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12/08/2012

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JohnWDB

We frittered away 3 trillion dollars of SS surplus and now Krasting poor-mouths about how it's broke and how the "wealthy" seniors should pay just a little more to help "fill the bucket", as if it's their fault the bucket is empty and they should feel guilty for not "paying their fair share".

Doubtless, wealthy seniors would include my 70-year-old mother, who supported us as a single mom on a teacher's salary for 30 years before retiring to total pension/SS of about 35 grand per year plus the simple IRA, she responsibly socked away at 50 bucks a month for years and years. Since she owns a car and a tiny house outright due to decades of penny-pinching, she should have to pay a tax on those assets, dammit! She should be ashamed of herself for having a bit more when other people have a bit less. God forbid we direct attention back to elected thieves who spent the money she sent them every month before it ever had a chance to be deposited in a trust fund.

Ben

How did the money get stolen?

Don Levit

Treasury borrowed the money to pay for current expenses.
How they were able to do this, I do not know. They pull similar tricks with 28 other trust funds. Sort of a way of internally financing the government's expenses.
If an insurer did this, it would be placed in receivership.
Don Levit

JohnWDB

@Ben, it's more like the money was never really put in the trust to begin with. It mostly got spent before it was even received, and IOU's got deposited in the trust. Those now total some 2-3 trillion bucks. The point of the trust was for the "greying" of the population after the baby boom and times of economic hardship (when revenues fall). When social security runs a deficit, it should be covered by the trust, but the trust contains not money but debt.

This is why people say it's like a ponzi scheme. As long as revenues cover the payouts, no one is the wiser. When revenues fall below payouts, such as when the population is getting older and/or unemployment is high, social security is said to "run a deficit". Some like to pretend this needs a tax-payer funded solution, such as old people paying more taxes on their benefits, when in fact, the trust was supposed to cover this very thing. It's like Bernie Madoff telling old ladies he robbed that they need to chip in a bit to help pay off his massive debts, and making them feel guilty for wanting to keep some money for themselves.

James

JohnWDB: If you point at the politicians who spent the money, how can you not hold culpable the people who elected (and re-elect) them? At the end of the day, the ignorant electorate is every bit as culpable. We have a broken system of the stupid and the corrupt. The vulnerable just get hit the hardest because its easy.

And, yes, it is terribly, bitterly, ironic that the problems SS face today are exactly the problems the SS trust fund was originally designed to address. The Bernie Madoff reference is particularly appropriate as Washington has no problem finding trillions to bail out the financial industry and fund the super wealthy, but hems and haws over how to scrounge up repayments (because they have already paid in) for senior taxpayers.

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