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Social Security in violent transition?

Bruce Krasting's picture





 

Jackie Calmes at the NYT has a good summary regarding the last minute effort to get an extension of the 2% payroll tax reduction for 2012. (There is consideration this morning for a two month extension) There are some subtleties of the debate that are worth noting. Both sides agree that an extension should happen, but within both parties there is surprising opposition. The lovers of Social Security see the handwriting on the wall. They fear that a second year of a payroll tax break may be the last step leading to significant changes in America’s biggest social program.

However, that the payroll reduction hurts SS is a common misperception. That's not correct. Every month, the Treasury transfers cash to SS in order to make up for the shortfall. I follow this stuff; if these transfers had not been made, I (and a bunch of others) would have blown the whistle months ago.

As a result of these transfers, SS ends up unharmed by the tax break. Other taxpayers foot the bill.  But since we have a deficit to begin with, this just adds to the countries red ink. Uncle Sam is digging into one pocket and transferring wealth to SS. This is the socialization of Social Security. What does it mean if SS becomes a ward of the state?  Charles Blahous, an ex Bush advisor had this to say:

“The payroll-tax cut would take a major step toward transforming Social Security from what it has long been — an earned benefit, funded by separate worker payroll taxes — into an income-tax based system more akin to welfare.”

For years the SS defenders have pointed out that SS is self-funding and does not contribute to the deficit. That was not true in 2011 (to the tune of $115b). The on-budget expense/increase to public debt will be $120b in 2012. That’s real money.

It's an unfortunate fact that the US economy will flounder if workers pay only 2/3rd of the statutory rate in 2012. That’s how fragile the economy is. It’s not likely that things will be much different a year from now. Another “one time only" extension of the FICA tax breaks will be on the table twelve months from today. From the Times:

Robert Reischauer, Ex CBO and SSA.
“Imagine that next December the unemployment rate is 8 percent and a year later it’s 7.4 percent. We’ll still be trying to stimulate employment and terminating the payroll tax holiday will be a big hit on most families, one that will hurt job growth.”

Reischauer is right, we will not revert to the statutory rates,  much less the 1% increase that is require to stabilize SSA.  I think he's also correct with his projection of a huge fight:

“The nightmare that I have is that when it comes time to raise the tax back up to 6.2 percent, conservatives are going to propose that these two percentage points of payroll tax be devoted to individual accounts. That will precipitate a huge fight and could change Social Security in a fundamental way.”

There is a huge brawl in front of the country on this issue. Folks on both sides are deeply entrenched. The following is an exchange I saw on Angry Bear blog. It's an example of the rhetoric we will get,  The fellow who wrote this, Dale Coberly, is a fairly well-know contributor to the SS debate. Dale loves SS and hates anyone who thinks that changes are required. If you have any doubts how visceral a fight we're in for, consider this bit of fluff:

rjs
just a heads up...
Bruce Krasting says Social Security 2011 - Another Bad Year...he concludes: The current thinking is that SS is a problem that can be worried about in another ten years or so. That's simply not true.
12/08/2011, 13:00:51
– Reply

coberly
rjs

there are bigger liars than Krasting writing about SS. I can't keep up with them all, and with Obama killing SS outright with the permanent payroll tax holiday, and the Democrats and Progressives rallying behind him, there is nothing more I can do.


Maybe Krasting will be out of a job soon.

The stalwarts of SS recognize that the program is now vulnerable. They want bad things to happen to those who believe changes are essential. We're going to have a fight. A big one. Think, “Age Warfare”.
.

 

 


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Mon, 12/19/2011 - 01:04 | Link to Comment malek
malek's picture

Age warfare?

If ever, it will not be like most imagine: try to empty the pocket of a naked man. In other words, the young generation is already in student debt up to their eyeballs, so the prudent Xer's are the main group they can try to strip.

Fri, 12/16/2011 - 16:07 | Link to Comment PJPony
PJPony's picture

If we weren't sending billions of dollars to hezbolah and the like and supporting all the crooks around the entire globe, taking care of our poor and elderly would not be a problem.

It's just easier to steal from them, because they can't fight back.  If you go back to when they were young and all of the years they have paid into the system, how can you possibly say it is at all ethical to dump them now, when they need it most?

Arrest the bastards who stole EVERYONE'S money, past and present.  Break up the monstrosities that are our Federal Government and start over.

