KMA-628

The first thing I noticed when reading this post was the references.

In providing opposing thought, one reference is falsely labeled and the other holds very little weight:

Well, no, that's not true. Some of the data being interpreted is from the CBO, but the report is not, it is from the CBPP, hardly a non-partisan organization. Also, the topic being disputed by guy44 regards the SS trust fund, its balance, etc. all of which are not even mentioned in the report by the CBPP.

First, I should mention that my initial opinion of this reference went down the toilet fast when i saw a banner ad proclaming "ASSES OF EVIL" along with pictures of GWB, Cheney and Rummmy. Not much is going to be accomplished in a debate when the very references you cite immediately alienate your intended audience.

Well, Matthew Yglesias is a writer for "The American Prospect". If you look at a history of articles written for the Prospect, you will note that they lean heavily towards Bush-bashing. While that is their perogative, they are not really a good reference for this discussion. The overwhelming bias presented by the Prospect makes me immediately dismiss any claims made by them.

Further, it is hard for me to even consider believing the words of a blogger (the article linked by guy44 was from Matthew's blog) over a learned economist.

Now, on to a different point:

In the CBPP report referenced by guy44 there is a very telling statement.
That tells you exactly where this group is coming from. Reading between the lines, I am left with the impression that OBPP's argument is to leave Social Security alone, and when problems arise in the future, we should just cut benefits and increase payroll taxes.

I cannot stress to you how much I am against this thought process. If we can come up with a better way of doing business that doesn't raise taxes and decrease benefits, shouldn't we take a look at it now rather than wait until the problem is staring at us in the face?

Why even propose a solution that involves more taxes and less benefits? I cannot believe that the left truly thinks this is a good plan--there has to be something happening behind the scenes here.

Anyway, moving on again:

Let me try and clear this up again. There is no money in the trust fund. None, nada, zero, zip. It is similar to a personal checking account having a balance of $5,000 but there are $5,000 worth of checks written against it, checks that have absolutely nothing to do with the original purpose of the checking account. The balance in the trust fund is not money to support Social Security payments, rather it represents an obligation that must be paid back by someone, and paid back with interest.

While the trust fund carries a balance, that balance represents no actual economic assets.

There is, however, a ton of money owed to the trust fund (with interest). That means, when Social Security starts running a deficit around 2016, it will have to call in those debts since there isn't any money in the trust fund to draw from.

Where is that money going to come from? Something will have to be done to:

a) Cover the money owed to the trust fund. By the way, the money that was borrowed has been spent. it is not sitting around waiting to be used to pay back the loan.

b) Cover the deficit that Social Security will be running. Regardless of how you interpret the balance of the trust fund, you have to realize that the gov't will not let SS continue to run by drawing on already used-up resources. More than likely, many of the things that are predicted to happen to SS, whill happen in around 10-15 years, not 40-50 years. Caps will be raised. Payroll taxes will go up. And talks of changing benefits will begin to happen.

Why do I think this?

Because our government stands to lose a lot of money when Social Security starts running a deficit. Right now they are used to spending the extra money that Social Security brings in to fund other, non-relevant spending programs. They are used to borrowing from the trust fund. All of this revenue will go away.

Now, do you think our government will make do with less revenue?

Here is an anology that makes sense to me:

Imagine it is time for me to pay my bills for the month and I have zero dollars in my bank account.

Well, if I write checks for everything, I can buy myself a little time. However, that will come back to haunt me later when I need to pay back the money that I owe, plus more, to cover all of the fees and fines.

But there is a different problem here. I don't have anymore money coming in now than before, plus, I now have to pay the bills that came due for this month.

So....

Not only do I have to pay my current bills, but I also have to payback my old bills and pay the extra fines and fees associated with those bills, all with the same amount of income coming in. I am in a lose-lose scenario unless I find another way of bringing in some extra cash to cover the old debts that I have.

Now, if I am living paycheck to paycheck (as our government is), there isn't any more money for me to get.

Moving on.....
Notice the contradiction here?

guy44 mentions above that there is money in the trust fund and then, in the last sentence, mentions that the trust fund will have to call in its IOU's.

Also, as to the first sentence in the above quote: the trust fund has no assets. How can it run out when it is already empty? The trust fund represents a liability held against us, the tax payers. We are the debtors here in this equation. The money was borrowed, without our approval, and we are the ones that will have to pay it back......and we aren't talking about paying back billions, we are talking trillions.

That's a lot of zeros.

On to the next point....
Do you see the problem in the above statement?

You can't compare this to money deposited in the bank. Why, because the money has been spent, not deposited. It isn't sitting anywhere waiting to be used, it is gone.

What is wrong with that?

The money isn't in the budget to pay back the debt. It will have to be raised through taxes.

Next point:

That was the stated purpose of his column, why are you criticizing him for doing what he said he would do?

The purpose of his column was to point out the obvious to the people who are claiming the obvious isn't true. He intent was not to propose a solution.

Anyway, this is already a novel, so on to my last point:

Why do they call Social Security the third rail of politics?

If you mention cutting Social Security benefits, whether it be today, tomorrow or 40 years from now, you will unleash a storm. There would be hell to pay if you didn't increase benefits, let alone discussing a possible cut. (which goes to show you that nobody is paying attention to the "experts" at CBPP and the details in their proposal).

O.K., I have said way too much and will be lucky if anybody reads even half of what I wrote...

more to follow later....