Social Security: Correct me if I'm wrong,

[kuozzman]

but this whole issue of whether or not to privatize Social Security is completely ignoring the true reason of why this is even a problem, which is only indirectly because baby boomers will soon start retiring. The direct reason is because the government has for years now spent the surplus on general expenditures. They take the surplus and replace it with treasury bonds. So at the end of 2003, there was a total of $1,530,764,000,000 worth of bonds. Well when the baby boomers soon begin to retire, they will need to be cashed, but there is no money to pay for the bonds. Had the government never spent the money on general expenditures, this wouldn't be a problem. So when you hear that "close to $2 Trillion" figure thrown around that would need to be borrowed, it's to pay for the bonds (should have been surplus) that the government spent. So basically a lot of people are paying for the same thing twice. Now, instead paying their own debt, the government will borrow almost $2 Trillion at the expense of the taxpayers. Now some people think privatization will be good for the stock market, which it will (adding almost $2 trillion to it), but it's one of the biggest frauds in the history of the United States!

S.S. Trust Fund Historical Data
Year revenue/expenditures/difference/cumulative surplus

1957 $8,090 $7,567 $523 $23,042
1960 12,445 11,798 647 22,613
1970 36,993 33,108 3,886 38,068
1980 119,712 123,550 -3,838 26,453
1990 315,443 253,135 62,309 225,277
2000 568,433 415,121 153,312 1,049,445
2001 602,003 438,916 163,088 1,212,533
2002 627,085 461,653 165,432 1,377,965
2003 631,886 479,086 152,799 1,530,764

Complete history: http://www.ssa.gov/OACT/STATS/table4a3.html

[havocmom]

1. Curious how many wealthy guys holding bonds are also in line to make $

selling stock if SS gets privatized, which ends up making it welfare to CEOs selling stocks and the brokers doing the deeds.

[BrklynLiberal]

2. SS is fine! The fraud that is being perpetrated is by Bush on the

American public. That is trying to get $$ into the hands of his friends the stock brokers, that should be in the hands of the American people. If they would raise the SS limit from $87,000 to $120,000 SS would be viable until everyone alive today would be dead.

The Neocons just want to kill every program that gives any kind of support to people. SS in NOT just for retirement. It is an insurance policy that everyone pays for for themselves, and it covers disability and surviving children as well!!!!!

[wtmusic]

3. We're not only paying the federal debt -- but the interest on it

Interest on the federal debt is the second biggest expenditure (after defense).

You are exactly right about the coming cash crisis. Read Paul Krugman (if you haven't already) who has made a science out of it.

[BrklynLiberal]

4. But this debt has nothing to do with Social Security..It is the idiot's

tax cuts, corporate tax loopholes and war expenditures among other things that are responsible for the inevitable economy crash that we are going to plummet into.....

[kuozzman]

12. True, but pumping $1.5+ Trillion into the economy would delay that

[Up2Late]

22. Yes it does

It's the Current S.S Surplus barrowing that is keeping us from having a $500 Billion or $600 Billion Dollar deficit.

But don't worry, Economic collapse is just around the corner, soon as the rest of the world gets tired of losing money because of the falling value of their Dollar investments, or they switch the "Petro Dollars" to "Petro Euros."
:evilgrin:
Check out these articles that warn of our impending Doom (which Bush and Co. have chosen to ignore):

<http://www.fromthewilderness.com/free/ww3/121504_insider_selling.shtml>
Rampant Insider Selling Raises Red Flags

By Rachel Beck
Associated Press
Dec. 14, 2004

NEW YORK - Talk about a double standard. While corporate leaders tout the benefits of investors owning their stocks, many executives seem to be running for the doors themselves.

Selling of shares by insiders - which includes executives and other top officers and directors at a company - has been rampant in recent months, with sales rising to their highest level in more than four years in November.

or this:

Economic "Armageddon" Predicted

By Brett Arends/ On State Street
Tuesday, November 23, 2004

Stephen Roach, the chief economist at investment banking giant Morgan Stanley, has a public reputation for being bearish.

But you should hear what he's saying in private.

Roach met select groups of fund managers downtown last week, including a group at Fidelity.