Fri, 12/16/2011 - 16:44 | Link to Comment FeralSerf
FeralSerf's picture

So, you think the Zionists should get it all?

"Non-Jews were born only to serve us. Without that, they have no place in the world-only to serve the People of Israel," ........"This is his servant...That's why he gets a long life, to work well for this Jew."......"why are gentiles needed? They will work, they will plow, they will reap; and we will sit? like an effendi (master) and eat."........ "That is why gentiles were created." -- Israeli (former chief) Rabbi Ovadia Yosef 10/18/2010 (radio speech in Israel)

Fri, 12/16/2011 - 16:10 | Link to Comment ddtuttle
ddtuttle's picture

Whoa there boys ...

FIrst, The baby boomers are jsut beginning to retire.  They paid for the SS of their parents through their payroll taxes.  But because there are so many of us, there was 4.5 trillion dollar SURPLUS (that word doesn't get much use these days) left over.  That's about $60,000 each, or 2 years of full benefits.  

However, the Regan administration in all its wisdom decided to SPEND that surplus on god only knows what.  It is now about 1/3 of the US Government debt ($4.5T/$15T ~ 1/3).  So now the deficits SS is running are actually coming out of that so called "surplus".  It seems Al Gore's lockbox had been robbed while he was still in college.

This surplus can only be repaid through TAX REVNUES (or more borrowing).  SS is broken because we allowed the government to break it a long time ago.

Because it's severely  broken, we need to convert it to a means tested safety net.  SS benefits need to be 100% taxable, with that rate depending on total income or preferrably net worth.  Bill Gate's tax rate would be 100%: he gets nothing; wheras, the homeless guy down the street gets full benefits because his tax rate is zero; and have a sliding scale in between.  The average person will have a few 100K saved up and will withdraw or take interst income of  about $20K per year.  He should get 2/3 to 1/2 of full benefits.  In all cases SS benefits are too meager to be a "retirement", just a survival level stipend.   If you saved nothing you survive. You will probably have to move somehwere undesreable, and eat really cheap food.   If you saved intelligently, you will have a nice retirement supplimented with a little by SS.  If you're rich, you're on your own.

At the same time get rid of payroll taxes to make American businesse more competitive in the world labor market.  Pay SS benefits out of the general budget, funded from income taxes.  Close loopholes on the rich to get more tax revenue.  Eliminate capital gains preferrence (duh).  This is just a tax dodge for the rich (trust me, I've made A LOT off it).  Eliminate all loss deductions.  If you loose your money, that's too bad, but pay your F'ing taxes.  Loss provisions in the tax code are a perverse incentive ENCOURAGING stupid behavior, and mal-investment. Those two loopholes would pay for SS easily, without rasing tax rates.

 

Fri, 12/16/2011 - 17:20 | Link to Comment Bruce Krasting
Bruce Krasting's picture

You have big fixes in this. Some of these might happen.

But you missed a very big one. The opt out. I think this has to happen. When it does, it will change SS forever.

 

 

Fri, 12/16/2011 - 19:41 | Link to Comment blunderdog
blunderdog's picture

The opt-out idea is probably the end of the system, Bruce. 

I can't think of a single person in my cohort who believes we'll be receiving benefits.  We've seen every promise ever made to ANYONE about their future broken by our politicians and business management.  The likelihood that Gen X'ers (and beyond) have any interest in supporting such a system is very small.

Fri, 12/16/2011 - 16:39 | Link to Comment FeralSerf
FeralSerf's picture

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Fri, 12/16/2011 - 16:37 | Link to Comment FeralSerf
FeralSerf's picture

<<SS benefits need to be 100% taxable, with that rate depending on total income . . .>>

The ss benefits are taxable already depending on income.  And payroll taxes are effectively paid out of after tax income too for the individual.  What's that all about?  Another example of double taxation?

Actually if was only double taxation, I wouldn't complain as much.

Fri, 12/16/2011 - 23:01 | Link to Comment boiltherich
boiltherich's picture

Feral, just a couple minor corrections, SS income is not taxable until the taxpayer reaches a total of $25,000 and change total income (at least for SS disability) at which point the full amount of SS benefit is considered taxable.  Like I said, minor point.  But, SS payroll taxes are dependent upon GROSS income not after tax income and that is not quite as minor.  If it were only taken out on wages net of income taxes the rich would pay nothing into it at all.   

