"Where's My Money?"

Pay As You Go

     Entitlement is a word designed to characterize beneficiaries as a drain on the Nation's treasury and her taxpaying citizens. We paid into Social Security, some of us, starting in childhood. People, we are being subjected to a storm of falsehood regarding Social Security. And it is shameful to call it an "entitlement program." 

“Never doubt that a small group of thoughtful, committed, citizens can change the world. Indeed, it is the only thing that ever has.” Margaret Mead
     
    We must make it clear to elected officials we understand the myth(s) involved here and demand the term 'entitlement' cease to be used, particularly with regard to Social Security.
     Let us dispel the notion Social Security is doomed because people are living longer, and there are too few workers, to support those who have retired. Here is the plain truth. Social Security was established, during the 1930s as a "pay as you go" program. During Franklin Roosevelt's administration, it seemed reasonable.
      Had benefits been guaranteed by the federal government, beneficiaries would have been paid, if necessary, out of the General Fund, irrespective of the ratio between active workers and retirees. In other words, Social Security would have remained secure. To make Social Security secure we'd have to have demanded the federal government guarantee all retirees, present and future, receive the federal benefits they earned. (The same applies to Medicare.) 

     As to the impending crisis in Social Security, the $2.7 trillion dollar reserve in the Social Security Trust gives us pause. What happened to our money, i.e., our cash payroll tax contri-butions? The contributions have been exchanged for non-negotiable Treasury IOUs. They are in are in the Social Security Trust Fund, but they can't be sold or redeemed. What is the result? Should there be a deficit in the Trust Fund, the U.S. government would have to sell bonds to the private sector, increasing government debt by $2.7 trillion. It is extremely unlikely to happen, however. 

     Had the Trust Fund monies been invested, it could have generated income, to be added to the cash in the fund. Government officials cover themselves by saying they traded payroll tax-generated monies for treasury bonds. -Sound good? Sure, there are treasury bonds but, again, they are bonds, which cannot be sold to generate cash. If they do generate cash returns, these are also taken from the fund, like the payroll tax cash. Should a true deficit occur in the Trust Fund, there will be no cash and no way to cash in the treasury bonds. Some experts believe this could come as soon as 2016 (sooner, if payroll tax cuts continue.) The crisis would mean the issuance of new bonds, increasing the federal deficit by at least another $250 billion a year over ten years ... a highly unlikely outcome. This is why we are unilaterally offered benefit cuts as the only alternative to avoid crisis. 
     The anticipated effects will will come first to those with five years to go before retirement and earlier. Those of us already retired, of course, are affected now by cuts in cost of living adjustments, which may be cut altogether, or which may be tied to the Chained Consumer Price Index, which will cause a cascade of negative results to beneficiaries. Last, but by no means least, social security disability is on the chopping block. -Seems to me, we have to get busy!