Editore"s Note
Tilting at Windmills

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December 7, 2010

THE SOCIAL SECURITY TRUST FUND WON'T BE TOUCHED.... One of the unexpected elements of the tax policy deal is a reduction in the Social Security payroll tax, which will give workers another little boost in their paychecks for a couple of years.

There's been some question about the lost revenue and where it will come from, so it's worth pausing to clarify matters. Firedoglake's Jane Hamsher was on PBS's "Newshour" last night, articulating one of the key concerns about this policy on the left.

"Well, of particular concern to me -- all the details haven't come out tonight -- are the 2 percent payroll tax cuts that is essentially being proposed.

"That's been a Republican idea that they have been pushing for a long time in order to sort of starve the beast of the Social Security trust fund. It means that money will not be coming in to the trust fund, but benefits will still be paid out. Up until now, the trust fund has been solvent and it's been able to pay out its own benefits.

"But, in this plan, they're basically trying to reduce the solvency of the trust fund, because they couldn't get a benefit cut through the Catfood Commission. They're just not going to stop until they try."

Jane acknowledged that all the details weren't yet available when she appeared on the program, and I'm pleased to note that this concern has already been addressed. We learned overnight that "the loss to the Social Security trust fund would be covered by general revenue."

In other words, the provision, if the deal is approved, won't undermine Social Security solvency at all. Not one penny of the payroll tax cut would come from the trust fund.

This is not to say the Republican ideal of "starving the beast" is on hold; I don't doubt that it remains a GOP goal that Democrats are going to have to fight. But when listing legitimate concerns about the tax policy agreement, this one doesn't make the cut. For those of us looking out for Social Security, that's good news.

Steve Benen 10:55 AM Permalink | Trackbacks | Comments (52)

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The loss to the Social Security trust fund would be covered by general revenue.

Riight, the 2011 Republican House is SO going to put that in the next budget.

Seriously, what the hell ARE you smoking, Steve?

Posted by: Steve LaBonne on December 7, 2010 at 10:59 AM | PERMALINK

We learned overnight that "the loss to the Social Security trust fund would be covered by general revenue."

I don't know whether to laugh or cry.

Posted by: kc on December 7, 2010 at 11:02 AM | PERMALINK

Come on--Wake Up!!! Social Security has survived for 70 years because it does not depend on general revenue--it is a dedicated fund--workers pay for the benefits that they recieve. It is not welfare--it is a combination insurance--I might outlive my money--and savings in what had been the most secure financial instrument the world had ever seen--U.S. Debt. Any one who considers themselves at all to the left of the far right has to be appalled at the deal. The GOP gets a twofer--they get tax cuts for the wealthy and they greatly weaken social security. People should be in the streets and calling for Obama's resignation.

Posted by: Terry on December 7, 2010 at 11:12 AM | PERMALINK

And the Republicans, having learned that the end of any "temporary" tax cut is a tax increase, will of course, agree to a tax increase in two years, so that Social Security can continue to be solvent. Right?

Posted by: David in NY on December 7, 2010 at 11:13 AM | PERMALINK

And what Terry said. This could be the beginning of the end of social security. The original deal has been broken, and it seems unlikely the Democrats will have the skill ever to reconstitute it.

Posted by: David in NY on December 7, 2010 at 11:16 AM | PERMALINK

It sickens me that the anti-Obama progressives are so adament in convincing us that this is a total sell-out that they have to invent reality to make this a bad deal.

Look, Social Security is already tied to the general fund. That's what the IOU's are all about. This will continue that policy, except the IOU's are being owed for money that the General Fund didn't raid from Social Security. In other words, this isn't some huge shift in policy that undermines Social Security. It's just more IOU's into the Trust Fund, like we've already been doing all along.

So we'll hear a whole bunch of attacks on Obama insisting that he sold us out, and when none of this materializes, because it can't, because it didn't happen, his attackers will have long moved on to the next attack on him. This is all part of the same drone we've been hearing in which we're told that Obama is giving everything away and getting nothing in return. Because if we understand that Obama has gotten us a lot, it completely undermines his progressive critics all together. So they'll keep telling us about all the things we've lost, because that's all they can hang their hats on.

