The biggest accounting fraud? -- Social Security

[radfringe]

Puts & Calls: J. Edward Ketz / The biggest accounting fraud? Social Security
Sunday, January 23, 2005
http://www.post-gazette.com/pg/05023/446719.stm

If President Bush and members of Congress and those responsible for the management of the federal government were chief executive officers, chief financial officers and directors of business enterprises, they might be in prison today. I wince when I hear them discuss budget deficits and budget surpluses and the future of Social Security.

Maybe they don't know what they are talking about, which is bad enough given their enormous responsibilities. But then again, maybe they do understand, in which case they are as guilty of accounting fraud as Enron's Jeff Skilling and Kenneth Lay.

The president has started a campaign to allow the partial privatization of Social Security. Republicans view this as a way to save Social Security and to allow average persons to earn more than the pathetic return on their Social Security investments.

---snip---

The Congressional Budget Office and Democrats make the mistake of believing that Social Security has $2 trillion of assets without examining and realizing that these assets predominantly consist of receivables from the general fund. These receivables aren't collectible unless additional taxes are imposed on the populace. (As an aside, what type of return would an investor enjoy if he or she had to ante up the cost of the investment not once but twice?)

Republicans led by Bush make the mistake that privatization solves the problem. Emphatically, it does not. It will still require about $2 trillion to clean up this accounting scandal whether or not privatization occurs. This amount will continue to climb until Congress repeals the unified budget act. (What is attractive about privatization is that it will force Congress' hand since the cash from Social Security is no longer available for its members to loot. Also a plus is that it will start the evolution from an unsound defined benefit plan to a sound defined contribution plan.)

[NickofTime]

1. What Does This Mean?

"What is attractive about privatization is that it will force Congress' hand since the cash from Social Security is no longer available for its members to loot. Also a plus is that it will start the evolution from an unsound defined benefit plan to a sound defined contribution plan."

Defined contribution means you pay in without knowing what you'll get out. Why is that "sound"? "Sounds" like a payoff to Wall Street to me!

Will it force Congress's hand to cut benefits? Typical BushS--t.