The Reality Of The Social Security Trust Fund
Those who are opposed to President Bush's Social Security reforms often tell us that there is no crisis facing the program. In support of that statement they tell us that the date the President has given us for when Social Security will reach critical mass, approximately a decade or so from now, is really just the point at which Social Security will cease to have a surplus and will have to start paying out of its trust fund.
Which sounds reasonable enough, until you find out what exactly this "trust fund" is all about.
Or, in other words, a big fat IOU for $8+ billion. That's the safety net that Democrats want you to believe exists.
But the government will surely pay it back when we need it, right? Well of course they will if we reach that point, but who's money do you think the government uses to pay off such debts? The people's money of course. Any way you cut it the American people get the pointy end of the stick. If we stay with the current system we're either going to get a big tax hike or a major cut in Social Security benefits.
Which isn't to say that President Bush's plan is the best one out there. I certainly don't like the way he's talking about raising taxes to accomplish it, but given the hopeless reality of the current situation doesn't it behoove Democrats to at least offer an alternative? There are plenty of alternatives to Bush's plan floating around, why aren't they latching on to one of these?
I'll tell you why: Its because they're playing partisan politics with this issue. They don't want to see Social Security fixed during a Republican administration. Regardless of how bad the situation is, they want to push it off until a time when they can fix it under a Democrat administration. And frankly, that's more than a little bit appalling.
Which sounds reasonable enough, until you find out what exactly this "trust fund" is all about.
PARKERSBURG, W.Va. - The Social Security trust fund really does exist --ť nestled in the bottom drawer of an unremarkable government file cabinet.
It's in a pair of white loose-leaf notebooks holding plastic page covers. Each caresses a piece of paper representing a bond worth a staggering amount of money. Say, $8,577,396,000.00 ($8.577 billion), due on June 30, 2013, with 6.5 percent interest. . . .
"The paper is symbolic," says Pete Hollenbach, spokesman for the U.S. Bureau of Public Debt, the creation of a 1994 law that anticipated the current debate about Social Security's solvency and whether the trust funds held anything more than IOUs.
As the computer era flowered, Congress passed legislation requiring the Treasury to create a "physical document in form of bond, note or certificate of indebtedness, rather than accounting entry."
Or, in other words, a big fat IOU for $8+ billion. That's the safety net that Democrats want you to believe exists.
But the government will surely pay it back when we need it, right? Well of course they will if we reach that point, but who's money do you think the government uses to pay off such debts? The people's money of course. Any way you cut it the American people get the pointy end of the stick. If we stay with the current system we're either going to get a big tax hike or a major cut in Social Security benefits.
Which isn't to say that President Bush's plan is the best one out there. I certainly don't like the way he's talking about raising taxes to accomplish it, but given the hopeless reality of the current situation doesn't it behoove Democrats to at least offer an alternative? There are plenty of alternatives to Bush's plan floating around, why aren't they latching on to one of these?
I'll tell you why: Its because they're playing partisan politics with this issue. They don't want to see Social Security fixed during a Republican administration. Regardless of how bad the situation is, they want to push it off until a time when they can fix it under a Democrat administration. And frankly, that's more than a little bit appalling.
Hairy Polemic
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