Letter: Social Security misunderstood

Tuesday, Oct. 12, 1999 | 9:22 a.m.

Let's get real! With all the gibberish about how Congress has been "spending" Social Security surpluses nobody has even come close to the truth, which is that under the Social Security Act any surplus was mandated to be invested in government bonds.

The rarely disclosed truth is that this would have happened even if Social Security had not been included in the "unified" budget, as the government doesn't borrow money just to leave it lying around anymore than you and I do. The most accurate, understandable way to describe this transaction is to say the Social Security fund has been credited with the amount of these borrowed funds for use later when needed to pay benefits.

The fact that general revenue funds will be required to pay back the borrowed or credited funds is inconsequential because they were used to replace general revenue taxes in the first place.

That is why the big budget impasse has occurred, in large measure. Since both sides of the aisle have pledged to stop borrowing from Social Security to balance the budget, there is a scramble to fund government operations but there is only one thing to do with the surplus other than leaving it lying around in a vault, and that is to redeem the bonds now instead of later.

But when boomers retire the government will still be obligated to pay their Social Security benefits and the money will have to come from somewhere. So as far as I am concerned the whole idea of "lock boxes" and "robbing Social Security" is a lot of political hogwash!

DAN OLIVIER