Sorry guys, there is no pony president who can give you what you want. And if you want Obama to be strong, you could start by attacking his opponents instead of attacking him.

Posted by: Doctor Biobrain on December 7, 2010 at 11:21 AM | PERMALINK

"the loss to the Social Security trust fund would be covered by general revenue"

In other words, China.

And can anyone deny that there is anything except IOUs in the so called trust fund? The source of repayment on this will ultimately come from repayment by whom? The middle class of course. SS surpluses were taken and used as general revenues to make up for deficits caused in part by the Bush tax cuts. So, the trust fund might as well be looked at as a monstrous debt that will very unlikely be repaid in whole. This is another reason why this tax deal is so sinister in its implications for the future.

Posted by: lou on December 7, 2010 at 11:24 AM | PERMALINK

What a shock, Jane Hamsher making shit up.

Posted by: FlipYrWhig on December 7, 2010 at 11:25 AM | PERMALINK

Littelbrain is evidently too stupid to understand that all Obama had to do in this instance is... nothing. Let the Bush tax cuts expire. Nobody forced him to do a capitulation thinly disguised as "compromise". And CERTAINLY nobody forced him to come up with the dumbass idea of helping the right starve Social Security.

Posted by: Steve LaBonne on December 7, 2010 at 11:27 AM | PERMALINK

And Borowitz nails it....
In Latest Compromise with GOP, Obama Agrees He is a Muslim
Place of Birth ‘Negotiable,’ President Says

Too funny -but true


http://www.borowitzreport.com/

Posted by: John R on December 7, 2010 at 11:31 AM | PERMALINK

Doctor BioBrain, in case you hadn't noticed in this country image matters more than substance. If you can't see how this damages SocSec's image when it has to go begging for what should be owed to it automatically, you haven't been paying attention. The government is the parasite not SocSec. This will give the opposite appearance.

Posted by: Michael7843853 on December 7, 2010 at 11:33 AM | PERMALINK

I don't comment here often as I feel that Steve pretty much always hits all the points. But I'm not feeling the Obama love that is coming through on today's posts.

Obama lost my 2012 vote today and I'm sure I'm not alone. Get with the program, Steve.

Posted by: JJ on December 7, 2010 at 11:39 AM | PERMALINK

I wish Jane Hamsher would just STFU. She's a film producer - she really doesn't know much about policy and she's nearly always wrong. She's usually wrong on the politics as well.

The only thing she's good at is bitching and moaning and promoting herself. I'm sick of her posing as a spokesman for the progressive left.

She does not speak for me.

Posted by: fourlegsgood on December 7, 2010 at 11:50 AM | PERMALINK

What a shock, Jane Hamsher making shit up.

I think it's more ignorance and an overwhelming need to be the most important player in the room than dishonesty.

Posted by: fourlegsgood on December 7, 2010 at 11:52 AM | PERMALINK

Doctor Biobrain,

Look, Social Security is already tied to the general fund.

No it isn’t.


That's what the IOU's are all about.

There are NO “IOUs” held by the Social Security Trust Fund.


This will continue that policy, except the IOU's are being owed for money that the General Fund didn't raid from Social Security.

There has never been any “raid” on the Social Security Trust Fund.


In other words, this isn't some huge shift in policy that undermines Social Security. It's just more IOU's into the Trust Fund, like we've already been doing all along.

No, it is NOT “like we've already been doing all along”.

The Social Security Trust Fund INVESTS in U.S. Treasury Securities, just as banks, mutual funds, brokerage firms, insurance companies, and individual Americans do.


Posted by: Joe Friday on December 7, 2010 at 11:53 AM | PERMALINK

Well, Iwish people as ignorant and naive as fourlegsgood would STFU.

Posted by: Steve LaBonne on December 7, 2010 at 11:53 AM | PERMALINK

I am so angry about the "let's attack social security and let's give the billionaires more of the national wealth" tax deal, that Obama has lost me. I don't even want to call it a deal. It's a betrayal. Let's just haul out the Nazi references. Let's go Godwin. Let's call it appeasement.

WTF is the WH thinking? They've alienated their base without persuading anyone on the right that they are more to be trusted at running government than Republicans. Eight years of Bushco followed by two years of Bozo. What can I say?

