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Originally Posted by aceventura3
I thought a good first step would have been to privatize social security. It simply makes so much sense for young wage earners. Certainly we have to keep our promise to those currently on social security and those near obtaining it. And for people like me (40ish) having some kind of combination. I think people being able to see how more efficient they can save for their future (even if forced) compared to government we may start a trend away from people wanting government to pay for virtually everything. Since their really is no social security trust fund and the money meant to be set aside is being spent, the folks in Washington would be forced to immediately cut current spending. This particular game of smoke and mirrors would end.
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ace....isn't your opinion that, "[there] really is no social security trust fund", even though that fund holds US Treasury bonds as assets in lieu of cash, just as every other US treasury debt holder, holds....an admission that the US treasury is bankrupt? It either is, or it isn't? If it is bankrupt now.....wa was s it in 2001, when it's total debt was $5.6 trillion, vs. $8.7 trillion, today? Did any SSI privitzation "reform", address where the money would come from to finance the government's portion of funding for private accounts/ Did any proposal offer a solution to cover the disability insurance and survivors' benefits components of the existing SSI program?
Doesn't the market for Treauries, at such low interest rates, considering your opinion that there are no SSI trust fund assets, contradict your opinion? ....or are buyers of T-Bills less informed than you are?
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http://mediamatters.org/items/200502040009
.....A January 10 (2005) New York Times editorial explained:
In suggesting that 2018 is doomsyear, the president is reinforcing a false impression that the trust fund is a worthless pile of I.O.U.'s -- as detractors of Social Security so often claim. The facts are different: since 1983, payroll taxes have exceeded benefits, with the excess tax revenue invested in interest-bearing Treasury securities. (An alternative would be to, say, put the money in a mattress.) That accumulating interest and the securities themselves make up the Social Security trust fund. If the trust fund's Treasury securities are worthless, someone better tell investors throughout the world, who currently hold $4.3 trillion in Treasury debt that carries the exact same government obligation to pay as the trust fund securities. The president is irresponsible to even imply that the United States might not honor its debt obligations.
Similarly, Princeton economist and New York Times columnist Paul Krugman explained on December 7, 2004, that claiming that the General Fund does not truly owe its apparent debt to the Social Security trust fund amounts to arguing for a large income transfer from working-class Americans to the wealthy:
Right now the revenues from the payroll tax exceed the amount paid out in benefits. This is deliberate, the result of a payroll tax increase -- recommended by none other than [Federal Reserve chairman] Alan Greenspan -- two decades ago. His justification at the time for raising a tax that falls mainly on lower- and middle-income families, even though Ronald Reagan had just cut the taxes that fall mainly on the very well-off, was that the extra revenue was needed to build up a trust fund. This could be drawn on to pay benefits once the baby boomers began to retire.
[...]
If the trust fund is meaningless, by the way, that Greenspan-sponsored tax increase in the 1980's was nothing but an exercise in class warfare: taxes on working-class Americans went up, taxes on the affluent went down, and the workers have nothing to show for their sacrifice.
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