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

2011.................$67.0 billion

2010.................$87.0 billion

2009...............$137.0 billion

2008...............$180.2 billion

2007...............$186.0 billion

2006...............$185.5 billion

2005..............$173.5 billion

2004..............$151.1 billion

2003.............$155.6 billion

2002.............$159.0 billion

2001.............$163.0 billion

2000.............$151.8 billion
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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.

How A Libertarian Cabal Plotted to Eviscerate Social Security

As President Obama prepares to deliver his budget tonight, and all eyes of an angry, hyper-aroused Left base are upon him as he plans to propose a 'chained CPI' to cut Social security benefits (as 'bait' to lure Repukes into a sequester spending deal)- it is useful to recall some recent history. This pertains to a decades old plot to defund, privatize and ultimately destroy the program - by using a strategic ploy first devised by Vladimir Ilyich Lenin.

This is timely, because I also believe this blog bears close attention from  Abby Huntsman and other Millennials, given the cabal that devised the plan factors them in as pawns to be manipulated. Normally, I’d not recommend specific books on Social Security to Millennials, aka the Generation Y cohort, but in this case I believe their attention and reading will enable them to escape ongoing exploitation by the Neoliberal-Libertarin 'Axis of Economic Evil' out to use them for its own purposes.

This book: ‘The Plot Against Social Security’ – by Michael A. Hiltzik, will make them aware of a decades old plan to turn generations against each other, while at the same time copying a political strategy hatched by Vladimir Ilyich Lenin (yes, THAT Lenin) to incite that detrimental change and enlist Social Security’s own putative ‘friends’ against it by appeal to political  “mind-fucking” (my term).

We learn in Hiltzik’s book (p. 18) that the plan was spurred after a (1983) Reagan administration plan to slash Social Security benefits sent 26 Republican congressmen crashing to defeat. At that point Social Security’s reputation as “the third rail” of American politics was born. But some ensconced in libertarian quarters weren’t happy. According to Hiltzik (ibid.):

“The following year, a privatization blueprint written by two analysts at the Heritage Foundation (Stuart Butler and Peter Germanis) surfaced in the libertarian CATO Institute’s  CATO Journal. Mischievously entitled, Achieving A Leninist Strategy. –  the article observed that while Social Security was certain to collapse someday under its own fiscal burdens, it was worth examining the Bolshevik leader’s precept that even a preordained revolution often needs to be jump-started by an elite vanguard.”  

These CATO vermin understood the key to enabling more open attacks on Social Security would be to undermine its reliability. People had to be made to believe, little by little, that the program could not deliver what it promised over the long term. So long as the reliability remained unchallenged, any politician that sought to change it, by reducing its benefits, would be served up ready roasted on the 3rd rail.

The CATO pests also realized they needed to employ a “divide and conquer” template to try and set younger generations-workers against the older. Betting on the ignorance or lack of attention of the young to the issue, they wagered they could eventually parlay their concept into a full-fledged triumph. Some excerpts from their tract:

"We (must)…construct … a coalition that will … reap benefits from the IRA-based private system … but also the banks, insurance companies, and other institutions that will gain from providing such plans to the public.”


“The first element consists of a campaign to achieve small legislative changes that embellish the present IRA system, making it in practice a small-scale private Social Security system.

“The second main element … involves what one might crudely call guerrilla warfare against both the current Social Security system and the coalition that supports it.”

“The banking industry and other business groups that can benefit from expanded IRAs …… the strategy must be to propose moving to a private Social Security system in such a way as to … neutralize … the coalition that supports the existing system.”

Hence, according to Hiltzik:

“The key to securing reform, they said, was to ‘cast doubt on the picture of reality’ promoted by Social Security’s supporters. This required ‘guerilla warfare against both the Social Security system, and the coalition that supports it’”


Additionally critical was to breed skepticism in the young that they’d receive a thin dime from the program, hence might be more disposed toward privatized solutions or outright cuts. Naturally, the themes of “permanent fiscal crisis” together with “Ponzi scheme” were soon adopted, especially after payroll taxes were increased in 1983 to accommodate the coming Boomer onslaught. (One reason why the other bollocks that “there aren’t enough workers” doesn’t hold water.)

In a more recent piece Hiltzik wrote last year for the LA Times (Attacks on Social Security, Medicare borrow a strategy from Lenin)  he noted:   "The answer, (Butler and Germanis) concluded, was to “neutralize” elderly voters while continuing to undermine confidence in Social Security among the young. Their model was the Leninist movement’s “success in isolating and weakening its opponents.”

Any plan to change Social Security, they wrote, “must therefore be neutral or (better still) clearly advantageous to senior citizens … the most powerful element of the coalition that opposes structural reform.”
-----

The young, by contrast, were "not organized to support privatization", and "uninformed about its virtues.”

Hiltzik observes these libertarians intended to “fill the knowledge gap” by making use of the financial industry, i.e. to impart faux beliefs to the young. This then is where the younger generations must enter. Then, hopefully, by educating themselves (say starting with Hiltzik’s book) they won’t fall into the mind trap that Abby Huntsman did on the Bill Maher show. They will, instead, recognize an insidious, cynical con when they see one and not take the bait.

If they also know there is a plan  that ultimately harms them too, and they recognize the plan describes a smokescreen strategy (that distracts people from seeing what is happening to them),  then  sthey should be able to see the plan unfold step by step … hence can stop reacting to the cover story meant to distract them!  In this case, the Millennials  can start fighting back as opposed to becoming willing and unknowing (unconscious?) pawns like Abby Huntsman displayed.

Next time any cheeseball pundit says:  “Social Security is going broke!” or “Social Security is making the debt worse!” the astute citizen can see what is going on in a whole different way. Social Security is not “going broke” and Social Security does not add to the debt.  Nor can it go "bankrupt" because it has no creditors against it - rather the U.S. gov't OWES Social Security via Treasuries to make good on ITS debts to the program!

See also: http://www.smirkingchimp.com/thread/gaius-publius/48988/obamas-budget-takes-more-from-seniors-than-from-the-wealthy

http://www.smirkingchimp.com/thread/norman-solomon/48990/time-to-bell-the-obama-cat