Government Should Level With Public About Social Security Trust Fund

By on September 21, 2012 in News, Retirement

The Security Trust fund is empty.  It contains no bonds or anything else of value.  This has been true for the past 30 years, but the public has been misled to believe otherwise the whole time. 

On January 21, 2005, David Walker, Comptroller General of the Government Accountability Office (GAO), made a public statement that was designed to make it clear that the trust fund did not hold any real assets.  Walker said, “There are no stocks or bonds or real estate in the trust fund.  It has nothing of real value to draw down.”

The intent of the Social Security Amendments of 1983 was not followed. The surplus Social Security revenue from the tax hike was supposed to be saved and invested in marketable Treasury bonds to build up a reserve with which to finance the retirement of the baby boomers. But that didn’t happen.  From the time the first surplus revenue arrived in 1985, until the surpluses ended in 2009, all of the Social Security surplus revenue was deposited into the general fund where it became indistinguishable from other federal tax revenue.  The Social Security money helped to finance wars and other government programs. But none of it went to Social Security.  The actual money was replaced with non-marketable government IOUs, called “special obligations of the Treasury.”  These IOUs are not at all like the marketable Treasury bonds held by China and other U.S. creditors. They are nothing more than an accounting record of how much Social Security money was spent for other purposes.

Some members of Congress spoke out against the misuse of the Social Security money more than 20 years ago.  The late Senator Daniel Patrick Moynihan (D-NY) was so outraged by the misuse of the Social Security money that he introduced legislation that would repeal the 1983 payroll tax hike and return the system to “pay-as-you go.” Moynihan’s position was that, if the government could not keep its hands out of the Social Security cookie jar, the jar should be emptied so there would be no Social Security surplus.  Senator Ernest Hollings (D-SC) felt compelled to warn future generations about the bogus “securities” in the trust fund.  During a senate speech on October 13, 1989, Hollings warned that, “in the next century…the American people will wake up to the reality that those IOUs in the trust fund vault are a 21st century version of Confederate bank notes.”

On March 16, 2011, Senator Tom Coburn (R-OK) uttered the following words during a Senate speech:

“Congresses under both Republican and Democrat control, both Republican and Democrat presidents, have stolen money from social security and spent it.  The money’s gone.  It’s been used for another purpose.”

Every word that Senator Coburn spoke was absolutely true, and all members of Congress, and the President, know that they are true.  But the Senator’s public admission that he and his colleagues had “stolen money from social security” got amazingly little news coverage.  Probably the only consequence of Coburn’s statement was that, most likely, Senator Coburn was privately chastised by members of both political parties for daring to admit that Congresses and Presidents from both parties had misused Social Security money.

Some individuals and organizations continue to claim that the Social Security trust fund does hold enough real assets to pay full benefits for another 20 years.  But they are wrong.  The Social Security Trustees, including the Secretary of the Treasury, the Secretary of Labor, the Secretary of Health and Human Services, and the Commissioner of Social Security are the ultimate authority on the financial status of Social Security.  In the Summary of the 2009 Social Security Trustees Report the following definitive statement is made.

“Neither the redemption of trust fund bonds, nor interest paid on those bonds, provides any new net income to the Treasury, which must finance redemptions and interest payments through some combination of increased taxation, reductions in other government spending, or additional borrowing from the public.”

If anyone still had doubts about whether or not the trust fund holds real money, President Barak Obama inadvertently set the record straight during an interview with CBS News on July 12, 2011.  It was during the stalemate over raising the debt ceiling.  President Obama was asked if he could assure the American people that Social Security checks would go out on August 3 as scheduled, even if the debt ceiling dispute was not settled.  President Obama said, “I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it.”

If Social Security had its own bank account with surplus money, why couldn’t the Social Security payments have been paid with that money? Why would Social Security payments be dependent on an increase in the debt ceiling?  The answer is that, since 2010, the Social Security tax revenue has been insufficient to pay full benefits.  The government had to borrow $49 billion in 2010 and $45 billion in 2011 in order to pay full Social Security benefits.  And the amount of money that will have to be borrowed in the future to supplement the inadequate Social Security tax revenue will increase at an increasing annual rate.