Where is the Tea Party movement on the Left, folks? I'm ready to rebel. If Obama is the Democratic candidate in 2012, I will vote for him, but in the meantime, I'm going to work to find a primary challenger who might stand a chance of winning in 2012 against Mitt Romney.

Posted by: PTate in MN on December 7, 2010 at 11:53 AM | PERMALINK

Why do I have a nagging suspicion that in a year, when you (I) get the statement of earnings from the Social Security administration, that it will
be lowered by the 25% of taxes due for the past year.

Posted by: catclub on December 7, 2010 at 11:53 AM | PERMALINK

And, so, once again, the left's cycle of self-immolation continues. a) "Progressive" works him/herself up into a state of preemptive rage based upon a prediction about some Terrible Thing he/she just knows he's going to do. b) Prediction doesn't come true. c) Preemptively enraged "progressives" cannot admit they were wrong because all of that preemptive rage would have nowhere to so, of course, whatever actually happens is deemed as bad or worse, than the Terrible Thing they were sure was going to happen. d) Original predicted Terrible Thing is added to long list of grievances "progressives" have against Obama despite fact it didn't come true.

Posted by: Another Steve on December 7, 2010 at 11:59 AM | PERMALINK

Look, Social Security is already tied to the general fund. That's what the IOU's are all about. This will continue that policy, except the IOU's are being owed for money that the General Fund didn't raid from Social Security. In other words, this isn't some huge shift in policy that undermines Social Security. It's just more IOU's into the Trust Fund, like we've already been doing all along.

No, it is not. Those aren't "IOU's": They're United States Treasury bills, the most secure investment on earth, backed by the full faith and credit of the US government, just like the ten's and twenties in your wallet. They are no different than the T-Bills owned by China, large investment houses, or the Bush family (which has many millions invested in T-Bills). You don't hear right-wingers claiming we have to default on T-Bills owned by Republicans, do you?

What right-wingers are hoping to do is convince the public that they are just empty IOUs.

I've been purchasing T-bills through the social security system for close to 40 years, and I take it very personally when some scumbag claims they are just "IOUs".

Posted by: phein on December 7, 2010 at 11:59 AM | PERMALINK

The pitchfork and torch brigade will not be satisfied by anything less than heads on pikes.

Posted by: John S. on December 7, 2010 at 12:02 PM | PERMALINK

-Sorry guys, there is no pony president who can give you what you want. And if you want Obama to be strong, you could start by attacking his opponents instead of attacking him.-

Good advice. Never attack sellouts.

Posted by: SFO in 2008 on December 7, 2010 at 12:03 PM | PERMALINK

Another Steve -- you are exactly right.

Posted by: pol on December 7, 2010 at 12:05 PM | PERMALINK

So, having denounced the latest rage shift, let's, just by way of windmill tilting, talk about a few actual facts.

Social Security used to be a purely socialized transfer of income from working people to retired people. The demographic bulge created by the boomers made that system unteneable, at least until the boomers died off, resulting in measures that substantially increased income from payroll taxes over payouts so as to build up a "trust fund" to cover the period of time when pay out would exceed income.

So, what do you do with all this money that's coming in? Put it in banks? What happens if the bank goes broke. Invest it in the stock market? Please. Buy bonds? Okay, whose? Why ours, of course. No way are we going to use our tax money to fund some other country's deficits.

These are those "IOU's" Bush (and now the left) was talking about. They're just Treasury bonds. They're bonds with a special limitation on their negotiability, but other than that, they're just regular T-Bonds--instruments of indebtedness purchased from the government at a discount from their redemption value.

So yes, Social Security taxes in excess of what was needed to pay current benefits were used to finance the general deficit. But, seriously, where the hell else were they supposed to park the cash other than in U.S. Treasury instruments? At least that way, its money we owe ourselves that will be paid out to and spent by Americans mostly in America (much like all those war bonds that financed a big chunk of our last big runup in the national debt) rather than money we owe the Chinese.

This payroll tax holiday gets financed by selling regular Treasury Bonds to investors--foreign and domestic--and, if there's any left over after payment of benefits (it being a little unclear whether we'd be in the black or the red this coming year) converting them into the special non-negotiable bonds in the "Trust Fund." No net loss to the Trust Fund.

