Social Security Sense and Nonsense

Just to correct some lies out there -- those about Social Security
(please follow link to original)



Social Security Sense and Nonsense
October 5, 2010 at 11:12 am

In a new paper and podcast I’ve tried to correct some of the misinformation that critics of Social Security have been spreading about the program.

Here are the facts. Social Security is a well-run, fiscally responsible program. People earn retirement, survivors, and disability benefits by making payroll tax contributions during their working years. Those taxes and other revenues are deposited in the Social Security trust funds, and all benefits and administrative expenses are paid out of the trust funds. The amount that Social Security can spend is limited by its payroll tax income plus the balance in the trust funds.

The Social Security trustees — the official body charged with evaluating the program’s long-term finances — project that Social Security can pay 100 percent of promised benefits through 2037 and about three-quarters of scheduled benefits after that, even if Congress makes no changes in the program. Relatively modest changes would put the program on a sound financial footing for 75 years and beyond.

Nonetheless, some critics are attempting to undermine confidence in Social Security with wild and blatantly false accusations. They allege that the trust funds have been “raided” or disparage the trust funds as “funny money” or mere “IOUs.” Some even label Social Security a “Ponzi scheme” after the notorious 1920s swindler Charles Ponzi. All of these claims are nonsense.

Every year since 1984, Social Security has collected more in payroll taxes and other income than it pays in benefits and other expenses. (The authors of the 1983 Social Security reform law did this on purpose in order to help pre-fund some of the costs of the baby boomers’ retirement.) These surpluses are invested in U.S. Treasury securities that are every bit as sound as the U.S. government securities held by investors around the globe; investors regard these securities as among the world’s very safest investments.

Investing the trust funds in Treasury securities is perfectly appropriate. The federal government borrows funds from Social Security to help finance its ongoing operations in the same way that consumers and businesses borrow money deposited in a bank to finance their spending. In neither case does this represent a “raid” on the funds. The bank depositor will get his or her money back when needed, and so will the Social Security trust funds.

As far back as 1938, independent advisors to Social Security firmly endorsed the investment of Social Security surpluses in Treasury securities, saying that it does “not involve any misuse of these moneys or endanger the safety of these funds.”

Moreover, Social Security is the “polar opposite of a Ponzi scheme,” says the man who quite literally wrote the book about Ponzi’s famous scam, Boston University professor Mitchell Zuckoff. The Social Security Administration’s historian has a piece on this topic as well.

Unlike the frauds of Ponzi — and, more recently, Bernard Madoff — Social Security does not promise unrealistically large financial returns and does not require unsustainable increases in the number of participants to remain solvent. Instead, for the past 75 years it has provided a foundation that workers can build on for retirement as well as social insurance protection to families whose breadwinner dies and workers who become disabled.
More About Paul N. Van de Water

Paul N. Van de Water is a Senior Fellow at the Center on Budget and Policy Priorities, where he specializes in Medicare, Social Security, and health coverage issues


As far as the , "ratio of workers to retirees argument:


"Dear .................., the “the ratio of retirees to workers” is NOT a problem. It is not. It is a zombie lie that, like the other ones (“IOUs,” “Ponzi scheme,” etc.) has been propagated and repropagated over and over. When Social Security was *established*, the issue of retiree-to-worker ratios was accounted for, and it was again reaccounted for during the 1983 Social Security Reform law.

http://www.epi.org/publications/entry/ib208/

http://www.thebattleforsocialsecurity.com/myths.php

http://www.dailykos.com/story/2010/7/17/884132/-Zombie-Social-Security-lie:-Worker-to-beneficiary-ratio-will-kill-the-system

Just because George Bush repeated this zombie lie in 2005 does not make it the truth.

Please stop repeating this zombie lie. The Social Security program from its beginnings took the demographic shifts into account, and claims that it hasn’t are groundless."

I guess you could follow the links provided by the commenter for the proofs.

Ask yourself some questions -- Why do the "Tea Party" and Republican folks want to destroy any safety net provided for us older folks?

Is it because they are upset by the fact it is well run, a sign of Government's ability to do things, and/or the fact they aren't making a huge profit off the old folks?

Heck, they try to rip us off in every other area. The fact they can't destroy Social Security must really gall them.