SOCIAL SECURITY PART 5

HELLO WORLD

                        SOCIAL SECURITY PART 1       Published Dec. 30, 2010

                        SOCIAL SECURITY PART 2       Published Jan. 10, 2011

                        SOCIAL SECURITY PART 3       Published Jan. 17, 2011

                        SOCIAL SECURITY PART 4       Published Jan. 24, 2011

                        SOCIAL SECURITY PART 5       Published Jan. 31, 2011

SOCIAL SECURITY PART 5

STATE  OF  THE  UNION  SPEECH

Well, it has been quite a week.  The STATE OF THE UNION speech has pretty well dominated the political news this week.  There have been mixed feelings about how good or bad it was.  Personally I think it was pretty good, considering the position the President is in with the opposing party controlling the House of Representatives.  He has to be a little soft, in some ways, if he expects to get anything he wants through Congress.  On the other hand, I thought he was quite forceful at times.  For example, when he said that there was not to be any changes in Social Security.  That, however, doesn't change the fact that there is a problem that must be addressed.

Also, I don't recall of any President, before, stating that he would veto any bill that came to his desk that had earmarks in it.  I thought that was being very forceful.  Of course, the Republicans will attached some earmarks to a "must pass" bill and try to make the President back down that way.

The budget, and reducing spending is going to be the next big discussion in Congress and that is when the attacks on Social Security are going to start.  The Republicans are even talking about complete abolishment of SS and Medicare and substitute it with a voucher system and people can do whatever they want to do with the vouchers.  This is really a drastic move and we must watch real close as to what is going to actually be brought up for Committee hearings. 

THE  THREE  SOCIAL  SECURITY  PROBLEMS 

1. The need for the Government to repay the SS Trust Fund the 2+ trillion dollars it has, illegally, taken from the Fund.

2. The use of the Social Security (SS) premiums as though they are General Revenue.

3. Find a way to make up the short fall in receipt of SS Insurance premiums resulting from the severe recession we have been experiencing.

WHAT  TO  DO  ABOUT  THESE  PROBLEMS

Regardless of what the President had to say about SS, these three problems still exist and must be addressed.  There are a number of dates floating around, from different sources, as to when the SS Trust Fund will run out of money.  I have seen 2051, 2041, 2037 and 2015.   From what I have been reviewing, the most realistic, to me, seems to be 2041.  That is, of course, if the SS Trust Fund was repaid all that has been taken out of it for General Revenue.  Also. the 1982 study commission's plan would make SS solvent to 2041, which, they determined, would be the year that the youngest Baby Boomer would be 79 years old.  

LET'S TAKE A SUMMARY LOOK, AGAIN, AT WHAT COULD BE DONE ABOUT THESE THREE PROBLEMS AND HOW ALL OF US, TOGETHER, CAN MAKE IT HAPPEN.

NOW  THIS  NEXT  PARAGRAPH  IS  VERY  IMPORTANT

First, and of utmost importance, is to keep saying, and pointing out, what SS is and isn't.  It isn't an ENTITLEMENT PROGRAM.   It is an INSURANCE PROGRAM.  There is a big difference.  The official name is "OLD AGE, SURVIVORS AND DISABILITY INSURANCE" (OASDI).  Every official writing calls SS "INSURANCE."  Also, what is referred to as "payroll taxes" relating to SS, is not a tax at all. It is an insurance premium. The official name of that withholding is "FEDERAL INSURANCE CONTRIBUTION ACCOUNT" (FICA).  That means that it is your contribution to your SS account.  DID YOU GET THAT?  YOUR ACCOUNT --not the Government's General Revenue account.  You have every right to expect your account to pay for the benefits, that you have been told, by legislation, you should get at a certain time.

Now, I know that your contributions, since 1983, have been paying for your parents benefits, as well as your own.  That's the double whammy referred to in SS Part 4.  Never the less, it is your account as I have said above.

