Republicans in the House of Representatives have selected Dave Camp of Michigan to be the Chairman of the Ways and Means Committee in the new Congress.
Camp believes in fairy tales. From his website:
Camp believes in fairy tales. From his website:
I support voluntary personal accounts for younger workers that would allow them to build a nest egg for retirement that they would own and control, and could pass on to their families. This will permanently strengthen Social Security, without changing benefits for those now in or near retirement, and without raising payroll taxes on workers. Inheritance rights in personal accounts would especially help widows who depend on Social Security and eliminate the need for cumbersome regulations that too often deny individuals from receiving their benefits in a timely fashion.
The truth is that if you divert money that would have gone into the Social Security trust funds into private accounts within only a few years you run out of money to pay current beneficiaries. But what difference does that make? Republicans have always regarded the Social Security trust funds as a fiction and Democrats are rapidly losing faith in their most basic convictions. Divert the entire FICA into private accounts, pay current benefits by borrowing money. Over a few decades Social Security disappears. It will only cost a few trillion dollars and destroy all retirement security but Wall Street will make even more obscene profits and Republicans will achieve the dream that they have had for the last 75 years. All Republicans may have to do is to threaten a default on our national debt.
8 comments:
Don't we already have voluntary retirement accounts called IRA'a or 401(k) and the like or Roth IRA accounts?
Doesn't experience show that most people don't use them and the investment return has been wildly unpredictable?
Add to them as much as you like but leave SS alone.
As negative as your piece sounds, it is all true. It is the goal of the Republican party to get rid of Social Security. They will persist and the rest of us must remain vigilant. Furthermore, the people who come up with these proposals, do not know all that Social Security offers in terms of insurance for disability, survivors, etc.
Your assumption is that when the trust fund hits zero, that Social Security is broke, other than the receipts that come in for that year.
The trust fund does not represent a store of wealth. The only income the trust fund really has is the FICA collections that go from the Treasury to Social Security. The interest in the trust fund is "paid" by issuing Treasury securities (debt).
It would be interesting to learn how much of those trillions of dollars represents "interest."
Don Levit
One aspect of the "individual accounts you can leave to your heirs" is that such individual accounts are subject to liens and judgements as a result of court orders such as those arising from divorce or disputed wills. The benefits paid by the OASDI trust funds are not. I don't think the actual benefits paid under SS matter to these people. They want to destroy SS and will do whatever they can to achieve that end. NancyO
Mr. Levit strikes again. The question is why, even assuming the trust fund is a fiction as you claim, that it makes no difference if we reduce FICA revenues? Even if the entire Social Security trust fund is merely an accounting device, the fact is that a finite amount of benefits are paid out, and if we reduce the revenue that comes in, we accelerate the debt problems that we already have.
Anonymous:
The "revenue" that is reduced are the numbers in the trust fund.
The numbers simply represent the balance that the trust fund can draw out of the Treasury without an appropriation.
It is the same funding process used to pay for battleships, although an appropriation is not needed.
If those numbers represented individual accounts, invested in say annuities, which the government, by law, was unable to access, then the numbbers would truly mean the trust fund makes it easier to pay beneficiaries than without a trust fund.
We need Social Security to be sustainable.
The way the system operates today simply adds to our eventual debt.
Don Levit
As does everything else the government does when the government refuses to balance the budget. Get off it, Levit. You can't turn SS into an annuity at this late date and you know it. Go bug some other website.
I really liked your blog article.Looking forward for more such stuff.
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