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October 1, 2014

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Letter to the editor:

Social Security not meant to be a lender

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In his letter, “Social Security, Medicare need help,” Tom Keller repeats the same old line that there is nothing in the Social Security trust funds but IOUs, trying to justify the GOP ambition of either eliminating Social Security and Medicare altogether or changing them into a stock market gamble and a voucher (worthless) program.

The reason these programs have withstood elimination attempts by the GOP is that typically the American people — by a huge majority — have said, “Leave them alone.” The most recent expression was in the last presidential election.

These so-called worthless IOUs are the same government bonds being sold to China and other investors, none of which consider them worthless. In the case of the government, these bonds are what Social Security taxes are invested in until needed to pay benefits.

Over the years, a huge trust fund has been built up in the form of this debt owed to Social Security by the general budget and, like any debt, it must be paid back. This process of payback has already begun with the disappearance of the surplus due to payroll tax holidays and Baby Boomers coming into the system.

The fact that this money has been, in effect, borrowed from Social Security to help fund budgetary expenses in lieu of tax increases does not dissolve the responsibility of Congress to pay it back by either borrowing the money or raising taxes. The cowards have refused to raise taxes, hence the increase in the debt.

Borrowing from Social Security is just a scheme to defer taxes, and the time has come to stop this practice.

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  1. What do you mean increase taxes! This is insane. The U.S economy has and continues to be in fragile shape with half the population on govenment assistance,half paying no taxes at all and those who do being drained by policies of this inept and incompetent administration which has an inexhaustable appetite for more spending and debt which is already at crisis levels. The real cowards are the ones who lack the guts to cut the incredible waste and expenditures from a bloated government that manages to drain the taxpayers on luxury White House vacations, an unaffordable heathcare system and deprive them of the simple courtesy of a tour through the White House. The Obama administration is a nightmare for America and is destroying it. One can only hope that enough Americans will wake up and stop drinking the toxic liberal koolaid.

  2. Olivier,

    Please cite one Republican member of the Senate or of the House of Representatives who proposes to eliminate Social Security. If you cannot, please go away and find a new argument.

    Purgatory

  3. Daniel Oliver seems to recognize that our government borrows and prints money because it won't impose higher taxes on enough Americans to cover what it spends.

    Here's the problem. If government did raise taxes enough on enough Americans to cover what it spends, I expect that Mr. Oliver and many others would be quite unhappy. If the government actually cut spending, like many on the right propose, many of those people would be quite unhappy.

    All of the above is not lost on Presidents and members of Congress, which is why little that matters is done. What former President Bush and Congresses during his two terms did is indefensible. The same is true of President Obama and Congresses during his time in office to this point.

    Until Mr. Oliver and those of the left and those on the right are willing to admit the truth of the above statement, there is no reason for Presidents and Congresses to take the unpopular actions required on higher taxes and decreased spending.

    Michael

  4. Presidents Clinton and Bush both recognized the importance of Social Security and Medicare and reforming both for future generations of America. President Obama did too when he was elected in 2008. He commissioned Bowles Simpson to recommend ways to reform the Funds. They did. What did President Obama do? So far, nothing. Reform of these two Funds should be President Obama's legacy.

    Carmine D

  5. The contention that the Social Security Trust Fund holds "worthless IOUs" leads me to ask what value you place on the green pictures of dead people in your wallet?

    The so-called "worthless IOUs" are already part of the $16+ trillion in National Debt. When the Treasury repays those IOUs by borrowing, no additional debt is created.

    The Social Security program is an outstanding success that has amassed over $2.7 Trillion in assets. The failure is our tax system that fails to match the spending of government and is loaded with entitlements for the wealthy and corporations..

  6. As is the case with most Commie-lites, Oliver makes up his "facts" to match his agenda. Republicrats and "moderate" Dumbocrats see the writing on the wall and are trying to save, not destroy, Social Security and Medicare. Both will be bankrupt within a few short years unless steps are taken today to ensure their financial stability. Contrary to the economic illiterates of the left, and adding trillions to an already bloated debt will not bring about an economic "Paradise." It will ultimately destroy the economic system that has sustained the USA for generations. Of course, to Commie-lites, that's not a bad thing. Actually, it is their ultimate goal because it will give them, or so they think, ultimate power and control. There is still time to defeat them, but the window is closing as more and more functionally illiterate parasites join their ranks.

  7. Some same body here still has the facts wrong on Social Security and Medicare. His words may sound good, blaming Nixon and Republicans, but it's not completely true.

