Posted on 02/06/2010 10:10:57 AM PST by Marty62
A Real Lockbox for Social Security
Do you know where your Social Security taxes are? Some of them went to pay for the National Cowgirl Hall of Fame and Museum in Fort Worth, Texas. The same monies helped the State Historical Society of Iowa in Des Moines pay for the development of exhibits for the World Food Prize. And we should all be happy that some of our Social Security surplus funded a study of mariachi music for the Clark County (Nevada) School District.
As we know by now, Social Security is facing many problems that will require long-term, comprehensive reform. But before a doctor operates on a patient, the first step is to stop the bleeding. And the first step toward Social Security reform should be to stop Congress from spending Social Security money on anything except workers' retirement.
The basic problem is that the way Social Security is currently set up, workers don't own their Social Security funds. Because workers don't own their money, Congress treats that money like its own: free to spend on whatever the members choose. And spend it they do, on everything from the war in Iraq to the International Fertilizer Development Center. In return, the Social Security Trust Fund is given a bond, essentially an IOU, which will eventually have to be repaid out of future taxes.
Michael Tanner is director of the Cato Institute's Project on Social Security Choice.
More by Michael D. Tanner It's the ultimate insult. Congress spends our Social Security taxes then expects us to pay more taxes to repay its borrowing. To date, Congress has borrowed and spent more than $1.7 trillion of Social Security taxes. This year it will borrow another $60 billion.
(Excerpt) Read more at cato.org ...
Further down in the Article, it mentions Jim Demint.
I still would rather those DC Scumsuckers take all the money “in my name” for SS and Medicare.. Send me a Check, and LMTFA (leave me the **** ALONE)
True, but what about the 1 trillion + they have already stolen from us.
PAY IT BACK!!!!
Lets confiscate the legislatures property.
I wonder if the Budget office counts the IOUs is the Budget deficit?
The Lock Box was a fiction from day one.
Roosevelt never intended to save SS money. Social Security was from its inception a Ponsi scheme.
From Heritage Foundation
March 29, 1999
Hard Questions Remain for the Social Security Lockbox
by David C. John
Executive Memorandum #585
The Senate and the House of Representatives are considering enforceable mechanisms to preserve the surplus generated by Social Security so that it could be used in the future to pay for reforms of both Social Security and Medicare. Pending those reforms, Social Security surpluses would be used to reduce the amount of federal debt held by the public. The measures are contained in the Republican leadership’s budget resolutions for fiscal year 2000, and will be given force in separate legislation to be considered later this spring.
There is a strong argument to be made for “walling off” Social Security surpluses in this way. The method under discussion also raises a number of questions, however, that need to be answered.
http://www.heritage.org/Research/SocialSecurity/EM585.cfm
Has interesting ideas.
Maybe your to young. But LBJ/w Democrat Congress in 1968 (to pay for Vietnam) Took all protections off the Social security Funds.
It was yet another Dummie “let them eat cake” moment. can you imagine what would happen if the dummies and Rinos got hold of Health Care premiums.
Katy bar the door.
It was just an accounting gimmick.
The only useful thing it did was make the budget deficit look bigger because you took the SS income off budget.
And even that has little impact on Congresses appetite for spending as we can see this year.
The point is TO STOP CONGRESS AND DADDY WARBUCKS ZERO FROM SPENDING. sorry for yelling.
If we could scare the Hell out of them,demanding the SS funds be repaid. Maybe, just maybe we could start to see the spending cut and hopefully ended. NO unfunded mandates..no pig barrel spending.
We have to do something to stop this nightmare heading towards us like a MACK truck.
This is inside the Beltway stupidity that is surprising from an otherwise economically literate think tank. Social security cannot be reformed; it has always been toxic; and, the financial cancer from programs like social security medicaid, medicare, government pensions, etc. has spread to the point that there will be a massive collapse and repudiation of so-called entitlements, either explicitly or through inflation. Unfortuntely, neither I nor anyone else can say exactly when it will occur, but it is clear that financial armageddon is something that cannot be avoided and will probably occur within the next decade.
