Jeff is Angry
Corporate Accounting Scandals are for Wussies, Check out Social Security
Red Thursday Columnist Jeff Gandee resides in Columbus, OH
Fortunately for America, the senate has been too preoccupied with judicial filibusters to do much damage to our nation lately. But there is a showdown looming, and before long they will have to find another potential crisis to occupy the news media. I sincerely hope it is social security. There has been a long break in coverage of the President’s Social Security plan, and by now everyone should be able to see through the laughable rhetoric used to defend our current social security system. However, it seems that there are many liberals who are wasting their vast sophistication, nuance, and intellect trying to defend this "ponzi scheme," instead of giving it the lambasting it deserves.
The left is hell-bent on trying to persuade the masses that the social security crisis does not exist, or at least it isn’t a crisis. Every proponent of our current system is quick to explain that the social security trust fund is large enough to sustain the full payment of benefits until 2052, the rosiest of all predictions. And on this one point, I’ll give them credit, but the accounting Washington uses to make this happen is enough to make even our former Enron execs envious.
Social security is a pay-as-you-go system. The bulk of the money collected isn’t being invested; it is immediately paid out to retirees. Currently, Social Security takes in more than it pays out, and by law it is required to “invest” this surplus into U.S. treasury bonds. The money is basically loaned to the government, on the condition that it will be paid back with interest. Unless you live in California, you are probably aware that the government isn’t generating any wealth. So that miniscule interest earned in our Social Security trust fund comes right out of the pockets of you and I. Aren’t you glad to know you are paying interest into your own retirement!
It gets much worse. Our congress loves having the privilege of spending our social security surplus on pork, while at the same time, declaring the program solvent. The average taxpayer believes they are paying social security in order to buy a stake into the retirement benefits, but the money ends up being devoured by politicians like Robert Byrd, who uses the cash to build wasteful government facilities named after themselves (like the “Robert C. Byrd Hardwood Technologies Center”). - Jeff Gandee's article is continued in the comments section of this post.
Red Thursday Columnist Jeff Gandee resides in Columbus, OH
Fortunately for America, the senate has been too preoccupied with judicial filibusters to do much damage to our nation lately. But there is a showdown looming, and before long they will have to find another potential crisis to occupy the news media. I sincerely hope it is social security. There has been a long break in coverage of the President’s Social Security plan, and by now everyone should be able to see through the laughable rhetoric used to defend our current social security system. However, it seems that there are many liberals who are wasting their vast sophistication, nuance, and intellect trying to defend this "ponzi scheme," instead of giving it the lambasting it deserves.The left is hell-bent on trying to persuade the masses that the social security crisis does not exist, or at least it isn’t a crisis. Every proponent of our current system is quick to explain that the social security trust fund is large enough to sustain the full payment of benefits until 2052, the rosiest of all predictions. And on this one point, I’ll give them credit, but the accounting Washington uses to make this happen is enough to make even our former Enron execs envious.
Social security is a pay-as-you-go system. The bulk of the money collected isn’t being invested; it is immediately paid out to retirees. Currently, Social Security takes in more than it pays out, and by law it is required to “invest” this surplus into U.S. treasury bonds. The money is basically loaned to the government, on the condition that it will be paid back with interest. Unless you live in California, you are probably aware that the government isn’t generating any wealth. So that miniscule interest earned in our Social Security trust fund comes right out of the pockets of you and I. Aren’t you glad to know you are paying interest into your own retirement!
It gets much worse. Our congress loves having the privilege of spending our social security surplus on pork, while at the same time, declaring the program solvent. The average taxpayer believes they are paying social security in order to buy a stake into the retirement benefits, but the money ends up being devoured by politicians like Robert Byrd, who uses the cash to build wasteful government facilities named after themselves (like the “Robert C. Byrd Hardwood Technologies Center”). - Jeff Gandee's article is continued in the comments section of this post.
By Kyle - 5/26/2005
20 Comments:
Jeff's article continued...
After raping the Social Security trust fund for years it is no wonder that republicans and democrats alike are unwilling to even admit that the trust fund exists only on paper. It is common to hear Social Security defenders claim that, after all, the U.S. Government has never defaulted on a loan, so clearly Social Security isn’t in any real trouble. But where will this money come from to pay off these government bonds? It will come from American workers right out of their income taxes. So while democrats insist that all the system needs is a small increase to the already ridiculously high 12.4% Social Security tax rate, they neglect to mention that an income tax increase will also be necessary to begin cashing in our “surplus.”