There is no money, or assets of any kind, in the trust fund.  The only thing it has is those worthless IOUs that cannot be used to pay benefits or anything else.  Every member of Congress and the President have known this basic truth for years.  Yet, the vast majority of the American people are still convinced that the money is there.  It is a basic fact that all of the surplus Social Security money was spent on other things, as it came in, over the past 30 years.  The president and members of Congress know all about the spending of Social Security money for non-Social Security purposes, but the American people know almost nothing about it.  The public has both a right and a need to know about the looting of Social Security and the empty trust fund.  And they need to know it before any action is taken with regard to changes in benefits.  But most politicians do not want the government to have to repay the $2.7 trillion of looted Social Security money.  That is why so many are calling for cuts in Social Security benefits. 

There has been a deliberate effort by the government, the AARP, and some other senior organizations, to lead the public to believe that the Social Security surpluses were saved and invested as planned, and that the trust fund now hold enough assets to pay full benefits for more than 20 years, without any government action. But that is a lie. And don’t expect to get much information on the trust fund from the official website of the Social Security Administration.  This site is designed to confuse people about the true status of the trust fund.  If you can navigate deeply enough into the official site to even find mention of the trust fund you will find a lot of double talk.   For example, the site makes the following statement:

The Trust Funds can hold both regular Treasury securities and special obligation securities issued only to federal trust funds. Currently, all securities in the Social Security Trust Funds are special obligations.

The Social Security surpluses were supposed to be saved and invested in “regular Treasury securities.”  With this statement, the Social Security Administration is admitting that currently there are no regular securities in the trust fund.  The only thing it holds is “special obligation securities,” which cannot be held by anyone but the trust funds.  These are simple IOUs that are not marketable, and they have no value.

The government has been pulling the wool over the eyes of the public for the past 30 years.  The President and the Congress know that their efforts to hide the looting from the public have been successful.  Most Americans have been “programmed” to believe something that is not true.  This big lie must be made public.  If it is made public, I think it will become a national scandal that might make Watergate pale by comparison. 

© 2016 Allen W. Smith, Ph.D.. All rights reserved. This article may not be reproduced without express written consent from Allen W. Smith, Ph.D..

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  1. Wolfie52 says:

    Lets face it, those who say “Congress” stole it are wrong. We stole it. We want to have everything, right now and not have to pay for it!! Look at personal debt over the last 30 years; look at local and state debt over the same time frame; up 100’s of %.

    MY neighbors used to have a Mercedes in their driveway until “their” house was foreclosed.(I use only 1 as an example but I have many more just like them in my own “wealthy” neighborhood!) There is no delayed gratification anymore– we all want something for nothing! And it is not going to end well.

    • grannybunny says:

      You’re right. Americans want the government services that benefit them, but don’t want to pay the taxes to support those services, especially the wealthiest among us.

  2. jo jo hobo says:

    No money in SS. Then we all should STOP PAYING TAXES

  3. DLFJ says:

    @MWM. The trustees WOULD prefer to hold marketable UST debt if they wanted to be able to buy and sell treasuries in the global marketplace. The only advantage to the non-marketable version, otherwise known as the Government Account Series is that this series pays a higher, managed amount of interest. You can Google GAS interest rate and see what is currently being paid. Since we are “paying it to ourselves” it doesn’t really matter what the interest rate is, it is largely a formality. We will borrow or create whatever amount needs to be paid.

    @justanavrerageguy:disqus. No, you are dead wrong. They have not started paying it back. To do so, would be to pay all the social security needs of the year and then make an additional payment on top of that, that actually reduced the outstanding balance. The balance BTW is much larger than the $2.8T mentioned, which is just the GAS issued to the social security trust fund. It is the single largest, but the money has been borrowed from a wide variety of funds many of which you have never heard of such as the Highway Trust Fund, or the Military Retirement Trust Fund.

