|
|
|
Social Security
PRESERVE AND PROTECT THE SOCIAL SECURITY TRUST ACCOUNTS WITH OPTION NOT TO PARTICIPATE
See the August 23, 2001 Update at the bottom
The Social Security System (officially, the Federal Deposit Insurance Corporation, or FDIC) was instituted in the 1930s, during the Great Depression, as one of the socialist 'New Deal' programs.
All minutia aside, the purpose of the FDIC was to provide a pension for all citizens of the U.S. once they reached retirement age. Fundamentally, retirement age is that point in time when a person is too old to work anymore.
Retirement age was fixed at 65, selected, most likely, from actuarial data provided by mortality statistics from whatever authoritative sources for that data. Thus, the FDIC deduction from the payroll check was added to the Federal Income Tax deduction, and placed in trust, to be paid back at retirement, with no interest on principle invested/deducted.
From observation, the following severe pressures were imposed on the solvency of the individual trust accounts (by Social Security Number, or SSN) as follows:
a. A deliberate inflation of national currency causes the purchasing power of funds in each SSN account to be diminished, such that the funds at retirement are not sufficient for life support at retirement. Consequently, a Cost-of-Living Adjustment (or COLA) was added to increase the amount of the Social Security check payment to retirees.
COLAs are paid for by increasing the FICA deduction. However, the purchasing power of the Social Security pension check is diminished proportionately as deliberate national inflation of U.S. currency (the U.S. dollar) occurs.
b. Purposes of the individual SSN trust accounts were expanded to include disability-before-retirement-age benefits, also paid for by increasing the amount of the FDIC deduction from payroll checks.
c. Recurring cries on some periodic basis from the establishment, that Social Security is headed for bankruptcy, has caused loss of confidence on the part of today's younger generation - "It probably won't be there for me to collect", is a common remark.
The causes of insolvency or inadequacy of Social Security funds has to be found in reasons other than a. and b. above. It could be that Social Security funds are tapped or used for funding more than a. and b. above - details and accountability of such extra expenditure of Social are simply not available to me, and I have not reseached for that data.
The bottom line is this: The zero inflation and the cost of borrowed money fixed at 5% does two things:
(1) zero inflation makes the requirement for COLAs disappear.
(2) zero inflation and the cost of borrowed money fixed at 5% insures that the purchasing power of the dollars placed into trust will not be diminished - that is, the purchasing power of the dollars in trust under each individual SSN account would not be diminished or changed over the working lifetime of the wage earner.
There is another point to be made clear. Social Security retirement pensions were never designed to provide the full income required for life support after retirement. Other investment such as Savings Accounts, Whole Life Insurance policies and/or annuities should be provided by the wage earner. The 401K plan with matching funds provided by employers is an excellent savings and investment program to supplement Social Security retirement pensions.
FREE CHOICE PARTICIPATION OPTION:
Any change to the Social Security system should allow the wage earner to decide, whether or not to include a Social Security deduction in their payroll check, including the percent amount of gross for deduction, not to exceed 15% of gross income (same as the maximum deduction for 401K payroll deduction).
Since the individual SSN accounts are trust accounts, and only supplemental to retirement income needs, any change should be limited to option to enter and withdraw from participation in the Social Security pension system, as personal circumstances dictate because of changes in employment, or location of employment, or changes of income.
As President Bush's Social Security Commission seeks to modernize the nation's retirement program, its members are reaching an inescapable conclusion. They must find a way to let the government wriggle out of re-paying $1.1 trillion the U.S. Treasury has borrowed from the Social Security trust fund over the past 17 years.
That money, about $8000 per worker, was used to pay for other federal programs, thereby reducing the federal deficit. Lately, with federal budgets in the black, Social Security funds have been borrowed to take the next step - paying down the national debt. In return, the government has issued bonds - essentially, IOUs - to the trust fund.
While it was assumed the loan would someday be repaid - mostly with income tax revenue - it now appears the debt (to the Social Security Trust Fund) will be absorbed by Social Security payroll taxpayers, 53 percent of whom earn less than $20,000 a year.
...Income taxes are paid primarily by wealthier Americans. ...
End of the August 2, 2001 Newhouse News report by Miles Benson.
Comment on the Facts:
Comment on False or mis-leading information
FACT: The Federal Deficit and the National Debt are one and the same.
The Federal Government of the U.S. has no intention of paying off the U.S. National Debt.
Why Not??? Because the total U.S. Money Supply, at the M3 increment of U.S. Money Supply, is the same money and money amount.
To reduce the national debt, which is the Federal Deficit, is to reduce the U.S. Money Supply.
Reduction of the Federal Deficit, which is the National Debt, means reduction of the U.S. National Money Supply.
The only proper and correct remedies are
End August 23, 2001 Update:
Bernard Palicki Return to All Issues Menu Return to Home Page |