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Sunday, August 7, 2005

Yes, Virginia, There is A Trust Fund.

Walter Shur, New York Life Insurance Company (Retired)

In a tour of the Bureau of The Public Debt several months ago, President Bush, commenting on the Social Security Trust Fund said, “There is no trust ‘fund’ — just IOUs that I saw firsthand.” That statement is, in its intent and effect, a repudiation of the public debt, and a clear violation of Section 4 of the Fourteenth Amendment to the U.S. Constitution, which states, “The validity of the public debt of the United States, authorized by law,...,shall not be questioned.”

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Posted on August 7, 2005  |  1 comment  |  Add your comment
Monday, May 23, 2005

The Right Tax To Pay for Social Security

Jon Forman, Alfred P. Murrah Professor of Law, University of Oklahoma

According to the 2005 Report of the Social Security Trustees, the Social Security system currently has a deficit of $4 trillion. To pay benefits for the next 75 years, the government needs $4 trillion more than it will collect in payroll taxes and interest over that period. How should the government raise that $4 trillion? The conventional wisdom says that we should either raise Social Security payroll taxes or cut Social Security benefits, but that's accounting nonsense. And it is keeping us from modernizing the Social Security system.

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Posted on May 23, 2005  |  1 comment  |  Add your comment
Wednesday, April 20, 2005

Social Security Reform

Dwight K. Bartlett, Fellow of the Society of Actuaries, Former Chief Actuary, Social Security Administration, 1979-81

President George W. Bush has made it clear that a high priority, perhaps the highest priority, item in his economic agenda for his second term will be the “partial privatization” of Social Security. He would allow younger workers to redirect a portion of their FICA tax from the Old Age Survivors and Disability Insurance (OASDI) Trust Funds into personal accounts, with a limited variety of investment options. The argument is-;»that such accounts will, on average, earn a higher rate of return than the trust funds do, resulting in ultimately larger benefits than the present program can sustain. It would also provide lower income workers, who find it impossible to save and invest at present, a sense of ownership of a portion of our economic pie.

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Posted on April 20, 2005  |  Write the first comment
Wednesday, April 13, 2005

Multigenerational Grand Larceny

Malvin Schechter, Freelance Consultant and Writer

What is so irritating to this Social Security taxpayer is that l have, in effect, overpaid my Social Security contributions since 1983 in order to build up the trust fund. The President insults me and other contributors by implying that the funds are tied up in worthless Treasury bonds, or lOUs. That's not what we were told when asked to dig deeper into our pockets. Moreover, if the objective of Bush's remarks is to prepare the way for a default on these Treasury securities, one wonders if he knows what he will do to the bond market and the pension funds that hold Treasury bonds: he is campaigning to discredit any Treasury bonds (and any corporate bonds, since they constitute lOUs, too).

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Monday, April 11, 2005

Social Security: What Now?

Laurence Seidman, Professor of Economics, University of Delaware

Social Security does not have to be changed to avoid a financial collapse. Even if nothing is done, benefits due under the current Social Security benefit formula will be paid until 2042, and after 2042 payroll taxes will be sufficient to finance a monthly benefit equal to 73% of the benefit due under the current benefit formula. This post-2042 benefit will be greater after inflation than today's benefit. In this sense, there is no crisis in Social Security.

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Posted on April 11, 2005  |  Write the first comment