PROBLEM   NUMBER  ONE  --  GETTING  THE  TRUST  FUND  REPAID

Remember, the Special Government Bonds (IOUs) in the Trust Fund are included in the National Debt.  If the Government would borrow, from the public, the 2+ trillion dollars needed to retire those Special Government Bonds, the increase that would occur in the National Debt would be, immediately, canceled when the Special Government Bonds no longer exist.

That is the quick and simple way to solve problem number one, BUT HARD TO GET DONE.

PROBLEM  NUMBER  TWO  --  USING  THE  FICA  MONEY  AS  GENERAL  REVENUE.

Correcting this problem is not as straight forward as fixing problem number one.  As has been pointed out before, it already is illegal, per the Budget Enforcement Act of 1990, to use FICA money as General Revenue.  There are two things that could be done that might solve this problem. 

First, once again, in updated legislation, make it illegal to use FICA money as General Revenue. 

Second,  make it so widely known that it is illegal that Congress just wouldn't dare to, again, use the FICA money as General Revenue.  There may be other ways and maybe some of you can come up with more and better ways to solve problem number two.  Also, maybe some of you can come up with a better way to solve problem number one.

PROBLEM  NUMBER  THREE  --  MAKING  UP  FOR  THE  SHORT  FALL  RESULTING  FROM  THE  RECESSION.

While this is a real problem and needs to be solved, it is not as devastating as problems one and two.  As of 2009, the income cap for paying FICA was $106,800.00.  If this cap was raised, it would increase the FICA and help to off set the short fall.  At this time, this is the only thing that I know of that would help to solve problem number three. 

I don't want to get every body confused with the different groups of letters and terms.  You probably realize that "insurance premiums" and "FICA" are one and the same and "OASDI"  is "Social Security."

See you next week.

Floyd

PS:  After re-reading the above, I feel the need to add a little bit more.  I have now written six messages about SS.  As near as I can tell, there have been only 3 people that have read some or all of them.  My Son is one, as he edits these for me.  My Sister and Dr. Allen W. Smith PH. D.  are the other two.  Folks, there are consequences to all actions or non-actions.  You, apparently, have decided to take the non-action route.  Therefore, you will have to suffer the consequences and I do mean suffer.  Of course, I don't think anyone will be reading this either so it really doesn't matter.  I simply cannot imagine the amount of dedication Dr. Smith has used in spending 10 years of his life trying to bring about the right consequences.

SOCIAL SECURITY PART 4

HELLO WORLD

                          SOCIAL SECURITY PART  1       Published  Dec. 30, 2010

                          SOCIAL SECURITY PART  2       Published  Jan. 10, 2011

                          SOCIAL SECURITY PART  3       Published  Jan.  17, 2011

                          SOCIAL SECURITY PART  4       Published  Jan.  25, 2011

SOCIAL SECURITY PART  4

I HAVE SOME GREAT NEWS.  In Social Security Parts 2 & 3, I referred to, and told you about, Dr. Allen W. Smith Ph. D. and that I had, a number of years ago, corresponded with him.  Well, I have been fortunate, once again, to correspond with him.  He has read my Blogs and has been kind enough to write some comments at the end of Social Security Part 3.  I strongly urge you to read his comments.   I am, however, going to quote part of his comments here, as they are so appropriate and points out one thing regarding the baby boomers that I have not.                                                                                                                                                                                                                                                        

"I want to commend Floyd Bowman for his years of service in trying to alert the public to the great Social Security scam. I have devoted the past ten years of my life, and more than $30,000 in borrowed money, to my mission to raise public awareness to the fact that, for the past 25 years, our government has been “borrowing” or “stealing” money from the Social Security trust fund and using it for such things as funding tax cuts for the rich, two wars, and other government programs.