    I was thinking about this recently, how most people know that they pay 6.2% of their paycheck toward social security, and their employer matches that. People may not know the exact percentages, but they get the general idea. And then Medicare adds another piece. But this framework helps support the illusion that somehow these funds are sequestered, and your 6.2% goes toward social security at all. Heaven forbid you think your 6.2% somehow is earmarked toward paying YOUR retirement. When in reality it all goes into the pot, gets spent, and the government will print or borrow whatever it needs to to make up the difference. The 6.2% is quite arbitrary in terms of solvency of the system, though it does account for a very real amount that gets deducted from your paycheck.

    • grannybunny says:

      I doubt if too many people believe that Social Security and Medicare taxes are “sequestered” or “earmarked” in separate individual accounts. Our taxes would be many times higher, were that the case. A lot of people falsely — in my opinion — accuse Americans of being a bunch of know-nothings. Please give people a little credit for understanding how our basic systems work.

  4. RICHEIVILIN says:

    TAX THE 1% AND CORPORATIONS AND PAY IT BACK.

  5. MWM says:

    why would the SSI trustees want to hold only non-marketable securities? If they bought marketable UST debt would they then have to mark-to-market those securities?

  6. justanavrerageguy says:

    The $2.8 trillion has been borrowed by the
    gov’t, and they have already started paying it
    back as there have been modest shortfalls over the past
    few years. The money hasn’t been stolen as the
    scare mongering author states, unless and until the feds
    cut benefits such that money into the system equals money
    out to beneficiaries, and continues over a period of time.

    I think the feds will eventually be forced to raise
    the cap and slowly increase FICA. They risk much
    if and. when it becomes clear to the public that
    they instead intend to dismantle and privatize
    the system. In any case, this author has a weird
    slant on things which is a disservice to the public.

  7. New Retiree says:

    Congress stole our money and used it for “special interests.” Congress was bought and paid for by the monied lobbyists whose bosses pay very little towards social security because of the cap. Congress should get our money back from those “fat cats” who didn’t suffer from the economic collapse and repay us. Instead, Congress is going to slash our benefits (and punish us) because you can never trust a thief to voluntarily repay the victim.

  8. Douglas Pauschert says:

    the gov can’t take ss of the debt as it would ad 2.7 trillion more to the debt.also they cant pay back the 3 trillion or so that they owe because that would ad another 3 trillion more so the real dept would be around 22 trillion,big gov sucks the live out of our country!

    • grannybunny says:

      There’s no such thing as a free lunch.  Americans were allowed to pay lower taxes because Congress was funding other programs with the surplus in the Social Security Trust Fund.  Now, that there’s no longer a surplus, we will have to find ways to increase payments into the fund, such as by lifting/raising the earnings cap on contributions.

  9. Czkid1 says:

    The original CSRS retirement fund was independently  managed for years by and outside banking system (of which I don’t know the details), and the Fed tried for years to get it in to the General Fund, which thru some shenanigans of which I know nothing, it finally ended up in the General Fund (I guess it just got moved arbitrarily without our knowledge); anyway, that’s how our CSRS became an endangered species……………………..

  10. Aaorchid93 says:

    i guess i am one of the uneducated millions but that just scared the *x**!y* out of me.   What can the average joe do to help fix this?
     

  11. ShickshinnyChuck says:

      I wonder how soon Congress will determine that raiding the Thrift Savings Plan coffers must be done “for the good of the country?”