The clever men who designed this welfare system knew it must have a separate budget from the federal government, even though its surplus goes straight into the federal budget. This way they can make claims like “Social Security is Solvent up to 2052,” even though federal taxes will increase or budgets must be cut to make that happen, all by 2012. And who honestly believes budgets will be cut? (For those of you in blue states, a cut means spending LESS. It does not mean spending more, but not as much more as you thought you would)
So if you are a young adult, or even a child, your taxes will go up in order to support the baby-boomers. The real kicker is that the baby-boomers didn’t even pay 12.4% of their paycheck into the system when they began working; they paid either 6%, or 8.4%. Workers didn’t pay 12.4% until the year 1990. Yet another reason to call them “The Me Generation.”
Does Social Security need to be reformed? It needs to be revealed for the sham that it is and disappear faster than Hillary-care. But that is politically unrealistic, and Bush’s plan to create private accounts is a good first step. It brings true capital into the system, and more importantly, takes control of the money away from congress and puts it into the hands of Americans. Democrats counter that such investment is risky, but the risk would be up to each individual. The American people do not need the government to treat them like children, giving them an allowance once they retire. The government can’t even keep its own finances strait. After all, the government is in debt 7.7 trillion dollars; making even GM look.
Liberals are quick to counter that Bush’s plan does not address the solvency issue, and they are right. However, that isn’t a reason to reject his plan. Private accounts come closer to curing the disease we call Social Security, while increasing taxes and pumping more money into the same system will only ease the symptoms. Leftists also complain about the high cost of starting private accounts, but unlike other government expenditures, the money isn’t being spent. When a I open a savings account with a five-hundred dollar check, call me crazy, but I don’t consider that spending five hundred dollars. These accounts would actually be real, interest earning accounts creating wealth for everyone, instead of black holes sucking our money into inefficient and useless government programs.
Most importantly, Social Security reform is a step forward for freedom. Government spending is out of control, and the only solution is to cut off the hands of our politicians. The executives at WorldCom never dreamed of conjuring such accounting tricks, and as you all know they will be locked away for some time. Liberals claim that Social Security is the most successful government program ever. If it is, then I can think of no better argument for limited government. The left needs to open its eyes to reality, and learn to embrace capitalism and individual freedom again. It is past time to remove the halo from FDR’s head, and place it on the constitution, a document that is great because it limits government and protects freedom, what a far greater government program than Social Security. - Jeff Gandee
1) Currently, 11% of our elderly live in poverty. Without SS, 47% of our elderly would live in poverty. If you can accept that, fine. I cannot live in the type of society that we would abandon our fellow man, and let them die a savage death.
also, 1 million children are kept out of poverty by SS.
2) and all this free market talk. BACK IT UP! NO MORE CORPORATE WELFARE! No more tax incentives for Walmart. No more tax shelters for foreign subsidiaries. No more slave labor in China and other nations. You cannot claim we live in a free market system, when there are so many corporate advantages given by the government.
3) you criticize our debt, but are a proponent of taking on more debt (not to mention ignoring you want us to trust the guy that got us into debt). Why would more debt be a good idea, when it is a fact that private accounts will not do anything to fix the solvency.
4) I am all for a good open debate on this issue. Your post brings one side of the argument to the table. We'll see what happens in the next couple months.
Why does President Bush want to talk about Social Security? Because it is a crisis? Absolutely not.
2004 Cost of Social Security - $533,709,000,000
Here are the real crises:
2005 Budget Request for Medicaid - $482,100,000,000 - The result of the jobless economy President Bush has provided us all.
Bush Tax Cuts - 330,000,000,000 -
Here is what the Bush legacy will be to future generations:
2004 Cost of the National Deficit - $477,000,000,000 and it is increasing $1,680,000,000 per day since last fall.
May 25, 2005 National Debt - $7,768,913,258,591.78
Given the budgetary performance of this administration, it is no wonder that the American people don't trust the President's plans to reform Social Security. Public polling has 36% of the Americans thinking the President's privitization plan is a good idea.
I hope Republicans continue to push for Social Security privitization, oppose stem cell research, and claim to be the party of less government while forcing feeding tubes down peoples throats.
