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View Diary: Should Americans Forgive the $2.5 Trillion Borrowed From Social Security? (181 comments)

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  •  And without our constantly calling out their crap (23+ / 0-)
    "Your Social Security savings have already been spent to fund tax cuts for the rich, which I, Paul Ryan voted for.  Sorry bro."
    is exactly what they'll say (and they'll get away with it).

    -7.38, -5.38 (didn't see that coming) I lie to myself because I'm the only one who continues to believe me. - Vermin

    by 84thProblem on Sun Dec 02, 2012 at 06:20:33 PM PST

    •  There's another angle on it too. (14+ / 0-)

      All during the Bush years there were good sized surpluses that were spent.   The surpluses are gradually declining. When Obama took over, he diverted the surpluses back to the taxpayers via the payroll tax cut.  

      Bush made himself look better by using those surpluses.  He gave himself an advantage.  If the surpluses weren't used, his revenue amounts would have been lower.  Instead, the extra revenue made his deficits smaller and disguised the effect of his lousy policies.  When you think about that, it's literally true that the Republicans used Social Security to fund the tax cuts and the wars.  They never worried about replacing what they borrowed before they left office.  

      Obama could have used the surpluses the same way.  He didn't have to forego the advantage Bush took.  No one would have objected because no one was expecting a payroll tax cut.  To me, that says a lot about character.

      "Those who deny freedom to others, deserve it not for themselves." - Abraham Lincoln

      by leftreborn on Sun Dec 02, 2012 at 06:49:54 PM PST

      [ Parent ]

      •  I think the "temporary" tax cuts... (17+ / 0-)

        ... instituted by BOTH Bush and Obama need to revert back to the level they were at before they were instituted.  I never did understand the extensions of either, or why they were voted for in the first place.

        Obama's, in particular, cuts into FICA, thus reducing the amount that goes to the Social Security fund.  Let it revert back to what it was.

        Bush's tax cuts to corporations and the uber-rich are just motivated by greed.  Let them revert back to what they were.

        If taxes are so bad, then why were we doing better in the 1950s under Eisenhower when taxes on the rich were 90%...?  Lower on the income levels that were lower...?

        The uber-rich & corporations are the ones putting us in debt because they are the only ones profiting from wars..., and soon, from our health insurance and health care systems.  Let THEM pay the ungodly tax burden since they profit so much more and we're forced by law, now, to pay outrageous health insurance premiums.

        Seniors get Medicare, but it's not free - as implied by the morons in government and media who call it an "entitlement program."  [They are "Earned Benefits" - NOT "entitlements."]  The cost of the Medicare insurance is deducted from Social Security checks before it's auto-deposited in their checking accounts, so senior citizens and disabled people who receive Social Security and/or Medicare are NOT receiving welfare, as implied by the word 'entitlements.'  Social Security insurance is not free since it was paid for when we were working, and we also paid into Medicare when we were working, before we could use it, and still pay for Medicare after we start receiving Social Security.

        LIFT THE CAPS for Soc Sec and Medicare on all the higher income levels, eliminate the extravagant tax breaks to uber-rich and corporations (also don't let them hide their money offshore!), and that will do much to alleviate the financial shortfalls for the US Treasury AND Social Security and Medicare.

        Better yet, instead of forcing us to buy into private corporations' medical insurance programs, let us buy into the only not-for-profit, single-payer plan already in effect and actually working efficiently:  Medicare.  [Bonus: we don't pay overhead for Medicare, there's no executive bonuses, no stockholders to pay.]  Force caps on the corporate medical institutions, hospitals and clinics who are already charging outrageous fees (which means people can't get by on Medicare, but have to buy additional medical insurance, for which they get soaked a ton of money they can't afford to spend on a Social Security income)..., and it will boost the economy very well when additional employees will need to be hired right here in the US to handle the increased paperwork.

        MOST OF ALL:  Do NOT borrow against the Social Security Trust Fund..., particularly for stupid illegal, unjustifiable, unethical, immoral, dishonorable, unconstitutional wars that gain us nothing!!!