  12. Pauldots says:

    He quotes Walker of the Peterson Foundation, a person and organization intent on privatizing social security? What gall. Why doesn’t Smith advocate for the lifting of the social security payroll cap. Doing so will eliminate any shortfalls and reduction of benefits. But then again, the rich get away from paying their fair share.  Paul Russo  

  13. SteveI46 says:

    Here’s the scenario:  Mankind is in rebelion against the God of Heaven.  Don’t expect man to fix anything.  But, we can invade and conquer (nuke ’em if necessary) ALL nations that hold our debt.  All foreign debts would therefore be cancelled.  During the war build-up all American factories will again be humming, just as in WWII.  It won’t matter that there is no real money to pay anyone with: there’s no real money now.  When all that’s finished, zero all the books, ergo no national debt, no Social Security shortfall, no nuthin’.  We’ll all go peaceably into squallor, hoping for the day, because a Strong Man, energized by Satan, will emerge who will attempt by his own wit to rule it all.  He will fail but the whole earth will be a shambles.

    And then The Just One, The LORD Jesus Christ, will arrive from Heaven to right the wrongs and usher in 1000 years of peace, longevity and prosperity.  There’ll be one last rebellion, a great war, a great judgment were all the rebels (living and dead) are committed to the fire, and then a new heaven and a new earth.

    I hope you’re not a rebel.

  14. GiGe says:

    Government should level with the public ON EVERYTHING. No lies, no deceit, tell it like it is so we ALL know what we are up against.

  15. Opinionated_Lady says:

    Don’t be fooled by these continuous assaults on our intelligence.  We are being conditioned to accept a reduction in benefits for future generations in order to sustain Defense spending and low tax rates for the countries’ wealthiest individuals and corporations. 

    Beware of any politician who says s/he wants to strengthen SS or that s/he believes in shared sacrifice, which means less for you and more for a smaller and smaller percentage of the population.

    SS is a pay as you go system.  Workers today pay for the benefits of current retirees.  The trust fund is not a lock box.  Is it any wonder when unemployment is high and workers are accepting lower wages just to become employed, and the tax rate has been reduced for 2 years running, that “worthless IOU’s” had to be redeemed? 

    Our currency, all Treasury securities and the SS trust fund are based on the full faith and credit of the United States.  If the trust fund is not “trustworthy” then look for much worse to come.  There is a lot of money in this country, but it’s being held by folks who want government workers and the population in general to be persuaded that they should continue to be advantaged at our disadvantage.

    In short, don’t drink the Kool Aid.  Long term deficit reduction over immediate austerity, will get us to a happier and more prosperoous place.  Revise  the tax code to eliminate subsidies to corporations that ship jobs overseas and are reaping record profits, increase rates for capital gains. let the gov invest in our broken infrastructure, raise the minimum wage and watch the tide lift all boats.   

  16. TruthMattersForSS says:

    This article is HOGWASH !!! There are 2.7 trillion sitting in US treasuries in the trust funds. Wall street wants the money pretty bad so they can invest in leveraged derivatives and cause the demise and bankruptcy of SS. 

    http://www.ssa.gov/oact/progda… 

    • coelacanth10 says:

       There are 2.7 trillion dollars in I.O.U.s sitting in the treasury. This is why we need to slash the size of government now.

  17. Guest says:

    Typical things politicians do.   Just like the money collected from the USPS to pay 75 years of future payments for retirees in only 5 years that probably goes into the general fund to help lessen the deficit.  If it is ever returned to the USPS it will probably be added to the deficit even though it wasn’t money collected in taxes, but revenue from stamps, etc.  When it was paid in it was probably counted as positive revenue.

  18. Littleann says:

    The majority of the American people have their heads in the sand!  It is about time to wake up & take our country back from the greedy politicians.

  19. GiGe says:

    Our only hope is to get the current and next generations gainfully working and paying into SS so that those that are currently paying in see the benefit of it. But once they know it has been looted things could change for the worse or just maybe someone in the future will have the nads to stand up and finally fix it and stop the looting.

  20. Larry says:

    If you want to know what is really happening, read Andy Andrews book entitled: “How Do You Kill 11 Million People”?  History does repeat itself and it is repeating itself once again.  All we can do is vote and keep sending new people to Washington to represent us, the American People and not the private interests that seem to be pulling all of the strings.

