Tuesday, January 3, 2012

The American Social Security Conspiracy

The Problems with Social Security are only Rumors Spread to Scare Public into accepting Benefit Cuts!

The rumors of Social Security's demise are greatly exaggerated, but some powerful people keep spreading lies about the program to scare people into accepting benefit cuts. 

Some fear the government is spending the trust fund instead of saving it. Actually, the trust fund is invested in U.S. Treasury bonds, which are widely considered the safest investment in the world. It’s a win-win: the bonds pay for education, research, transportation and other public structures that benefit us all, and the investment return improves Social Security’s long-term bottom line.

Waging no holds barred class war, they echo Ronald Reagan’s 1976 Chicago’s South Side presidential campaign speech theme when he attacked “welfare queens” without calling them Black. Today, all working Americans are “Black” in terms of struggling more than ever to make ends meet, and needing political Washington’s help, not greater planned trickle-up poverty.

Still, Obama and congressional Democrats agree with Republicans. According to Washington Post writer Zachary Goldfarb, Obama’s also gambling on winning the political center saying:
His “political advisers have long believed that securing an agreement (even by slashing entitlements) would provide an enormous boost to his 2012 campaign, according to people familiar with White House thinking. In particular, they want to preserve and improve the president’s standing among political independents, who abandoned Democrats in the 2010 midterm election and who say reining in the nation’s debt is a high priority.”
Perhaps Obama needs some new advisers, given clear evidence that Americans overwhelmingly oppose cutting Social Security and Medicare with good reason. Their payroll taxes pay insurance premiums to receive them.

Taking the money and running may jeopardize any politician’s reelection, especially for high office. That said, Obama’s strategists may, in fact, count on winning by default, given no viable Republican candidate opposing him. At least, not so far.

Social Security is not going broke

Besides, Social Security is not going broke. There is no Social Security crisis. Anyone who insists Social Security is broke doesn't fully understand the system or they are lying. 

By 2023, Social Security will have a $4.3 trillion surplus (yes, trillion with a 'T'). It can pay out all scheduled benefits for the next quarter-century with no changes whatsoever. 

After 2037, it'll still be able to pay out 75% of scheduled benefits--and again, without any changes. The program started preparing for the Baby Boomers retirement decades ago.

We don't have to raise retirement age because people live longer

We do not have to raise the retirement age because people are living longer. This is another way they are trying to trick you into agreeing to benefit cuts. 

Even with modern medicine, retirees are only living about the same amount of time as they were in the 1930s! The reason average life expectancy is higher is mostly because far fewer people die as children than did 70 years ago.

What's more, what gains there have been are distributed very unevenly--since 1972, life expectancy increased by 6.5 years for workers in the top half of the income brackets, but by less than 2 years for those in the bottom half. Still,  those intent on cutting Social Security love this argument because raising the retirement age is the same as an across-the-board benefit cut. 

Benefit cuts are not the way to fix Social Security

Benefit cuts are not the only way to fix Social Security. Social Security doesn't need to be fixed. But if we want to strengthen it, here's a better way: Make the rich pay their fair share. If the very rich paid taxes on all of their income, Social Security would be sustainable for decades to come.

Right now, high earners only pay Social Security taxes on the first $106,000 of their income. Still, conservatives insist benefit cuts are the only way because they want to protect the super-rich from paying their fair share.

The Social Security Trust Fund is not full of IOUs

The Social Security Trust Fund isn't full of IOUs, it's full of United States Treasury Bonds and those bonds are backed by the full faith and credit of the United States. The reason Social Security holds only treasury bonds is the same reason many Americans do: The federal government has never missed a single interest payment on its debts.

President Bush wanted to put Social Security funds in the stock market, but fortunately he failed, so the trillions of dollars in the Social Security Trust Fund, which are separate from the regular budget, are as safe. 

Social Security does not add to the deficit

For some reason, many people believe that Social Security adds to the deficit. That's impossible! By law, Social Security funds are separate from the budget, and it must pay their own way. This means that Social Security can't add to the deficit. Not even one penny!

Even with the economy in recession, Social Security currently operates at a surplus. And the program is projected to have ample funding to serve future generations, including:
  • Baby-Boomers: Social Security has been collecting extra payroll taxes for the past 25 years to prepare for the retirement of the baby boom generation. For example, in 2008 Social Security took in $49 billion more in payroll taxes and $131 billion more in interest and other income than it paid out in benefits and expenses.
  • Gen-Xers, Gen-Ys and Millennials: Even if Social Security’s Trust Fund is spent down during the baby boomers’ retirement years, because benefits actually go up a little faster than inflation, Social Security payroll taxes alone will finance benefits for later retirees worth more than today's seniors receive.
Meanwhile young workers can rest assured that if anything happens to them, their families will receive survivors or disability benefits.

Even if Social Security would require additional funds due to some unexpected real crisis, we could still “remove the cap.” For example, in 2009, workers payed into the system only on earnings under $106,800. Applying Social Security taxes to all earnings as we already do for Medicare, we could even afford more generous benefits for those who most need them.

Can you share the above Social Security facts with your friends, family and coworkers and make sure they understand what's really going on? 

How do you feel about the lies and deceptions that have been spread about Social Security?

Written By: Tom Retterbush

Social Security: The Phony Crisis
Is it true that the Social Security system is in serious trouble and must be repaired? As baby boomers begin to retire, will they inevitably, by force of their sheer numbers, bankrupt the system? According to the authors of this important new study, the answer to these questions is a resounding no. In Social Security: The Phony Crisis, economists Dean Baker and Mark Weisbrot argue that there is no economic, demographic, or actuarial basis for the widespread belief that the program needs to be fixed. As the authors emphasize, there is virtually no disagreement about the facts of Social Security's finances, or even the projections for its future. Rather, the Social Security debate has been foundering on misconceptions, confusion, and lack of agreement on the meaning of crucial terms.
Get Social Security: The Phony Crisis directly from Amazon, HERE

"Social Security is sustainable" Economic and Policy Institute, May 27, 2010

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