The difficulty with policy “intellectuals” is that they fail to understand that the problems they have “solutions” for are in fact someone else’s “solution” to an entirely different problem. Those other people have demonstrated for generations that they have the power to maintain a narrative that portrays their pursuit of their interests as a “solution to a problem” and that the policy wonks’ “solutions” are evil, unworkable, misguided, or some combination of the foregoing.
The article is a museum quality specimen of a Titanic and deck chairs exercise.
A great use for our phantom lock box would be to stuff Obomba and Gore in it, turn the key and throw both the key and the lock box into either ocean.
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TITLE II-FEDERAL OLD-AGE BENEFITS OLD-AGE RESERVE ACCOUNT
Section 201. (a) There is hereby created an account in the Treasury of the United States to be known as the Old-Age Reserve Account hereinafter in this title called the Account. There is hereby authorized to be appropriated to the Account for each fiscal year, beginning with the fiscal year ending June 30, 1937, an amount sufficient as an annual premium to provide for the payments required under this title, such amount to be determined on a reserve basis in accordance with accepted actuarial principles, and based upon such tables of mortality as the Secretary of the Treasury shall from time to time adopt, and upon an interest rate of 3 per centum per annum compounded annually. The Secretary of the Treasury shall submit annually to the Bureau of the Budget an estimate of the appropriations to be made to the Account.
(b) It shall be the duty of the Secretary of the Treasury to invest such portion of the amounts credited to the Account as is not, in his judgment, required to meet current withdrawals. Such investment may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to both principal and interest by the United States. For such purpose such obligations may be acquired
(1) on original issue at par, or
(2) by purchase of outstanding obligations at the market price. The purposes for which obligations of the United States may be issued under the Second Liberty Bond Act, as amended, are hereby extended to authorize the issuance at par of special obligations exclusively to the Account. Such special obligations shall bear interest at the rate of 3 per centum per annum. Obligations other than such special obligations may be acquired for the Account only on such terms as to provide an investment yield of not less than 3 per centum per annum.
(c) Any obligations acquired by the Account (except special obligations issued exclusively to the Account) may be sold at the market price, and such special obligations may be redeemed at par plus accrued interest.
(d) The interest on, and the proceeds from the sale or redemption of, any obligations held in the Account shall be credited to and form a part of the Account.
(e) All amounts credited to the Account shall be available for making payments required under this title.
(f) The Secretary of the Treasury shall include in his annual report the actuarial status of the Account.
Yes well that is another very good idea.
I don’t understand the push back on my suggestion.
China is telling Zero how to run Foreign Policy due to the amout of IOUs Zero has given them.
Since when are American citizens suppose to sit down and shut up.
I say we should be paid back FIRST.
But if everyone wants China running the U.S., you got it.
Which one..CATO or Heritage? Or Both?
The only way they can repay the SS funds is to tax us all in to poverty.
I would love to stop their spending us in to oblivion but the bulk of the Fed budget is social welfare spending that in entrenched in law; Social Security, Medicare, Medicaid and Welfare.
All of the stuff that is “discretionary” is insignificant by comparison.
The only hope we have is to stop the growth of government and stop government from doing things that stop the private side of the economy from growing until finally tax receipts exceed government spending.
I was responding to the Tanner article, and he’s at Cato.
No problem. I did find it interesting that this subject is an on going discusion.
even Ronald Reagan talked about the supreme Court decision that allowed the Critters to get access to the fund.
and that was in 1964.
I am just a history buff and not an economist but I remember reading that in the first ten years of the act they treated it like an insurance company would; they put it in a reserve-type of fund. The economists of the day blamed the removal of that large sum of money from the economy (not to be spent by consumers) as one of the reasons the recovery from the depression took so long. We all know the general policies of the Roosevelt New Deal was the reason for the prolonged depression. But what would the removal of that much money from the economy do now? It is kind of like a perpetual stimulus fund that Washington can draw from to fund all their projects.
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