Great post Jeff. You hit almost every point I would have made. I like how you call it a disease. It truly is one. I would also highlight the ownership issues. I want to own my retirement money, not give it away. That's all I'm doing every week. I will never see a dime, my kids wont see a dime either. The government is tricking every dem and many republicans into thinking they are not responsible enough to handle their own paycheck and retirment planning. Maybe some people are not. Fine, them keep paying into Social Security. ALll I want is the same retirment plan Barbara Boxer and Harry Reid have. They don't have to worry about this debate. Chuck's point about the elderly starving and not wanting to live in a society of savages (whatever he said), that is a rediculous and overbroad statement. Guess what, I don't want to live in that society either. Everyone 55 and older now will still receive their small SS check. I don't want to live in a society where I am mandated by the government to pay $300 every two weeks knowing I will never see that money again. Just call it a tax dems, CALLL IT A TAX. I swear, everytime I hear a lib talk about SS, I cringe and daydream about how my life would be in a libertarian society (settle Chuck, just joking). Lets start thinking what's in the best interest of ALL Americans (young and old), not just a FDR's legacy and a select few Senators.
1. Turn off the talk radio and do some research. Senators and Members of Congress started paying into and collecting from Social Security in 1983. Presidents and Members of Congress receive similar pension plans.
2. We do call it a tax. Everyone does.
1) SS is not meant to be a persons sole retirement plan, its meant to be a safety net, to keep a person out of poverty.
2) SS keeps millions out of poverty. How do people die when they have no money? Just like the homeless or a stray dog. I don't think that is too overbroad. That is the reality of a society w/out SS.
3) You aren't entitled to the same retirement as millionaire senators. Sorry.
4) I have no problem calling it a tax. ITS A TAX.
5) Now you quit saying the benefits aren't going to get paid! We might have to dip into other funds, but they will get paid. And then around 2070, all the baby boomers will be dead. And the program will go back to normal, because our birth rates have slowed.
6) I am not totally opposed to these private accounts. maybe they could be part of a fix. But right now, its a dead issue, because there aren't even enough republicans to accept taking on $2 trillion in debt for something that doesnt fix the solvency. Maybe after the next Democrat President creates a surplus, it will be a more sensible time to have the discussion. But time will tell.
Gentlemen, Lets stop kidDing each other.
The REAL problem is the HUGE debt that is presently the "liberal" spending policy of the Bush administration. Sure, if we keep accumulating debt at this rate ($400 billion per year) we won't have a pot to piss in let alone SS for our elderly. This is the case that you suggest for NOT trusting the government. So why don't we make these spending liberals act fiscally responsible - as conservatives should. I ask you : Who is the LIBERAL IN THIS CASE.
Come on you conservatives - SAVE US FROM THESE SPENDING LIBERALS!
I think there is a major point here about social security here that is being missed. People that never paid a dime into it are collecting. To me that makes no sense and is not fair. I am not entitled to someone's 401K that they have saved their whole life for, so why are people who never paid into social security receiveing it. If you want to keep people from being on a poverty level, fix the welfare program and let them collect that. And, I am not pulling this from no where. My grandma, who never worked a day in her life, gets her own personal check every month. And, people can immigrate here late in their lives, work for a little bit, then collect well beyond what they put in. Don't get the idea that I want people to starve, I just feel that if you are going to collect from a fund for your retirement, you should at least have made a fair contribution.
Zeus, I believe those people don't get the same amount as people that paid the full amount into the program.
And again, this is not a retirement program. It is a security blanket, so our elderly have money. The amount of money they get is small, and alone is still very difficult to live off of.
Overall, you make a good point. It is a problem, and an understandable complaint. I would just again say, what are we going to do? Because, in no way does a Bush plan involve solving your valid complaint.
SS is a tax. and to people that make over $90,000 per year, it may very well seem unfair. But lets talk about these problems in a real way. See, in my opinion, the problems that Jeff, John, and anonymous bring up, only have one solution: eliminate the program (or drastically reduce benefits). Fine, but lets have a real public debate on that....whether, we want SS or not. All this private account talk is a smoke screen.
I personally think that when it comes down to it, most of the country wants SS to continue paying the same benefits.
and Jeff, you seem to criticize Robert Byrd adding crap on the highway bill. Look at your own party, who passes the bill. Look at your own President that signs it.
Great Response Chuck!
I think it is pretty funny how many liberals are suprised that so many of the elderly retire on social security alone. After all, the government forced them to be a part of the program since they began working. So putting their money into SS rather than a retirement account wasn't exactly a choice they made, uncle sam made it for them. I don't understand why leftists insist that they know what is best for everyone. Liberals constantly complain about the religeous right pushing their morals on everyone, and then chuck says "I cannot live in the type of society that we would abandon our fellow man." Truly, what a noble set of principles you have, but they are yours, not necessarily everyone elses. If you really feel so strongly, round up your friends and work a soup kitchen, but don't force the entire nation to participate in a welfare system that encourages people not to work harder save more and invest. Let's stop legislating this kind of garbage, and allow people to be free.
