as it is obligated to honor the $4 trillion in obligations to foreign bond holders, and the other $7.8 trillion in bonds held by other non-SS bondholders such as the Federal Reserve, banks, mutual funds, and individual domestic investors.

in order to repay these funds, there will be pain (specifically, those who have benefited by artificially low top income tax rates will have to pay higher rates, unless they are successful in their attempt to convince Americans that the obligations owed to SS recipients are not legitimate, or unless they can use their influence to convince Congress to force others to continue to finance the favoritism they are continuing to receive in the form of lower marginal tax rates than middle class Americans pay.

It appears that one of the most effective strategies the right wing has is their campaign to convince Americans that the bond obligations to the SS Trust Fund (obligations owed by the income tax financed general fund) are not "real", are "just paper IOU's", or are otherwise not legitimate, when the reality is that they are as equally binding as are the other$11.8 trillion in bonds ($$ trillion of which are foreign held.)

Think about it.

(I think you will see we are really on the same side.)




:hi:

[Faryn Balyncd]

79. You're right...The deficit financing I was referring to was the general revenue deficits...

....which have accrued to $14 trillion, $2.2 trillion of which is currently financed by loans from the SS Trust Fund.


:hi:

[jtown1123]

209. Cost of continuing tax cuts on wealthy = Paying back SS Trust Fund...now we know

why the Republicans are squeeking and squawking about SS.

[hfojvt]

81. the difference is very consequential

If you lend me $1,000 an I invest it in my business, then you are probably not going to accept "it doesn't exist" as an answer when you come to collect on your debt. Because in the same sense ANY time money is owed, that money does not really exist. The borrower has spent it, or lent it out (in the case of a bank or credit union). The money invested in 1,000 shares of stock does not exist either, until you get it from people who buy the stock in the open market. Try selling $2 trillion worth of stock and see what happens to prices.

The money is gone, but the OBLIGATION to repay it still exists.

The trouble is that some people are spreading the idea that the money is gone as a way to eliminate the obligation to repay the debt.

The trust fund does not exist is just another way of saying "we are not gonna pay the working class what we owe them".

As far as I an concerned when people owe me substantial amount of money, then I am going to get it back, even if I have to take it out of their hide or in the form of broken teeth.

[Taitertots]

91. You are confused

It is one entity loaning money to itself, not two separate entities. What happens if your business takes $1,000, buys a $1,000 bond from itself, spends the $1,000, and claims the $1,000 bond on it's balance sheet? You go to jail.

"The money is gone, but the OBLIGATION to repay it still exists."
That means it is not a trust fund, but a $2 trillion dollar addition to the national debt. It doesn't exist as a trust fund.

"The trust fund does not exist is just another way of saying "we are not gonna pay the working class what we owe them"."
No. It means that there is no trust fund, there is only a pile of IOUs. If the working class expect to get anything they better recognize this fact.

[Hannah Bell]

108. no, you are confused. and you're sowing confusion. trust fund securities are redeemed every year.

The government borrowed money from workers & loaned it to capital in the form of income tax cuts, the bulk of which went to the top 2%.

The Social Security Administration is not coextensive with the US government.

Nor are SS taxees coextensive with income taxees.

The US government runs multiple Trust Funds.

According to you, none of them exist.

http://www.treasurydirect.gov/govt/apps/tfp/tfp_mgrlst.pdf

[creeksneakers2]

149. IOUs sounds flimsy

They are treasury bonds. Is your bank account an IOU?

The money is all there. Its in the future earnings of the American public.

[Taitertots]

165. There are specific rules that govern what my Bank can do with that money

To make sure that I can withdrawal it. What does the SSTF do? They spend all the money without making any accommodations for how it will be repaid.

"The money is all there. Its in the future earnings of the American public."
Wow, massive double think. It is both all there and not at the same time. Those statements are mutually exclusive. I'll tell that to my landlord, "the money is all there, I just have not earned it yet".

[creeksneakers2]

198. That's what you told your landlord when you signed a lease

You didn't pay the entire lease up front, did you?

[Taitertots]

202. My lease specifically says when I have to pay, Monthly

When I sign my lease I'm not claiming to have the full lease cost upfront by virtue of being able to make money in the future. The money isn't there because I haven't earned it.

I can't give the Taitertots Trust Fund all the money in my bank account(Overcharging to create the excess), spend it all on cars and TVs (war, tax cuts for rich), give myself notes from the TTF, and claim that I still have all my money and more (interest) because I have the notes.

[creeksneakers2]

211. SS isn't writing a note to itself.

Its writing a note from future taxpayers to present accounts.

By the way, if the only money that counts is money right now, then the SS has no problem, as it only has future expenses. The present ones are all paid.

You can twist it around in silly ways, but you are counting future expenses and not future income and saying it doesn't balance. Of course not! You are counting wrong.

[rhett o rick]

153. It's an IOU to be paid with tax dollars. It was borrowed to fund wars and other. nm

[Taitertots]

33. Where does the money for foreign bond holders come from?

Where does the money for SS Trust bonds come from?

Why don't you go borrow some money from yourself, spend it, and tell me that you are holding that debt as an asset to spend later. That is what the government has done. The SS trust fund is in no way different from raising taxes now, and raising taxes in the future to cover increasing expenses.

[Faryn Balyncd]

45. All bond funds came from investors, whether foreign or domestic. . . :

The bonds held by the SS Trust Fund represent obligations to present and future retirees, just as bonds held by domestic mutual funds represent obligations to domestic mutual fund investors, and a bond held by a widow in Decatur, Illinois represents an obligation to that widow in Decatur, Illinois.

