August 3, 2011 – potential quote of the moment, Social Security


Artificial hip, UC Berkeley

“If Social Security checks don’t go out on August 3, it’s just old people. You know how they are. They’re just gonna blow that money on medicine and hips.” – Jon Stewart

6 Responses to August 3, 2011 – potential quote of the moment, Social Security

  1. Ed Darrell says:

    Still, as I always say, there’s nothing wrong with Social Security that killing off the baby boomers wouldn’t fix.

    A week ago I laughed at that. Today, I fear that’s exactly what the Tea Partiers want.

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  2. James Hanley says:

    Not only did people not vote for Gore, the Republicans mocked his lock box proposal. Over its existence Social Security has taken in far more than it has paid out, and if there ever had been a reserved account–even if it was just sitting in a 1.2% checking account–there would currently be enough money in it. During the existence of Social Security, there have been 5 Republican presidents (Ike, Nixon, Reagan, Bushes I & II, not counting Ford). None of them, so far as I know, pushed hard for sequestering Social Security funds. Reagan had a working conservative majority in Congress–no lock box. Republicans had a majority in Congress during Clinton’s last 6 years–no push for a lock box. Bush II had a unified Republican government for 6 years–no lock box.

    What the Democrats did to us? Yeah, they never made a serious push for a lock box, either, but only a person bent on being a lying ideologue could seriously try to pin the blame solely on them, with the implication that the Republicans are one iota less responsible for the current mess.

    Still, as I always say, there’s nothing wrong with Social Security that killing off the baby boomers wouldn’t fix. (Yes, I’m from the baby bust generation, but my proposal is motivated solely by patriotic concern for my country’s finances.)

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  3. Ed Darrell says:

    Morgan said: The full story.

    Well, part of the full story. One might do as Dorid did and start looking at the actual documents from the actual agency.

    The author finds some merit in President Obama’s claim. But by the time you’re done reading it you’re not going to have too much affection for what the democrats have been doing to us.

    Obama simply told the truth. You may be right, it’s what the democrats have been doing to us, but it’s not what the Democrats have been doing to us.

    There is no Social Security trust fund, and there never has been. The last time there was a serious proposal to make one, people voted for Bush instead — Gore’s famous “lock box” was never created. Talk to your Republican buddies about that one, Morgan.

    I think the previous time there was serious discussion was in the first couple of years of the Reagan administration. Republicans on the Senate Budget Committee shot it down then because it covered up enough of Reagan’s deficits that they could claim to be working towards a balanced budget. It was “necessary maneuvering” at the time, though I think even the Republicans understood they were foregoing a fix of the Social Security “problem.”

    Social Security has always functioned on a tax basis — there is no “account” for each citizen from which their checks are paid. The assumption is that most SS recipients will collect more than they paid, and the difference would be made up by collections from the current batch of people paying in. That works well in expanding economies with growing populations, but not so well in severe economic contractions.

    Sure, there are treasury funds to back up the money the Treasury has borrowed from the SS account — but that money isn’t there if the debt ceiling is not raised. As any good business owner knows, you must have enough money in the bank on payday to cover the checks you write for payroll. Most businesses keep a line of credit at the bank to borrow to make sure there is enough money on deposit in the account from which the checks are drawn, even if and when it looks like revenues should provide enough. The line of credit protects against a one-month sales slump, or difficulties in collecting, or other issues — an it keeps you in business. Obama understands this principle, and he was merely stating the obvious: On August 3, if there is no increase in the debt ceiling, Treasury has already calculated that they cannot be sure to have enough money in the “checks payable account” to pay the military, Social Security, interest on the national debt, and other obligations.

    CBS asked for a guarantee that Obama would cover for the stupidity of the Tea Party, and Obama told the truth: No one has that much money.

    Obama well remembers his Scout Oath and Law, and the oath he took for the presidency. He may take a political hit for telling the truth and honoring his oaths. That’s more a statement about the shallowness and deceitfulness of those who criticize him, than it is a statement about Obama.

    For this reason, if none other, you’re going to find him to be a bonehead (in the hopes that just a few people might be dissuaded from reading it). But his conclusion is dead-on-target and his logic is sound.