Fri, 12/16/2011 - 15:26 | Link to Comment I got the Bull ...
I got the Bull by The Horns - HELP's picture

After lurking in all other sites such as ZH (Seeking Alpha, Market Watch, Business Insider, Azizonomics etc) I conclude that a lot of disaffected (The lost their savings gambling the markets) people are venting their spleen on these sites, but still have no idea.

 

Because the market is now centrally planned by the BIS and its Henchmen, the Central Banks, it is impossible to use history as a guide, and charts for that matter. The top houses and traders have read all the books, most new traders have, and as a result they (and their algos) know how to shake out Retail, and even wholesale traders.

Most of the bears are probably paid shills to strike fear in peoples hearts, forcing them to liquidate their underwater holdings.

People forget that money equals a commodity to exchange it for. With all this liquidity and money printing, the dollars will be winding up in the hands of people who are snapping up hard commodities, before the owners realise that the money is devalued.

For this reason I have gone to Cash (To buy items at deflated desperate prices) and prime farmland (to earn income from people who have to eat). In Australia you can only own guns if you have a farm or  member of a sporting shooter association. I bet eventually the sporting shooters will lose their right, but farmers will have a genuine reason (Stock shootings, vermin shootings and pest control) IF the SHTFH (Hard-causing a fine gut wrenching spray) at least I know I will be able to defend my interests. (My great Grandfather and Great Grandmother on both sides were burned alive in their home in Ukraine WW2 and I am learning from history)

BTW I have contacts in Australian Real Estate, in prime areas of Melbourne, and the market has dropped 40% in price offers but vendors are not selling. Once they are forced to sell (unemployment or panic), they will be underwater big time. In Australia, we have full recourse loans, so consumer spending is going to take a dive. Short Australian Banks and Retail. Australian Banks have heavily relied on offshore financing of Mortgages, and their funding costs are huge. I used to work in the Big 4 banks and their IT systems are inadequate for them to report quickly and efficiently.

Fri, 12/16/2011 - 14:54 | Link to Comment csmith
csmith's picture

"...conservatives are going to propose that these two percentage points of payroll tax be devoted to individual accounts. That will precipitate a huge fight and could change Social Security in a fundamental way.”

 

Hear! Hear! About time. Any sensible person knows that SS is welfare, not insurance. This is because it pays out at rates which would bankrupt any normal insurance system. And if the "insurance fund" ever ran short of cash to pay benefits, said benefits would quickly be paid out of general revenues/borrowings/money printing.

Fri, 12/16/2011 - 14:28 | Link to Comment New American Re...
New American Revolution's picture

IF unemployment is at 8% at the end of the year?    That's funny, who did you say that guy was,... Robert Reich'snborrow tomorrow to pay for today?   Laughing and laughing and laughing out LOUD!

Fri, 12/16/2011 - 17:22 | Link to Comment Bruce Krasting
Bruce Krasting's picture

He was referring to 12/31/2012, not this year. Who knows? the way they jigger the numbers the UE could be 8% in a year. But that would be an excellent excuse to extend the cuts for yet another year.

Fri, 12/16/2011 - 14:24 | Link to Comment crzyhun
crzyhun's picture

The 'socialization of Soci Secu'. Really? You think that the Manchurian Candidate and his klack do not want this to occur? This is class warfare par exellance. And we were forwarned by Stanley Kurtz two years ago. There are solutions- they were all rendered neuter by the wizzes in DC.

Thanks for the ongoing good news.

 

Fri, 12/16/2011 - 13:34 | Link to Comment Don Levit
Don Levit's picture

I have the honor of being kicked off of the Angry Bear blog.

It wasn't due to profanity, but, rather, due to Coberly and Bruce Webb's inability to respond to objective governmental links and excerpts which put big holes in their opinions.

I mean when someone has problems with the CBO, GAO, the Treasury, and the Social Security Administration itself, what else can I say?

The biggest problem, as I see it, is that Bruce Webb considers unfunded Treasuries as  better than cash, for Treasuries pay interest.

I explained to him that these Treasuries, when redeemed from the trust fund, require new revenues, AS IF THE TRUST FUND DID NOT EXIST, he has no good response.

It is the same way we pay for all expenses, with or without a trust fund, with general revenues from the Treasury, or, more likely, increased debt held by the public.

When one thinks unfunded debt is better than cash, what else is there to talk about?

Don Levit

Mon, 12/19/2011 - 01:08 | Link to Comment malek
malek's picture

Take it as a badge of honor.