  21. grannybunny says:

    The special obligation securities are only worthless to those who do not believe in the Full Faith and Credit of the United States of America.  Prior to last year’s debt-limit debacle in the House of Representatives, no reasonable person doubted our Nation’s resolve and ability to pay its just debts.  Now, we are at the mercy of cynical political partisans who place their extreme ideologies over the welfare of the Country, and the World.  There are many steps that can — and should — be taken to strengthen Social Security, so that it can continue indefinitely, such as:  eliminating the income cap on contributions, allowing immigrants to legally work in the US, etc., and they need to be diligently pursued.

    • I want to believe says:

      Full Faith and Credit of the United States of America  implies that all of the resources of the Nation will be tapped before the government defaults.  But we are living in a time when there is no stigma associated with not payng your bills.  You have to be very niave to believe the public will commit to honoring public debts at the cost of higher taxes or loss of services.  States and local governments are already defaulting on debts and obligations incurred under their “full faith and credit”.

    • Daniel Herring says:

       Your solution sounds simple to eliminate the income cap on contributions. In the short term it may even work. The problem is for every $10 dollars revenue is increased…our politicians spend $15! Is it that incoming revenues are to small or that living within their budgeting has been lackadaisical? If politicians were held to a standard that their increases in pay & benefits depended on whether or not they stayed under budget….you would see a monumental swing in their frivolousness!

  22. msgrowan says:

    The saddest aspect of the situation described in the article – every word of which is true – is that it has long been well known, as indicated by the cited past quotes from politicians of both parties and statements in official and openly available government documents.  In addition to those so cited, OMB has also openly admitted that there is no inherent monetary value in the Social Security “special obligation” bonds held by the Treasury’s Bureau of the Public Debt.  However, this unpleasant reality has never been able to dent seriously the widespread public perception (occasioned perhaps by unrealistic wishful thinking) that there exists a Social Security “trust fund” that holds the actual surplus cash balance accumulated over decades from FICA tax receipts and which can fully fund benefit payments until the early 2030s with no immediate intervening action being necessary to deal with the now growing shortfall of incoming FICA tax receipts, which are increasingly far less than needed to counterbalance outgoing benefit payments.  This erroneous perception is not helped by comments such as that by Senate majority leader Harry Reid several months ago, who said that there would be no problem in meeting Social Security benefit payment schedules for the next 20 years and that therefore there was no need to deal with the Social Security viability issue until then.  The Simpson-Bowles debt reduction commission, established by President Obama to assess and come up with recommendations to deal with our ballooning national debt, did not include Social Security and Medicare in the scope of their study, as the President ruled those as being out of bounds.  However, as such entitlement programs, due to the past fiscal folly and mismanagement of the pols of both parties, are now in jeopardy and increasingly adding to the scope of the horrendous borrowing needed to fund our current bloated government spending, the complacent ostritch-head-in-the-sand approach (which is a calumny on ostritiches, by the way) of Senator Reid and his ilk seem ever more surreal.

    • Black_Diamond says:

      So the us will default on these bonds. I bet you 100k you are wrong. Some have been redeemed already. lol

      • Bgboettch says:

        You may be right in the long run…and what will that $100k you’re betting be worth if you’re wrong?  What’s a dollar worth today, or any day?  The paper it’s written on, backed by the full faith and credit of the US government.  Take a dollar bill to the Federal Reserve and demand a dollar…you won’t get anything more than another piece of paper, although if you take 100 copper pennies you may be ahead.  That’s the “standard” of value that governs the value of the notes you carry in your pocket and the numbers in your bank account statement.  I used to laugh at my old man years ago and his tales of five cent Cokes and two cent newspapers…what are you paying for those same goods today?

  23. grannybunny says:

    The special obligation securities are only worthless if one does not believe in the Full Faith and Credit of the United States of America.  Before last year’s Congressional debt limit debacle, no reasonable person doubted our Nation’s resolve and ability to pay its just debts; America’s word was its bond.  Now, we find outselves at the mercy of cynical political partisans who place their extreme ideologies above the welfare of the Country, and even the World.  There are numerous steps that can be taken to strengthen Social Security so that it can continue indefinitely — such as removing the income cap on contributions, allowing immigrants to legally work in the US, etc. — and they should, and likely will, be vigorously pursued.