So, given all of that, I cannot for the life of me figure out what the hell people are going Godwin over other than just a general need to find something that sounds proportional to all of their sweet, sweet delicious rage.

Yeah, overall, this deal sucks. If Congressional Democrats hadn't balked at Obama's consistent urgent requests that they push the middle class tax cuts through before the election--for reasons that were and still are completely incoherent as only people mired in the Beltway can be--he wouldn't have had to make it. Given the world as it was in the aftermath of the November clusterfrak, this was what he could do.
But getting all ragey over the Social Security part is just nonsensical.

Posted by: Another Steve on December 7, 2010 at 12:22 PM | PERMALINK

"Those aren't "IOU's": They're United States Treasury bills"

Please explain just how these T bills will be paid for in the future. This is a debt. If the treasury has some pot of gold sitting there why would they be borrowing it from the SS surpluses to begin with? Some of us are puzzled on exactly how this debt will be paid for. More borrowing from what? The hole is getting pretty damned big and this deal made it that much bigger, unnecessarily.

Posted by: lou on December 7, 2010 at 12:22 PM | PERMALINK

Jane being on auto-anti-Obama-drive, shocker! The idea has been pushed by Shumer and other "liberals" in congress. Ron Byers explained it nicely in a previous thread. Sure it's not the greatest deal but it's suicide to let them expire in totality. Their is no stimulus option to replace them. The economy tanks fast with that money leaving the system. I guess Jane can push more ponies but they are what they are-ponies.

Posted by: KK on December 7, 2010 at 12:27 PM | PERMALINK

and what is the white house thinking? Get whatever stimulus they can and get the economy moving. Take the fight to 2012 with wind at your back or least not a gale force wind in your face. Without this bit of stimulus we have no shot.

Posted by: KK on December 7, 2010 at 12:30 PM | PERMALINK

For those of you, including Steve, who think/write that this is "nothing to worry about": you are all losers and dumbf*cks.

If the Fed gov wants to give back $120B to workers they have the ability and means to do it as a special tax subsidy. They can send checks every quarter, for example.

There was no need to pull this sleight of hand of lowering the SS tax rate and then paying $120B to SS from general revenues.

So you dumbf*cks should be asking why, SPECIFICALLY WHY, it was done this way.

Of course there's only one answer. First you establish the principle of dicking with SS rates, then you never let the "temporary" cut expire, then when you're running a deficit you say, well we could give SS another $200M or we can use it to "stimulate the economy".

Every single argument raised the Obama and the other stealers of your money in this "SS is bankrupt" lying scheme was so far faulty because lots of people like Dean Baker keep pointing out that you can't lump SS in with Medicare because it is self-funding and solvent. This little scheme of Obama's direct cuts that argument out from under its legs.

If you folks and Steve are too stupid to understand this, then you really should quit saying your Democrats and become Tea Partiers becuase the end result will the same.

This is just another move of the chess pieces by Obama to remake American into a Republican wetdream.

Obama should be kicked out of the Democratic party.

Posted by: Observer on December 7, 2010 at 12:30 PM | PERMALINK

Again, many progressive have pushed the payroll tax holiday. It reaches all working people in a way no other rebate can. It means it will be spent. Win elections and we won't have to worry about SS. Bellow and Bray but please offer alternatives that are real.

Posted by: KK on December 7, 2010 at 12:34 PM | PERMALINK

@lou. Frankly you are too stupid to explain this to and waste time but here goes:
the "IOUs" are US TBills. SS is just ONE OF MANY MANY HOLDERS OF US TBILLS.

The money to payback TBils holders comes from future tax revenues. The US Fed cannot BY LAW default on the TBill.s

More specifically, the US Gov't cannot tell one TBILL holder they cannot be redeemed while telling another holder of the exact same TBILL that they can.

If they're "worthless" IOUs then the ENTIRE FREAKING WORLD OF GOVERNMENT FINANCE US, EUROPE, CHINA, CANADA, JAPAN is fraudulent because they are all based on the exact same thing. They are all defrauding all their gov't bond holders.

Are you going to ask for the gov't to put them all in jail?