To say "we owe it to ourself" (so it presumably doesn't count) overlooks the fact that when the money was borrowed from the SS Trust Fund (to be spent on general expenditures) that certain portions of our population benefited (for example, certain Americans had their income tax rates artificially lowered to rates that would not have been possible without such deficit financing). General (non SS) fund expenditures are to be be paid by non-SS sources, primarily, by the income tax. The bonds held by all bondholders represent an obligation to be met by the same segments that benefited from the original deficit financing.

Your contention seems to ignore the fact that specific segments of the American tax-paying base benefited by deficits financed by loans from the surpluses of SS beneficiaries.......and that these same segments of the American tax-paying base that benefited from the artificial, n on-sustainable low income tax rates must now pay back the funds borrowed from the SS Trust Fund.

[chervilant]

60. sigh...

I stand by my assertion hereinabove...

Look at how many DUers are struggling to articulate (and/or understand) what's happened to SS (and other social safety nets).

Our global economy is inevitably experiencing catastrophic change (we can't sustain a Ponzi scheme forever...). Our species can either spend the next few months whinging about it, or we can explore ways we can recover from our own hubris (and, yes, I recognize that a miniscule percentage of the species is inordinately responsible for the catastrophic change we're witnessing).

[Hannah Bell]

77. People who say SS is a ponzi scheme either don't know how a ponzi scheme works, don't know

how SS works, or are deliberately prevaricating.

Which is it in your case?

[chervilant]

121. Well, now,

SS is not a ponzi scheme, Hannah Bell, disaster capitalism is.

[chervilant]

128. BTW

I thought about putting the sarcasm emoticon in my reply to your bizarre contention about my post, but I realize that it's just sad that so many of us lack basic comprehension skills...

[Hannah Bell]

75. "we" did not borrow money from "us". capital borrowed money from labor.

labor pays SS taxes, down to the lowliest minimum-wage worker.

Top 5% of filers pay about 60% of all income taxes.

[JDPriestly]

54. Bonds are how the rich rip off he rest of us.

I stopped voting on bond measures. If my local and state government want money, they should raise taxes. Bonds just enrich the lenders -- who are the very rich and pension funds.

Instead of investing in the private sector, by buying bonds wealthy people "invest" in the government. And then to insure those investments, they invest in the Republican Party. Then the Republican Party passes austerity and tax measures that force the poor and working people to pay back the money the wealthy loaned to the government plus interest. The interest comes from the working people who end up getting nothing because they have to pay for the loan and the interest. Don't ever vote for a bond measure. Tell your politicians to simply raise taxes instead.

If you want to buy bonds, go ahead. But the tax benefits from government bonds are mostly only available to people with high incomes. So the rich get another giveaway there that most of the rest of us do not get.

[customerserviceguy]

83. Bonds are how long-term projects are financed

Do you really think it's possible to tax people enough to pay for a highway or a bridge that's going to last for decades (and possibly financed through tolls) in one year?

Few people have the money to buy a car (even fewer if we're talking about a house) with all cash upfront. Being able to buy those things on long-term financing is what makes it possible for folks to acquire big ticket items that they can pledge a future income stream towards.

Without bond financing, a lot of working class jobs would just not exist.

[Taitertots]

85. If they have the money to buy the bonds, than they have the money to pay taxes

Bond financing kills working class jobs by siphoning away the benefits of their labor by forcing the repayment of bonds with interest.

[customerserviceguy]

90. I'm sure that the auto workers and construction workers

wouldn't agree with you. Financing at interest allows people to buy the things that they make.

If you ask people who invest in bonds to simply empty their investment money into 100% taxation, then watch them leave skid marks while getting out of this country. Your title statement simply says that you don't understand why people invest anything.

[Taitertots]

98. We should be glad to have them gone if they want to leave because we stop them from exploiting us

Let them leave skid marks. We can finally have a society where the labor of the masses doesn't go to the benefit of a tiny cabal.

[customerserviceguy]

130. Oh, they'll be glad to take their money with them

And it will never come back into our economy again. Be careful of what you wish for.

[Taitertots]

160. Let them try...

Without being able to exploit the workers their money won't last. We will progress and without being able to siphon off all the productivity in the economy they will shrivel and die.

[customerserviceguy]

176. They'll just exploit workers in the Third World, like they've been doing for quite some time

Only this time, they'll outsource themselves, as well.

[Taitertots]

179. Only until the third world gets strong enough to join us

Which is much more likely to happen if we shed off the parasites in the economy.

[customerserviceguy]

184. I'm not sure how having ultra-rich capitalists

moving to vacation spots overseas, where they can use Third World sweatshop factories in hellholes, to sell crap to willing Americans makes the world's poor any more likely to 'join us', but if you see a mechanism for that, more power to you.

[Taitertots]

195. Combine higher taxation on the rich with tariffs, capital controls, and tighter international policy

The ultra-rich capitalists will be forced to either pay our higher taxes or invest in the third world. As long as we have a tiny amount of solidarity with foreign workers we can make all of our lives better.

The ultra rich maintain their wealth through the systems we put in place, one of which is permanent debt through bond financing. Eliminate the mechanisms that create wealth inequality and our society will be better off. Wealth flight is the best sign that these policies would work to reduce the accelerating wealth inequality.

[customerserviceguy]

80. There are important differences between the types of securities

Any excess FICA taxes collected were required to be lent to the Federal Goverment, the bondholders who buy Treasury bonds and notes don't have that restriction. They can go anywhere they want to where the risk/reward ratio is better. That's what fundamentally insures that Treasury securities are sold at fair market rates. When you have one big fat buyer who is obligated to sweep excesses into the Treasury, you lower the amount that has to be borrowed on the open market, and you lower the yields paid. Congress likes that, too.