    Obama’s not the bonehead here. It’s the Tea Party, and the House Republicans, who propose to default the government in order to . . . bring down the nation? Tell me again why they shouldn’t be tried for treason, if they do indeed do the bidding of the dead Nikita Khrushchev and Osama bid Laden.

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  4. Dorid says:

    Look. My family relies totally on Social Security. I’m scared, too. I wonder if there’s a possibility we may be homeless next month. But when it comes right down to it, I have to admit that it’s better for the nation as a whole to have a long term, balanced solution. Of course my idea of a balanced solution might look a little different than most. Roll back Bush tax cuts, and/or develop a more balanced tax code, taxing everyone at the same rate (maybe not totally fair, but more fair that overtaxing the poor while granting exemptions to the rich). Raise the debt ceiling. (which would need to be raised periodically anyway just to account for inflation) And cut waste in government spending.

    That last is where I think a lot of us get hung up. I suppose Republicans would say that Social Security, Medicare and Medicaid are wasteful spending. Never mind all of us who’ve paid into the system for decades and have nothing else to fall back on because of the economic situation in this country for the last 30 years. I suppose the Republican solution is to let all of us die off if our families can’t support us (and decrease the surplus population) and from here on out, if a company fails and people lose their retirement, tough cookies.

    This month there was a rush on food pantries here in Albuquerque. The lines are getting longer and longer, and more and more people are being turned away hungry. I suspect this isn’t a local phenomena. I suppose there is one good thing about that: If I am homeless next month, I won’t have canned goods cluttering up my shopping cart, and I’ll have more room for my clothes, medicine, and maybe a pillow or blanket.

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  5. Fab Kate says:

    The democrats have been doing to us? The government has been borrowing against the Social Security Trust fund since before the Obama administration.

    Here’s part of a question and answer document, from the 1957-1959 Social Security Advisory Council, relating to borrowing, spending, and the national deficit:

    V. THE IDEA THAT THE PURCHASE OF FEDERAL OBLIGATIONS BY THE TRUST FUNDS INCREASES THE NATIONAL DEBT

    Explanation

    An outstanding example of this view is the statement by John T. Flynn in 1947 (5) that the Federal old-age and survivors insurance program “is a plan to add a billion or two every year to the national debt which we are supposed to reduce.” From time to time newspaper writers and letters received by the Department of Health, Education, and Welfare have expressed the belief that trust fund investments cause increases in the national debt. In some comments, this idea has been linked with a belief that the availability of borrowable money due to trust fund accumulation is a temptation to Federal extravagance.

    Answer

    The national debt is increased only when for a given fiscal year Congress has approved expenditures that exceed tax revenues. The excess expenditures, of course, must be met by borrowing through the sale of additional Federal obligations. These obligations add to the national debt.

    The purchase of Federal obligations by the trust funds does not increase the total Federal debt. If there were no trust funds, the Treasury would still borrow just as much, all of it from other investors. When the Treasury has no deficit to meet, Treasury borrowing from the trust funds can result only in the redemption of an equal amount of outstanding Federal obligations. In this way trust fund purchases of Federal obligations from the Treasury when there is no budget deficit result only in a transfer of Federal debt obligations to the trust funds from other investors; the total amount of the public debt remains unchanged.

    There is no indication that the availability of trust fund money for borrowing by the Treasury ever has influenced Congress to vote expenditures not covered by general tax revenues which it would not have otherwise voted. The United States Treasury can always borrow money on the open market; the trust fund money does not increase the amount it is able to borrow. Whether borrowed on the open market or from the trust funds, money borrowed to meet a deficit increases the national debt and adds to the costs of servicing that debt.

    The reports of Social Security being “in the red” go back to at LEAST to 1947.

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  6. The full story.

    The author finds some merit in President Obama’s claim. But by the time you’re done reading it you’re not going to have too much affection for what the democrats have been doing to us.

    For this reason, if none other, you’re going to find him to be a bonehead (in the hopes that just a few people might be dissuaded from reading it). But his conclusion is dead-on-target and his logic is sound.

    Like

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