For many people, including Webb it seems, there's only so much truth they can take...

Fri, 12/16/2011 - 17:25 | Link to Comment Bruce Krasting
Bruce Krasting's picture

I used to communicate with Webb. He's a smart guy. But after I wrote a report that highlighted the growing cash deficit at SS he wrote and said he never wanted to hear from me again.

Just silly. But that's what we're looking at.

Fri, 12/16/2011 - 14:01 | Link to Comment the grateful un...
the grateful unemployed's picture

they just keep rolling those bonds forward, so the fact there is no money there to begin with is irrelevant (to them)

Fri, 12/16/2011 - 13:59 | Link to Comment RMolineaux
RMolineaux's picture

The main article above is rather silly in tone and does not define its terms, so- that it is difficult to comment on it.

The principal item in need of definition is the term "budget."   The so-called unified budget, which for 40 some odd years has jumbled SS contributions in with other strictly general fund revenues, was installed by Lyndon Johnson (to the cheers of the SS destroyers) in order to conceal the general fund deficits arising from his "guns and butter" policy in the Vietnam period.

The legal and institutional aspects of the SS program are not referred to at all, for example: Does the SS Trust Fund have a legally enforceable claim (on befalf of citizens and employers) against the government of the US for a possible failure to repay the general fund's debt to the SS Trust Fund?

It is also obvious that most members of congress (who, lamentably will make the decisions) are totally uninformed about the legal status of the SS Trust Fund and its history.  This gives encouragement to those ideologues who have always hated the SS system and  have ceaselessly worked to destroy is for the past 70 years. 

Fri, 12/16/2011 - 14:29 | Link to Comment FreedomGuy
FreedomGuy's picture

It actually doesn't matter if there is a legal status. Congress is allowed to change the rules at any time. It is one of the primary reasons that I argue against not only Social Security but any government benefit. We speak of "social contracts" but they are a legal myth. There is no legal contract that the government cannot change at will. It is a one sided agreement. As a people we have been so stupid to put our faith in self absorbed politicians rather than keeping it in ourselves.

Fri, 12/16/2011 - 17:32 | Link to Comment Bruce Krasting
Bruce Krasting's picture

I think that the bonds owned by the SSTF are equal in status to Public treasury bonds. But I agree with Freedom Guy. They (congress) can re legislate anything they want to. Including a restructuring of the IOUs held by SS.

What congress can and will do is change the way benefits are paid. Either they will be taxed or you will have to wait longer to get the benefits (70). That way they can avoid restructuring the confetti that is "owned" by SS trust fund.

Fri, 12/16/2011 - 22:45 | Link to Comment boiltherich
boiltherich's picture

BK, people getting SS benefits (as well as disabled vets and others recieving government benefits) have not had a COLA increase since BushCo was in office (SNARK, SARC) because as we all know there has been NO inflation since 2007.  (/SNARK, /SARC)

It is not that they could restructure benefits, they already have. 

Fri, 12/16/2011 - 13:18 | Link to Comment gwar5
gwar5's picture

SS will have it's crises moment before long and it will be "fixed" with confiscation of private pensions (401Ks) so they can be comingled with SS to make SS  "solvent".  Discussions in congress toward that end have already been done, the plans are probably already sitting in a drawer. The money will be put in USTs for "safe keeping"  because no one else will be wanting US Treasury bonds at that point and GovCo must be funded and it's our "duty" to support our government. Will that also help the FED to unload their increasingly toxic balance sheet? 

 

Obamacare also conveniently attempts to solve the socialist utopian broken promises of providing healthcare to the elderly by providing a means by which GovCo can deny them healthcare through rationing.  Of course it will ration who lives and who shall die.  The state has a huge vested interest in accelerating the death rates based on economic benefits to the state, and now they have the means to implement it.  The state now has one hand on the respirator plug and the other hand on your estate. When you die the state will save money on your SS payments. not just your medical care.

Be aware, under Obamacare you won't be able to use your own money to pay for your own treatment. So unless you are an able bodied debt slave, you are worth more dead than alive to the state and you won't be able to spend down your estate paying for your own cancer treatments -- doctors can be jailed if they provide any treatment that is not authorized by the state regardless of funding source.  Capital controls already prevent transferring funds out of country to receive care. 

TopcallingTroll is right, get your estate in order. Everyone should plan accordingly to protect yourself at all levels.  Gerald Celente is right, we will increasingly see financial repression and economic martial law creeping up and being imposed.