Also, T-bills and notes are fully negotiable securities, if interest rates go down, they can be sold at a profit, if rates rise, they will be sold at a loss, and some other buyer will take the risk that rates will continue to rise. The special Treasury securities held by the Social Security Trust Fund are not negotiable.

While making your point, even Sen. Bernie Sanders referred to them as IOU's (see comment at very bottom of article):

http://news.yahoo.com/s/ap/20110127/ap_on_re_us/social_security

If he can use that language, the rest of can, too.

[Faryn Balyncd]

137. Points well taken....

My objection is not to whether or not the Treasury securities held by the SS Trust Fund are an "IOU's" (They are, as are all the other Treasury securities, and our paper currency, for that matter.)

My objection is to the right wing's attempt to de-legitimize the obligations represented by IOU's.

This attempt at de-legitimization is sometimes done by use of terms such as "nothing but a pile of IOU's" or "worthless IOU's", such terms carrying the false implication that they fundamentally differ from the obligations to honor the Treasury securities held by other entities, such as foreign bondholders, mutual funds, individuals, etc., when the truth is that all of these securities (those held by SS Trust Fund and all others) are all backed by the same full faith and credit of the United States.

I think my view is consistent with Bernie Sanders statement you referred to:

"Its' an IOU that is backed by Treasury bonds and the faith and credit of the United States government," said Sen. Bernie Sanders, I-Vt. "It is the same faith and credit that enables us to borrow from rich people and from China and from other countries. As you well know, in the history of this country, the United States has never defaulted on one penny owed to a creditor."

And it appears to me that Sanders' view has nothing in common with those who seek to de-legitimize the financial obligations that the general revenue fund of the Treasury ( whose primary tax source is the income tax) has to the SS Trust Fund, and indirectly to those who have paid a lifetime of payroll and/or SE taxes.

The right wing excels at perverting language in order to bamboozle the public (including their own base).

It's time we not let the right wing continue to control perceptions with their false frames/memes.






Think about it. I think we are on the same side.





:hi:

[customerserviceguy]

186. We are indeed on the same side

And in other posts on this thread, I salute your copious research, and plain-language explanation of the problem. I also admire your bringing forth the concept that the CPI is about to be fiddled with in an unfair way.

What we might differ on is the eventual outcome. Some here at DU believe that if we wring our hands enough, and write enough letters to the right congresscritters, somehow there will be zero changes to the present Social Security System, and there will magically be enough money to pay for everything for as far as the eye can see. Others think that the present or a future Congress will just raise taxes on the rich, and all will be well.

Your brilliant and thorough analysis of the situation in your OP documents the very reasons that I firmly believe this will not happen. Congress loves the fact that they can tax less and spend more with a Social Security System that takes in more than it spends, and I fully expect them to move heaven and earth to keep that cash cow milkable. It appears to be absolutely inevitable that taxes will rise, and benefits will be cut in order to make that happen.

The de-legitimization of the specialized Treasury securities are just a sideshow at this three ring circus, and have little bearing on the outcome. There is no way that the US government is going to run the surpluses needed to redeem them, and there is little chance that they will be paid for by borrowing on the open market through traditional Treasury notes and bills. There is an outside chance that the printing presses will roll as the mechanism to pay them off, but the inflation that results will be ruinous, both to the country, and to the political careers of any incumbents.

The only 'easy' way out is to convince the American public that taxes must be raised, and benefits must be cut, in a feigned spirit of 'shared pain'. I have advocated ways that such could happen, that would minimize the overall pain, I would appreciate your comment on them:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=9021996&mesg_id=9029588

You've very effectively made points that I've been trying to get across for months, I guess you're just a better communicator than I am, and I would like to hear your thoughts on my proposals.

[Faryn Balyncd]

189. I think you have some good ideas...

I looked for the link to to leave a comment on that thread, but apparently there is a time limit.

Regarding your first two points, raising the cap on FICA taxes seems appropriate, and a better solution than the Deficit Commissions recommendations, which involve a significant lowering of benefits for middle income beneficiaries. The Deficit Commission 's recommendations essentially turn SS into more of a welfare system paid for with payroll taxes which exempt most of the income of the wealthy. The rationale for placing a cap on FICA taxes being that after a certain amount of income benefits do not increase, it would be logical that to the extent that SS benefits include a subsidy for lower income beneficiaries, rather than being a simple insurance program, that this burden should be born as a general revenue burden (ie, not exempt income above the cap) rather than be paid for by reducing benefits of middle class beneficiaries and exempting the wealthy from the burden. Eliminating the cap would have an effect similar to funding it from general revenues, and raising the cap would approach this.

Your suggestions make a distinction between the employer and employee contributions. In the long run, I am not so sure that whether the tax comes from the employer or employee makes a difference, as an employer tax reduces the amount available for bargaining. I think that (in the long run at least) the tax all comes out of the employee's compensation (just as in the case of self-employed individuals both portions are paid y the same person). There are, of course, existing contractural circumstances that might make the short term effect different than the long run effect.

Point 3 (moving Disability out of SS) might be a good option. SS Disability certainly is more of a fiscal problem.

I think your points 4 and 5 also make sense.

Regarding point 6, there are some questions to consider (and I don't claim to have the answer): It would seem to me that the only options are (1) lending it to the Treasury, as is currently the case, in which case it would finance deficit spending, and requires surpluses later to be repaid, or (2) investing it in the private equity and bond markets, as the privatizers promote, which has its own set of problems, (and which I am not advocating for the SS portion of retirement funding), or (3) taking the money out of circulation until needed. All three options involve inflationary and deflationary pressures at different times of the cycle. Am I missing something here regarding the options?

