Is the Social-Security Trust Safe?
Just the Facts:
The national debt is borrowed from many sources and always has been. Once borrowed the money is spent—that's the point of it. But the U.S. government has always honored its debts and is still the safest investment.
Is the national debt so big we can't pay it back? Compared to the size of our economy it's smaller than in World War II, and we paid it down after that. There is only one danger to social Security, and that's Congress.
Congress could decide not to let Social Security use its trust fund. Here's how. It could reduce Social Security benefits so much, that Social Security would never need the trust fund. But the Democrats have always supported Social Security, so that danger could only come from the Republicans.
The Whitehouse says: There is no trust fund, just IOUs that I saw firsthand, that future generations will pay. –Bush, April 5, 2005
• We take your payroll taxes; we pay out the benefits to the current retirees; and with the money left over, we pay -- pay for other programs. And there's nothing left but file cabinets with IOUs. –Bush, April 26, 2005
• I went to West Virginia the other day to look at the filing cabinets, to make sure the IOUs were there — paper. And it's there. ... not a very encouraging sight. –Bush, April 18, 2005
• Now, about $1.7 trillion of that is in the so-called trust fund; that is, money -- that's money that's been collected that's not there as cash at this point. –Cheney, March 22, 2005
Hey, wait a minute!
• What about the Federal Pension Trust Fund? It's just the same—all $800 billion of it. You mean there are no military pensions?!
• What about the $280 billion in Medicare Trusts—are those fake?
• And, the highway trust and all other government trusts? $3.1 trillion all told.
And what's their problem with "paper"? A thousand dollar bill is paper, the check I write, my stock certificate, my government bond—all paper. Did they expect the trust would be made of diamonds?
What of the millions of Americans who own Treasury bonds, all paper? Seven trillion dollars of national debt has been spent on government programs, and there is "nothing left." Has the US of A defrauded the world of $7 trillion?
When you put money in the bank you get paper, and they lend your money to someone who spends it. Your cash does not stay in the bank. Does Cheney really think the SSA should have a storeroom of cash? They're just trying to frighten the people.
There Is Only One Danger—Congressh
Congress could pass a law that Social Security Benefits will be cut in half from now on. TheSupreme Court ruled ruled that legal 40 years ago. If they did that, the SSA would never "need" it to pay benefits. So the contribution from all those millions of pay checks would be trapped in the Soc. Sec. Trust and never see the light of day—it may as well be stolen.
But What Congress Would Do That? Would the Democrats do that? Not on your life. Would the Republicans do that? Hmmm. They've always disliked Social Security. They are the ones saying the Trust is not real, it's just paper, it's just a burden, too bad it has to be paid back ...
Social Security has always had a Trust Fund, but in 1982 it was tiny, and Greenspan pushed for raising the low and middle-income payroll taxes which are putting billions into the Trust. Meanwhile Reagan and Bush have cut income taxes, mainly on the rich. The national debt goes up and they tell us—Hey, we're in debt, we can't afford to pay back that Trust fund.
Why rob Social Security? That's where the money is !