Which Senate candidate is right about Social Security?

We find Democratic Senate candidate Jacky Rosen’s sanguine and naive response to the recent 83rd anniversary of Social Security Act disturbing to say the least.

Rosen put out a press release touting the fact she had met with a senior citizen group in Henderson to mark the anniversary.

“Social Security successfully lifts millions out of poverty and helps ensure economic security for Nevada seniors when they retire after a lifetime of hard work,” Rosen was quoted as saying. “These are benefits our seniors have earned, and Nevadans deserve another Senator who is committed to protecting and strengthening Social Security. Unfortunately, Senator (Dean) Heller is yet another Washington politician who wants to cut programs like Social Security and Medicare to pay for tax cuts for his ultra-wealthy donors.”

She paid no heed to the fact the so-called Social Security trust fund that she apparently wants to “save” is not going broke, but already is broke.

According to an article in The Hill by Merrill Matthews, this year Social Security must pay out more money than it receives from the payroll tax of 12.4 percent on current paychecks. This is the first time that has happened since 1982.

You see that trust fund of $2.9 trillion has already been spent and replaced with what are essentially IOUs. “Thus the government must borrow the money — or raise taxes — to redeem its IOUs so Social Security can pay benefits,” Matthews writes.

If some reform is not instituted in a few years benefits will have to be cut to 75 cents on the dollar or less.

Some have suggested cutting benefits for the rich and raising the retirement age. Others have suggested allowing younger workers to invest a portion of their payroll tax in private accounts.

Rosen specifically chastised her Senate opponent, Republican incumbent Heller, for having supported partial privatization in the past. Historically, such private accounts would likely pay retirees far more than Social Security ever can.

Rosen’s press release also screeched, “Sen. Heller is an architect of the reckless Republican tax bill that will add nearly $2 trillion to the debt and put Medicare and Social Security at risk,” paying no heed to the fact tax revenue has actually increased since the tax bill was enacted and the increased deficit and debt are due entirely to continued excessive spending by both political parties.

According to The Wall Street Journal, in the first 10 months of fiscal year 2018 revenues were up $26 billion, but spending increased by $143 billion.

No Band-Aid will stanch the hemorrhaging at the Social Security. It is fundamentally flawed. Eight decades ago when the Social Security Act was passed there were 40 workers for every retiree. The ratio is rapidly approaching 2 to 1.

Social Security was and is a Ponzi scheme. That’s when early investors are paid with money invested by newcomers. When the newcomers stop coming, the scheme goes bust.

Stephen Moore wrote an op-ed in Investor’s Business Daily a couple of years ago explaining, “From the moment Franklin Roosevelt created Social Security in 1935, the system was set up as a classic Ponzi scheme.”

Moore said there are options to fix the program, such as giving younger workers the option of partial privatization. For example, giving them the option of putting 10 percent of their 12.4 percent payroll tax dollars into an individual account. Moore estimated, “At historic rates of return, this would give workers a 7% return per year, which would let them retire as millionaires after 40 years of work. They’d receive two to three times more than Social Security promises.”

Or we can do like Rosen suggest — just wait for the whole darned thing to collapse. — TM

All editorials, Letters to the Editor, columns and comments are the sole opinions of the authors and do not reflect the views or opinions of Mesquite Local News.

 

 

Comments

  1. Ray Bacon says:

    There is another solution which while not perfect makes a huge step in the right direction. Congress could Index the SS retirement age to average life expectancy (ALE) minus some fixed number of years. Ten (10) years might be a good starting point and should never need to be adjusted. So if the ALE for men is 75 then retirement age would be 65 for men. The ALE for women is a couple years older (77) so the retirement age them would move to 67. The early retirement provision should go away. I am not sure it matters whose database is used to figure the current ALE as long as it is used consistently. As we get older, the retirement age would adjust every year a little and Congress should never need to deal with it again. Maybe the right fixed number is seven years, but either way this could be a one time fix to last for decades and perhaps never need congressional action again.

  2. What a disingenuous representation you make. The $3 Trillion in the SS Trust Fund has not been spent….it was invested in US Government Securities that are guaranteed by the Full Faith and Credit of the United States. Do you advocate the position that the US Government should default on its debt? If so, do you think it should only default on its debt to it’s own senior citizens from whom it borrowed the money? Or do you advocate defaulting on all of its debt, thus certainly losing its ability to borrow and most certainly losing the status of the Dollar as the fiat currency on which the world markets rely? Yes Thomas, the government DOES need to raise taxes on the wealthy and highest earners and corporations instead of continuing to lower their taxes while borrowing from others….that is true. If the US defaults on its debt then it really is headed for horrific times.

  3. Sid Lawrence says:

    If we could get our government to pay back the money they stole from SS under the pretense of borrowing it then, and only then SS would be solvent. The borrowing started soon after it was started as a safety net for workers. Congress and senate need to come clean on this despite not being the people who started siphoning money from that fund.

  4. Mike Young says:

    As most know, when Social Security was first introduced the life span was much shorter. Today with longer life span and in many cases longer work careers, increasing the age for benefits seems logical. One month a year for retirement seems reasonable until the age of 72 at least. Some of the state retirement funds using private investment strategy have done quite well as long as they are not controlled by the current governments. The trick it to keep the governments out as they are always hungry for more money. Make the money untouchable for any government entity.

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