[customerserviceguy]

190. Thank you for your thoughtful answers to my proposals

Right now, there is a graduated system of figuring Social Security benefits based on one's wages. There is already a sort of subsidy, if you will, built into the calculations. I am unable to currently find it, but another DU'er pointed out some months ago that the first $X of your wages are at a relatively high percent, the next $X are at a lower percent, etc. Maybe somebody here has a quick link to the percentages.

We might just choose to use an even lower percentage on any tier of income taxed above the current maximum wage base, just to increase the graduated nature of it. Is that means testing? Perhaps, but those who make at or above the current wage base are in an awfully good position to be able to save to supplement their Social Security benefits in retirement, so I'm not terribly worried about it.

Yes, I do firmly believe that employment taxes reduce the amount that an employer is willing to pay an employee, and are counted as a cost of employing a person. However, there are successful companies, and struggling companies, and it can be said that the more prosperous ones are those benefitting most from the American system of government. With progressivity as the principle, my proposal is that we establish a scale by which the most profitable companies pay more for the employer share of FICA, as a way of shoring up the system. It need not be from 1 to 2 to 3 percent, as I pointed out in my long-ago post, it can be in tenths of a percent, and be applied to the future, rather than assessed on a present-day basis. In other words, if a company makes $X billion dollars in 2011, then in 2013, they will pay Y percent more for the employer's share of FICA taxes.

I would not favor such a change for the self-employed, as most of them do not make the kinds of money that I expect major successful corporations make. Besides, if they did, they would just form corporations, anyway.

As for the Social Security surplus, if we ever get one again, why not have them invested in fully tradeable Treasury notes and bonds, at full market rates? It might be sensible to invest in blue-chip companies, but that approach is fraught with danger, and is too controversial to ever be seriously considered. As a captive customer of the Treasury, the Social Security Trust Fund is forever beholden to the whims of Congress in redemption of its securities. If they were able to be traded on the open market, there would be zero chance of failing to fund the retirements of the people whose taxes went to build up that Trust Fund.

Because you have seriously considered my proposals, and also because you're a great communicator, I have given you one of my alloted hearts. You do not have the right to take further liberties with me.

[Zax2me]

32. Simply put, you are 100% correct.

We currently spend collected SS funds - today. As fast as they come in.
This mythical 'fund' is more evasive than the Yeti, or his North American cousin, the Sasquatch.

[eomer]

159. Please link us a photo of you sitting on top of your bank account balance. (eom)

[eomer]

124. A Treasury bonds is a promise to pay. The dollar bill in your wallet is also a promise to pay.

The value of a dollar is no more real than the value of a Treasury bond.

[Taitertots]

162. You are fundamentally wrong

A dollar is also a medium of exchange.
SSTF securities are not.

A dollar is a store of wealth.
A SSTF security is a liability for future debt.

[eomer]

166. They are the same in the essential respect that matters.

The value of each is nothing more than an agreement by society that such value exists. A dollar is a store of wealth only because we agree that it is. A Treasury security is a store of wealth also because we agree that it is. We could decide at any moment (as a society, through our government) to cancel that value and, poof, it would be gone. That's true of dollars just as much as it is of Treasury securities. In fact this happens (fractionally) all the time with dollars. When the government increases the supply of dollars it is cancelling part of the value that you thought your own dollars had (it's called inflation). So what happened to your claim that a dollar is a store of wealth? It is a store of wealth only to the extent that we, through our government, say that it is and gear our actions in a way that sustains the effectiveness of it being so.

And the essential purpose of each is the same: to represent value transmitted from one person to another. So the purpose of Treasury securities held by the SSTF is the same as the purpose of dollars held by you. The securities represent value transmitted from the beneficiaries of the deficit spending to the beneficiaries of the trust fund. The dollars in your bank account represent value transmitted from the beneficiaries of some past act of value you performed to you, the future beneficiary of some act of value by someone else. They are both abstract entities that have the exact same purpose and value that can be cancelled if we merely decide to but won't be cancelled if we decide not to.

[Taitertots]

167. They are different in the all most important respects

A treasury security is a debt obligation, not a store of wealth. Being an imperfect store of wealth (inflation) doesn't change it's fundamental nature.

They are certainly not a medium of exchange. They can't be exchanged for anything.

[eomer]

170. A debt obligation is a store of wealth. Tell me what it is if it's not that.

And a Treasury security can be exchanged for something -- it is exchanged for dollars. Just because that exchange does not occur in a free market does not mean it does not occur.

When the Treasury securities were created they were exchanged for dollars. When they are later redeemed then they are exchanged again for dollars.

[Taitertots]

171. It is the opposite of a store of wealth

It is the obligation to pay money, not the obligation to receive money.

[eomer]

172. Every obligation to pay money is also a right to receive money, by the other party.

To say that something can be an obligation to pay money without simultaneously being a right (by the other party) to receive money is truly nonsensical.

[Taitertots]

177. What other party?....The people who paid into SS

So, the SSTF is an obligation to pay and not a trust fund.

You are stuck in the normal way of thinking about bonds where two separate parties are buying and selling them in a market. The government is the only seller and buyer in the SSTF securities market. They are taking money, spending it, and marking it as an asset.

[eomer]

181. No, it is the Treasury security that is an obligation to pay.

As owner of the security the SSTF is the party with a right to receive dollars in the future. The SSTF is acting on behalf of Social Security participants.

Your claim that the US government must be treated as a monolith without any distinction of one branch or agency from another is without foundation. There is no difficulty, logical, legal, or otherwise, with treating the SSTF as an entity unto itself, even though it may also be a part of the US government.

