“Questions,” by Collounsbury, Lounsbury, http://www.livejournal.com/users/collounsbury/286044.html, 10 February 2005
“Debate Quality,” by Dan, Lounsbury, http://www.livejournal.com/users/collounsbury/286044.html?thread=1152604#t1152604, 10 February 2005.
I’m Not Implying That SS Is Optional…,” by “Aaron,” tdaxp, http://www.tdaxp.com/archive/2005/02/09/farm_subsidies_welfare_queens_and_kings.html#c38898, 16 February 2005.
There’s a troublesome meme brewing that somehow government solvency has anything to do with Social Security as it now is
I don’t think that government bonds are without risk either. But what I do think is without risk is US Government solvency. Regardless of the strength of the bond that the accounts are drawn on, I believe the Government has an obligation to pay the benefits promised and will do so. That might mean a budget deficit or cuts in certain programs. Perhaps we could cut welfare for repeat customers or some other abuser of government good-will, instead of cutting benefits for people who have (documentedly?) paid into the system and contributed to the betterment of American society.
Aaron is not alone in his fears.
In reading the Talking Points and others, I come away with the hopefully unfounded sense that there is an actual argument in the US to walk away from Treasuries held by the Social Security contraption.
I could not care less about what the US does with its Social Security contraption, but please do tell me that no one is seriously advocating reneging on bonds.
Fortunately, this is just a lie being spread by the Left
There are advantages and disadvantages to the differen optionst. But no one is “seriously advocating reneging on bonds.” The Social Security Administration is a government entity controlled by Congress – it has even less independence than the United States Postal Service. It’s income, investments, and expenditures are all determined (directly or indirectly) by Congress.
Most serious plans keep SS “in surplus” forever, meaning that the bonds will never be redeemed (they have only been two years where SS was not in surplus in the past, and both were blips). However, even if SS would not run a surplus Congress could direct SSA not to redeem the bonds. Mechanically, it would not be “reneging” on the bonds so much as never calling them in.
Because the bonds are owned by an organ of government, and will be redeemed only if Congress wishes (a redemption that obviously would need to be immediately made up with either other bonds or revenues) they are not on the open market.
Solvency has nothing to do with the Social Security Administration. Nothing
Congress is under no obligation to pay anyone, anything under the current Social Security system.
Some background. Congress may steal. In Amendment V of the Bill of Rights
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
So if the U.S. has a budget problem, Congress can’t just announce that money deposited in banks is now theirs. Congress can’t simply take stocks, mutual funds, or even land from anyone without paying for it.
However, you do not have property rights to Social Security. The only entity that does is the federal goernment, because all the money in the Social Security “trust fund” is money the federal goverment owes to itself.
The federal government has repeatedly changed Social Security formulas. Solvency is not an issue.
If you write someone else a big check, it’s going to come out of your account. If you default, you are in serious troblem. If you write yourself a big check… well, it’s a joke.