His prediction: America has no better than a 10 percent chance of avoiding economic "Armageddon."
for more click link<http://www.fromthewilderness.com/free/ww3/112304_economic_armageddon.shtml>

or this
"Japan Threatens Huge Dollar Sell-Off"

Heather Stewart,
The London Observer
Sunday December 5, 2004

http://observer.guardian.co.uk/business/story/0,6903,1366578,00.html

Japan is warning the White House that there will be 'enormous capital flight' from the dollar if the Bush administration maintains its laissez-faire approach to the mounting currency crisis.
Tokyo fears that Japan's strongest economic recovery in a decade could be derailed by the sudden appreciation in the yen against the greenback...

or this

Opec sharply reduces dollar exposure

By Steve Johnson and Javier Blas in London
The Financial Times

Published: December 6 2004 21:12
Last updated: December 6 2004 21:12

Oil exporters have sharply reduced their exposure to the US dollar over the past three years, according to data from the Bank for International Settlements.

Members of the Organisation of Petroleum Exporting Countries have cut the proportion of deposits held in dollars from 75 per cent in the third quarter of 2001 to 61.5 per cent.

Middle Eastern central banks have reportedly switched reserves from dollars to euros and sterling to avoid incurring losses as the dollar has fallen and prepare for a shift away from pricing oil exports in dollars alone...
<http://www.fromthewilderness.com/free/ww3/120804_opec_dollar.shtml>

Cheers :toast:

[unblock]

5. actually, there isn't a problem at all

social security retirement is a well-funded retirement insurance program that the banana republicans want to raid. plain and simple.

the fact that there's currently a huge surplus, which has been loaned out to for general expenditures through the purchase of treasuries is irrelevant. it's a fund with a huge amount of assets, namely, treasury securities, and the banana republicans want to get their grubby paws all over that loot.

left alone, without change, the program lasts another 40+ years without changing a single thing. allow a few modest changes, like tweaking the retirement age, and it lasts 70 years. these are very large time frames for pension plans. this is NOT a retirement program in need of a "solution".

privatization is a bad solution in search of a problem, and causing fear is the banana republicans' forte, so they wail that the sky is falling and the fund is unsound, so that they can trot out their "solution", and drain the fund of the very assets that make it so sound in the first place.

[BrklynLiberal]

6. Well said....I heard today on the radio, that if they just raised the

SS deduction limit to $120,000 from the current $87,000, Social Security will be fine until well after all of us, and our grand children are dust.

[bunkerbuster1]

45. yew cain't have that!

this is Murka, and ah wants mah wages safe from that thar theivin' gubmint!

even though Ah wont see 120K in wages from the pisspoor wages Ah make now, well... Ah might win the Lott-ree!

/winger "argument"

[kuozzman]

10. The treasury securities aren't securities at all, they are unfunded.

The first year that has more expenditures than revenues would require more borrowing by issuing more of their worthless treasury securities. Bush is just doing it all at once. He's doing this for two reasons; 1. in order to be able to pay S.S. benefits 2. and more importantly, to throw $1.5+ Trillion at Wall Street to a) hook up the "elite" b)delay the collapse of the economy. It will increase economic growth, but once again, only by increasing the government's debt which won't be dealt with for years.

[unblock]

20. the treasury securities are EXACTLY securities

and they are backed with the full faith and credit of the federal government, just as ordinary t-bills, notes and bonds. any default or implication of default on these securities would have a devastating effect on the credit worthiness of all federal debt, and would thereby have a disastrous effect on federal financing, not to mention the u.s. and world economies.

my paying gig is as a securitization guru for a securitization firm in manhattan.

care to reconsider your position?

[kuozzman]

25. well you're right, but

just because they are "backed with the full faith and credit of the federal government, just as ordinary t-bills, notes and bonds", doesn't mean that the federal government can give you cash for them, which, I think, is what you are saying as well. When the gov issues bonds, they have to issue more in order to pay for any that are redeemed, digging a big hole. So when I said they're not securities, I meant that they're only "secure" if we can borrow more money to pay for them. Correct?

