One of the biggest obstacles to fixing Social Security is that the vast majority of people do not understand what is truly wrong with it. Neither cutting benefits, nor raising payroll taxes can fix this failed program.
Why, you ask? Because there is a fundamental flaw in the way this program is funded. Let me explain. The bonds in this phony “trust fund” (i.e., the purported assets that Social Security has credited to its account) are not true bonds. True bonds are contracts between two parties. The bonds in the Social Security “trust” fund are between the U.S. government, and ... wait for it ... the U.S. government.
There are only three ways the U.S. government can pay for these obligations: 1) by printing money, 2) by borrowing money, or 3) by taxing you again for something you’ve already been taxed for once. All three of these actions have one thing in common —they are going to cost you a bundle.
There can be no cure for Social Security’s ills unless it is treated like a true trust fund for the benefit of its beneficiaries rather than a government slush fund. Don’t believe the lies told by mendacious politicians who’ve become accustomed to spending your Social Security withholding on their pet projects. Investing every penny of Social Security in government bonds so that the government can spend that money as it sees fit is not protecting your best interest. If it were in your best interest, private retirement plan fiduciaries would be required to invest in a similar manner. Instead, private retirement plan fiduciaries are required to invest in a diversified way to minimize risk to plan participants. Think about it.
Judith Muehlbauer
Brainerd
Comments (27)
Add commentTake 'er away, Fish
Take 'er away, Fish
"Instead, private retirement
"Instead, private retirement plan fiduciaries are required to invest in a diversified way to minimize risk to plan participants."
Well, Judith, we have seen and experienced how those diversified investments have fallen and how the plan creators define risk and how no regulation or enforcement has protected consumers.
Borrowing from Social Security isn't borrowing if you don't intend to re-pay it. Kind of like that tobacco fund in Minnesota. What are the plans to pay it back?
The big question is whether
The big question is whether we'll pay the school kids back for the money we borrowed from K-12 education. One governor said it took more than a decade the first time.
In the meantime the schools can just continue to borrow money and pay interest on it.
I heard one Republican legislator say that they added extra money for schools to account for the interest the schools would have to pay in order to cover the shortfall the legislature created.
Whatever happened to the Republican mantra about pay your way?
Remember PayGo? Wasn't that the Clinton administration's gift to the budget?
Now we have BorrowGo. Borrow money so we can give tax breaks to Big Oil and the wealthiest 2% so they can invest it overseas.
Question for Fishhead...
Riddle me this: How much do we currently spend per student for K-12 education?
So, Eyolf...
Do you agree that a criminal offense has been perpetrated against the American people re: the way Social Security withholding has been pilfered and not held in trust for the American people? The US government is claiming to have money to pay Social Security benefits that it has already spent. The nicest thing I can call that is fraud.
Lakelander, you're hilarious
Tell you what, Lakelander, why don't you invest all your money in US government bonds, and I'll invest mine in a diversified portfolio, and we'll see who comes out better ten years from now, eh?
Eyolf, there was a HUGE
Eyolf, there was a HUGE "reserve" coming in for many years. And by reserve, I mean way more money coming in than what was needed to pay current benefits. It's that amount (the amount above past current benefits) that was pilfered without regard to the obligations to future Social Security beneficiaries. Doesn't that tick you off?
Buy gold!
Just kidding, after watching more ads which suggest that. I invested my meager funds in education for my children. I hope they appreciate it, and let me move in when I retire!
Speaking of which, I think it's time for Pat Buchanan to retire. He seems a bit overwhelmed lately.
meuhl..Judith is that you? Do you sell investments?
I'm not a rich person, and I don't play one on TV...
But I don't think taxing the rich will fix our problems. Do you know why? Because the government is a giant money pit that sucks in wealth and returns poverty and totalitarian control over our lives.
Lakelander, seriously...
No lakelander, I don't sell investments. I am one of the millions underemployed created by our genius leaders over the last several years. As for investing in education, maybe you can tell me...how much do we currently spend on average per student for K-12 education? And as a follow up...how much more do you want to spend?
Is it foolish to ponder the truth?
Yes, Eyolf, I do want to revisit how we got to this sorry state, because I think it's instructive. The money in the Social Security trust fund should have been used to the benefit of its beneficiaries. Not as a government slush fund that could only be paid back by future taxpayers. How does one look out for retirement plan beneficiaries? First and foremost by making sure the plan principal is invested soundly. If an employer used private retirement plan money the way our government used Social Security they would be hung out to dry. Why should we give the villains who created this mess a pass?
spending on education
I am not in your district, if you are in Brainerd, so I don't have any idea what you spend per child. But, I would rather spend on education than on armaments, frankly. However, it seems you can't convince Congress that is an option. I would be willing to bear arms for my country, but not to provide arms for the world. I would rather send food to Africa than soldiers. How has that worked for us any way?