 

 

 

 

 

 

Fri, 12/16/2011 - 14:09 | Link to Comment RMolineaux
RMolineaux's picture

This is nonsense.  It is an obvious scare piece intended to support the efforts of those who are trying to sieze this opportunity to destroy the SS system. 

There will always be private heath care available for those who wish to pay for it.  Just as there will always be private and religious schools available for those who wish to pay for them.   This choice does not relieve the citizen from the obligation to support public health care and public schools.  These latter institutions are essential to the maintenance of the constitutional mandate to protect the sovereign equality of citizens in a democracy, and the equality of opportunity essential to the exercise of their rights.

Fri, 12/16/2011 - 16:28 | Link to Comment robobbob
robobbob's picture

Private care has always been about voluntary shared distribution of risks. The costs are distributed over a large enough group to keep the cost affordable to the overall group. This is the fundamental basis of insurance. Without it, it does not exist.

Under O-care, the rules are written(I've read them, have you?) to: a) dramatically increase the types of care/services that the private plans must provide to remain legal, b) systematically disqualify people from using the private care pool and force them into the gov sponsored plans. This will automatically cause the cost of private care to skyrocket beyond the average persons ability to pay, driving even more people off of the plans in a vicious cycle, eventually causing most private plans to disappear. This is not scare mongering. This is how the law is written.

this is just a sample: 

 (1) LIMITATION ON NEW ENROLLMENT

(A) IN GENERAL

Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day of Y1.

so how long can a given plan survive without any new members? 10years, 20? one generation at most. hurray for me, screw all the children? with clauses like this scattered all over the law, why should we trust anything they say?

Fri, 12/16/2011 - 14:42 | Link to Comment FreedomGuy
FreedomGuy's picture

Really? You can guarantee there will always be a private system? How do you know and guarantee this? You don't know and can't guarantee it. However, I generally agree. Then we will have a two tier system where "the rich" get the good care and the bulk of us get the standard government econo-care. This is the British and European system. Amazing how government makes it less equal and poorer quality isn't it?

Fri, 12/16/2011 - 17:52 | Link to Comment Lord Koos
Lord Koos's picture

I don't know what planet you are on, but we already have a two-tier system.  The rich and those with decent (affordable) insurance get good care, the poor go to the ER or stay sick.

Sat, 12/17/2011 - 03:20 | Link to Comment FreedomGuy
FreedomGuy's picture

I work in healthcare and what you say is a modern liberal fiction. Even welfare/Medicaid recipients get excellent care. There are local clinics that have sliding rates for the working uninsured, etc. The idea that everyone gets precisely the same care is silly anyway. It doesn't happen in Cuba, England or the U.S. However, the quality of healthcare in the U.S. is excellent and it is all provided and subsidized by the free market. The poor often do things for reasons that have little to do with the healthcare they can get. They may go to an ER to get their Tylenol paid for by the state instead of buying it themselves which they have to do if prescribed by a doctor in a clinic. Anyway, you are not making a serious statement based on any observation or facts.

You might want to check your planet.

Fri, 12/16/2011 - 13:37 | Link to Comment ElvisDog
ElvisDog's picture

Be aware, under Obamacare you won't be able to use your own money to pay for your own treatment

Are they going to stop people from flying to India or Mexico to get medical treatment (just as high quality, lot less money)? Because that's what people are going to do.

And another thing, you really think people are going to passively accept the government telling them (or their mom or dad) that they can't have cancer treatment? It would be political suicide for the Democrats if Obama were to try it.

Fri, 12/16/2011 - 14:55 | Link to Comment Jena
Jena's picture

GW5 is right.

 

As it is now, fewer physicians are accepting Medicare patients because of diminished reimbursement. That will increase under Obamacare because of planned cuts to providers, particularly with specialists. If you don't have secondary insurance to pick up the 20% not covered by Medicare, good luck. As for whether someone will be able to get cancer treatment? Yeah, that's the general concern. See (D) below: http://www.americanthinker.com/2010/08/the_deadly_pact_how_obamacare.html From Section 3025, Limiting hospital admissions for certain diagnoses: In General the Secretary shall establish a community- Based Care Transitions Program under which the Secretary provides funding to eligible entities that furnish improved care transition services to high-risk Medicare beneficiaries... HIGH-RISK MEDICARE BENEFICIARY.-The term ‘‘high-risk Medicare beneficiary'' means a Medicare beneficiary who has attained a minimum hierarchical condition category score, as determined by the Secretary, based on a diagnosis of multiple chronic conditions or other risk factors associated with a hospital readmission or substandard transition into post-hospitalization care, which may include 1 or more of the following:



(A) Cognitive impairment. (B) Depression. (C) A history of multiple readmissions. (D) Any other chronic disease or risk factor as determined by the Secretary. _____ As for limiting access to the specialists who WILL see you, or getting the CT/MRI/PT scan that will diagnose the cancer, Mom & DAD (or you) will have to get past the ACO first: http://www.obamacarewatch.org/primer/medicare Accountable Care Organizations:

One of many new ideas to cut costs is the creation of Accountable Care Organizations (ACO). These are effectively government-encouraged HMOs, except with hospitals and doctors, and not insurers, running them. The theory is that if hospitals and doctors get to share in the savings, they will find ways to manage care more efficiently for Medicare patients.

The problem with ACOs, however, is that Medicare beneficiaries are going to be assigned to them involuntarily by the government. Thus, many seniors who today enjoy complete freedom of choice of physicians could find themselves in an ACO in which their physician has a financial incentive to steer them away from the specialists they have normally used for care.

Mexico and India, sure. Great facilities, excellent care are available for cash-paying customers. But they have a problem with drug-resistant bacteria (so do we but not to the same level) and here's hoping that you don't need any blood products.

Edit: Crap.  It's sloppy, sorry.

Fri, 12/16/2011 - 13:19 | Link to Comment ebworthen
ebworthen's picture

I've been taxed for S.S. for over 30 years.

They've bumped up the retirement age, and now are saying it won't be there.

Really? 

I guess I won't be paying my taxes then, and may very well not be here in the U.S.S.A.

Had it, had it, had it with the bullshit from Washington and Wall Street.

Fuck 'em all.

Fri, 12/16/2011 - 14:13 | Link to Comment RMolineaux
RMolineaux's picture

You have never been taxed for SS.  You have made contributions of your own money and that of your employers to ensure that you had a financially secure old age, you ingrate!

Fri, 12/16/2011 - 15:01 | Link to Comment Chupacabra
Chupacabra's picture

Oh, I get it.  Just like I "contribute" my taxes to "ensure" that I have clean water and electricity and roads - you know, those things that only a government can deliver.  lol  The quality of trolls on ZH is fairly high, I must admit.  Kudos to you, sir.

Fri, 12/16/2011 - 14:45 | Link to Comment FreedomGuy
FreedomGuy's picture

Yes, you did contribute to your own retirement. However, the government and MF Global have the same problem: They comingled those funds! Oh, darn! Neither can tell you where they went.

Fri, 12/16/2011 - 16:17 | Link to Comment FeralSerf
FeralSerf's picture

The records of about 2 trillion $$ of that money (that the DOD took under Clinton's watch) were lost when WTC7 collapsed into its own footprint.  There were no copies of those records anywhere else.  No offsite backup tapes either.

 D'you believe that?  Would your own government lie to you?

Fri, 12/16/2011 - 13:15 | Link to Comment sbenard
sbenard's picture

Interesting perspective. Thanks, Bruce!

I wonder if this change may also open up a legal can of worms. The Supreme Court case of Fleming vs. Nestor held that SS was not a contractual obligation. However, it found that the reason for this was partly that it was self-funded. Legal scholars have also suggested that IF George Bush had been successful in privatizing SS, it would have now become a contratual obligation of the US government to its citizens. If it is no longer self-funded, but funded instead from general tax revenues, could the courts now view SS differently -- as a contractual obligation? That would only accelerate our decline into fiscal oblivion!It would also require substantially higher taxes as a result!

I'm curious if anyone has any thoughts on how this might shake out! Thanks in advance for any additional insights or perspectives!

Fri, 12/16/2011 - 14:18 | Link to Comment RMolineaux
RMolineaux's picture

Lawyers have always been good at upside-down reasoning.  Looks like the Supreme Court fell for it.

The government has a conractual obligation to protect the SS Trust Fund in conformity with the founding law and the will of Congress.

Fri, 12/16/2011 - 12:57 | Link to Comment Bob Sacamano
Bob Sacamano's picture

Social Security IS a Ponzi scheme.

Liberals (which includes Republicans and Democrats) will want it to become welfare for the elderly (not an "earned benefit" for those who contributed all their life and unfortunately had some financial success too -- they will have their SS "lock box" account raided for the many who made so many bad decisions in life).