    "On-Budget"-

    In early 1968 President Lyndon Johnson made a change in the budget presentation by including Social Security and all other trust funds in a"unified budget." This is likewise sometimes described by saying that Social Security was placed "on-budget."

    This 1968 change grew out of the recommendations of a presidential commission appointed by President Johnson in 1967, and known as the President's Commission on Budget Concepts. The concern of this Commission was not specifically with the Social Security Trust Funds, but rather it was an effort to rationalize what the Commission viewed as a confusing budget presentation. At that time, the federal budget consisted of three separate and inconsistent sets of measures, and often budget debates became bogged-down in arguments over which of the three to use. As an illustration of the problem, the projected fiscal 1968 budget was either in deficit by $2.1 billion, $4.3 billion, or $8.1 billion, depending upon which measure one chose to use. Consequently, the Commission's central recommendation was for a single, unified, measure of the federal budget--a measure in which every function and activity of government was added together to assess the government's fiscal position.

    This change took effect for the first time in the President's budget proposal for fiscal year 1969, which President Johnson presented to Congress in January 1968. This change in accounting practices did not initially put the President's budget proposal into surplus--it was still projecting an $8 billion deficit. However, it is clear that the budget deficit would have been somewhat larger without this change (it is difficult to say how much larger because this change was mixed-in with the other legislative, budgetary and fiscal policies the President was urging Congress to adopt). In early 1969--just five days before leaving office--President Johnson sent his 1970 budget message to Congress, also using the revised accounting procedures. At this point, a year later than his initial estimate, he was projecting the budget for 1969 to be in a net balance of $2.4 billion. (The fiscal year 1969 began on January 1, 1969, even though the President had released his FY 1969 budget almost a year earlier.)

    The FY 1969 budget would not be implemented by President Johnson; it would instead be presided over by President Nixon, who took office on January 20,1969. This was 20 days into the 1969 fiscal year. When President Nixon took office, he too adopted the unified budget approach, and it was used by all Presidents thereafter until 1986."

    Carmine D

  8. .....WRT President Reagan, the some same body is confused:

    ""Off-Budget" Again-

    In the 1983 Social Security Amendments a provision was included mandating that Social Security be taken "off-budget" starting in FY 1993. This was a recommendation from the National Commission on Social Security Reform (aka the Greenspan Commission). The Commission's report argued: "The National Commission believes that changes in the Social Security program should be made only for programmatic reasons, and not for purposes of balancing the budget. Those who support the removal of the operations of the trust funds from the budget believe that this policy of making changes only for programmatic reasons would be more likely to be carried out if the Social Security program were not in the unified budget." (Note that this was a majority recommendation of the Commission, not the unanimous view of all members.) This change was in fact enacted into statute in the Social Security Amendments of 1983, signed into law by President Reagan on April 20, 1983."

    Carmine D

  9. WRT budgeting vs. financing: Some same body still confused:

    "Summary-

    So, to sum up:

    1- Social Security was off-budget from 1935-1968;
    2- On-budget from 1969-1985;
    3- Off-budget from 1986-1990, for all purposes except computing the deficit;
    4- Off-budget for all purposes since 1990.

    Finally, just note once again that the financing procedures involving the Social Security program have not changed in any fundamental way since they were established in the original Social Security Act of 1935 and amended in 1939. These changes in federal budgeting rules govern how the Social Security program is accounted for in the federal budget, not how it is financed."

    Carmine D

  10. Here's the Trustee's analysis and commentary for the Social Security and Medicare Funds that the rosy-scenario posters here [read Democrats] like to ignore. [BTW this comes from the link provided above with opinions that the alarms and flags about the Funds solvency are GOP scare tactics.]

    "The last 5 Trustees Reports [2007, 2008, 2009, 2010, and 2011] have indicated that Social Security's Old-Age, Survivors, and Disability Insurance (OASDI) Trust Funds would become exhausted between 2036 and 2041 under the intermediate set of economic and demographic assumptions provided in each report. If no legislative change is enacted, scheduled tax revenues will be sufficient to pay only about three fourths of the scheduled benefits after trust fund exhaustion. Many policymakers have developed proposals and options to address this long-range solvency problem."

    Carmine D

  11. Reading government speak and bureaucratize takes some reading between the lines.

    For example, the Trustee's Reports above for the last 5 years and currently says: "If no legislative change is enacted, scheduled tax revenues will be sufficient to pay only about three fourths of the scheduled benefits after trust fund exhaustion."