[Taitertots]

201. Exactly, the federal government has an obligation to pay, and not a trust fund

You are creating arbitrary distinctions within the federal government. The SSTF is part of the federal government and the only reason the want to claim otherwise is to cover up their theft from SS.

What is the net effect without arbitrary distinctions? The government took $2 trillion dollars, spent all of it, and replaced it with a tax burden, and claimed their debt as an asset.

[eomer]

203. The distinctions are not arbitrary. They are deliberate and important.

There are plenty of similar distinctions in entities other than the federal government. For example, insurance companies often set up a segregated pool that walls off one set of assets that are thereby dedicated toward one corresponding set of liabilities. There are certainly circumstances in which they transfer monies between their non-segregated assets and their segregated assets. According to your logic those segregated asset pools don't exist but, guess what, they actually do exist. You are just flat out wrong when you say that it is impossible to create such a distinction. It is done all the time and for reasons that are equivalent to the reasons it is done with the SSTF.

And, no, I don't want to cover up a theft, I want to prevent one. If the obligation of the US government and its general fund to repay dollars to the SSTF is respected then there will be no theft.

What are you driving toward from a practical point of view? Are you in favor of the US government general fund repaying the SSTF as its obligations to do so come due? When the securities were created and sold there was a transfer of actual dollars from the SSTF to the general fund. Are you in favor of a transfer of dollars year-by-year from the general fund to the SSTF as those securities come due? Or not?

[grahamhgreen]

144. Banks keep debts on their books and they are listed as assets, and are very real.

[Taitertots]

161. They are not in debt to themselves

That is the difference.

Your bank doesn't loan money to itself and list it as an asset. That is what the government is doing.

[grahamhgreen]

174. Yes - one division lends it to another and lists it as an asset, from my understanding.

[Taitertots]

175. Not the same thing at all

At no point is all the money spent (Spent, not lent) under the guise that new business is going to cover the losses.

[jtown1123]

205. It was invested in Treasury bonds which collect interest and must be paid back

[snappyturtle]

27. K&R Now, what do we do about this, may I call it, fraudulent economic policy?

I've been sitting here for ten minutes trying to figure out what to say! One the one hand, reading this explains SO much what I have felt in my gut for decades about CPI and COL indexes,but on the other the sad realization that those who advise us both politically and economically, are genuine liars who become the recipients of the cash cow they've nurtured. THEN, I remembered bush's concerted efforts to get SS privatized and see that now as another tentacle to this monster.

Again, WHAT, do we do?

[customerserviceguy]

87. The time for 'doing' is long past

This system was set in place very many decades ago. The only reason it hasn't collapsed yet is because of the baby boom. Taxes were a pittance on a small amount of wages for the first 20-30 years of the system, it was only as the midpoint of the baby boom started hitting its productive years that both the taxes and the wage base went up.

That kept things going for a few more decades, now that we boomers are starting to retire, the plan has run out of ever-larger layers of the pyramid to keep putting underneath it. And that bulge of boomers is threatening to move upwards in the house of cards.

Congreses knew this was coming for many years now, it just kept getting easier and easier to put it off, and focus merely on getting re-elected. The thinking must have been that the particular congresscritter would either have more seniority (and thus, ability to effectuate a 'solution') or would be out of office, and it would be somebody else's problem. The American public simply let them get away with it, because we didn't want to face the hard truths any more than the Congress did.

We've only got painful choices ahead of us in dealing with this accumulated snowball. We ultimately either have to dismantle the existing system, or figure out a way to build a much more sound system for younger workers, while trying to deal with paying off the older ones somehow. Of course, there is the possibility of making tweaks, and just kicking the can down the road a few more decades...

[Oilwellian]

92. I'm sorry, but the "doing" was most certainly "done"

Our SS taxes under Reagan were doubled to assure payments would be met for 80 million Boomer retirees. Congress didn't "put off" doing anything about SS & Boomers. They fucking created a huge tax increase that we've been paying for 30 years now. You speak of SS as thought it were some kind of pyramid or Ponzi scheme. Obviously you haven't a clue about how it works. The problem isn't with the social security system. It's with greedy fucking politicians who couldn't keep their hands off of the surplus and they either spent it or gave it away to their wealthy contributors. The only "tweak" to be made that would make the program whole again, is to tax the shit out of the wealthy who stole it to begin with.

[snappyturtle]

112. Excuse me? I think you have replied to the wrong person. nt

[customerserviceguy]

132. Yes, they were doubled

And if you look it up, it started under Jimmy Carter. It was indeed expanded after the early 1980's recession under Reagan, when benefit cuts started to make up part of the fix. In 1983, the middle of the baby boomers (peak year-1957) was 26. That's when you're out of college, or out of your apprenticeship in a trade, and are starting to make enough money to think about maybe settling down and starting a family.

At that time, a craven Congress figured it could jack taxes, and permanently borrow the surplus. That turned this into a Ponzi scheme, in effect, regardless of FDR's original intentions.

Here's the person I get a lot of my thinking from, perhaps you'd enjoy reading some of his stuff:

http://dissidentvoice.org/2009/11/abuse-of-the-social-security-trust-fund-began-in-the-1980s/

Dr. Smith's written a few good books on the subject, it changed my whole set of expectations about the system. Now, I'm trying as hard as I can to shovel away as much as possible for retirement, because I don't believe that there will be adequate fixes, only Band-Aids that just prolong the day of reckoning to a nearby future election cycle.

[neverforget]

29. Yep. knr

[annabanana]

31. Since the cost of a "personal computer" has dropped from THOUSANDS

to a couple hundred for a netbook...

