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View Diary: The Real Cost of Social Security Surplus Raiding (9 comments)

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  •  This is what went wrong (1+ / 0-)
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    Above59th

    I have no problem with modifying social security to extend it till the end of the century.  I actually think this is the responsible thing.

    However, the government doesn't have the right to take money from social security.

    If a pension fund manager in the private market took money out of the fund, and spent it on other parts of his business without replacing it, he would go to jail.  It isn't his money.

    For some reason the government can raid funds with impunity.  This has to stop.

    •  Name one other thing is can do with it? (0+ / 0-)

      Yes, your problem with the trust fund has been brought up since before the program even existed. It has been used by  both left and right.

      Because, it is pretty much true.

      The huge problem is that there aren't too many options:

      (1) Lock it in a vault.
      (2) Put the excess into the general fund.
      (3) Buy foreign government bonds and gold
      (4) Buy private assets

      (1) is terrible since by the time you took out your $1 that you placed into the trust 30 years ago, it isn't worth jack anymore. Inflation kills this idea.

      (2) Is what we currently do. Some will say just pay down the debt, but regardless of how it is reported - unified or now, the government would just use the extra debt room to consume more and you have the current situation. It sounds nice in theory that every penny should go to debt deduction, but in practice since dollars are fungible, it just means some other dollar that would have done to debt reduction is spent in its place.

      (3) This might be the best option. It is essentially buying up foreign currencies then parking it in foreign debt to accrue interest. The big plus is that it gets the money out of the domestic hands that can spend it. The problem is that might not hold up. It seems like it would just funnel back to us pretty quickly.

      (4) This is just so ripe for abuse. So Congress would not only control regulation and tax policy of companies, but now could invest in it in those same companies? Talk about the mother of all special interest problems. We might as well just nationalize all these firms then.

      There just isn't really a good alternative, so it is not an easy thing to solve. Although there has to be something better than the way we are doing it.

      •  No, your ideas are silly. (0+ / 0-)

        It is safest in treasuries where it is now.

        The US treasuries are the best and safest. That's why other countries park their funds in it. Which is to say, they buy Treasury bonds too.

        is terrible since by the time you took out your $1 that you placed into the trust 30 years ago, it isn't worth jack anymore. Inflation kills this idea.

        This is the sillyist. You don't place your money in the trust then take it out. SS is insurance that you buy for an annuity. You are guaranteed payments in your older years — for life. You are guaranteed payments if you become disabled. Your dependents are  guaranteed payments if you die.

        Plus the funds are earning interest.

        I'm asking you to believe. Not in my ability to bring about real change in Washington ... *I'm asking you to believe in yours.* Barack Obama

        by samddobermann on Fri Jul 29, 2011 at 11:05:16 AM PDT

        [ Parent ]

    •  They aren't. See above. (0+ / 0-)

      No one is raiding funds. SS shouldn't be included in the deficit. It just is to make it look better. All surplus over payments goes to the fund.

      I'm asking you to believe. Not in my ability to bring about real change in Washington ... *I'm asking you to believe in yours.* Barack Obama

      by samddobermann on Fri Jul 29, 2011 at 10:55:20 AM PDT

      [ Parent ]

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