Sunday, March 15, 2015
Gracious! Social Security Disability Trust Fund to Go Broke By Next Year? What Will People DO?
Leave it to deficit scolds like David Walker (former Comptroller of the U.S. - often mistakenly referred to as a "former Social Security official") to throw the fear of "the Lord" into millions of disabled folks by hinting their disability benefits will likely expire by next year.
That would leave an estimated 11 million people and their families (often with caregivers) in the lurch. Walker, in a recent interview on CNBC, claims it's inevitable as there is no real "trust fund" money left to pay benefits, only "debt". Technically, that would mean by early next year all payments would either cease, OR the monthly benefits would have to be severely cut - perhaps by 50 percent or more.
Walker testily asserts the only way out would be for the gov't to take money from the Social Security retirement trust fund and apply it to the disability trust fund. But he more or less compares such a move to musical chairs. Besides, he avers, that doesn't help the problems in the retirement trust fund which is also laden with "debt" only, no real instruments of worth to pay beneficiaries. To which I call bollocks!
Make no mistake that the enemies of Social Security - and there are many, like David Walker - continually go back to the same old tool box to make attacks- hoping that some of the shit will stick, and alas, a lot of it has- including that the Trust Fund is full of useless IOUs. But this is why smart people need to do themselves a favor and inform themselves on the facts. No better book can be found right now than 'Social Security Works' by Nancy J. Altman and Eric R. Kingson, which in their Chapters 8, 10 totally demolishes this "IOU" nonsense, showing these bonds carry the same weight as those dispensed to other countries, including China. In other words, they carry "the full faith and credit of the U.S. government" and - if ever betrayed - will show this nation can't be trusted to pay its just debts.
Does this former "comptroller" process any of that? No! Because it's easier to try to scare the Bejeezus out of vulnerable people and get their knees shaking. But because Walker is described (by CNBC) as a "former Social Security official" we are asked to take his warning seriously. But why should we when the bozo goes on to claim the general trust fund is approaching bankruptcy. Another wild canard since it is impossible for a program to go "bankrupt" if it has no creditors. On the other hand, Social Security is a creditor to the rest of the gov't - which has taken Social Security monies !
The following data shows how much has been raided each year through 2011, the data from the same Trust Fund sources and GAO:
Year: ................Amount raided
TOTAL: $2.63 TRILLION
This is what is now owed Social Security, and just as bonds comprise a form of instrumental debt owed, say to pay for a new school construction in a community - so do the treasuries the gov't owes to Social Security.
Yes, technically Walker is correct that the gov't will transfer S.S. bonds to the S.S. disability fund, but don't for a minute believe the trust fund for Social Security is a sham or worthless. This is just what Social security's enemies want you to think so we may conclude on that basis David Walker is an enemy of Social Security. He is certainly no friend with his snide and manipulative misinformation.
Further facts on Social Security:
1) Social Security's Trust fund has historically taken in more money than it pays out in benefits. Currently it is at $2.76 trillion and continues to grow.
2) Without making any changes whatsoever, current projections show Social Security will be able to pay full benefits through 2033.
3) With just a minor tweak to the payroll tax cap - raising it to a mere $300,000, full benefits would be able to be paid through 2100.
4) The system could easily be rendered 100 percent secure, even with higher disability benefits paid out, if congress would cease raiding Social Security moneys for current expenses, including wars.