Social Security

Consider this and comment – Congress stole Social Security money 

Right now the only reason we are collecting our full Social Social benefits is because the trust is using  interest on its special treasury bonds. 

Now, for those of you who are convinced congress stole the Social Security trust money, where would you have invested the funds to earn guaranteed interest payments that are now vital to paying benefits?

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11 replies »

  1. There are/was a problem with how the social security tax was “invested” and also how it was/is spent. I finally agree with you that investing it in government securities makes some sense. If there were no or little deficit and if there were not also a demographic problem (too few babies being born), there would not be such a great burden to current and future taxpayers as the “investment” plus all current SS tax receipts is sent to SS recipients. The other problem is that the system was never actuarily sound from day 1 and the Congress has increased benefits of one kind or another (to buy votes) many times since it started. Just consider the first SS recipient, Ida May Fuller. She contributed a total of $24.75 for SS tax during the last 3 years before she retired. She lived to 100 years old and received a total $22,888.92 from SS (all from the SS government website). This was FDR and the progressive socialists at work — SS is and always was mostly a pay as you go welfare program. But FDR and his commie band knew they couldn’t sell it to the American people, so they did what Hillary Clinton and Barack Obama do today, THEY LIED.

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    • Social Security was never meant to be sole retirement income. It is suppose to be a supplement to whatever else you have.
      And, as I stated earlier, should have been invested in a very low risk source, such as short-term Govt. securities.

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      • “Investment of sorts” is an apt description. Government debt is nothing more than a promise to pay, and interest paid to the trust funds is nothing more than added taxes. When you make an investment, in the ordinary sense, it generates a “return” (sometimes negative) or triggers a “dividend”. Government debt, on the other hand, only triggers more taxes – it is always, always negative with regard to taxpayers.

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  2. I will never have to rely on social security, but I would suggest investing it in something like the TSP G-fund.
    Its investment objective is to produce a rate of return higher than inflation while avoiding exposure to default risk
    and market fluctuations. The fund invests exclusively in non-marketable short term U.S. Treasury securities.
    And I agree with BenefitJack in his comment; the term “squanders” is more appropo than “stolen.”

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  3. Obviously, Congress has invested the taxes we pay, by statute, in government debt obligations. Taxpayers are the guarantors of those government debt obligations in the trust accounts. So, Congress has spent all the money collected from taxpayers, run $500 Billion to $1,4T in deficits (over and above all the taxes collected over the past 8 years), and now wants to claim that they have safeguarded Social Security benefits by making investments in government debt – which are simply more promises by members of Congress and the President made on behalf of current and future taxpayers to pay more … you guessed it … more taxes. The added taxes are not in the current statute (a ~25% cut in benefits is actually in the statute once the trust funds are exhausted), but who are we kidding … they will raise taxes given the alternatives.

    Perhaps you have a problem with the word “stole”. So do I. What we really have is a Congress, and many different administrations, from Jimmy Peanut to W, who used these entitlement programs to buy votes. The last true reform was Reagan’s, in 1983, and all that really accomplished was to commit taxpayers to paying more, much more, in taxes in an attempt to finance past vote buying of our members of Congress and the White House.

    FDR junked the initial program provisions and created beneficiaries five years before initially planned – people like Ida Mae Fuller, the first Social Security recipient, who paid in less than $60 over less than three years and got out $20,000 over more than two decades. Did she “steal” social security monies?

    Later, Jimmy Carter screwed up the COLA process. But the biggest vote buyer after FDR is a Republican – W added $10+T in new long term debt with his failure to finance the Medicare Part D addition.

    We have to go all the way back to vote-buying FDR to find the guy in charge of investing all Social Security trust fund assets in government debt obligations.

    So, if you don’t like the word “stole”, perhaps you prefer the word “squander” – not that they spent the money on anyone other than beneficiaries, but that they promised and spent so much more than they gathered in taxes, then invested it in “securities” that today have a “rate of return” (which is nothing more than … you guessed it … more taxes) of barely 2%.

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      • Most govt programs don’t collect taxes for 30, 40, 50, or more years with an plicit promise of benefits; nor do the typically have “mid-trust” accounts designed to give the misinpression that there is real money held in reserve.

        More importantly, as I noted before, there is no real investment – just more taxes to be paid.

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      • No but they rarely are terminated so is about the same thing. Nothing the government does doesn’t come from taxes of one kind or another. But if the Trust bonds are not an investment of sorts, what a US Savings bonds?

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