Taking FOOD AND ENERGY COSTS out of the CPI means they only count things that you could do without.. and not the stuff you need to LIVE.

[lonestarnot]

34. I would like to know what they think about walking like Egyptians.

[Taitertots]

38. What is "Walking like Egyptians"?

Protest in the streets until Obama resigns and the military takes over? Sounds like a bad idea to me.

[lonestarnot]

42. Running the rich theiving fuckers out of the fucking country, even if they happen to hold office.

Good idea!

[Taitertots]

43. Do you think overthrowing Obama and putting the military in charge is a good idea?

That is exactly what you are advocating. I think there are ways to make the country better that don't have results worse than the original problems.

[Fuddnik]

50. Do you think just sitting around on our asses, doing nothing, is a good idea?

Working people. the unemployed, the elderly, the sick are under a full frontal assault in this country right now. They're trying to destroy unions, Social Security, Medicare, wages.

The Oligarchy is slowly turning us into serfs, while Wall Street, banks, insurance companies, and utilities siphon off all the wealth this country has.

We should have been "Walking Like Egyptians" before the Egyptians.

[Taitertots]

53. False dilemma- There are an infinity of choices between two equally bad ideas

At least we know where you stand. Against our democratic party, democratically elected President.

[chervilant]

56. hmm...

Can you not see why some of the hoi polloi think we should protest 'the way things are'? We ARE facing catastrophic economic change, and our response to such change is not likely to be sitting around with our thumbs up our butts.

[Taitertots]

61. There are an infinity of ways to do that which are not epically bad ideas like...

Overthrowing Obama and imposing military control on the nation or sticking our thumbs up our butts.

[chervilant]

67. So,

in other words, no.

Many of the hoi polloi ARE sitting around with their thumbs up their butts (surely you can recognize the sarcastic component of that assessment?). I would encourage you to understand that I am not blaming/shaming here--merely observing. Too few of us actively pursue available information so that we can make informed decisions--and so that our political activism derives from an informed perspective. Too few of us actually VOTE!!

If the hoi polloi were to 'walk like the Egyptians,' we should witness MILLIONS of US citizens surrounding the White House and the Capital, demanding that our current crop of politicians step down--OR step up to "promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity"! That level of activism would certainly be an exciting sight to behold, but how likely are that many of us to get a clue?

No matter what path our citizenry chooses to trod, we ARE witnessing a most significant sociocultural shift in our economic behavior. Uncle Miltie's minions are losing ground as the vast 'unwashed masses' say ENOUGH! "May we live in interesting times," indeed!

Notice I don't mention your rather puerile contention that We the People want to 'overthrow Obama and impose military control.' Such a simplistic conclusion denigrates those among us who recognize the frustration (and fear) that motivates our peers to applaud the courage of the Egyptian activists.

[Taitertots]

82. You want to "walk like an Egyptian"

But don't want to face the same obvious results. Even worse you claim that the obvious result isn't what you want and therefore won't happen.

"Uncle Miltie's minions"
Out comes the Friedman boogy man. It isn't Friedman's fault that people in power use that knowledge to exploit those ignorant of economics and/or their best interests. Makes about as much sense as blaming Keynes, Marx, Smith, Bagehot, or Richardo.

"Notice I don't mention your rather puerile contention that We the People want to 'overthrow Obama and impose military control."
You want to do the same thing over and over while expecting different results. What was that the definition of again? Walks like an Egyptian, talks like an Egyptian, probably ends up like an Egyptian.

[chervilant]

123. hmm...

Why don't you just keep digging that hole all by yourself, poor wee mannie?

BTW, I did not ONCE say that I wanted to 'walk like an Egyptian.' I merely encouraged you to empathize with those on DU who've made that assertion hereinabove.

And, Milton Friedman is MUCH different from the other economists (and philosphers) you've listed. The fact that you could make such a statement about him tells me that I could wade through the depths of your intellect without getting the tops of my toes wet.

[chervilant]

129. BTW

Please don't bother to reply to me. I've relegated you to my ignore list--a space you richly deserve.

[Fuddnik]

84. How do you surmise that I stand against our party and President?

I'm describing a situation that has been escalating since the 1950's. Some shots fired in the '40s such as Taft-Hartley.

And where do I even hint to want a military government? The Petagon is so infested with members of "The Family, that would be the worst outcome. But, a line must be drawn in the sand. Especially with Republicans in control. This week alone, three Republican Governors (at least) have said they plan on eliminating collective bargaining for public employees.

Every union and state employee in this country needs to put it's foot down and call a general strike. A "We're not going to take it anymore" moment, before we all wind up like the Air Traffic Controllers.

It's the Democratic way. It's the American way. We'll be abused until we put a stop to it.

[TBF]

116. This democratically elected president is assisting the ruling class in robbing

our working class. Of course we should be in the streets, and WE take over.

[rhett o rick]

154. Give us one of those "ways". And dont tell me to be sure and vote. nm

[RegieRocker]

36. If that doesn't make people angry enough to protest

nothing will

[Mnemosyne]

39. "Nothing but a bunch of IOU's." Is it time to walk like the Egyptians yet? KnR! n/t

[Lugnut]

41. K&R!

:kick:

[Zax2me]

44. Here's why the trust fund has no economic value -

You can't owe money to yourself - and call it an asset.