 The Social Security Amendments of 1983 imposed a hefty payroll tax hike on the baby boomers. All previous generations had been required to pay only for the Social Security benefits of the preceding generation. But the 1982 Greenspan Commission decided that the baby boomers should prepay the cost of their own benefits, in addition to paying for the benefits of their parents’ generation. The boomers were hit with a double whammy, and they have contributed more to the Social Security fund than any other generation. Still, they are often falsely accused of being the cause of the Social Security problem."

The point, that Dr. Smith is making here, is extremely important.  NOT ONLY HAVE THE BABY BOOMERS BEEN HIT WITH A DOUBLE WHAMMY, AS DR. SMITH POINTS OUT, THEY ARE FACING A CONGRESS THAT WANTS TO CUT BENEFITS, RAISE THE ELIGIBILITY AGE, PRIVEATIZE SS, AND WHO KNOWS WHAT ELSE.  THIS WOULD NOT ONLY BE A DOUBLE WHAMMY, IT WOULD BE A TRIPLE WHAMMY FOR THE BABY BOOMERS.   WE CAN NOT LET THIS HAPPEN.   Please, join Dr. Smith and me and lets try to correct this.

Last week, I pointed out that there was one development that has occurred,   since the 1983 plan was formulated, that could not have been anticipated.  That development is the severe recession we are experiencing.  Because of this development, there is less money coming into Social Security (SS) Insurance program, and remember, this is an Insurance Program, not an Entitlement Program.  What is called a "Payroll Tax" is actually a "Payroll Premium" you pay for coverage of this Insurance Program.

Also, remember that, I have previously said that there are two problems that need to be corrected in order for the SS Program to be solvent till 2041.  One: the Government needs to pay back the 2+ trillion dollars it has taken from the SS Trust Fund.  Two: the Government must stop taking money out of the SS Trust Fund.  Because of the recession, there is now number three. 

There will need to be some way to make up the short fall, as a result of lower and fewer premium payments, resulting from the recession. Of course, this is why Congress talks about raising the eligibility age, reduced benefits, means testing, privatizing of SS and others.  All of these are steps towards the end of SS as we now know it.  THIS HITS THE BABY BOOMERS MORE THAN ANY OTHER GENERATION.

I only know of one thing that would help offset this problem.  Whether or not it would be sufficient to make up for the reduced premiums is a question that would have to be determined by statisticians.  As of 2009, you stop paying SS Premiums when you make more than $106,800.00 a year. If that limit were raised it would increase receipt of premiums.  That is the only thing I know of that would help some.  As I said, whether or not it would be enough would be questionable.  Maybe, some of you, Baby Boomers, can think of other ways that would not signal the beginning of the end of SS.

KEEP REMEMBERING, THE SS TRUST FUND CAN BE MADE WHOLE WITHOUT RAISING THE NATIONAL DEBT.  WE NEED TO PUSH THE PRESIDENT AND CONGRESS TO DO JUST THAT.  ALSO, SS IS NOT AN ENTITLEMENT PROGRAM,  IT IS AN INSURANCE PROGRAM.   

See you next week.

Floyd

Social Security Part 3

HELLO WORLD

                                    SOCIAL SECURITY PART 1       Published Dec 30, 2010

                                    SOCIAL SECURITY PART 2       Published Jan. 10, 2011

                                    SOCIAL SECURITY PART 3       Published Jan. 17, 2011

SOCIAL SECURITY  PART 3

First, A few personal notes and observations.  This is the third message I have put on my Blog and, so far, there have only been two people that have read it, as far as I can tell.  It, of course, is possible that others have read and just didn't see fit to send me any comments.  Now, I know that starting a Blog really takes a long time to get recognition.  However, in this case, there were about 35 people notified on e-mail about it.  For that reason, I thought maybe I would hear from someone. 

I certainly will keep trying, because this matter of Social Security (SS) is really quite important.  Dr. Allen W. Smith, Ph. D. has donated over ten years trying to educate the public about Social Security.  In light of that fact, I don't dare get discouraged or give up.     