[kuozzman]

27. Quote....

"If we had a truth-in-Government act comparable to the truth-in-advertising law, every note issued by the Treasury would be obliged to include a sentence stating: "This note will be redeemed with the proceeds from an identical note which will be sold to the public when this one comes due." When this activity is carried out in the United States, as it is weekly, it is described as a Treasury bill auction. But when basically the same process is conducted abroad in a foreign language, our news media usually speak of a country's "rolling over its debts." The perception remains that some form of disaster is inevitable. It is not. To see why, it is only necessary to understand the basic facts of government borrowing. The first is that there are few recorded instances in history of government-any government-actually getting out of debt. Certainly in an era of $100-billion deficits(obviously an old quote), no one lending money to our Government by buying a Treasury bill expects that it will be paid at maturity in any way except by our Government's selling a new bill of like amount." -WALTER WRISTON (former chairman of the Citicorp Bank)

[unblock]

43. actually, no

"backed by the full faith and credit of the federal government" means that they are UNsecured. my mortgage is backed by my house. if i get a personal loan, it's backed by the full faith and credit of unblock.

and similarly, if a bank lends me unsecured money (e.g., a credit card company), it doesn't really care if i pay them back with borrowed funds, just so long as they have the confidence (based on my credit history, etc.) that i will, in fact, be able to do so.

i'm overstating the case slightly, because they also want me to have a salary, but this only corresponds, by analogy, to the federal government's taxing authority.

and by the way, clinton did run a surplus for a few years, so actually, some of the debt DID get retired with surplus revenue, though nowhere near all of it.

anyway, my point was that the social security surplus, which consists of treasury securities, is every bit as real as ordinary treasury securities, which people all over the world invest in with great confidence. in fact, on wall street, treasuries are known as the "risk-free asset", meaning that the odds of the federal government defaulting are considered to be zero.

[Up2Late]

29. Hey, a guy who might know!

I read a few months ago here at DU, that part of the National Debt is the Actual Cash Money (U.S. Currency) that is in circulation, is that true? :hi:

[kuozzman]

32. That may be what they say,

but if so, it's only because that would have made sense decades ago. Long ago, currency or “paper money” was not actually money itself but represented a “claim” for money that was on deposit with the issuer of the paper. When you would give goods or services for a piece of paper, you did not do so for the paper itself, because that of course was worthless. However, with that paper, you could claim something which had value(gold, silver, etc). But since then, we were taken off the gold standard in 1933, silver coins were withdrawn from circulation in 1964 and redemption of silver certificates came to an end in 1968. Since then, they have minted coins which resemble the old silver ones, but they are actually just copper covered with nickel. In addition to the coins of course, they have printed money which also bears a stunning resemblance to the redeemable bills of a generation ago. Unfortunately, if you take a dollar bill to a bank and try to redeem it today, they will simply give you another piece of paper. There is nothing on deposit in the vaults to be claimed by the holder of currency.

As of July 2004, currency in circulation—that is, U.S. coins and paper currency in the hands of the public—totaled about $730 billion. The amount of cash in circulation has risen rapidly in recent decades and much of the increase has been caused by demand from abroad. The Federal Reserve estimates that the majority of the cash in circulation today is outside the United States.

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold," "Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

-Alan Greenspan in 1966 for Ayn Rand's Objectivist Magazine

[unblock]

42. well done

nice summary.
correct, nixon removed the last vestiges of redeemable currency. today, papar and coins have value only because society believes they have value. in practice, though, there's no evidence that this is a problem.

[wtmusic]

17. making one big assumption

your treasury securities could become nearly valueless should there be a cash crisis in the next ten years. "US Treasury Securities? Impossible!" you say.

Paul Krugman says very possible. Ex-fed chair Paul Volcker puts the odds at 75% in the next FIVE years if we keep runnning $400B deficits.

[BrklynLiberal]

7. Article about Social Security just posted at this thread

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x1087875

[On the Road]

8. Wait a Minute,

you mean those figures on Social Security going bankrupt don't take into account the $1.5 trillion surplus that's been built up over the last twenty years? Are you kidding?

Do you know what the numbers look like when that's taken into account?

[The Doctor.]

9. How terribly amusing it will be....

When all the safety nets are gone and the general populus begins to turn to crime...

Those wealthy people had better watch out... but I suppose they'll have private security forces.

Hmmm... think they're hoping all the impoverished just kill each-other?

[kuozzman]

11. Even besides the current rip off,the program is a rip off in the first

place:

*Eighteen-year-olds entering the labor market today and earning only an average income can expect to accumulate more than $700,000 in tax payments by the time they reach age 65.

*Yet they can expect to withdraw from the system just over $140,000 in benefits (discounted to age 65) - a fraction of what they will have paid in.

[Up2Late]

13. You are CORRECT SIR, Bush's Urgent Plan

Is 100% BULLSHIT!!! :freak:

It was described on NPR Weekend Addition (Sat or Sun) as like sending in the 101st Airborne to get a Cat out a tree. :crazy:

There are much easier ways to fix the "problem."