        I'm sick of attempts to steer this nation from principles evolved in The Age of Reason to hallucinations derived from illiterate herdsmen. ~ Crashing Vor

        by NonnyO on Mon Dec 03, 2012 at 02:24:24 AM PST

        [ Parent ]

        •  Originally there was ideology derived from (9+ / 0-)

          economic theory behind the trend to lower tax rates.  I call it Rightwing Republican Religion. Its almost in the DNA of this country going back to the first monopolies, trusts (business corporations) and robber barons.  Even earlier, at the founding of the country, there was the noble principle and ideal of equality and freedom for the common man versus the privileged few of the aristocracy.  I say it's in the DNA of America because we repeat this struggle and that's where we are again.  From 1880-1907 (approx), "Horse and Sparrow" was an earlier form of trickle down.  The elite self-identified as the Horse that deserved more than his share of oats to fortify him for pulling the wagon and if he had enough some would always pass through in his droppings for the Sparrows.  By the time of the Panic of 1907, the ratification of amendments instituting the income tax (1913) and women's suffrage (1920), and incidents like the Triangle Shirtwaist Factory fire in NYC (1911) when 146 women who were locked inside a factory that caught fire and died, there was consciousness that people needed protection from a predatory class of a privileged few who threatened to destroy the entire nation.  The formation of the Federal Reserve (1913) and the income tax were considered to be blows directed at wealth and government interference.   The wealthy gained an upper hand once again in the 1920s.  The stockmarket crash of 1929 was an echo of the 1907 bank panic.  FDR did a good job of instituting permanent provisions for people who were vulnerable to predators. It fuses together business and labor with both contributing to Social Security.  Medicare, Medicare, the Civil Rights Act and the Voting Rights Act represent a high water mark for progressivism in the US.  

          Somehow, by 1981 Reagan was able to sell the poisonous Nihilism that government is the problem and that it should abdicate its role in favor of the privileged few once again.  Capitalism was replaced with corporate fascism that reduced the consumer classes to subservients who waited for benevolence from a Job Creator God on high.  This was the biggest high-stakes con job the world has ever seen.   Americans still don't fully grasp the magnitude of it.  

          Everything you say is true and then some.  Even though the election is over, the struggle goes on.  The "owners" and their agents in Congress are not going to give up. A broad and prosperous middle class does not happen by itself.  It takes interference and intervention to make it happen.  This little bit of foolery buried on page 104 or a "concurrent budget resolution" betrays the vulture who still wants to take what you have if you don't protect it.

          "Those who deny freedom to others, deserve it not for themselves." - Abraham Lincoln

          by leftreborn on Mon Dec 03, 2012 at 06:27:17 AM PST

          [ Parent ]

      •  Correct me if I'm wrong (0+ / 0-)

        But I seem to recall it was Reagan who was the first to begin to raid Social Security.  I wonder if it is only Republicans who have done so.

        Government of the people, by the people, for the people, shall not perish from the earth - Abraham Lincoln

        by Gustogirl on Mon Dec 03, 2012 at 06:11:47 AM PST

        [ Parent ]

        •  Well you ARE wrong (2+ / 0-)
          Recommended by:
          84thProblem, Roger Fox

          I bow to no one in my general disdain for Ronald Wilson Reagan and all his works, as a Californian I am just old enough to remember his commencing the tear down of what was the finest top to bottom public education system IN THE WORLD.

          That said, and against his nature, and indeed against an abortive effort made in 1981, Reagan did not "raid" or to anything untoward as regards the Social Security Trust Funds. When Reagan entered office the Trust Funds were hurtling towards insolvency having been cash flow negative for years, not only wasn't there anything to steal or borrow the Special Treasuries were being redeemed right down to the last dollar. And by some reckoning beyond that, Treasury Secretary Baker did some fine dancing and intra-fund borrowing to keep checks flowing prior to approval of the 1983 legislation that was the ultimate result of the Greenspan Commission. And that legislation phased tax increases in so slowly that the Trust Funds were only at 48% of their legal minimums by 1988. And since law since 1939 mandated that any such reserves be invested in Treasuries (I.e. borrowed by the GF) he was only doing the legal minimum.