I think I need to make the objective more precise.  It is my hope that between now and the time Congress begins to debate SS, which is not going to be very far off, we can have a good representation in numbers.  At that time, we can all send letters to our Senators and Representatives and also, in a coordinated way, call them, as well.  WHEN THAT TIME COMES THERE WILL BE A SAMPLE LETTER ON THIS BLOG THAT YOU CAN USE OR WRITE YOUR OWN.  Please let me hear from you as to your thoughts about this matter.

If, this is the first time you have read my Blog, I'd like to ask you to pull up SS Part 1 & 2 so that this one will make more sense.  Also, I encourage you to read Dr Smith's Ph.D. Webpage for more detailed information.

                                    http://www.allenwsmith.com/id7.html

MORE CREDITABILITY ABOUT THE DEPLETION OF THE SS TRUST FUND

During the Presidential campaign of 2000, Al Gore first talked about the depletion of the SS Trust Fund.  He pledged to put the SS TRUST FUND IN A LOCK BOX.  It was  shortly after that, that George W. Bush pledged the same thing.  I don't have any quotes from either man at the time of the campaign, but it is common knowledge that they made this pledge.  I do have some interesting quotations from George W. Bush, after he became President.  These quotations can leave no doubt about the fact that the Government has been using the SS Trust Fund surplus for programs other than SS.

                            INTERESTING  QUOTES  OF  PRESIDENT GEORGE W.  BUSH
                                                                               On
                                                              SOCIAL  SECURITY

2001 QUOTES AS THE BEGINNING TO LAY GROUND WORK FOR

RE-ELECTION.

February 3, 2001       Radio address to the nation.

“My plan will keep all Social Security money in the Social Security system where it belongs.”

February 27, 2001     State of the Union address.

“To make sure the retirement savings of America’s seniors are not diverted in any other program, my budget protects all 2.6 trillion dollars of the Social Security surplus for Social Security, and for Social Security alone.”

March 3, 2001            Radio address to the nation.

“We’re going to keep the promise of Social Security and keep the government from raiding (Pres. Bush's own word) the Social Security surplus.”

2005 QUOTES DESIGNED TO PROMOTE PRIVATE ACCOUNTS

February 9, 2005       In a Washington speech.

“The money—payroll taxes going into the Social Security are spent.  They’re spent on benefits and they’re spent on government programs.  There is no trust.”

March 10, 2005          Speech in Montgomery, Alabama

“The government takes your money and spends it on other things and puts an IOU, a piece of paper, on your behalf, which may be worth something, and may not be worth something.”

March 16. 2005          At a press conference.

“We’re paying for a lot of programs other than Social Security with the payroll tax coming in, thereby leaving a pile of IOUs,”         

(Quotations were taken from Dr. Smith's Ph.D. research.)

SOCIAL SECURITY & THE NATIONAL DEBT

The solution to the entire SS problem, as I stated in "SOCIAL SECURITY #2," is a process that does not increase the National Debt.  When the government borrows the 2+ trillion dollars, needed to make the SS Trust Fund whole, the corresponding increase to the National Debt is immediately cancelled when that 2+ trillion dollars replaces the Special Government Bonds (IOUs), currently in the Trust Fund.  REMEMBER the Special Government Bonds, now in the Trust Fund, are a part of the national debt.   Therefore, when the Special Government Bonds no longer exist, the National Debt decreases, which offsets the temporary increase referred to above.

When that is done and Congress stops taking the money from the SS Trust Fund, there is no  longer any need to consider raising the eligibility age, reducing benefits or, certainly not, privatizing SS.

However, there is one factor that has occurred, since the plan for solvency was  setup in 1983, which needs to be considered.  That factor is the severe recession we have been experiencing.  Thoughts about how to handle that will be discussed next week.  See you then.

