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Once again, Bill Clinton
is trying to outdo Congress in protecting Social Security. Two years
ago, he challenged the Congress to save 60 percent of the surplus for
Social Security. In this year’s budget, Clinton is proposing a "Social
Security solvency lock-box" that is intended to secure every dollar of
the Social Security surplus for Social Security. While this plan may
conjure up images of stacks of cash waiting in Fort Knox for the Baby
Boomers to retire, the reality is that his plan leaves the vault empty
when the program begins to run large cash deficits in just 14 years.
There is only one place
to put the Social Security surplus - in the Personal Retirement
Accounts of hard working Americans
Clinton’s lock-box
plan is nothing more than a scheme to use more than $3 trillion in
Social Security surpluses to buy down federal debt. In exchange, the
Social Security trust fund gets another $3 trillion worth of IOUs. To
be sure, most Americans would rather pay down the debt than use Social
Security’s surpluses to fund pork barrel projects. But make no mistake,
once that money is spent – to buy down debt or fund new programs – it
will not be there to cover Social Security’s long-term liabilities.
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Why isn't the S.S. system solvent? Because it's been robbed to fund other programs. And, a give payments to frauds. Rose sharply when slick willie took office.
ReplyDeleteOn top of all that, people who intended to work long enough so that they could draw full or even maximum social security, who were over fifty found themselves without jobs or able to get hired when jobs where available because they were beat out by younger applicants. So they applied for Soc. Sec. as soon as they qualifed to get even the reduced payment. This in turn caused a larger than planned for demand on the Soc. Sec. out pay.
ReplyDeleteHere we go with the "lock box" again. There IS, nor has there EVER been a lock box! ALL S.S. funds are funneled into the general fund. A Ponzi scheme from the beginning.
ReplyDeleteThe Social Security trust funds are part of the national debt. FICA taxes can be either used to pay benefits or are "borrowed" and credited to the trust funds, thus increasing the national debt. If Obama refuses to pay benefits because he has exceeded the debt limit, any FICA taxes he diverts for his pals and pet projects will cause the national debt to increase further violating the debt ceiling. The only legal choices, as if Obama cares a fig about the law, would be to use FICA taxes for benefits or use FICA taxes to redeem bonds; any other use would just further add to the debt.
ReplyDeleteFreddie Sykes
Here we go with the "lock box" again. ...
ReplyDeleteLet's put the Archie comic away and pay attention to the date of the article. This was the semi-official, semi-premier of the "lock-box" device. Now clean the erasers.
I can always count on Libs to throw the Bush "raised our debt after Clinton balanced the budget" crap at me. Looking at bottom line numbers it appears so, until you find out Bubba "borrowed" SS funds to do that. More funny bookkeeping and another Clinton cancer cell planted in our body politic.
ReplyDeleteLt. Col. Gen. Tailgunner dick
The large Clinton revenues were based on the Biotech bubble, the Dotcom bubble and companies like Enron cooking the books; these lead to unsustainable capital gain revenues. The burst and the following recession lead to an uncharacteristic lowering of tax revenues due to capital loss deductions.
ReplyDeleteWe should stop taxing capital gains and allowing deductions for capital losses. The first increases tax revenue in good years and lowers tax revenues in bad times. We punish people who increase the country's wealth and reward those who decrease our wealth.
Freddie Sykes
The large Clinton revenues, I think, came from his being able to sell billions of dollars of property seized during the Savings & Loan bailout. The cost of the bailout went on Bush 41's ledger. Additionally, Al Gore's "reinventing government" initiative created huge cost savings. 99% from closing military bases and cutting the military budget. Even with all that, his economy was flat until the Republicans took the House in 1994, and forced him to, among other things, kick millions off welfare rolls and cut taxes.
ReplyDeleteThe S&L money went to the Demonrat cronies not the government coffers. The pressure on spending from a Repuke house helped. The fact remains that income tax revenue went up 50% from FY 1996 to FY 2000, from a little over $800 billions to $1200 billions. I contend that this increase was greatly helped by phony gains from market bubbles and cooked books and that they disappeared in the recession caused when the bubbles burst and the crooks were caught during the Bush years.
ReplyDeleteFreddie Sykes
The S&L money went to the Demonrat cronies not the government coffers. ?
ReplyDeleteHow did that happen - they were federal auctions. Can you point me to that story?
As usual, I am pulling my conclusions out of my butt but think that some facts support my premise.
ReplyDeleteI am referring to the fact that in the late 80s congress forced the S&Ls to dump all their "junk bonds" forcing them into bankruptcy. 90% of those bonds were paid in full but the S&Ls got dimes on their dollars of face value. The smart money then snapped up these bonds and made a killing. I know I am glad I bought some.
I would have guessed that the effects of S&L auctions - which I would have assumed were offered at bargain prices to cronies - were not much of a factor by the time the Republicans had an effect on the budget starting in FY 1996. Total federal revenue rose from about $1.5 trillion in FY 1996 to $2 trillion in FY 2000. $400 billion of this $500 increase was due to increased income tax revenue. By FY 2002, income tax revenue dropped back to $1 trillion, a 16% drop that I attribute to the effects of stock losses from bubble bursting.
Freddie Sykes