What is wrong with borrowing from Social Security?

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The so called Social Security trust fund is the root of the debate over the Social Security crisis. Currently, more money flows into the Social Security trust fund than is needed. This excess is “invested” in billions of dollars in Treasury securities, which are considered safe because they’re backed by the full faith and credit of the U.S. government. {quotes align=right}To see the trust fund at the office of Public Debt Accounting, you go to a locked file cabinet. There’s no real cash in the cabinet. Inside are four brown file folders filled with the $650 billion in Treasury bonds.{/quotes} But, they are not real. They’re virtual Treasury bonds. Those who follow this issue, may recall that we said the Social Security trust fund money did not exist. Enough of you took issue that congress did something about it, so every month, a bureau employee makes up these fake Treasury bonds on their computer, prints them on a laser printer and files them in a cabinet — just in case anybody wants to take a look. These 162 paper instruments are frauds. If we did this, we would wind up in the pokey. The Treasury insists they represent real assets sitting in the trust fund. In fact, what they represent are higher taxes and inflation. Some think they are worthless and wonder how the government can repay the trust fund the $650 billion it has borrowed over the years. “This was a good faith effort to prove to the public that the money really is there,” said S. Chapman, of the government securities management branch in Parkersburg, W.Va. Yearly, the Social Security surplus has been looted by the government.

Here is how they save your retirement money: The money goes into the trust fund and the incumbents use that money to buy votes, vowing all the while to pay back the trust fund with interest. With the coming wave of retirees, income from payroll taxes flowing into Social Security will be sufficient to pay benefits. But, starting in 2002, Social Security is going to draw upon the interest and in 2005, the principal. Do you realize how much they’ve misappropriated ? {quotes align=left}Could you sleep knowing you’ve borrowed twice your annual pay from the kids college fund just to meet the bills? We have been snookered. To pay back the trust fund, the federal government will have to raise taxes, slash spending, or create more money. {/quotes}And even if the government finds a way to pay back the fund, a larger problem looms. In 2018, all the interest and principal will be gone. The Social Security system will have to depend solely on the payroll taxes from workers. Even then, there will only be enough money to cover about half of the Social Security benefits. Unless changes are made now, the Social Security system, and the inflation it unleashes, will swamp our children’s economy. Taxation without representation and the swindle of posterity is what’s wrong in borrowing from Social Security.

 

 

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