  24. Womanphoenix says:

    Oh, no.  Not the Bogosity Trifecfta again!

    The only danger Social Security is in, is from the people who want to scare you into turning over the (very real) trillions in its trust fund to privatizers.  They have been trying this for years now:

    http://www.dailykos.com/story/

  25. Serf in USA says:

    “The last official act of any Government is to loot the Treasury”.  -George Washington

    Same with “quantitative easing”; buying your own bonds, i.e, printing money….
    That’s the only way I can see the government “honoring” it obligations; printing money to pay a defined benefit which immediatly becomes worthless due to hyperinflation.  “Hey, we made the payment.”

  26. Fed Peasant says:

    Before the crash of 2008, private companies were notorious for taking “excess profits” from the employee pension funds.  It was legal.  The markets went up, up, up!!!  Few even cared!!  In some cases, the PBGC (federal) had to rescue insolvent pension funds, at these companies, as markets turned sour.  If looking to the private sector is the solution….SORRY….THAT’S FOOLS GOLD!!!

    • steve5656546346 says:

      The government is the problem.  The Social Security mess is a Federal mess.  The PBGC is Federal.  The regulations that allowed companies to take that money were Federal.  The reason that individual employees and/or retirees could not successfully sue the companies over their actions was due to protections provided by Federal law.

      • Black_Diamond says:

        private companys all have problems too and most fail within 7 years. You are way too gloomy

      • Retired Army Veteran says:

        This is the logic used by the Tea Party hypocrites. If the Bankers/Hedge Fund crowd crash the economy, “its the government’s fault!”  If the government proposes to regulate the economy, “the government’s at fault for too much regulation!”  If the government has TSA screen passengers throughly, “the government’s at fault for invading privacy!’  If terrorists get thru screening, “It’s the government’s fault for not detecting them!”  If the government spends money to protect an embassy, “the government is at fault for spending too much money!” If the embassy is attacked, “it’s the government’s fault for not protecting the ambassador!” Grow up and get logic (an integrity while you’re at it….)!

        • Independent2012 says:

          Yes, it IS the government’s fault (for the most part) for crashing the economy, and for too much regulation, and for invading privacy, and for spending too much money.  If you think otherwise, you are dreaming, or you’ve been smoking something.

      • $31427826 says:

         I beg to differ with you steve.  The problem has been Congress not the federal government.  Congress wrote the laws, the government enforces them.  Congress and politicians like Ronald Reagan, the first one to raid Social Security for the general Treasury.

      • grannybunny says:

        Actually, it think it was deregulation “that allowed companies to take that money.”  Yes, our system of government is a mess, until you compare it with all the other systems out there, especially including alot of state and local governments.

  27. Black_Diamond says:

    Yes he is right if You think US Bonds have no value. Our money was lent to the government and spent just like when the bank lends you or a corporation money and they spend it. Someone needs to understand basic finance and economics. Money is ALWAYS lent based on the ability of the borrower to pay back the loan. Does anyone NOT beleive the government wont pay back the loan? If the US defaults we are in the worlds biggest depression since the Dark ages of 460 AD to 1400.

    • Cleasachd says:

      Welcome to the Dark Ages.

    • steve5656546346 says:

      Yes, we will are facing a huge depression:  a government cannot go on indefinitely buying votes with money it does not have.  This is shown by history, and the current economic problems in Europe.  We are in for real tragedy if we don’t change our course NOW.

