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BY JEFF CHURCHILL — The below link of the Fox News article is what set me off today and if you want to read it please click on the below link:
“Slash Social Security to Pay for War? Dems Slam Boehner for Remark He Denies”
https://www.foxnews.com/politics/2010/06/30/slash-social-security-pay-war-dems-slam-boehner-remark-denies/
The above article just chapped my hide and inspired me to write a short essay on the demise of our “Progressive Social Security System.”
Bear with me, it’s a bit long, but it’s necessary. Especially, if you want to know the facts. If you require more information please refer to Wikipedia or the Cato Institute or even the Heritage Foundation like I did.
“The Social Security Spin Cycle Continues”
After reading article from Fox News this morning the “Spin Cyclers” twisted South Carolina’sRepresentative Boehner’s commendable attempt to rescue our ill fated Social Securityby raisingthe retirement age to 70 years was the icing on the cake. Specifically on two fronts.
1. I’m against Congress raising the retirement age to 70. Especially since the original authors of the Social Security Act of 1935 promised that we could receive retirement funds at age 65 after being forced to pay into the program through our payroll taxes.
2. How these elected alleged pundits accused republicans of looking to “break America’s promise to seniors.” As quoted by South Carolina Democrat Party Chairwoman Carol Fowler. And, “the Queen” Nancy Pelosi’s office put out a “fact sheet” accusing Boehner of wanting to “slash” Social Security not to stabilize the program, but to pay for Iraq and Afghanistan. Well we all know what a twit Pelosi is; and, Pelosi or her office minions don’t require any further comments.
Talk about calling the kettle black. Let’s review what the liberals or “Progressives” have done for the last 75 years; shall we.
Our Social Security is crumbling and crumbling fast. As a matter of fact the unfunded liability is $43 trillion, that’s with a “T,” or about $379,475 per household.
And, within the next 5 years, that total will climb to $57 trillion because of what our infamous Democrats and even few Republican “R.I.N.O.’s” have doing for the past 75 years. And I guarantee it’s not because of us “Baby Boomers” becoming of age either.
As I said earlier for the past 75 years American’s have been forced, not volunteered, to pay payroll taxes into Social Security; with our employers kicking in matching funds.
That’s a ton of money to accumulate. Now, quite frankly I didn’t have a choice in this decision back in 1935, I wasn’t even thought of yet. Personally, I believe we should all invest in our own retirement accounts so that we can manage our own future, not government, specifically because of its past performances.
However, this program was one of the biggest government alleged entitlement programs ever devised; until the introduction of the Social Security Act of 1965 implementing the mother of all so-called privileges at the time, Medicare. And now of course we have the grand mother of all, “Obama-care;” which tears into Social Security/Medicare to the tune of a half a trillion dollars.
Since the enormous growth of the Social Security funds, the administrator, the Secretary of the Treasury (now that’s a scary thought) had developed two private trust accounts. One or the largest of the two is the “Old-Age and Survivors Insurance (OASI) Trust Fund”, which holds in trust those funds that the federal government intends to use to pay future benefits to retirees and their survivors. In 1956, the tax rate was raised to 4.0% (2.0% for the employer, 2.0% for the employee) and disability benefits were added.
Also in 1956, women were allowed to retire at 62 with benefits reduced by 25%. Widows of covered workers were allowed to retire at 62 without the reduction in benefits. So now we have the second or the smaller fund the “Disability Insurance (DI) Trust Fund,” which holds in trust those funds that the federal government intends to use to pay benefits to those who are judged by the federal government to be disabled and incapable of productive work, as well as to their spouses and dependents.
So, now have you noticed how our fearless leaders have expanded Social Security just in a very short few years through various amendments? And, it’s not that they give a “rat’s poop” about you or me, it’s assuring that their votes increase during their re-elections. Because, now they can boast by saying “look at what I have done for you;” it’s that, “it’s all about ME attitude.”
Okay, here comes the real meat and potatoes, the Social Security Act of 1965 and the implementation of Medicare. Oh and here’s one more thing. You remember those two private trusts, OASI and DI? Well, our liberal Congress with the backing of President Johnson decided to move those trusts to the General Fund. As quoted in the original Act of 1965, “for additional congressional revenue!”