Useless: The Social Security trust fund
http://money.cnn.com/2010/08/09/news/economy/social_security_value.fortune/index.htm

The Social Security Trust Fund Myth
http://moneywatch.bnet.com/retirement-planning/blog/money-life/the-social-security-trust-fund-myth/2944/

Your payroll taxes go into bottomless hole
http://www.suntimes.com/business/savage/2291351-452/fica-tax-security-social-breakouttext.html

[Faryn Balyncd]

52. It is not just "owed to ourself"...The top 2% benefitted from deficits financed by borrowing from...

...the SS Trust Fund. Without this deficit financing the artificially low top income tax rates for the very wealthy would not have happened.

The deficits came from loans that were not spread equally, just as the benefits of the deficit financing (artificially low income tax rates) were not spread equally. We are obligated to pay back all of these bondholders, whether the SS Trust Fund, foreign bondholders, mutual fund bondholders, or whoever. And we are obligated to pay these obligations with general revenue sources (ie, primarily the income tax).

If you meditate upon you statement, I believe you will recognize that "owing money to yourself" implies that "yourself" is a homogeneous entity, which is not exactly the case: Those who "are owed" (in the case of the SS Trust Fund) are SS beneficiaries, to the extent that they contributed. Those who "owe" are those who benefited from the artificially low income tax rates made possible by the deficit financing....Yes, there is some overlap, but it is not the same. I think you will see there is a consequential difference between financing general (non-SS) expenditures with a mildly progressive income tax vs a harshly regressive payroll tax.



:hi:

[WillyT]

46. HUGE K & R !!! - Thank You !!!

:yourock:

:kick:

:hi:

[kentuck]

47. That is the plan.

No doubt about it.

[jwirr]

49. Thank you. I was aware of this and the more of us the better.

[Poboy]

51. Recommend

[glinda]

55. K & R n/t

[Tsiyu]

57. K & R

Thanks for this OP, for putting it all together here.

We should not have to be fighting this battle, but we'd best be prepared to fight.

[kentuck]

64. Since the Congress has proven itself untrustworthy of paying back...

what it has borrowed already, why should they be permitted to continue to raid Social Security. Let them pay back what they owe before they borrow more.

[blindpig]

65. They're gonna need friends to pull that off...

and they've got them, partners, actually.

[obxhead]

66. All of it will have Obama's signature of approval.

Republicans propose it, Democrats make it reality.

[Curmudgeoness]

68. How do these people even dream up these schemes.

The dishonesty of it all is so far beyond my abilities. I could never conceive of a warped plan like "chained CPI", much less seriously try to implement it.

[defendandprotect]

71. K/R -- back later to read

[DJ13]

72. Another bump, people need to read this

[Odin2005]

73. K&R

[leftstreet]

86. Wait til the Democrats hear about this! They'll fight it tooth and....

...nevermind

K&R

[Capitalocracy]

88. So when people switch from hot dogs to cat food...

then the government basically says OK, looks like you really love eating cat food, let's just adjust your payment accordingly...

Great explanation, thank you

[Fuddnik]

89. I think the food for my dogs costs more than my food.

So there it is. Inflation!

Come to think of it. They get better health care than me too. They have single-payer. ME.

[Capitalocracy]

94. Is this your dog?

j/k ;)

[Fuddnik]

100. Nope, mine are athletic Lab pups.

But, their food sure is expensive. And that's before chicken jerky treats.

[scarletwoman]

93. K&R and bookmarked. Thank you for pulling all this information together.

:applause:

[raouldukelives]

95. Some will rob you with a sixgun

Some with a fountain pen.

[chervilant]

147. Most

astute observation. Well put.

[Locrian]

97. huge KICKI !!! This needs to be up somewhere BIG

Awesome post and spot on! Do you have a site or can we post this or ??? This should be posted far and wide for EVERYONE to SEE!

[SpiralHawk]

101. Fatcat Republicon grifters are a plauge upon Americans

Ptooey on their darkside greed thingy.

[BrklynLiberal]

104. Thank you for this. I am sharing it with everyone I know.

[Faryn Balyncd]

182. Thanks. If each who voted for this would send a hard copy to every Congressperson IN THEIR STATE...

...we would have an average of 5 copies in every Congressperson and Senators office.


If every one who voted for this contacted 5 additional people to do the same, we would gert an average of 25 copies of this (in hard copy) in each Congressperson's and Senator's office office.

If we did that, we could count on a few Congresspeople taking notice.

Republican Congresspeople might even benefit from knowing that this word is getting out even more than Democrats, because Republicans can ill afford that their base wake up to what they intend to do with Social Security, since at least 80% of Republican voters do or will rely on Social Security for a very significant portion of their retirement income, and they, including those already on SS, will be hurt by the re-rigging of CPI/COLA's.

Would you be interested in sending copies to Congesspeople and Senators in your state?







:hi:

[mstinamotorcity]

107. kick

and rec

[bluestateboomer]

110. K&R!

[pa28]

114. When it's time to privatize SS that "reverse lock box" will open like Alladin's cave.

You'll quickly see that the trust fund is not just a bunch of "worthless IOU's". In 2005 Cheney referred to this as a 'transition cost' or something along that line. Amazing how quickly the GOP abandoned their 'scraps of paper' line when it came to turning that money over to Wall Street.

Tampering with SS is just one more stop toward the final destination of privatization. There is no emergency and Democrats need to pledge hands off.

[Generic Other]

115. This breaks it down into plain everyday language as it must to be effective

We need some postcard sized one-stop explanation cards to give out to the "low information voter." This is insane and needs to be exposed. No one should let this happen. We should be very concerned.

It is such a book keeping trick. They are slick and seem to be planning to pull off a robbery!

Thanks for sharing your insights.

