Journal pudge's Journal: Letter: Lock Box Won't Save The Problem 6
Editor,
Ernest Schmidt wrote in a letter published Tuesday that there is no financial problem with Social Security and Medicare, we just need to stop raiding the trust fund.
This is not remotely accurate. Yes, we have taken money from the Social Security trust fund, through the purchase of government bonds. But those bonds are not mere IOUs. No one in government is saying that money will not be paid back, and in fact, to make such a claim is a violation of the 14th Amendment.
And on the contrary, by purchasing government bonds, the trust fund is *more* healthy than it otherwise would have been, because that money can grow in value, instead of losing value due to inflation. It may not be good for the rest of the government, but it is good for the trust fund.
And as to not being in financial trouble: pretty much everyone on both sides of the aisle agrees the trust fund will be completely empty at some point, if nothing changes. The Democrats like to quote the CBO year, 2052, while the Republicans like the SSA number, 2041. But if we didn't purchase government bonds, that fund would expire even sooner.
Blow up the Lock Box! (Score:2)
The purpose of a forced savings program should be to save for expenses you need to pay for. The solution is not locking your payroll contributions into the stock market, but letting you spend them when you most need to. Private accounts should fund what young people need to save money for: home ownership and children. People should be able to take
Re:Blow up the Lock Box! (Score:2)
The government should get out of the "forced savings program" business entirely. The government has no enumerated power to require people to spend their income on anything, let alone things deemed "valuable" like houses, children, education, or retirement. That's not the job of the federal government.
So blow up the lock box, but also cut off the hand that's taking money to put in the box in the first place.
pay back (Score:1)
Okay, then I'll say it. How are we going to afford to pay off all those treasury bonds? Decreased spending or higher taxes?
Maybe Congress will just dismantle the Social Security Administration. If they do, all the assets formerly held by the SSA devolve to the government. Poof! All those bonds are suddenly paid.
Such a drastic measure would not desirable in the Capitol building. But then again, neither is decreased spending or highe
Re:pay back (Score:2)
Beats me, though it is not hard to figure out which I prefer. And it is the biggest problem I have with privatization: it accelerates the rate at which that money will be required in order to pay off benefits (as it decreases revenues), when we already lack a plan to pay it back. In the long term it's a wash, at worst, and a gain at best, but in the short term, we have a serious problem of how to pay it o
Re:pay back (Score:1)
When the time comes to cash in those treasury bonds, Congress is going to face a larger than average budget problem. They will have to cut spending, or raise taxes. One of the ways they can cut spending is to reduce social security benefits. This is why it is said, "There is no lock box".
Public debt (Score:2)
United States Constitution, Amendment XIV, Section 4:
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.
Wow; I had no idea it said that. Guess that's what I get for just reading the bullet points in school. That Amendment is much longer than I expected, too.
As it stands, it sounds as if this Amendment means no American citizen can expres