Social Security Really Is Dried Up Right Now, And Pam Gulleson Is Telling A “Big Lie” About It
Gulleson said Social Security “isn’t broken.” Berg accused her of telling the “big lie” about the troubled entitlement program, a reference to a passage from Nazi leader Adolf Hitler’s book Mein Kampf. Dennis, too, says Gulleson is sugarcoating the problem.
“Berg’s right that Gulleson is too Pollyanish on Social Security, judging by her comments to date,” writes Dennis. But then Dennis goes on to be a bit too Pollyanish himself.
Now, “the Social Security trustees project the surplus will be gone in 2033. Unless Congress acts, Social Security would only collect enough tax revenue each year to pay about 75 percent of benefits, triggering an automatic reduction.”
After that, according to the Social Security Administration’s website, “tax income would be sufficient to pay only about three-quarters of scheduled benefits through 2086.”
Seventy-five percent is not 100 percent. And when Gulleson says Social Security is “not broken,” it sounds like she’s sugar-coating the tremendous political challenge of making the system whole.
But at the same time, 75 percent also is not 0 percent. The Social Security trust fund may be “dried up” in 2033, but the Social Security system is not and almost certainly will keep on paying benefits — reduced benefits, but benefits. That’s a difference Berg should recognize.
What Dennis is leaving out of the equation is the fact that there is no trust fund. The “trust fund” is nothing more than promises made by the government to pay the money already spent out of the trust fund back. A lot of people don’t realize this, but the #1 holder of the national debt isn’t China but rather the Social Security trust fund.
What this means is that, while the trust fund represents a total amount of obligations for the government to pay itself back to pay dividends through 2033, the US Treasury must find funds to make good on the bonds the trust fund is calling in. And the last time I checked, there wasn’t a lot of extra money laying around in our national budget which is running a $1 trillion annual deficit.
Social Security is in deficit, meaning it is obligated to pay more in benefits than it collects in revenues, right now. And because the Social Security trust fund is effectively empty, that means this deficit is adding to the national debt right now.
The only thing that will change between now and 2033 is that the size of the deficit between Social Security revenues collected and benefits paid (the deficit that will be added to our national debt) will grow.
Anyone writing or talking about Social Security and ignoring that fact isn’t engaging in an honest analysis.
By the way, Dennis says Social Security is “difficult but solvable.” But the “solution” is to make Americans pay more while giving them less return.
That hardly sounds like a solution to me.Tags: Chris Berg, North Dakota News, pam gulleson, social security, tom dennis