          The Reagan Raid on Social Security is a pure myth. Much like the similar one that had LBJ looting the TF to pay for Vietnam. Neither happened, the dollars just were not there to steal. In fact even Bush II never managed to steal anything, in fact his Administration started redeeming principal in the DI (Disability) Trust Fund starting right in 2005, ironically at the same time that he was loudly claiming "Phony IOU!".

          Lots of what people "know" about SS breaks down once you actually examine the numbers. As the poster in this excellent post does and helpfully points the way for others to do. Read and heed.

          bruceweb.blogspot.com

          by Bruce Webb on Mon Dec 03, 2012 at 07:25:23 AM PST

          [ Parent ]

        •  The data I have goes back to 1990 but (2+ / 0-)
          Recommended by:
          saluda, DvCM

          the political angle is tricky.  It always ends up in cross accucations and blame shifting depending on which party has a majority in Congress or was in the White House.  It gets into hair splitting over the fiscal year calendar versus the calendar year versus inauguration dates and sessions of Congress.  

          The borrowing itself doesn't bother me as much as a politician who could use it along with the public's lack of understanding, to spread fear, confusion, and doubt.  Especially when the politician is so dishonest that he omits the role that he played as a member of Congress controlling the purse strings.  

          The bad crop of Republicans we have in Congress is hell bent on F'ing everything up so they add an element of risk that shouldn't be there.

          "Those who deny freedom to others, deserve it not for themselves." - Abraham Lincoln

          by leftreborn on Mon Dec 03, 2012 at 08:01:26 AM PST

          [ Parent ]

      •  Do I understand correctly (1+ / 0-)
        Recommended by:
        DvCM

        that most of the $2.5 trillion benefited the MICC and those who received tax cuts, from which we might say the wealthy benefited most? Do we know the details of where it all went?

        I've often wondered if we could determine specifically where the social security fund money went and who was it that benefited from it.

        In all fairness those who benefited should be made to pay it back but we might suspect that political influence will not allow that to happen.

        Orwell - "Political language ... is designed to make lies sound truthful and murder respectable"

        by truong son traveler on Mon Dec 03, 2012 at 07:08:34 AM PST

        [ Parent ]

        •  Yes we can (8+ / 0-)

          Surplus funds that flow to Social Security have since 1939 by law (and in practice before that) been invested in Treasuries, these days in a separate class called Special Treasuries. The resulting cash simply goes to regular governmental operations without distinction, to say that they funded a specific tax cut here or spending there is between simple rhetoric and hyperbole. Greek either way.

          Social Security "reformers" can rage and bluster, but there is zero chance that there will be an actual default on the Special Treasuries, each issue has been quietly redeemed on schedule for 70 years and Social Security actually was cash flow negative more years from 1956 to 1980 than not. And the DI Trust Fund has been a net redeemer of its bonds since 2005. With nobody noticing, because it was a non event.

          What is really going on is an attempt to slow or stop net redemptions of those Special Treasuries by slashing benefits and so cut out-go. But this (while a crime against seniors and the disabled) doesn't remotely rise to the level of default or even proposed default. That just isn't in the cards, the theft isn't from the Trust Funds as such.

          bruceweb.blogspot.com

          by Bruce Webb on Mon Dec 03, 2012 at 07:36:22 AM PST

          [ Parent ]

          •  True, Factual, Correct, but . . . (5+ / 0-)

            the borrowing of Social Security funds moved from non-controversial to controversial because conservatives pushed it in that direction.  They deliberately decided there was an opportunity to further their agenda by spreading lies, and manufacturing their own set of facts.
            This bit of nonsense inserted into the Republicans budget resolution is an example.

            The borrowing itself isn't really the problem.  It turns out that it depends who's involved and nowadays we have an unprecedented situation with members of Congress who play a game of brinksmanship with the debt.  That ain't cool says S&P.  

            I wish I could pretend that there's no risk.  