The easiest is to
1)raise the cut off cap on the S.S. Salary withholding from the limit set in 1983 of $89,000 and moving it up to a more realistic $150,000-$200,000, i.e. Employers can no longer stop withholding S.S. TAX at $89,000 :think:

Less attractive:
2) Cut off People from getting S.S. if you made, let's say, 20x the yearly poverty rate. :think:

Their are dozens of other BETTER Ideas than Bush's "Plan," but this one is the Most Profitable for all of Bush's Campaign Donors.

This is just another Horse Shit CASH GRAB. Bush and his Greedy (one of the Seven deadly SINS, by the way)Buddy's just can't stand the idea of all that CASH just sittin' there, when it could be making them money, even though it's OUR money they are risking. :grr:

[TreasonousBastard]

14. OK, here's the problem...

by law, and fundamental fiduciary responsibility, any time SS takes in more money than it spends, it has to invest it somewhere. That somewhere is Treasuries for a lot of reasons, some of which are actually good. This deal was originally cut by Reagan, when he conned Congress into thinking he wouldn't run up the deficit and trading Treasuries wouldn't be a big deal.

The gummint has already borrowed the money, and owes it to the SS fund, which is the bondholder. This, in itself, is not a problem

The catch, as you have noticed, is that when the notes are due, which is all the time since SS buys them all the time, gummint rarely has the cash to pay them off and has to sell new bonds to pay off the old ones. Many of these will simply be sold back to the SS trust and are no big deal. Many others will be sold to China and Japan, which is a big deal.

With luck, and with falling interest rates, the deals back and forth between the SS trust and the Treasury could be a wash and cause few problems. Even sales to China or the Bundesbank would be OK if we dind't have the trade deficit on top of the federal deficit.

With the bad luck that is the Bush fiscal mismanagement, horrendous total debt and deficits, the falling dollar, and possibly rising interest rates, the whole thing could fall apart and break the country financially.

But, that's not the worst problem. If this asshole actually gets privatisation through, the massively reduced SS tax income has to be made up by massive new borrowing that is absolutely not a wash, but billions, or trillions, in new debt with nothing behind it. At least the old borrowing was done with cash that actually existed!

And, that problem pales next to the increased Medicare spending we'll be seeing just when 35 million new Medicare subscribers sign on as medical care inflation is running at 7-8% annually. With the new drug "benefit" guaranteed to break the bank that takes spending way over the inflation rate..

Our only hope is that the real Republican conservatives out there have enough stones to help stop this insanity.

And, absolute insanity it is. You start to think they are planning to deliberately bankrupt the country. Could anyone actually be that stupid?

[kuozzman]

24. Oh, don't worry, that problem just started sneaking into the news

Today: Medicare's Troubles May Be Sleeping Giant

http://story.news.yahoo.com/news?tmpl=story&cid=2026&ncid=2026&e=2&u=/latimests/20041220/ts_latimes/medicarestroublesmaybesleepinggiant

WASHINGTON — As restructuring Social Security (news - web sites) moves to the top of his agenda, President Bush (news - web sites) is sidestepping a troublesome problem: Medicare, which provides health insurance for 41 million elderly and disabled people, is fast going broke.


From: http://www.cbo.gov/showdoc.cfm?index=1683&sequence=0

[Up2Late]

28. I had the same though a few years ago

I'm wondering if they think they can just declare Bankruptcy and "Poof" the debts Gone!:nuke:

I hope they are NOT that Stupid :crazy:

[kuozzman]

30. They are that stupid....

It doesn't just disappear by vanishing, but by creating money out of thin air to pay it off. So basically "Poof", the debts gone. The Fed creates money out of thin air and buys US government debt, committing a blatant fraud. As of July 04, in the last 12-months they had created a total of $692 billion. It's called "monetizing the debt" and/or increasing the money supply and is part of the reason the $ is so low.

[Yupster]

41. No, the way it will be handled is

in 2018 when the social security fund starts paying out more than it takes in, then congress will decide it's silly having social security off budget. The budget will be "unified". The social security burden will just become an obligation of the US government like any other program. Poof - instantly the bonds are gone because you can't owe yourself.

Then congress will solve the problem by raising the retirement age and raising the payroll tax the same as they always do. And the looted surplus money will have disappeared.