    In plain English this means by the years 2036-41, if no legislative changes are taken, 25 percent of the beneficiaries' payments of the two funds can't and won't be paid.

    Honky dory? Tweaking? Not important problem in the scheme of things? Ostriches keep sticking their heads in the sand. It doesn't work.

    Carmine D

  12. Politicians pandering. They keep painting us into corners so that we "have to" increase revenue and/or decrease essential programs for citizens in order to pay for 24/7/lifelong care for career-indigents and illegal invaders. Of course we can't expect them to ENFORCE OUR LAWS and expel 15-20 million illegals, to prioritize national border security, to prioritize "contracts" with those who've paid into SS for decades. We would enjoy being able to retire into modest prosperity instead of losing our benefits via explosive inflation, devalued dollars, more spending on the takers who've never paid their fair share. We need POLITICIANS who will ENFORCE RESTRICTIONS on WELFARE BENEFITS to 2 years consecutive / 5 years lifetime so that these programs don't completely drain our economy and way of life. Just think of the cost to society (and to relatives, kids, community) of one single parent who chucks out more than one child and the "family" lives off benefits for 18-plus years. Then the empty-nester parent "fosters" grandkids or has more of their own. Eventually, the parent ages out of available young children and winds up, still on the doll, in subsidized senior housing, Medicaid, EBT SNAP, in toto. Many get into Medicaid-funded assisted living long before they need it--because the social workers have no where else to place them--they don't qualify for SS benefits 'cause they NEVER paid in. Not once has the "parent" acted responsibly, supported self and kids, planned or saved a blessed thing. And we endorse this? We need to fix our thinking and authorize self-reliance and limit dependency thinking.

  13. SS for illegals? This WILL happen just as soon as anyone gives them a waiver or pathway to anything. For decades, SS has been paid to Canadians and others who worked "legally". ALL legal residents qualify. And the media now says illegals who get permits will qualify for OBAMACARE--at the cost of mega-billions.

  14. It's difficult to figure out what's going to happen tomorrow yet people are worried about 2041.

    In the next 50 years this country is going to generate a Quad trillion dollars worth of economic activity. That's enough to cover Social Security, Medicare and anything else that pops up.

    All that really matters is that people get their checks on the third Wednesday of the month. They always have and will continue to get what they have been promised. No Social Security check has ever bounced.

    It's amazing the way Rosalinda posts the exact same thing no matter what the topic is for discussion. I think she is the founding member of the Las Vegas branch of the Aryan sisterhood. "This girl is on fire."

  15. I'd make a comment except for the fact that only clergy and "literate" Austrian economists are permitted to voice their opinions here.

  16. Before you whine read her 2400 posts. She insults someone in nearly every post. Hispanics, single moms, teachers, Medicaid recipients, disabled...you name it!
    Her racism and discriminatory tone are draining our way of life.
    She defines a bad mouth!

  17. To Jim Weber's comment "The so-called "worthless IOUs" are lready part of the $16+ trillion in National Debt. When the Treasury repays those IOUs by borrowing, no additional debt is created."

    SgtRock (1:19 p.m) expands "What Jim Weber is saying is during all those Social Security surplus years , it was really adding to the National Debt back then.

    Wrong, Sarge. Neither Social Security nor Treasury had/has anything to do with it! The Social Security Trust Fund has always been required to invest its cash in non-marketable US securities. As those become due, or the trust fund needs cash, Treasure redeems some of those securities, usually getting the cash by issuing marketable securities. The debate that has been going on for a good many years is whether the value of the securities held in the trust fund should be included in calculating the deficit - offsetting the value of marketable securities currently issued thus "reducing" the deficit, or whether their value should be kept out of the current deficit calculations thus "increasing" the deficit. We are, at least nominally, a government by, for, and of the people. Accordingly, that very same argument (how do we deal with debts issued to ourselves) could thus be used for ANY government securities held by ANY U.S. person or company. Regardless, all U.S securities issued to anyone will eventually either have to be refunded in cash or declared to be in default.

    Confused?? Welcome to the club!

  18. "Hmmmmmmm......I think I said earlier that down the line Social Security would need to be "tweaked" again..."

    If by "tweak" you agree with the Trustees that legislative action is needed, then you are right. Since you give President Obama a pass on addressing the issue of the funds' insolvency, I opine you are straddling the fence. Be careful you don't get impaled in your sweet spot.

    Carmine D