But then again by your logic, any money in a bank account is also a "worthless" IOU since the bank sends money to the FED overnight and also holds TBILLS.

Posted by: Observer on December 7, 2010 at 12:37 PM | PERMALINK

lou,

Please explain just how these T bills will be paid for in the future.

Same way all the treasury securities held by the banks, mutual funds, brokerage firms, insurance companies, and individual Americans will be paid for in the future (which, BTW, is a FAR larger amount).


This is a debt.

That’s how a bond works. An investor buys the bond and the issuer has to pay back the money when it is redeemed.


If the treasury has some pot of gold sitting there why would they be borrowing it from the SS surpluses to begin with?

They’re not.


Some of us are puzzled on exactly how this debt will be paid for.

Obviously.


Posted by: Joe Friday on December 7, 2010 at 12:41 PM | PERMALINK

@kk. Once again, I don't know why we are having this debate with people like you.

If the gov't wants to give $120B to workers it doesn't need to dick with SS rates to do so. It can just send checks. IIRC, didn't Bush do something like that before? It's not that hard.

Lowering SS rates and then paying SS out of general revenue is about Obama screwing with SS *on purpose* to set up his narrative of how "we" (i.e. YOU) can't afford SS.

Please get a clue.

Posted by: Observer on December 7, 2010 at 12:43 PM | PERMALINK

All of us who are in the right should save this post and comments for use when it is time to set the rate straight and give T-Bills to Socsec for what it was denied.

Posted by: Michael7843853 on December 7, 2010 at 12:49 PM | PERMALINK

I think Obama could have gotten more in the negotiation. He really had the Republicans by the shorts. The only thing they really cared about was extending the Bush tax cuts for the rich. That put him in the drivers seat. Once they get the tax cuts they are done with their priorities for the next two years.

As angry as I am with Obama, I am more angry with our elected congressional Democrats. They could have forced this issue to great advantage back in September, but they took a pass and still lost. If you want to point fingers point them at Harry Reid and Nancy Pelosi and a whole bunch of cowardly Democrats who didn't have the courage or imagination to actually lead.

Mostly I am mad at us, you and me, and all of the other so called progressives who bitch and moan on the progressive blogs. We have just taken it as the Republicans, hate radio and the mainstream media have been pushing us farther and farther into a corner. We have taken it as our elected Democrats have taken us forgranted. The Democratic party is controlled by a bunch of old hacks who are more interested in making sure they get the right seats and hotel rooms at the next state and national convention than they are in winning at all levels of government. Lets face it the Democratic party isn't even working hard to win at the local level. We are not really promoting new faces.

If we progressives want to do something, we will show up at townhall meetings and voice our concerns; we will write letters to our local news papers, loudly and proudly telling people what we stand for; we will organize locally and run candidates for every position right down to dog catcher and school board; we will seize control from the worn out party functionaries most of whom have gone to seed; we will finance and elect candidates at all levels down to and including school board members; but mostly we will get off our asses do something.

You don't want to be ignored do something more than bitch in a blog comment. When doing so remember we don't just stand in opposition, we stand for something. Be proud that we are the people who believe that business and government are just tools to help all Americans, rich and poor, Democrat and Republican, achieve their greatest potential.

Posted by: Ron Byers on December 7, 2010 at 12:51 PM | PERMALINK

Another Steve:

And, so, once again, the left's cycle of self-immolation continues. a) "Progressive" works him/herself up into a state of preemptive rage based upon a prediction about some Terrible Thing he/she just knows he's going to do. b) Prediction doesn't come true. c) Preemptively enraged "progressives" cannot admit they were wrong because all of that preemptive rage would have nowhere to so, of course, whatever actually happens is deemed as bad or worse, than the Terrible Thing they were sure was going to happen. d) Original predicted Terrible Thing is added to long list of grievances "progressives" have against Obama despite fact it didn't come true.

Spot on! There are plenty of real grievances, but a lot of the cumulative effect is exactly this feedback loop, where people lurch from some sense of being pissed off about _something_ to the next. Like all the sturm und drang about the "Catfood Commission" in the first place, which didn't actually do anything.