[Sugarbleus]

15. Great posts all!! This is a huge scam for certain...

There is a crisis but I think it's part of a larger debt crisis our illustrious leaders have led us into via borrowing and spending with impunity, an unfair tax code, and special perks to the aristocracy...not to mention propping up other governments worldwide.

They spend like kids in a candy store! And play with our treasury like drunken gamblers..

I watched a fellow on c-span talking about the amount of our debt Japan and China hold........IT'S ENORMOUS. Another guest spoke of the outrageous sums we send to places like Colombia/SA..what do we get in return? Not much.

These fools in Wasington have RUINED this country and our economy, raped our treasury, and continue to try to kill off our once functioning culture.

We have to get these bastards OUT OF GOVERNMENT PDQ.

Those that are "holding" must kick down their fair share or we will have to take it from them!

It's a scandal and an outrage what this government/republicans in particular (but not exclusively) have done to the people of the United States!!

[kuozzman]

16. But why is nobody pointing out that

the government essentially stole $1.5+ from the S.S. trust fund that it can't pay back. I mean I know they do all kinds of crooked shit like that, but they've never risked having to confront the issue like they are now. If some dumbass reporter would ask "where's the f'n trust fund, Mr. Bush"

This is for anyone questioning if they really just spent it with no way to pay it back.
Statement of
Dan L. Crippen
Director
Congressional Budget Office
on
Social Security Financing
http://www.cbo.gov/showdoc.cfm?index=1683&sequence=0
Excerpt
The federal government's trust funds, including Social Security, are not trust funds in the usual sense but accounting mechanisms. They record the income from Social Security taxes, the expenditures for Social Security benefits, and interest that accrues on the difference. Private trust funds preserve assets for future use. Government trust funds do not do that because the government does not have financial assets to preserve. On the contrary, it currently owes the public $3.6 trillion. The government's ability to pay Social Security benefits depends ultimately on the total financial resources of the government--not on the balances attributed to the trust funds.

For much of its history, Social Security has been financed on a pay-as-you-go basis--current payroll tax collections fund current benefits. In recent years, however, tax collections have exceeded outlays, and trust fund balances have begun to mount. The Treasury credits a trust fund with nonmarketable special-issue bonds whenever the fund's income exceeds outgo; it redeems those securities whenever the fund's current income cannot cover current expenditures. To get cash for redemptions, the Treasury uses tax revenues or borrows money from the public.

[wtmusic]

19. Many have pointed it out

but most are too stupid to understand or have their hands in the cookie jar.

It's the interest that pisses me off. My kids will be paying for Bushco's excesses for years to come. :grr:

[Yupster]

40. Yes the government stole it

and spent it like a junkie and they can't pay it back.

So what to do about it?

I get a kick out of the guys who say "it's all fine. Just leave it alone."

[Hippo_Tron]

18. Take the money back from where it was looted and spent, raise the cap

That's how we fix social security overnight.

[kuozzman]

21. The people who did this should literally go to jail for it.

No matter what happens, the taxpayers will pay the tab and the whole program, especially once they started spending the surplus, is a complete fraud.

[Yupster]

39. But it's gone

It's been looted like you said. You can't take it back because it's gone.

So what to do about it?

[HawkerHurricane]

23. Imagine this...

You hold a large sum in Corparate Bonds. You decide to cash out. The Corparation tells you "We're sorry, we spent the money, tough luck guy."
What happens? You sue thier asses off.

This is precisely what the Republicans want to do: Tell you they spent your money and can't pay it back, and tough luck on you.

Social Security is not a entitlement program, nor a welfare program, it is a long term life insurance program run by the government. The solution to the problem is not to bankrupt it and tell people 'you're on your own', it is to shift money away from the general fund back to social security... which is what BOTH Al Gore and George the Lesser promised during the campaign in 2000. George lied. The tax cuts were paid for (in part) by the social security fund; the surplus we once had came from the social security fund.

