Monday, February 07, 2005

Saving the Social Security Surplus

     How's that for alliteration?
     A lot has been made on both sides of the fence that the "Social Security surplus" is a myth. They have a point - the SS trust fund had been raided by the Treasury department to help fund the government. Anyone ever wonder just how we can operate the government on a deficit year after year after year? Despite the fact that and Delta Airlines both seem to do it, the US of A borrows money. Two of the scariest places we borrow money from are foreign governments and from, you guessed it, Social Security. It's fairly obvious why it's scary to borrow from foreign governments. All of a sudden, they have power over us. We can have all the B2 bombers, all the "nukular" warheads in the world, but if they decide to stop supporting our debt, we may as well be owing Vinny from down the block the money, and we're about to lose our kneecaps.
     That's another issue, although it's related to why borrowing from SS is so scary. See, it's fine and dandy to be flip about the rape of SS and say that the trust fund is a myth and write off the money paid into it so far. Let's call it even and start over! Here's the problem. According to the Social Security Administration (which has a nice red & blue FAQ written by the partisans in the White House), we contributed a net $137.8 billion to the "mythical trust fund" last year. In the worst case scenario, the Treasury borrows all of it. If we fast forward to 2018 when revenue equals disbursement, or even look at next year if we "reform" the system, we need to come up with $137.8 billion extra for the government to run!
     It's absolutely true that if we continue on our current course, we're in for a world of budgetary hurt as the government struggles to pay back the fund's money. But there's not a single thing we can do to SS to fix that now. Even if we cancel the program today, where's that $137.8 billion going to come from tomorrow? Ouch. What's the solution to this? It all comes back to fiscal responsibility: Cut spending or raise taxes (or some combination of the two). Based on recent history, it doesn't look like the Republican congress is willing to do either.
     Which brings us back to the trust fund. It's not mythical. It's real. It is a real obligation the US Treasury has to us, the working public. If we decide to give the government a break and call off the debt owed to SS ($1.5 trillion and growing), good for us. But don't believe the shell game that says that reforming SS will fix any budgetary problem. We're in way too far over our heads for that.

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