I too hate corporate welfare, but sadly I can't "back it up" because I'm only a libertarian plumber, who pretends to be angry to attract attention to my views. I'm not a law-maker. The free market is what has made this nation prosper, and is helping other nations prosper around the world, by providing work where it is most scarce. Slave labor in china? Do you mean cheap labor, or actual slaves? Those men and women choose their employment, and are glad to have big corporations providing them with jobs. You need to do more research about what the people from china and other nations say about factories, and other jobs american corporations provide. I find it funny that Americans are the only ones upset about the cheap labor
About the dept, I know it exists, but like I said SS is a vehicle for more debt, and I'd like to end that now, even if it costs.
I understand and sympathgize with the urge to help others, but not when the government puts a gun to your head to do it
Chief, I know medicare is a mess, but it is politically more difficult to attack. Too many current congress members are responsible for the mess they've created for them to actually address it, just like they don't want to address the nonexistence of the SS trust fund, because it is their fault. Anyway, none of this is a reason not to change SS they both need help (actually they both need destroyed)
Chuck, I would look at my party, but none of them are in congress, or the white house, I'm a libertarian.
I hate big gov't conservatives as much as I hate socialists.
we need to something about medicare first anyways - babyboom + risong costs = disaster.
tim
Jeff, I respect your Libertarian views. Ridding of SS is a viewpoint. Supporting it is another viewpoint. We all vote. The voters support SS. And if any Presidential candidate ran on a "lets eliminate SS" platform, they would be smashed. So its not some mysterious Uncle Sam that takes your money, it is "the people", represented by their congressmen (admittedly, misrepresented at times, but for a program to persist for 70 years, shows the people want it)
And I must admit you make an excellent point about my own hypocrisy, about picking and choosing to allow myself to impose moral values. I guess my main defense is that I don't think the religious-right is genuine. I think they are out to manipulate religion to their political gain.
and the chinese don't really have a chance to oppose their labor options. that's a whole new issue. perhaps you can do another red thursday post to explain why its good to pay people $2 a day to make our shoes, and how they will dig out of that hole. I actually mean that seriously, I would like to hear the explanation, since I don't know enough.
People need to be planning ahead for their golden years no matter how social security looks. Start saving now -- if social security turns out to be pimp, then you'll have some extra cheddar when you move down to florida. AND if it does go sour, youll still be set.
I would love to do a piece about globalization, offshoring, adn cheap labor, it is one of my fav libertarian issues.
Absolutely the people imposed social security. People really suck at governing themselves, that is the main reason why our fore-fathers wrote the constitution. A piece of paper is a far better way to run the country than plain old democracy. If only Jefferson had foreseen FDR coming, that constitution would be alot longer.
The only reason I write this stuff is to try and persuade people that big government goes against freedom in so many ways, and it isn't worth it. Political change follows social change.
But the truth is, few governments around the world are getting smaller.(but those that are have some seriously kick-ass economies going right now, and then there's the EU...... I love the EU and all the welfare states in it, they make the best arguement for small gov't) I believe that our incredible life-style in the U.S. makes us take capitalism and freedom for granted. We want to improve our condition, but we are eroding our foundation while we try.
Individuals rights and liberties should always come before groupo rights. The most amazing ideas, inventions, art, discoveries, etc. came from great individuals. Meanwhile, our Senate spends months debating miniscule federal judges.
OK, this is completely off-topic, but I don't think I have EVER, in the entire history of my time on the internet, heard anyone admit when someone else made a good point, particularly when it came at their own expense. Chuck, I am impressed.
Chief, you (and whoever else is responsible, of course) have got an interesting site here. Keep up the good work. I know I'll be checking back again soon.
And, Jeff, nice article. I'll post a better comment about it when I have more time.
Chuck I agree completely, the right does manipulate religion for political gain (but so does jesse jackson). But in a similar way I think the left manipulates the battle over racial disparities to hold on to the black vote. Columbus just held the caucas for black mayors, and the talking points made me think we were back in the 1920's.
The problem is that the religios right is gaining way to much ground, just look at the monkeys screwing up the definition of science down in Kansas.
It is those kind of people that make true democracy unworkable.
Steve, thanks for the positive feedback. I hope all is well in San Fran. I think our readers can look forward to more posts from Jeff in the coming Thursdays based on his writing and the big discussion generated.
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