Talk about leaving the lid off the cookie jar! Woe Nelly! Congress could invest these trust funds into any political agenda item they wanted or to use the funds to help with their current national budgets not even related to our Social Security system! We are talking about more votes for the Progressives here folks.
The more they fund “Pork” projects keeping their constituents on the hook the more votes they get down the election road! And, to pay for these alleged entitlements they increased the payroll tax to 6%! Also, during the Carter Administration they allowed immigrants to receive benefits without even paying into the program; so to accomplish this task he raised the payroll tax to 6.5%! This is where the unfunded liabilities began to leap towards the $43 trillion mark.
I’m getting a bit long winded here so I’ll cut it short for now. However, I am making an attempt to write a book with one of the chapters discussing Social Security in great detail.
A few attempts to rescue Social Security have been made since the 1980’s, including the Reagan Administration and the Clinton Administration. The Clinton Administration ultimately adjusted the tax free retirement annuities Social Security paid out to be taxed at a rate of 85%. Vice President Al Gore the sitting President of the Senate casted the tie breaker vote for the increase.
So, my entire point here is that our infamous leaders, mostly Democrats, have been bleeding Social Security for over 75 years, not the “Baby Boomers.” And, quite frankly the only way to fix it is to allow American’s to take the funds that they paid into the program and allow us to invest the funds into our own private investment accounts like, IRA’s Roth IRA’s, 401(k)’s; etc., keeping these thieving thugs’ hands out of the cookie jar.
That’s my opinion and I’m entitled to it!
Hana Five O
For decades politicians have sometimes quietly, sometimes noisily, acknowledged that Social Security must be reformed if it is to survive the aging baby boomer generation. Its endangered Federal Insurance Contributions Act (FICA) sister, Medicare, threatens to implode even sooner, perhaps within just a few years, accelerated by Obama’s assault on the government’s “wasteful” reimbursements to medical providers. We often hear the tired drumbeat from Washington that taxes must be increased and/or benefits reduced. Some want to tinker our system back to health, while others believe that only a major overhaul can save it. In truth, the elements necessary for financial stability have always been in place.
Social Security and Medicare are not true entitlements. The Supreme Court in Flemming v. Nestor ruled that there is no contractual right to receive Social Security benefits. Nevertheless, the 7.625% deduction from our paychecks is not really a tax but a de facto insurance annuity installment payment, matched by an equal contribution from our employers. That’s 15.25% in total, a substantial amount of forced retirement savings.
Proponents of allowing individuals to privately invest these FICA contributions have been criticized as too willing to minimize what can be formidable market risks. The safest investment vehicles have always been US Treasury Notes and Bonds, but can these conservative instruments generate the income necessary to sustain a “reasonable” standard of living? If, by “reasonable” one means something comparable to what the system currently promises, then the answer is yes!
An individual reaching the age of 65 after earning no more than the minimum wage for 35 years from 1975 through 2009 would have paid about $36,000 into Social Security, and over $8,400 towards Medicare. If these funds had been invested along the way in 10 year Treasury Notes, the contributions would have grown to almost $100,000 in Social Security and $23,000 in Medicare. A 19 year duration (life expectancy at age 65) Social Security annuity based on $100,000 earning interest equivalent to the 10 year Treasury Note average for the preceding 35 years would generate a monthly income in excess of $800. Consider now that the minimum wage earner is the exception (just 4% of all employees). Over these 35 years, the minimum wage has represented less than 40% of the average wage for all working Americans. Adjusting the numbers to reflect what the average worker could expect, the annuity inflates to over $2,000 per month!
Similarly for the Medicare component of FICA, the monthly annuity amount for the typical American wage earner would be more than $460. In Hawaii that covers premium costs for most private individual health insurance plans. So where’s the crisis?
Former Vice President Al Gore may be prone to exaggeration and questionable science, but in this case he had it right. We need not only a “lock box”, but a guarantee that our
monies will be invested and ultimately returned, with interest. This analysis was done using 10 year Notes. A better return and higher future benefit would be realized with either 20 or 30 year Treasury Bonds. Triple A rated corporate securities thrown into the portfolio mix would increase yields still more, with negligible added risk.
We must demand that our elected representatives recognize FICA contributions as deposits into savings bonds, not interest free, forgiven loans. The time has come to establish 30, 35, or even 50 year Social Security Bonds.
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