            "Those who deny freedom to others, deserve it not for themselves." - Abraham Lincoln

            by leftreborn on Mon Dec 03, 2012 at 08:16:12 AM PST

            [ Parent ]

            •  Progressives took the bait (3+ / 0-)
              Recommended by:
              saluda, 84thProblem, DvCM

              The whole 'Phony IOU' 'Trust Fund has been LOOTED' meme was cooked up by the right as part of the Butler-Germanis 'Leninist Strategy' (a real thing-Google it) to undermine faith among younger workers in Social Security. Which has led to all too many progressives solemnly proclaiming that Reagan "stole" the money to pay for tax cuts. But nothing was stolen, not a single penny ever sent to the Trust Funds has been treated in anyway not mandated by the Social Security Amendments of 1939. Not by Reagan or Bush II for tax cuts, not even by LBJ for Vietnam (another version).

              It never happened. Unless we let ourselves believe it already happened and open the barn door and let the horse thieves in ourself. Which is the plan.

              Don't buy into Phony IOU on any level or in any narrative form. Especially those which pose Reagan in the role of horse thief. Cuz he didn't steal nothing. Not that he didn't TRY. As did Bush II. They just got caught, stymied by the locked door that current law affords the Trust Fund. It works and will continue to work. If we don't get hornswoggled.

              bruceweb.blogspot.com

              by Bruce Webb on Mon Dec 03, 2012 at 10:24:34 AM PST

              [ Parent ]

              •  Of course nothing was stolen and the (2+ / 0-)
                Recommended by:
                84thProblem, DvCM

                Government Account Series bond issues are solid.  Maybe I didn't emphasize it strongly enough but anyone who implies that redemption of the securities depends on anythng other than the full faith and credit of the United States of American is full of crap.  

                People say all sorts of nonsense.  In one ear, out the other.  I didn't mention Reagan anywhere in the piece and I'm not very familiar with SSTF activity that occurred in the early 80s.  I believe its solvency was enhanced or restored but the details are hazy.  Problems I have with Reagan are outside the scope of this diary.

                "Those who deny freedom to others, deserve it not for themselves." - Abraham Lincoln

                by leftreborn on Mon Dec 03, 2012 at 11:38:38 AM PST

                [ Parent ]

    •  Unfortunately, lots of Democrats who putatively (4+ / 0-)
      Recommended by:
      WheninRome, JohnnySacks, 84thProblem, DvCM

      want to protect SS say the same thing. It's a meme that needs to be retired.

      Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

      by Robobagpiper on Mon Dec 03, 2012 at 05:44:43 AM PST

      [ Parent ]

      •  Money = a commodity is also a meme that needs (7+ / 0-)

        to be retired.

        Talking as though we're still on the gold standard has great political advantages for the plutocrats.

        Fiat money is not a thing.  It's a unit of account, like inches or miles.

        What would it mean to say that X owes Y some inches or some miles?  

        That it's money owed to the US by the US makes such talk even more odd.

        "Yikes, I owe myself money."  Whatever.  But especially since I also have a money making machine.

        "Yikes, I owe myself money, which I create at will, whenever I want to and in any amount."

        Yep.  That's a real problem.

        No wonder we can't concentrate on the little, tangible things like good jobs and a burning planet.

        •  Funny, the Fed probably could buy the General (2+ / 0-)
          Recommended by:
          katiec, DvCM

          Account Series held in the trust funds.

          "Those who deny freedom to others, deserve it not for themselves." - Abraham Lincoln

          by leftreborn on Mon Dec 03, 2012 at 08:22:27 AM PST

          [ Parent ]

          •  It could also just simply fund SS directly. Not (1+ / 0-)
            Recommended by:
            DvCM

            saying that this would be better.  Just that it's possible.

            And this possibility is one that should be well known.

            The issue is never what the Fed Gov can "afford", it can afford anything it wants to.  

            People really need to understand that the issue is not one of affordability, but whether the US has the real resources to take care of the elderly:  enough labor to build houses, make clothes, produce medicine, provide health care, etc....  and all those natural resources that go into making all those things.

            The answer so far is simply:  Yes.

            Where do we find the money?  On a computer key board.

            We really need to be thinking much bigger regarding our economy -- what we want out of it, etc....

            And stop treating each and every issue as though there's a limited amount of money that everyone's competing over.

            Fighting over inches makes no sense.

    •  He's not sorry. /eom (1+ / 0-)
      Recommended by:
      84thProblem

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