Posted by: FlipYrWhig on December 7, 2010 at 12:52 PM | PERMALINK

"The money to payback TBils holders comes from future tax revenues."

This is exactly the point I am trying to make -- these debts will only be repaid by more borrowing or more taxation. If the economy does pick up and more tax revenues are available then this becomes more feasible. This is a big gamble. Many, including me, believe that we are on a downhill slide from which we may not recover. And if we are less prosperous in the future our ability to repay these debts by taxation will be severely weakened.

And I have no doubts about which segment of our population will repay most of this IOU debt -- the middle class which paid most of the original SS taxes. We are doubly screwed.

Posted by: lou on December 7, 2010 at 1:08 PM | PERMALINK

Fuck Jane Hamsher. If she's bitching about something, it must be good.

Posted by: MsJoanne on December 7, 2010 at 1:14 PM | PERMALINK

@lou. these debts will only be repaid by more borrowing or more taxation....This is a big gamble.

Gamble for whom? Do you think 50 years from now everyone in the country will be dead or something and no one will be living in it?

In your mind is this problem limited to the US?

Countries with a perceived higher risk of default need to pay higher Gov bond issuer rates.

The US has the lowest rates, lou. There's a reason for that.

Do you think the Germans (and every other rich country) believe that 50 years from now their entire country will be 'effed and can't generate revenue? 'cause that's what your really saying.

Posted by: Observer on December 7, 2010 at 1:29 PM | PERMALINK

"that's what your really saying"

That is what I am saying. I think we are fucked. Collapse is a very real and increasingly probable result of our collective muddle in creating such an maladaptive monstrosity.

Posted by: lou on December 7, 2010 at 1:40 PM | PERMALINK

lou,

This is exactly the point I am trying to make -- these debts will only be repaid by more borrowing or more taxation.

This is different from the past two centuries HOW ?


Many, including me, believe that we are on a downhill slide from which we may not recover.

The debt as a percentage of GDP was almost this bad at the end of the 12 years of Reagan/Poppy Bush, yet we were in net surplus one year later and had annual surpluses less than six years later by raising taxes on the Rich & Corporate. Greenie was testified to Congress that our entire federal debt would be soon paid off, which he considered “dangerous”.

Failed public policy CAN be reversed over relatively short periods of time.


Posted by: Joe Friday on December 7, 2010 at 1:42 PM | PERMALINK

Umm, pay attention, people. Obama hasn't just lost Jane Hamsher, you know. He has even lost Markos Moulitsas and Oliver Willis, as you can see by visiting their sites today.

That's BAD.

Posted by: Steve LaBonne on December 7, 2010 at 1:50 PM | PERMALINK

Oh honestly. The stupid on the left has gotten painful. There Is No Trust Fund. They Don't Want To Pay That Money Back.
Why put MORE in it? Why let them use OUR FICA to cover their tax cut losses?
This is a good idea. Workers win. Congress has to deal with a budget that doesn't rely on the "Trust Fund".

Posted by: Sandy on December 7, 2010 at 2:52 PM | PERMALINK

Sandy,

There Is No Trust Fund.

The Social Security Trust Fund disagrees:

INVESTMENTS HELD BY SOCIAL SECURITY TRUST FUND


Click on the “GO” button in the bottom lower left.


Posted by: Joe Friday on December 7, 2010 at 3:07 PM | PERMALINK

Steve, don't forget that Barry also promised everyone a pony.

This is sad. In the deal where Barry caves on his promise to let the 250K tax cuts expire, he adds a 33% cut in Social Security Revenue.

And I'm supposed to believe that he'll just let them expire. Yeah, right. Just like you were gonna close Guantanimo and end Don't Ask, Don't Tell. The guy is a lying sack of crap.

You gotta hand it to Barry-- if we're talking about destroying Democratic ideas, he's as dogged a fighter as one could want. First he proposed the Catfood Commission. Then he stacked it with people who'd try to kill it.

When they fouled up by presenting ideas that weren't on Planet Earth couldn't get even close to the ballpark, he's come back with a new idea-- starve it.

A year from now, he'll point out that Socal Security is now ten years closer to bankruptcy, and he'll be able to get the Dems in the Senate to roll over.

