Just The Facts Ma’am: Digby Delivers Social Security Sensibility

Thanks for the link Digby!

In a nutshell, don’t listen to the “drown the government in a bathtub crowd,” Social Security is doing just fine.

Below is a clip from a little blog post covering briefly what is reviewed in greater detail in Paul N. Van de Water’s larger new paper published on the website of the Center on Budget and Policy Priorities.

The Social Security trustees — the official body charged with evaluating the program’s long-term finances — project that Social Security can pay 100 percent of promised benefits through 2037 and about three-quarters of scheduled benefits after that, even if Congress makes no changes in the program. Relatively modest changes would put the program on a sound financial footing for 75 years and beyond.

Nonetheless, some critics are attempting to undermine confidence in Social Security with wild and blatantly false accusations. They allege that the trust funds have been “raided” or disparage the trust funds as “funny money” or mere “IOUs.” Some even label Social Security a “Ponzi scheme” after the notorious 1920s swindler Charles Ponzi. All of these claims are nonsense.

Every year since 1984, Social Security has collected more in payroll taxes and other income than it pays in benefits and other expenses. (The authors of the 1983 Social Security reform law did this on purpose in order to help pre-fund some of the costs of the baby boomers’ retirement.) These surpluses are invested in U.S. Treasury securities that are every bit as sound as the U.S. government securities held by investors around the globe; investors regard these securities as among the world’s very safest investments.

2 Responses to “Just The Facts Ma’am: Digby Delivers Social Security Sensibility”

  1. daniel noe says:

    I was always taught that money went in the treasury, and money went out of the treasury. Nothing was invested and all money existed in the same fund. Because of changing demographics, social security would be bankrupt circa 2018. In that way, it is like a Ponzi scheme.
    If what I have been taught is untrue, why then did Al Gore talk of a “lockbox” during the 2000 campaign?

  2. He talked of a lockbox for his own political gain. It was targeted language meant to assure those who were concerned that there would be no messing with Social Security. Simple as that. Based on what we have heard repeatedly from politicians or aspiring politicians on the right (and some on the left) there is indeed a interest in privatizing social security so Gore’s talk of a lockbox was appropriate.

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