Sunday, January 23, 2011

An angry man from Montana has part of it right and part wrong

Every now and then I receive e-mails containing propaganda about Social Security.  One came in today, January 23, 2011.  Supposedly, it was written by an angry man in Montana who had written to Alan Simpson, former Republican Senator who is a member of the President’s deficit commission.  I have reproduced it below; I feel certain that this is not protected by copyright.   Now some of his seems concerns seem legitimate, but the third item on this list is just flat out wrong.  I will address that paragraph at the bottom of this page. 
From a man in Montana ....who - like the rest of us - has just about had enough.
Hey Alan,
Let’s get a few things straight…
1. As a career politician, you have been on the public dole for FIFTY YEARS…
2. I have been paying Social Security taxes for 48 YEARS (since I was 15 years old. I am now 63)…
3. My Social Security payments, and those of millions of other Americans, were safely tucked away in an interest bearing account for decades until you political pukes decided to raid the account and give OUR money to a bunch of zero ambition losers in return for votes, thus bankrupting the system and turning Social Security into a Ponzi scheme that would have made Bernie Madoff proud…
4. Recently, just like Lucy & Charlie Brown, you and your ilk pulled the proverbial football away from millions of American seniors nearing retirement and moved the goalposts for full retirement from age 65 to age 67. NOW, you and your shill commission is proposing to move the goalposts YET AGAIN…
5. I, and millions of other Americans, have been paying into Medicare from Day One, and now you morons propose to change the rules of the game. Why? Because you idiots mismanaged other parts of the economy to such an extent that you need to steal money from Medicare to pay the bills…
6. I, and millions of other Americans, have been paying income taxes our entire lives, and now you propose to increase our taxes yet again. Why? Because you incompetent bastards spent our money so profligately that you just kept on spending even after you ran out of money. Now, you come to the American taxpayers and say you need more to pay off YOUR debt.

The third paragraph claims that “you political pukes decided to raid the (Social Security Trust Fund) account.”  "...thus bankrupting the system and turning Social Security into a Ponzi scheme…”  Well, where did this angry man go wrong?  In fact, Social is not bankrupt, and has not been raided.  That is a claim that has been around for decades.  It has never been true.

Social Security is no more a Ponzi scheme than any legitimate private insurance policy from a major insurance company.  Think about it, Social Security is paid for by a stream of revenue paid in by workers, their employers and by the self employed.  The money is used to pay the small expense of operating the system, less than one percent, and to pay benefits.  Surplus revenues have accumulated through the last 27 years.  Every dime of those surpluses has been invested in U.S. Treasury bonds that pay interest and promise to be redeemed at face value with that interest.  Private insurance companies collect premiums from those who buy their insurance.  They use those premiums to pay for the expenses of their operations (salaries and and agents' commissions), to pay benefits, and to make profits for their shareholders. But who accuses them of being Ponzi schemes?  No one.

Neither Social Security nor Medicare have added one dime to the federal deficits.  In fact, both programs have had surpluses and have helped to finance deficits with investments in Treasury bonds.   Neither program should be reported in the federal budget because both are off budget items paid for with FICA taxes.  Yet, the man from Montana is right to be angry that the first place that many Republican politicians think to find ways to cut the federal deficits is to cut these important programs that are no part of the problem or the general budget.

No comments:

Post a Comment