Tag: Social Security

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national politics & policies tax policy too much government

Social Security Beyond Retirement Age

Social Security turned 75 last week, and yet I saw few demands to retire the program.

Instead, pundits like Paul Krugman took the occasion to praise the septuagenarian boondoggle. 

Krugman started boldly, saying that the program “brought dignity and decency to the lives of older Americans.” Huh? Social Security has indeed brought a steady income to retired Americans, many of whom would have had to rely on their children’s help to live out their last years. But Krugman doesn’t say that. Instead he implies that, before Social Security, old folks led indecent and base lives. 

But think about this: Saving for yourself and living on a limited means is indecent? It lacks dignity?

Krugman also talks about the economics of the program, defending, for instance, its dual accounting method in a bizarre way. But mostly he steps carefully around Social Security’s biggest failings, which include the intergenerational swindle, providing bigger rewards-​over-​contributions to earlier retirees than to current recipients, and, by its nature, will take more from, and give less to, future retirees.

Most shockingly, though, he says this: “Social Security has been running surpluses for the last quarter-​century, banking those surpluses in a special account, the so-​called trust fund.”

Krugman does all but state that the special account has money in it.

It doesn’t. The “trust fund” consists of IOUs from Congress. That’s it.

I guess Social Security is a program too important to Krugman to tell the truth about.

This is Common Sense. I’m Paul Jacob.

Categories
ideological culture national politics & policies too much government

Move On to the Poverty Line

According to a recent email bulletin from Daniel Mintz of MoveOn​.org, Republicans and running-​dog Democrats are gearing up to “slash” Social Security benefits.

The tone of the bulletin? Strident hysteria. How can anyone even think of such a thing in hard times like these, when “no jobs bill can pass congress”? 

Well, we’ve had stimulus bills up to our nostrils, but hope of “recovery” remains just that, mere hope. Mintz, who denies that Social Security is in anything like a crisis, ignores the devastation to the system caused by its Ponzi nature, Congress’s longtime plundering of the program, and the current depression.

He wants you to sign a pledge for no cuts and no raise in the retirement age. He says it would easy to “strengthen” the program by “making the rich pay their fair share.” 

Of course, the effect of raising the maximum FICA payment (their “fair share”) without correspondingly increasing benefits to those who pay extra (no one’s proposing that!) would turn Social Security into a blatant welfare redistribution program. All ties to investment? Severed. 

Further, it would signal politicians that their sins can always be covered over with a tax.

Worse yet, it would soak up huge hunks of wealth from those who do the most investing and turn a pension system — ideally a huge source of capital — into one humungous capital drain. 

Making us all poorer. MoveOn​-to​-the​-poverty​-line​.org.

This is Common Sense. I’m Paul Jacob.

Categories
Accountability government transparency too much government

The Liability Behind the Curtain

Do not look at the liability behind that curtain! Or: Do not mention that we don’t know what the liabilities are.

Some things are too painful to report.

Apparently.

The folks who audit the Social Security Administration are late on a set of reports. The reports in question account for the financial and actuarial (un)soundness of Social Security, specifically on the (un)funded liabilities of the pension system and Medicare.

Unlike corporations, which are required to report to the IRS on March 15 each year, and individuals, who must report on April 15, there’s no set date for the trustees of our federal government’s biggest program to make its report. But in recent years the reports have been published early enough to allow summary by May. The last report summary we have is for 2009.

Why so late?

Could it be that things have gotten so bad that it’s difficult to figure out — and embarrassing to sign one’s name to — the actual financial situation? After all, this year Social Security ran out of money to write checks for its promised (and quite immediate) pay-outs.

Sheila Weinberg, CEO of the Institute for Truth in Accounting, writes that she heard the reports were late because “trustees wanted to include the effect the health care bill had on these liabilities.” Ms. Weinberg not unreasonably challenges this rationale. Wouldn’t Social Security’s liabilities have been worth knowing before Congress committed to more entitlement spending?

