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  •  It's not a scam. (1+ / 0-)
    Recommended by:
    ferg

    What do you think a bank does when you set up a trust account?  It lends the money out while you don't need to use it.  Ditto for the Social Security Fund.  It's nothing more than a national savings account.

    If Treasury bonds are indeed at 0%, that's a real scandal.  Of course, the persistent reduction of interest rates by the Federal Reserve has been screwing up seniors for years.  When prudent seniors put their spare cash into CDs in the late nineties, they could earn 6%--i.e. six thousand dollars of income ($500 a month) on a nest egg of a hundred thousand (probably from selling a house).  That's now been reduced to less than a thousand a year--doesn't pay for rent, meds or food.

    How do you tell a predator from a protector? The predator will eat you sooner rather than later.

    by hannah on Fri Feb 20, 2009 at 07:32:58 AM PST

    [ Parent ]

    •  It's a scam because it was engineered, from the (1+ / 0-)
      Recommended by:
      melpomene1

      start, to be a transfer of money from FICA to general revenues to hide the deficits caused by Reagan's arms build-up and tax cuts for the rich. The "threat" of the boomer hump was coupled with a brief shortfall in FICA in the late '70s into scaring people into changing FICA from pay-as-you-go into a surplus-generating machine.

      And it's a scam because NO ONE is talking about paying down the trust fund the honest way, by raising income and other taxes, they're talking about further increasing FICA revenues and writing off the trust fund.

      Washington's panic over social security is entirely about the fact that the FICA surplus-diversion gravy train is coming to an end, and will start becoming a drain on the treasury instead.

      •  I would love to know for sure, (0+ / 0-)

        but I don't think we have to loan Social Security.

        If we do loan it, we have to buy non marketable treasury bonds and that is how the government gets the money.  Social Security's bonds are as good as any bond that is in a 401k or IRA.

        We would be better off to park it in a safe vault, than let the government touch it.

        It was set up for the bonds to be non marketable, so they couldn't be sold, then defaulted on.

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