Fri, 12/16/2011 - 15:06 | Link to Comment Chupacabra
Chupacabra's picture

Gotta buy them votes, and the old folks vote like their lives depend on it.  Old folks used to have extended family to support them (or they just wandered off into the wilderness to die) now they have Uncle Sugar, so who needs a family?  Same with single Moms these days, who needs a husband, they're just sperm donors and it pays more to have more kids with more men.  Big Daddy gov't will provide.  Until it doesn't.

Fri, 12/16/2011 - 14:19 | Link to Comment RMolineaux
RMolineaux's picture

Yes, Anne

Fri, 12/16/2011 - 13:39 | Link to Comment ElvisDog
ElvisDog's picture

I think almost everyone these days realizes that SS is a welfare program. Most people understand that they will take out far more than they put in. Anyone who still buys into the "lockbox" crapola is either stupid or ignorant.

Fri, 12/16/2011 - 18:50 | Link to Comment Bob Sacamano
Bob Sacamano's picture

Never believed the lock-box -- just repeating the liberals description of it for many years.  So you're saying they lied??  Dang.

Just want them to call it what it is increasingly becoming - WELFARE. 

Fri, 12/16/2011 - 13:57 | Link to Comment DosZap
DosZap's picture

ElvisDog

Most people understand that they will take out far more than they put in.

Then when they get to the point were they are even,stop the payments.Simple.

I am all for it. I just refuse to lose what I put in, I do not want more, and damned sure not a cent less.

Fri, 12/16/2011 - 15:09 | Link to Comment Chupacabra
Chupacabra's picture

You already lost a fortune even if they pay you back, it's called the time value of money aka confiscation through inflation.  Unless you made those contributions in gold, I'm pretty sure you're f*cked.

Fri, 12/16/2011 - 12:56 | Link to Comment non_anon
non_anon's picture

ha ha, another federal holiday instituted

Fri, 12/16/2011 - 12:52 | Link to Comment cranky-old-geezer
cranky-old-geezer's picture

 

 

Government doesn't have a benevolent bone in its body these days. Everything government does is rooted in selfishness toward the people, fraud against the people, and outright theft from the people.

This underlying selfishness cannot be corrected with all the regulation in the world. There's no way to make selfish people stop being selfish.

There are only two paths this can go. Increasing government selfishness to the point where the people are destitute slaves to a rich ruling class (the current direction things are going), or people revolting sufficiently strong enough to end that government.

This is more or less what the Founders said when they created this government. They knew way back then it could turn into a selfish oppressive regime (banana republic) and need to be ended.

They mentioned it in the Declaration of Independence regarding British rule in the colonies. They knew it wasn't "changeable". Ending it was the only solution.

They mentioned it later regarding the new government they created. They knew it wouldn't be "changeable" because you can't change basic human selfishness. Ending it would be the only solution.

Sadly there's not enough guts among the dumbed-down sheepish American people these days to wage anything approaching an effective revolution.

So the other path will be the outcome: Increasing government selfishness to the point where the people are destitute slaves to a rich ruling class.

Fri, 12/16/2011 - 15:14 | Link to Comment Chupacabra
Chupacabra's picture

IMO this is the genius of the Constitution, because it recognizes that politics by nature attracts the undesirables amongst us and that power corrupts.  So, they created an amazing system of checks and balances and certain fundamental rights that would not and could not be abridged, to contain the inevitable creeping rot.  Unfortunately, we long ago wiped our collective asses with this "outdated document" drafted by "old white men" and now we are reaping what we have sown.  The great American experiment was great while it lasted, maybe it will reappear someday (on the moon?).

Fri, 12/16/2011 - 12:41 | Link to Comment chistletoe
chistletoe's picture

Social security is a big part of the grand plan

to take money away from young people and give it to old people.

 

There is, however, always the small danger

that one of these days, the young poeple figure it all out ....

Fri, 12/16/2011 - 14:28 | Link to Comment piceridu
piceridu's picture

The simplest answer is usually the correct one to the question: who votes, who goes to polls? AARP anyone?

Fri, 12/16/2011 - 12:34 | Link to Comment oldmanagain
oldmanagain's picture

The SS is not broke, since 1984 it has lent money to the general fund.  The conservatives are actually lying once again.

They are just mad because a little bit is being paid back.

Stupid article.

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