Both are based on comments from….ta dah!…Maya MacGuineas! She must be the go-to commenter of the day or so on dissing SocSec and promoting cuts to benefits.
The government has invested all that money in Treasury bonds, which are traditionally considered among the safest investments in the world.
But a Treasury bond, remember, is the way the government borrows money. So the government is lending the Social Security surplus to itself. And the obligation to repay those loans is the trust funds.
“They are nothing like any trust fund that any one of us would think of,” says Maya MacGuineas of the New America Foundation. “It conjures up an image of really holding savings, and it doesn’t do that at all.”
But there’s another way to think about what the government is doing here.
The federal government owes $2.5 trillion to the Social Security trust funds. And if the government doesn’t pay that money, it will default on its debt — something the U.S. has never done in its history.
By the middle of the next decade, the Social Security surplus will turn into yearly deficits as more Baby Boomers retire. And the government will have to come up with hundreds of billions of dollars a year to cover its obligations to the trust fund.
At that point, the debate over whether or not the trust funds exist becomes a moot.
“The policy choices that we have to make good on Social Security obligations are exactly the same with the trust fund or if we’d never had the trust fund,” MacGuineas says. “Raise taxes, cut Social Security benefits, cut other government spending, or borrow the money. That’s the only way to repay the money.” (My emphasis)
Of course, everyone who paid FICA taxes from the O’Neill/Reagan grand bargain paid not only to support the current retirees but also to pay forward for their own retirement. So, actually, those (of us) who did that are being asked to pay three times: For those retired while we worked, for ourselves, and now for the tax cuts to the Uberwealthy (which I think took up lots of the SocSec trust funds) and whatever other deficit spending was done with our Treasury note amounts.
Gotta hand it to the deficit hawks, lackeys to the Uberwealthy; they sure to know how to con the public. Scammers are they.
And the MCMers will NOT make this clear — unless forced to do so in some way. What is that way?
CONservative
GovernMENt
A sign that was once painted on the side of a building i Brooklyn and visible to the Brooklyn-Queens Expressway.
I vaguely remember reading that Patrick Moynihan predicted this would happen, way back then. It would be interesting to see who else saw the con from the beginning. I was so young. I was at my first job and when my SS tax went up, I just figured, “Well, that’s taxes do , they go up.”
NPR’s Planet Money segment last evening reinforced this very view, with another kinda cutesy vignette thingy. Also written article.
Both are based on comments from….ta dah!…Maya MacGuineas! She must be the go-to commenter of the day or so on dissing SocSec and promoting cuts to benefits.
Of course, everyone who paid FICA taxes from the O’Neill/Reagan grand bargain paid not only to support the current retirees but also to pay forward for their own retirement. So, actually, those (of us) who did that are being asked to pay three times: For those retired while we worked, for ourselves, and now for the tax cuts to the Uberwealthy (which I think took up lots of the SocSec trust funds) and whatever other deficit spending was done with our Treasury note amounts.
Gotta hand it to the deficit hawks, lackeys to the Uberwealthy; they sure to know how to con the public. Scammers are they.
And the MCMers will NOT make this clear — unless forced to do so in some way. What is that way?
CONservative
GovernMENt
A sign that was once painted on the side of a building i Brooklyn and visible to the Brooklyn-Queens Expressway.
I vaguely remember reading that Patrick Moynihan predicted this would happen, way back then. It would be interesting to see who else saw the con from the beginning. I was so young. I was at my first job and when my SS tax went up, I just figured, “Well, that’s taxes do , they go up.”