Well, this is what happens when you elect someone with absolutely no track record. If he turns out to be a conservative, there isn't anything you can do other than make sure he isn't re-elected.

Posted by: Woodrow L. Goode, IV on December 7, 2010 at 3:28 PM | PERMALINK

This link to a PBS Newshour clip from 2001 is about the Social Security Lockbox in WV. The cash surplus of social security was and hopefully still is invested by law in treasury bills.

Posted by: tko on December 7, 2010 at 4:36 PM | PERMALINK

Lou, and others, I am confused.

What exactly is it that you think they should be doing with the money that's going into the Social Security trust fund besides putting it into treasury bonds?

Put it in banks? a) Insanely inflationary, which defeats the purpose of building a trust fund. b) Not enough banks in the U.S. to spread the risk of bank failure and sure as hell not enough to keep the deposits below the FDIC limit.

Put it into some other country's debt instruments? Put it into the stock market? Print it up into hundreds hide it under the mattress in the Lincoln Bedroom? Gonna need a lot of mattress to cover that stack.

I don't think we're going to do anything but talk past each other if you don't have a cogent answer to this question.

Posted by: Another Steve on December 7, 2010 at 4:42 PM | PERMALINK

Btw, guys, not to be pedandic--okay it is pedantic--but it's T-Bonds, not T-Bills. A bill is a short-term debt instrument, usually a year or less. A bond is a long term instrument--U.S. Treasuries mostly being ten or thirty year instruments.

Posted by: Another Steve on December 7, 2010 at 4:44 PM | PERMALINK

"What exactly is it that you think they should be doing with the money that's going into the Social Security trust fund besides putting it into treasury bonds?"

For me, paying the self employment tax on myself and my wife (employer and employee contribution), I would have been much better off with a payroll tax cut! Why generate a surplus if it is going to be used to offset deficits in general revenues created by the Bush tax cut which effectively raised my overall income tax rate. And this absconded surplus also was used to create the mirage of a surplus in the Clinton administration.

If anything the surplus should have been used to pay down the federal debt, which I predict will never, ever be payed down.

Posted by: lou on December 7, 2010 at 5:46 PM | PERMALINK

Steve, Steve, the bullshit concern for Social Security's solvency 30-40 years down the road wasn't causing enough alarm so they get this instead. The payroll deduction lost revenues will hasten the formerly 30-40 years down the road shortfall to about 10-15 years. It's just a way to gut Social Security. DO the math this is easy to calculate.

Obama has done what even the GOP hasn't been able to do in 70 years. Grats Obama! You managed to gut Social Security! I think in 2012, the Democrats need to run, you know, a Democrat.

Posted by: shifterx on December 7, 2010 at 8:03 PM | PERMALINK

Doctor Biobrain: The IOUS are actually illegal, in fact, so was Reagan's spending the trust fund.

Trust funds are held in trust and the trustee (the person to whom the trust is entrusted) are not allowed to spend that money.

The mere fact that the money was illegally spent and now has, instead of funds, "IOUs" that may or may not be paid back from the general fund does not in any way, shape or form, "TIE" social security to the general fund, any more than any other embezzling trustee's repayment of stolen trust funds ties those funds to his personal bank account.

Posted by: getaclue on December 7, 2010 at 8:07 PM | PERMALINK

lou,

And this absconded surplus also was used to create the mirage of a surplus in the Clinton administration.

False.

You’re falling for RightWing propaganda.

Posted by: Joe Friday on December 8, 2010 at 2:52 AM | PERMALINK

getaclue (I’m tempted to say - Try A Mirror),


The IOUS are actually illegal

There are NO “IOUs” held by Social Security.


in fact, so was Reagan's spending the trust fund.

Reagan didn’t spend any of the trust fund.


Trust funds are held in trust and the trustee (the person to whom the trust is entrusted) are not allowed to spend that money.

Exactly.

By federal statute, all Social Security monies can only be spent on Social Security benefits.


The mere fact that the money was illegally spent

Never happened.


and now has, instead of funds, 'IOUs'.

NO “IOUs”.


You REALLY don’t comprehend Social Security, do you ?


Posted by: Joe Friday on December 8, 2010 at 3:01 AM | PERMALINK
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