Social Security

Something has been bothering me as I listen to the republicans rail against Social Security as being bankrupt.

That something is something that I think I know but can't remember enough about to say definitively and publicly.

So I did a Google search: "in how many years since inception has the social security trust fund had a surplus?"

Answer: "Since 1937, there have been 11 years in which benefits paid out exceeded income and so the assets of the Trust Funds had to be spent to make up the difference."

In 86 years, Social Security has run a surplus for 75 of them.

"What happened to that aggregate surplus?" I asked myself.

"I don't know", I said in reply.

So I did another Google: "what has happened to social security surpluses?".

I found an article from 2000 based on a book by a guy named John Attarian.

He had a lot to say, most of it sounding pretty republican, mostly railing against calling the financial apparatus that contains the surplus a "trust fund" - republicans are really prone to railing.

He died in 2004 at age 48.

Before dying he did say this "Social Security revenues go into the Treasury’s general fund and are automatically credited to the Trust Fund in the form of Treasury bonds. The Treasury pays Social Security benefits and administrative outlays out of general revenue and debits the Trust Fund an equivalent value of bonds. Any leftover Social Security revenue finances general government operations, with an equivalent value of bonds remaining in the Trust Fund as Social Security’s “surplus;”"

So the dollars come from paying citizens and get turned into treasury bonds upon receipt, at which point the dollars go into the General Fund.

So cash is turned into debt at the outset.

And the cash becomes an anonymous component of the General Fund to be spent willy-nilly on trillion dollar wars and such.

(You are probably saying to yourself "there you go again, picking on those poor republicans"; and you are right; however, consider this: GW Bush went to Congress and asked for permission to invade Iraq; Congress gave permission; no funds were provided; they must have paid the trillion from somewhere.)

But let's back up a click or two.

Turning Social Security Payroll Tax Payment dollars into debt as soon as they get to the Treasury, spending the actual dollars on SS benefits and SS admin and then spending the surplus anywhere that seems good while giving SS back its surplus as more debt, leaving an aggregate surplus as debt is a dazzling accounting trick.

After perceiving the preceding I began to understand why the republicans let Social Security stay in place rather than getting rid of it (they have been railing against it for 86 years and still haven't gotten rid of it; even the republicans aren't that incompetent, one would hope).

That is because it serves them three very useful purposes. 

It gives them something to rail against under the banner of having a balanced budget. 

It gives them a ready source of money for various trillion dollar unfunded gambits like George Bush's war in Iraq.

It gives them a straw man - "worthless IOUs" (Treasury Bonds - I didn't mention that a favorite republican talking point when discussing the 'trust fund" is that its contents are "worthless IOUs"; "don't tell the Chinese" I always think to myself) instead of a cash surplus.

It's a neat system.

I don't know why the Democrats don't call them on it, except that trying to explain what I have just described, and going on Fox and Friends to do it is probably too grotesque to imagine, even for Ol' Kevin or Ol' Mitch. 

donnie, being a brilliant businessman, would probably be willing to do it; I'd watch that; hell, I'd pay to watch that.

That, then, is what I have been able to discover about something that I think I know but can't remember enough about to say definitively and publicly.

What I haven't answered and am too tired to look into it any further is do we have a 75-year aggregate surplus in the "trust fund" albeit in Treasury Bonds rather than cash, or has that been disappeared somewhere as well?

Or did I get my hands crossed somewhere as we moved all that money around?

And don't forget to remember that since Spring 2017 I am a declared manufacturer of fake news, so I probably just invented John Attarian.