A New York Times piece (6/17/11) on Social Security actually quotes a defender of Social Security–but as that source notes, “the context looks designed to refute me.”
In a story about the AARP suggesting that maybe Social Security benefits will have to be cut, the Times‘ Erich Lichtblau writes:
But other advocacy groups that are pushing to preserve Social Security benefits accused AARP of effectively abandoning its core constituency.
Doug Henwood, the Brooklyn editor of a liberal business blog and Internet radio program who has written on Social Security, said AARP’s willingness to consider cuts in benefits “reads like a sign that this former lobby for the interest of older Americans has now transformed itself completely into an insurance company.” He continued, “Surely they can’t be persuaded by the merits of the arguments, since the alleged Social Security crisis is a phantom that can’t survive a serious round of factchecking.”
The most recent estimates from the Social Security Administration, issued last month, indicate that under current law the program’s trust funds will be exhausted by 2036, and that $6.5 trillion in additional money will be needed over a 75-year period to pay all scheduled benefits.
In other words, it can too survive a serious round of factchecking!
Or maybe not so serious. Is it nicer to assume that New York Times reporters can’t use calculators, or that they count on their readers not being able to? That enormous $6.5 trillion number, divided by 75 years, gives you the not-so-enormous sum of $87 billion–a figure no one would blink an eye at if you suggested it was necessary to subdue some possibly terrorist-harboring rebels in Central Asia. This amount should be even less daunting in 2036, when it will begin to be required, and will likely be rather trivial in 2111–assuming things keep going on in the future roughly the way they have in the past, which is a necessary assumption to make if you’re going to pretend that making economic projections for a century in the future is in any way a meaningful endeavor.
Gee, is that the same AARP that wanted people to sign on with them for Medicare? How about their car insurance? Well, hey!
There’s an office (or offices) somewhere over at the U.S. Treasury Department where “trust” funds are managed, i.e., where the debt owed to “trust” funds is managed…well…where the “trust” fund cash that gets exchanged for IOU’s is called “investments”…and where those “investments” get managed. We can’t say that we’re really all that sure what goes on, except that there are some 20 or so “trust” funds involved (we think).
We’ve never been able to get anybody “somewhere over there” to answer our email. But we know the following person is listed as the “trust funds management branch (TFMB) contact” for the Federal Old Age & Survivors Insurance trust fund…otherwise (we think) known as the “social security trust fund”, i.e., “Trust Fund Name & Account Symbol: FOASI Trust Fund 28X8006 So-and-So (000) 000-0000 So-and-So@bpd.treas.gov“. Incidentally, the “bpd” in this person’s email address stands for the “Bureau of Public Debt”. So, that tells you something right there.
All of of the TFMB contacts (all of the so-and-so’s) are listed here: http://www.treasurydirect.gov/govt/apps/tfp/tfp_mgrlst.pdf.
Now, if you go to this link: http://www.treasurydirect.gov/govt/reports/pd/feddebt/feddebt_may2011.pdf, you can find (on p. 2 therein) a little something called “As of May 31, 2011, Intragovernmental Debt Holdings are owed to the following:”…and then this line as well, i.e., “SSA: Federal-Old Age & Survivors Insurance Trust Fund $2,446,613″. That’s in millions by the way, so it means $2.45 trillion (rounded).
Just in case this isn’t clear, we’re pretty darn sure (basically speaking) that the social security trust fund would have $2.45 trillion in it right now if the cash hadn’t been borrowed…whoops…”invested” in those good ole government securities and such that are backed by “the full faith and credit of the United States” (or however that line goes).
Of course, the United States is $14.3 trillion up to its eyeballs in “full faith and credit” type debt (that same p. 2 again, incidentally), and congress has to raise the debt ceiling so that the “interest” can be paid on the “investments” (and to borrow more money, of course). Whether or not the social security trust fund gets any “interest” on its “investments”, we don’t know.
We are, however, pretty sure that if you subtract $4.6 trillion from $14.3 trillion, you get $9.7 trillion…which is the external debt of the United States, e.g., China and other folks.
Where did we get $4.6 trillion? Well, there are a lot more internal (i.e., “intragovernmental”) IOU’s floating around than just in the social security trust fund. As a matter of fact, there is another $2.15 trillion ($4.6 minus $2.45) in said “intragovernmental debt holdings”, i.e., $2.15 trillion in IOU’s piled up in about 17 or so other major funds and trust funds. This includes $334.8 billion in cash owed to the “DOD Military Retirement Fund” (something that you might say we here have a “vested” interest in).
Like you, we’re getting a collective headache. But we think the picture is “sort of clear”. If the government wasn’t borrowing internally (and never paying it back), the U.S. would be “only” $9.7 trillion in debt, i.e., “total federal debt held by the public: $9,723,456” (to include the “Chinese public”). Again, that’s in millions, so $9.7 trillion (rounded).
Within the context of this web log, the point we’re making is that the social security trust fund would be perfectly “A Okay” if its $2.45 trillion in “paper” IOU’s was cash instead.
By the way, if somebody out there differs with us on the preceding, we’re open to all kinds of heavy duty suggestions. OKJGp┞¢
OKJack┞¢Group┞¢
Middle and Working Class Disabled American Veterans┞¢
We Paid the Dues that Aren’t Required!┞¢
And is that the same AARP that spends money from the elderly to send them a superficial periodical and masses of promotional mail, nearly on a daily basis, that goes straight into the recycling bin?
That’s the one! AARP always was an insurance company. That curtain all our wizards hid behind for so very long while we pretended to be a free nation of “we the People” is no longer necessary. Citizens United, a lovely curtain name itself, ended the charade. The flying monkeys will be here shortly for your dying carcasses.
AARP sold out completely during the Bush administration when they traded being able to sell insurance for allowing the donut hole and not allowing the government to shop around for the best medication prices. From that point on the quit representing not only the 55 and over but all Americans (except those working for AARP).
AARP has lost all credibility, unless your looking for insurance, what buggers! Social security has plenty of cash- -Think about it 2036- Please pay the fund forward now that wall street wrecked our 401ks. Seniors need more help!
AARP is worthless for seniors. They speak only for their corporate masters.