Employment in the private sector is obviously not robust as you know from your experience. I would be willing to try something else: the public sector! I would like to see aides and volunteers more in the schools to cut down expenses, but then the paraprofessionals might be adversely affected. So it is a conundrum.
When it comes to voting, no candidate is going to be totally in synch with anyone, so we compromise. And then we live with the consequences until the next election.
The whole IRA/401k issue reminded me of folks at work who borrowed from theirs to improve their homes or have a down payment, and then boom! They can't pay it back for whatever reason, and the home is underwater. So, I am glad they have the hope of social security in the future, even if it isn't enough to live on.
Okay, Lakelander. How much
Okay, Lakelander. How much does YOUR district spend per child? Why is it that so many people who want to spend more educating children don't seem to know how much we currently spend?
As for not paying anything for defense, you may be surprised to know that I believe that war is one of the most destructive things that can happen to an economy. The only people who are enriched by it are defense contractors and it sucks wealth out of the economy. That said, if we don't prepare a defense for our country, it doesn't mean we will be able to avoid the negative consequences of war. It would be pretty hard to provide good education for our children if we were overrun by terrorists or if we were cleaning up one 9-11 after another. That's why I believe we need to prepare a reasonable defense for our country even though I see war as a very bad thing.
Self-preservation is "job one," Eyolf
We are literally on the brink of self-destruction, Eyolf. The time for sitting back and saying "Que sera, sera" are long gone. I blame any politician who knowingly perpetrated the lie that there was a Social Security "trust" fund that held assets rather than liabilities. I do not think either party emphasized this problem enough given how confused the general population is on this matter. I do think the typical Democratic plan to raising payroll taxes to solve (and I use that term tongue-in-cheek) the problem just gives the politicians more opportunity to steal more money from future Social Security beneficiaries. The spigot from Social Security to the general fund must be shut off--permanently.
meuhl
I know exactly how much we spend since I am quite interested, but I am not going to say and reveal the district I live in. I generallly approve the school budget, but like any budget, it could be pared down. What are you really asking me with that question?
As the country which spends the most for defense, and the largest percent of GDP, I think we are well-protected. And wars of the future will not require the tanks etc. that drain us now. It will be computer geeks firing drones at each other!
As for terrorists, those school shootings are taking a toll on our education funding.
Well, see, it is possible to agree with everyone on at least a few things!
Lakelander, why would you be
Lakelander, why would you be afraid to say how much the per student cost is where you live? I couldn't care less what district you live in. My reason for asking is that people who say we should spend more usually don't have a clue how much we are spending right now. Either that, or they are trying to keep the information secret because we are already spending a lot more per student than most people imagine. BTW, are you a teacher or do you work for the Public School System?
yes
I was and I did. And I like being anonymous. It isn't fear.
As I said, I know what my district spends, and it can't be a secret as it is public knowledge.
The per student cost is a
The per student cost is a veritable secret, lakelander, because I doubt the amount you think is the per student cost includes the cost for the teacher's retirement fund, capital funds, and other, non-local, funding. For example, back in 2008, they were spending almost $25,000 per student in Washington DC to publicly educate students (and I use the term educate. loosely, since even Obama said that the public schools in DC "had problems"). However, the cost per student number the schools were publishing was closer to $8,000 per student for this same period. This strikes me as a very dishonest accounting of the true cost of public education. DC is one of the worst school districts in the country and yet they spend the most per student. So, I ask you, where is the connection between spending and results?
meuhl
What is the per pupil cost in your district? What part of that is from Federal Funds and what part is from State Funds and what part is from Property Taxes paid in the district? I would like to see a chart of that for all MN schools.
Eyolf
If you see self-preservation as something out of "Brave New World", you are right, we have a different idea of the concept. Personally, I think mine concept of self-preservation is a lot less scary. My vision of self-preservation is the right and duty to defend myself from those who would seek to destroy me...to not be lulled into a hypnotic trance by those who want to steal from me my right to self-determination...nor to be drugged into not caring about things that need to be changed.
Sounds like muehly should
Sounds like muehly should consider taking a relaxing, radio-less stroll in the early evening hours .......... los paranoia.