[kuozzman]

33. Very true!

[kuozzman]

35. In order for the dollar to have any value at all

there must be “confidence”. It is confidence that even the Federal Reserve admits is what accounts for the acceptance of the worthless paper. The confidence is that one will be able to exchange it for something of value. While this seems OK, everybody knows that a decade ago, a dollar would get you more than it will today. This will continue to happen, it is because more and more money keeps getting created (out of thin air) and put into circulation (over $600 Billion in the last year). This of course is called inflation and it will eventually lead to an economic collapse. Think about the history of a $. A dollar originally was a “unit” of exchange. The dictionary defines “a “unit” as a definite amount or quantity used as a measurement of exchange.” That is what it originally was. A certain amount of something (gold, silver, etc.) would equal that of a dollar and that was standard. But now it is the dollar itself which fluctuates, thus completely contradicting the logic behind the dollar as a “unit” of exchange. Think about the logic behind it. The dollar as a “unit” can be compared to a “gallon”, as a standard “unit” of measurement. While we may hear on the news that “the dollar is down”, when is the last time somebody asked you “hey, how’s the gallon doing these days?” Maybe George Washington was right when he said, "If ever again our nation stumbles upon unfunded paper, it shall surely be like death to our body politic. This country will crash.”

[drthais]

26. Let us be clear about this:

the 'Privatization of Social Security'
is not about 'saving' social security
it is about dissembling a social program
it is about pumping more money into the stock market
it is about dismembering the middle class
it is about widening the gap between rich and poor

it is amazing to me
the wide-eyed wonder of the masses
as they have visions of wealth by 'investing their retirement'
it's a crock

it will end in poverty for the elderly

[TreasonousBastard]

31. BTW, here's a page o'links...

including some summaries of Social Security problems and answers from the American Friends Service Committee's statements on economic justice:

http://www.afsc.org/economic-justice/LearnAbout.htm#SocialSecurity

[RBHam]

34. Good men and women fought and died for social security implementation....

If you hear rumblings from cemeteries...

[kuozzman]

36. I bet they didn't plan on letting the government spend the surplus......

[kuozzman]

37. Definition: debt: sin (Merriam-Webster Dictionary)

I think * needs to be reminded of this, the damn sinner! Not that this is what gave him the title, but he is officially the biggest Presidential sinner in the history of the U.S.

[Up2Late]

38. Greed--One of the Seven Deadly Sins!

Who can point to examples of * committing the other six?:think:

[rman]

44. surplus is rising, what's this "problem" you speak of?

The issue that is being ignored is the fact that there is no problem with SS as it is.

[kuozzman]

46. The "problem" is that the government spent the "cash" surplus and

replaced it with Treasury Bonds, which when redeemed, will be paid for by the public. So there should be $1.5+ Trillion to cover the baby boomers when they retire and S.S. expenditures exceed S.S. revenues. So basically they are handing the taxpayers the tab for money they spent "illegally". That's the problem with S.S. as it is.

The far right column (cumulative surplus)was replaced with "IOUs", but in reality they are more like "UOUs"
http://www.ssa.gov/OACT/STATS/table4a1.html

[JHB]

47. The Piratization Propaganda campaign has been in progress for a LONG time

Check out this decade-old article. How little has changed (except the projected national debt...)

The Myth of Social Security's Imminent Collapse
By: Doug Henwood
Left Business Observer, July/August 1995

Thirty years ago, when Barry Goldwater proposed making Social Security voluntary, he was dismissed as a lunatic. Now, however, the radical transformation of Social Security--essentially its privatization--is the consensus among the political class and the pundits who serve them.

The strategy of the privatizers is proving quite successful. Sow doubts about the future solvency of the system. Chip away its near-universal political support by taxing benefits of "affluent" retirees, periodically lowering the definition of affluence. Encourage the "affluent" retirees of the future to provide for themselves, because of the system's wobbliness. And eventually turn the public pension system into welfare for the elderly poor--an easy target for cuts--while leaving the middle class and rich to fend for themselves. This isn't only happening in the U.S.; it's happening around the globe.
-----
Almost no one bothers to investigate the claim of Social Security's coming insolvency, which is based on projections in the annual report of the system's trustees. I did (Left Business Observer, 12/22/95), and discovered that the projections assume the economy will grow an average of 1.5 percent a year (after inflation) for the next 75 years--half the rate of the previous 75, and matched in only one decade this century, from 1910-20. Even the 1930s, the decade of the Great Depression, saw a faster growth rate.

What would happen if the economy grew at a peppier 2.2 percent rate? The trustees provide alternative projections based on that as well, and, gosh, the system remains solvent indefinitely. At 2.5 percent--still slower than the 75-year average--it runs a surplus. About the only other journalist to question the dire predictions for Social Security's future was Robert Kuttner, in his Business Week column (2/20/95).
-----
http://www.globalaging.org/pension/us/socialsec/henwood.htm