[Ghost in the Machine]

117. Kicked, Recommended & Cross Posted

here... http://www.handsoffsocialsecurity.us/?q=node

This is a must read! Thanks for posting, Faryn Balyncd

[Faryn Balyncd]

133. Thanks for DROSS POSTING....If anyone wants to print to send to Representatives, etc......feel free

Republicans can't afford for their base to find out what they desire to do to Social Security,, anymore that DLC enablers can afford for their base to find out what they are complicit with.

So both Democratic and Republicans Congresspeople to these facts would do both good, since their plan is to blame it on the accountants who calculate CPI.

If any of the folks at HandsOffSocialSecurity.us want to print this and send to Congresspeople, I say "Right On!"





:hi:

[Ghost in the Machine]

196. It was my pleasure to cross post it...

"If any of the folks at HandsOffSocialSecurity.us want to print this and send to Congresspeople, I say "Right On!"

Well, sad to say, but I'm the only one at handsoffsocialsecurity.us... but please feel free to post there any time, especially articles as great as this one.


Peace,

Ghost

[Kaleva]

118. They ought to erase the cap on SS

[TxVietVet]

119. I'm drawing SS now. However,

the conservanazis in their propaganda try to convince people that SS is not a going to work. But, I remember 20 years ago a comment made by an actuary and accountant that said that "they won't do away with SS because for about 65% of Americans, that's their only retirement plan along with a house investment." Now, look at the housing market at this period in our history. It's cratered. This issue of screwing people on SS and the falling real estate market is going to do some serious damage to the "baby boomers".

The next generation better grow out of their "greed" or there will be some serious consequences to pay. There will be the very rich and the very poor, where some work and others just survive.

[liberal N proud]

120. The last 30 years have all been aimed at this

Borrow the surplus, never pay it back and the break the system.

[chimpymustgo]

125. Big fat K&R!!!

[DirkGently]

126. Excellent. nt

[Uncle Joe]

127. Kicked and recommended.

Thanks for the thread, Faryn Balyncd.

[lordsummerisle]

134. K&R n/t

[sasha031]

136. I can't thank you enough for your excellence in researching

:kick:

[Eedjee]

138. Egypt

If those possessed reptilians think there cannot be an Egyptian revolution here, they better get their head out of their behinds. Storming the Bastile just doesn't happen once in France. Someone tell them.

[Shaman Omaha]

139. Leaving HuffPo

Dear DU,

I have left HuffPo and moved to DU. I was appalled by Huffington's sale of the site to AOL Time-Warner. I said so in a post and was censored. Apparently it is not okay to suggest that Arianna betrayed her readership. Apparently it is not okay at HuffPo to suggest that any alliance with the corporatists is contaminating. I look forward to a happy relationship with DU.

[unkachuck]

140. Welcome aboard, Shaman Omaha!

....jump in, the water's fine...and bring a progressive friend!

[Bozita]

141. K&R

[grahamhgreen]

142. Those who would cut benefits rather than tax the rich are selfish, self serving, con artists.

[MannyGoldstein]

145. Yep

That's it.

[OwnedByFerrets]

148. The biggest problem as I see it is that we can do NOTHING

but bitch. Protest?? About what and to whom?

[The Wizard]

150. K&R

:kick:

[rhett o rick]

152. k&R

[ljm2002]

155. Thanks for laying it out so clearly...

...and with so many details to back it up.

People need to understand what is happening. I hope you have a chance to speak to a wider audience, you certainly have the facts and figures and more importantly, you know how to make sense of them.

K&R

[JohnnyRingo]

158. I wish I could force Barstool Republicans to read this.

...but they're too busy reading Glenn Beck's magic chalkboard about the "Mooslims" are coming to take their God away.

When and if this scenario plays out, their mentors at Fox News will explain how Clinton caused it.

k&r

[woo me with science]

164. We are being systematically impoverished by thieves.

Thank you for this post.

[JPZenger]

169. Al Gore

"What part of 'lock box' didn't you understand"

- Al Gore speaking to the voters, on Sat. Night Live, a couple years after his defeat to King George

[ctsnowman]

173. SS should not be called an entitlemen­t program.

It's a retirement plan that I've paid into for over 30 years.
The plan had terms and I expect them to be honored. Paris Hilton has an entitlemen­t program, cut hers before you mess with my investment­.

[lonestarnot]

183. Second that!

[Poboy]

178. .

[Fire1]

180. Thank you SO much for bringing this to my attention! n/t

[woo me with science]

192. Kicking for release of budget. nt

[mariawr]

193. k and r nt

[disillusioned73]

194. Past due kick..

:dem:

[bullwinkle428]

197. Too late for a rec, but I can sure kick!!

:kick:

[dkf]

200. What I don't understand is why liberals don't realize Reagan created this as a scam to basically

Flatten the tax rate. The rich pay a higher marginal tax rate but they get capped on social security. The middle class gets the double whammy of payroll and income taxes.

And yet creating the surplus did not improve our ability to pay benefits.

We have been ripped off.

[jtown1123]

206. It did improve ability to make payments. The end of the 75 years solvency

is 2037. It will need to have extra revenue to maintain 100% of benefits.

[dkf]

212. No it didnt. The taxes either come from payroll taxes or income taxes, but generally

The two taxes together don't go above 20% of GDP. When the "surplus" is being used from now til 2037 it has to come from Income taxes. This will either crowd out other spending from general funds, or they will cut benefits to keep a surplus which generates revenue for the general fund. And call it payroll taxes or income taxes, they still come from the same population with a certain ability to pay.

Or you can think they will keep social security taxes the same and increase income taxes every year to pay back the social security bonds off. If you think any US congress will keep increasing income taxes I'm sorry I gotta laugh.

[jtown1123]

204. A bit text heavy but very well done, K&R