      • Black_Diamond says:

        i have faith that We will face the issue. Everyone who has bet against us has lost. Ask George  III, The kaiser, hitler, and Ben Laden. If we fail, the whole world will fail. AND it aint gonna happen

    • msgrowan says:

      The problem comes in your blithe assumption that the government can be counted on to “pay back the loan” on an indefinite basis.  With the growing shortfall between incoming FICA tax receipts and outgoing Social Security benefit payments, it is now increasingly necessary for the government to meet its obligations in paying these benefits to redeem the cited “special obligation” bonds by further expanded borrowing, as there is no inherent value per se in these bonds themselves.  There must come a time when this inherently unrealistic broader borrowing strategy will collapse of its own weight.  That may come sooner than many want to believe, as the current artifically low interest rate levels – driven by the Federal Reserve’s “stimulus” policy – must eventually end, at which point the rising interest payments on the principal of our currently close to $16 trillion national debt (which essentially also equals our current national GDP) will skyrocket. Servicing that debt will ever more increasingly consume Federal revenues and drive ever more increased borrowing.  The Fed can “print money” to stave all this off for a while, but the inevitable soaring inflation that causes will bring with it an inevitable day of reckoning.  If you want to believe that our current highly and increasingly unstable fiscal crisis will never enhance the probability of default, you’re welcome to such a touching “and they lived happily ever after” fairy tale.

      • grannybunny says:

        I can’t speak for Black Diamond, but I don’t read his comment as blithely making the assumption that the current situation is permanent, or indefinite.  And there are alternatives to borrowing — although they might not be acceptable to the Grover Norquist crowd — such as increasing revenues through taxation, the prime example of which in this situation being to remove the income cap on Social Security contributions.  Another alternative to borrowing is to increase revenues by continuing to grow the economy, rather than engaging in a short-sighted, counterproductive, austerity campaign focused solely on the deficit; recent events in Europe have amply demonstrated the folly of that approach.  There are also numerous proposals that have been made to shore up Social Security itself, so that it can continue on in a self-supporting manner, but those are a whole other story, not on point to this article.

        • msgrowan says:

          We can agree to disagree on the necessity for austerity, while the enhancing revenue option, a.k.a. increased taxation, may indeed be part of a solution, if done strategically.  If the rate of increase in governmental spending, however, does not abate, increased taxes – even to the extent they are agreed upon to be devoted primarily to debt reduction – will not be anywhere near sufficient to reverse the present adverse trends.  There are no easy answers, no “low hanging fruit,” as the saying goes.  What’s yet to be accepted by the pols – as well as the general public – is that ALL stakeholders are going to have to grit their respective teeth and recognize that the ongoing model of seeking to “rob Peter to pay Paul” can’t work anymore, if it ever did in reality.  That means ending corporate welfare and the maze of tax loopholes and “perks” in the U.S. tax code as well as judicious tailoring of various other benefit programs targeting various clienteles of both parties.  This will entail the need for serious, responsible leadership, which has been lacking on both sides until now, rather than the demagoguery and name calling that the pols of both parties indulge in to avoid proposing the unpalatable by increasingly necessary measures needed to restore some measure of fiscal sanity to the nation.

          • Eagledon35 says:

            I would like to say we the people could fix the social security problem real fast. Just insist that ALL members of congress, the President be complelled to contribute into the same sytem and live by the same rules the the rest of us are required to.

          • Black_Diamond says:

            they do. since 1988

        • Coelacanth10 says:

           No amount of taxation is going to bring in the kind of revenues we need to balance the budget. You are living in a dream world. Growth will not come to the economy until the public deleverages its massive debts, which is not going to happen for at least 7 more years. the “numerous proposals” to shore up social security are also part of the same unworkable solutions. Government itself is an enormous  part of the problem and must be slashed down to levels that we can afford. This can be done by sequester after sequester or if intelligent men of good faith get together, selective cutting across all levels including defense and entitlements. This will cause much pain to public employees, but they will need to lose their jobs to a level which private industry has already suffered. Their healthcare and pensions will also have to be cut. There is simply no more money to pay for the beast that is the federal government.

    • Valter Ezerins says:

      Yes US Bonds have value, too bad that none of the Social Security Money has purchased such bonds.  Black_Diamond failed to see the key point in the article and has been fooled like most of the public has by the Congresses and Presidents since 1980..

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