Social Security is going bankrupt. The federal government's largest spending program, accounting for nearly 22 percent of all federal spending, faces irresistible demographic and fiscal pressures that threaten the future retirement security of today's young workers. According to the 1998 report of the Social Security system's Board of Trustees, in 2013, just 15 years from now, the Social Security system will begin to run a deficit. That is, it will begin to spend more on benefits than it brings in through taxes. Anyone who has ever run a business--or balanced a checkbook-understands that when you are spending more than you bring in, something has to give--you need to start either earning more money or spending less to keep things balanced. For Social Security, that means either higher taxes or lower benefits.

But even if Social Security's financial difficulties could be fixed by raising taxes or cutting benefits, the system would still need to be reformed because it is a bad deal for most Americans. Social Security simply costs too much and pays too little. Social Security's rate of return on payroll taxes is dismal (about 2 percent) and declining. Workers deserve a retirement system that will make the most of their money.

THE GREAT SOCIAL SECURITY RIP-OFF

by Roger Ellman

Saturday, 16 April 2011

Back under Ronald Reagan the Republicans engineered the biggest increase in the national debt ever [until the junior Bush exceeded even that]. Those oh so fiscally conservative and financially sound Republicans more than tripled the national debt, from about $1½ trillion to about $4½ trillion.

Well, what did they use all that money for ? They used it for the biggest arms build up in history. But, they didn't want to pay for it themselves, so they drastically reduced their taxes at the same time. Of course, anyone can see that if you run expenses up [the arms build-up] and run income down [the reduction in taxes on corporations and wealthy individuals] there's going to be a lot of debt incurred. And there was, trillions of dollars of new additional debt -- more than ever before [again, until Bush, Jr. “did it in spades”].

Well, but it takes cash to pay. Where did the cash come from ? Some of it came from borrowings from the public and some from foreign investors. But, the biggest single piece of it came from our pension fund, our retirement money -- the Social Security Trust Fund. All that money paid into Social Security by all of us over the years has been taken right back out by the government to finance that great indebtedness. The government took our pension money, used it to buy weapons, pay bribes, and reduce their taxes, and gave us little notes, pieces of paper saying that they owed us the trillions that they had taken.

But, surely the word of the U.S. government is good; surely the government will pay on those notes; surely our government is not going to borrow our money and then welch on the loan; surely ... ?

That's what all the noise about Social Security is about. That's what the propaganda and beating drums for changing Social Security are about. If they can't make changes, if they can't do something on this one as they have so often in the past, then -- my God, they'll actually have to pay on those notes, pay on that debt !

They're scared stiff that they might have to live up to their word and pay off the debt, and they're hell-bent on welching. And the way they intend to welch is by dismantling our Social Security System. They're going to make their debt go away, make it just disappear, by doing away with what that money was supposed to be for -- our pensions.

So, there's the deal. They take our pensions, which we paid for with the money they took from our earnings, and they use it to give themselves a big tax cut and to buy the weapons they want and they leave us with shattered Social Security retirement. How democratic ! How free !