reply to post by queenannie38
Thank you so much for your post and links.
They've been very helpful. I've left aside, for a moment, the question of the starting year of the
charts, and looked at the Social Security information. It seems that we're quite close in our understanding of it. May I explain what I thought I
saw, and you can tell me if I've gone wrong?
Social Security was designed to collect more in taxes than it spends in benefits, and it has. In 2009 the total surplus they had collected was $2.5
trillion, and by 2020 it is estimated to be $4 trillion. This money has been lent to the government as a whole to spend as it sees fit. In return
the government has given the SS fund, treasury bonds, or "promises to pay," or IOUs. The government is also giving the fund about 5% interest on
the money it has borrowed.
In 2011, SS had to use $45 billion of its interst, in addition to all the money it received in taxes, to cover payments, and that number is expected
to rise. In 2030, the estimate is that the SS deficit will be over $300 billion, far more than the interest payments and taxes combined. According
to the SS 2012 report, all of the IOU's will be cashed in by 2033. After that they will only be able to make payments out of the taxes received,
meaning about a 25% reduction in benefits.
If you like long-term projections, the SS also uses a 75 year planning range. The shortage in the accounts by 2086 could be covered if the government
invested $11.3 trillion dollars today. The problem is being caused by fewer employed people paying taxes, lower wages paid to the workers, the baby
boomers retiring (and retiring earlier) and the increase in disability recipients.
So, now to your point. Where in the world is the money going? You know the answer: wars, Solyndra, bailouts, DHS, and anywhere else the government
wants to spend money. But as the years go on, the amount needed to pay SS benefits will grow. The more we spend on other things, the less will be
able to be paid out by SS, and the more drastically we'll have to change the system to keep it afloat.
But the thing is this...the economy began a decidedly worsening downward shift in the year 2001. And every year that follows, with nothing
changed that the events of that year instigated...i.e. continued increased military involvement in the world and war still in Afghanistan...the
national debt gets larger and subsequently the yearly federal budget reflects this...because debt continues to accrue but nothing can be paid back
since every penny possible must be spent on the expenses incurred by the activities of military and defense.
I'm not sure I can entirely
agree with you here. Our deficits have been over a trillion dollars a year for the last four years. The president has asked for $740 billion for
defense and the wars in the 2011 budget. In addition, Congress still has that sequestration issue to deal with, which may reduce defense even more.
Further, looking at the charts in The Huffington Post
article you linked, I saw that the deficit grew quickly under Bush from 2001-2003. Then,
surprisingly, it started to turn around and get smaller. Then, in 2007 and 2008 the deficit became huge. What happened? The war was still going on,
that hadn't changed. My belief was that the increase in the deficit for 2007-2008 was due to to the fact that for the first time in his
administration the entire Congress, both houses, were Democrat controlled.
I am wide open to ideas, but even eliminating the military completely will not be sufficient. Ok, let's not spend so much there, but where else can
we cut? Or should we change SS? Maybe make people retire at an older age? Raise their taxes? Reduce their benefits? I can understand why the
government has wanted to "kick the can" down the road, everything looks unpleasant.
As an off-topic aside, you may want to look for additional sources to The Center on Budget and Policy Priorities
. My first impression is that
they are not neutral. They have a section where they list the praises they have earned from various people. They have three from columnists from
The New York Times
and [/]The Washington Post combined, Vice-President Biden, a columnist from The Boston Globe
, and three others I
Again, I am very grateful for all the help you've given me in learning about this issue. If you ever think I can be of help to you, please U2U.