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Well Ken, there are lies and damned lies. And then there’s Wikipedia.
When I Googled the phrase: “Where is Social Security money kept?” I got a Wikipedia page with the following:
Unlike a typical private pension plan, the Social Security Trust Fund does not hold any marketable assets to secure workers’ paid-in contributions. Instead, it holds non-negotiable United States Treasury bonds and U.S. securities backed “by the full faith and credit of the government”.
Source: http://en.wikipedia.org/wiki/Social_Security_Trust_Fund
—In other words, there’s no actual money in the SS Trust Fund. There’s just a big IOU from Uncle Sam. So you can call it a trust fund if you want, but it’s certainly not a trust fund in the typical sense of that word.
Same goes for Medicare, of course.
Now as to what kind of a critter SS is, exactly . . . yes, it is an entitlement. And no, that’s not a bad word.
But is it really a pre-paid insurance program? Not really.
Social Security is actually more like an annuity program: you pay in up front and then you get it back at the end. Problem is, the current funding model is not sustainable. As Americans live longer, they are receiving much more SS $$$ than they paid in. Meanwhile, new money coming into the system from payroll taxes has shrunk and will soon be insufficient to meet current or future obligations. (And the same is true for Medicare, only more so.)
So it’s pretty clear that the system is “broke.” But how broke? That’s the real question. A few years ago, Democrats were claiming that SS could be fixed with minor tweaks. Now they’re not so sure. Republicans, meanwhile, have proposed a variety of schemes (and I do mean shemes) for addressing the problem. Some want to do away with it all together, I suppose, but I don’t think anyone’s taking that option seriously.
As for me, I want to keep Social Security because it works; it keeps people out of the gutter. At the same time, I agree with Hooper’s previously expressed sentiments to the effect that folks should not view SS as their sole retirement plan, because it was never intended to be that. I also agree with Hooper’s oft-expressed view that people should try to live within their means.
Do you disagree with either of those two assertions in principle, Ken?
Frankly, I don’t see any fundamental contradiction between your outlook and Hooper’s. However, when people express their differences with words like “moron” and “leech” it tends to artificially magnify those differences. But I guess that’s why people like political blogs.
They’re like pro wrestling.
For the mind.
Yeah, you’re right, Ken. When you take it to that level, the whole economy is a mirage. It’s one big house of cards. Holding off a collapse depends on maintaining the fiction that the dollar is worth what the public thinks its worth or what the government says it’s worth.
Fat cat investment bankers took advantage of the dollar value fiction by getting the Federal Reserve to inject money into the economy directly through them. As we recently learned, though, they don’t have to pay any of that money back if they should happen to lose it. (But who cares, it was only play money anyway, right?)
Keynesian liberals also take advantage of the dollar value fiction through deficit-financed social spending. Of course I like the liberals’ motives better than the investement bankers’ motives, but at the end of the day, the result is the same: We’re broke.
So we’re broke. No problem, right? Just print more money. Take on more public debt. Sell more T-bills to the Chinese. All backed by the (ahem) “full faith and credit of the United States of America.” (Really chokes me up every time I say that.)
Ken: Do you think it’s wise to keep financing deficits this way? Do you believe there will NEVER come a day of reckoning? Read the history books, man.
This really has nothing to do with gold and guns. It has to do with our financial solvency as a nation. It has to do with our ability to continue living in the lifestyle to which we’re accustomed.
Truth is, Americans CAN’T go on living that lifestyle much longer, just like we can’t keep polluting the earth and sucking more than our share of its resources. It’s a systemic problem and it must be solved systemically, by all parties agreeing to work together for the common good.
Ultimately that means you, and me, and yes, even Hooper, sitting down at the table together and deciding what to do.
Or . . . we can keep duking it out over who has “the answer.”
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