Letter: Why Social Security is heading for a fall
To the editor:
Social Security is functionally bankrupt due to 40 years of dishonest politicians using our retirement funds to buy votes. This really started in 1968, but has continued unabated.
Yes, I know, that there is currently $2.5 trillion in special U.S. Treasury bonds being held in the "trust fund." But those bonds currently amount to worthless IOUs. If a corporation did this, its officers would be in prison, but for Congress it is business as usual.
What happens is: We pay our payroll taxes, and Congress promptly spends that and more, replacing this money with bonds. These bonds are a promise to pay in the future. There is no money to redeem these bonds. The Social Security actuary announced recently that this year Social Security will pay out more than it takes in, going "into the red" for the first time.
As time rolls on, this shortfall will have to be made up by the general fund. Currently Congress spends $1.5 trillion more than it takes in through the general fund. The national debt is already 98 percent of GDP. There is no more room for increased spending.
Contrast this with a corporation, which, if providing a pension, would have to invest the funds in that account and plan on the return. Social Security was initially set up the same way, with trust funds managed by portfolio managers to provide a return. The return forecasted was an unrealistic 6 percent annually.
When Congress spends the money, they tell the public that they are putting bonds with a yield of 5 percent in place, without acknowledging that these funds, as well as the original funds they have blown, must also come from the same place they are currently stealing from — the taxpayers.
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