This is Common Sense. I’m Paul Jacob.

Categories
national politics & policies too much government

The $2.5 Trillion Tip of the Iceberg

This year, Social Security goes into the red, unable to pay out all that’s been promised … without somehow finding new funds. Five years ago, the estimated date for this was 2017. An economic downturn later and seven years disappear. Just like that.

It’s obviously time for a major overhaul. But Congress and the President had other priorities. Don’t fix the old entitlement program — add a new one to bankrupt the country, “health care reform.”

What to do? Well, Associated Press’s Stephen Ohlemacher writes that it is time to cash in the IOUs that Congress owes the Social Security Administration. Congress has been siphoning off the system’s revenue surplus since the ’80s.

Congress, that august body of spendthrifts and thieves, actually accounted for these funds by printing up non-​negotiable bonds, rather than leaving them as electronic IOUs. They are stored in a folder in Parkersburg, West Virginia.

Fat lot of good that does us, though. To pay the bonds, Congress would have to raise taxes or borrow even more money.

Or it could auction off some property. Selling vast tracts of BLM land might make sense, but you won’t see that brought up. Instead, Congress will be sorely tempted to debase our money further. 

Congress’s IOUs to Social Security add up, to $2.5 trillion. Of course, the money promised Americans in basic retirement is far more than that. The two-​and-​a-​half trillion is just the tip of a very large iceberg … heading this way.

This is Common Sense. I’m Paul Jacob.

Categories
Accountability national politics & policies too much government

Drop Out of the Bucket

Does $40.3 million seem like a lot of money to you? It does to me.

But to the Social Security Administration? It’s a drop in the bucket.

Or, a drop out of the bucket.

You see, while the federal government is scheduled to soon reinstate the estate tax on the wealth of deceased people, we now learn that it has also been giving money to the dearly departed.

Yes, an internal audit of the Social Security Administration revealed that it paid out more than $40 million to over six thousand dead people.

These benefits were given out weeks, months, years after receiving death certificates. The bureaucracy had been duly notified. And yet it went blithely on, continuing to send monthly checks.

Bureaucratic error. Hey, we all make mistakes. But it’s worth noting that this was an internal audit. Who knows what we’d catch if it were an external audit, with teeth?

Lately, the federal government has been talking over car companies and banks. Now the president and Congress plan to take control of the medical sector of our economy. They tell us they’ll cut medical costs by cutting waste. Yeah, right.

On a cheerier note, we needn’t fear the institution of those so-​called “death panels” to cut costs. The way the feds work, there’d be no savings — they’d still be paying for care long after the patients were dead and gone.

This is Common Sense. I’m Paul Jacob.

Categories
responsibility tax policy too much government

March to Bankruptcy

I have warned, before, about the upcoming double-​barrel crisis aimed at the U.S. financial system: The insolvency of the U.S. government itself, as entitlement debt can no longer be kept afloat by FICA withholding, and as Treasury debt can no longer be maintained on a monthly basis simply because it has grown too big.

Last week our entitlement system’s trustees said that the current recession is so undermining Medicare Part A that payments for elderly care will fail in eight years, with Social Security itself imploding in less than 28.

That is, if the economy doesn’t get worse.

Medicare Part B, covering doctors’ visits and outpatient care, and Part D, covering prescriptions, are right now insolvent, sucking money from general revenues.

This crisis rushes closer, even as our president insists on reforming health care in ways that will almost certainly add new entitlements — which will also have to be paid for. 

President Obama says that more government will do the opposite of what it’s done in the past. Until now, government involvement in medicine has increased costs and prices. Now he says what he’ll do will make for more “efficiency.”

Why do politicians believe in the magic of their new programs rather than the history of their old ones?

Why is it that, in politics, irresponsibility rises to the top? 

However you answer that, the march to bankruptcy is picking up pace.

This is Common Sense. I’m Paul Jacob.