Floyd  

Social Security Part 2

HELLO WORLD

                        SOCIAL SECURITY PART 1         Published Dec. 30, 2010

                        SOCIAL SECURITY PART 2         Published Jan. 10, 2011

SOCIAL SECURITY PART 2

At the end of last week's message, "Social Security Part 1," I said that I would tell you of the solution to the present Social Security (SS) problem.  I will do that and I will also say why it won't happen unless ???

I want to preface the following by telling you that I am not at all interested in playing the blame game for the present SS mess.  I only want to get it corrected, in a way that is consistent with the original intent of the program.  SS is, without a doubt, the most successful government program that has ever been formulated.   We must not let it be scuttled.

Before I get into all that, however, I want to tell you about a very unusual man.  He is Dr. Allen W. Smith PH.D.  For 30 years, Dr. Smith has been an economic professor.  He taught economics at Eastern Illinois University, is a graduate of Ball University Indiana and has written seven books.  If you want to know more about him, just put his name in search and you will find  a complete story about him and what he has done regarding Social Security.

It was in the late 80s, when Dr. Smith was doing research for a book he was writing called "The Alleged Surplus, Social Security & Voodoo Economics" that he stumbled onto what was happening with the SS Trust Fund.  He just couldn't believe it, until he changed his research and found more information regarding the depletion of the SS Trust Fund.  Much of what I wrote last week in SS Part 1, came from his work. Dr. Smith deals in facts and I have been very impressed with his work. 

He has spent more than ten years trying to get the public educated about the SS Trust Fund.  He has hit road blocks all along the way.  One, of his books, was even taken off the book shelves in stores all across the country and the publisher would not print anymore copies.  His book, "The Looting Of Social Security," only got published, because he published it himself, with his own money.  He feels that strong about what is happening.

THE SOLUTION FOR THE SOCIAL SECURITY PROBLEM

Fixing the SS problem is simple, BUT NOT EASY.  Remember, last week, I said that for accounting purposes, when the Fed. Government takes money out of the SS Trust Fund the Fed. Government replaces it with  Government Bonds.

These bonds are classed as Special Governments Bonds, not marketable bonds.  They are, however, a part of the National Debt since they are backed by the Good Faith of the United States Government.  As things stand now, they are worthless because the government, at this time, has no intention of redeeming them. 

Now you can see why there is such an effort, by everyone in Government to call SS an Entitlement Program instead of an Insurance Program, which it actually is.  Almost every day someone in Government refers to SS as an Entitlement.  In the Jan 3, 2011 edition of the Washington Post, Rep. Allen West of Fl. was quoted as saying "I could support raising the National Debt limit, if there were also spending caps and changes to entitlement programs, like Social Security." 

If the Government can convince the public that their payroll deduction, is a tax instead of a premium, which is what it actual is, then they don't have to admit to the fraudulent looting of the SS Trust  Fund.  If they can call SS an entitlement program, then they can make changes in eligibility and benefits, as they choose and they're out of the woods. 

At the same time, as they are trying to make acceptable adjustments, the Republicans, particularly, can start trying to sell the Privatatization of SS, which, if ever adopted, would be the beginning of the end of SS.  This is what Republicans want.  They have fought against SS almost from the time it was passed.  Historical facts show this to be true.   It is simply too much of a social program for them.

You're probably wondering, if I am ever going to come up with the solution.  Well here it is. 

First, remember, the bonds in the SS Trust Fund are a part of the National Debt.  All that has to be done is for the government to borrow from the public, the 2+trillion dollars to redeem the Special Government Bonds in the SS Trust Fund.  When they do that, it increases the National Debt, BUT when it is paid to the Trust Fund, it cancels out that increase because, those bonds in the Trust Fund are no longer a part of the National Debt.

The second thing that has to be done, and this may be the hardest part, is to someway stop Congress from taking money out of the Trust Fund and show a true operating budget.   At this time, I don't have any suggestions as to how to accomplish this, since it is already against the law to do this (THE BUDGET ENFORCEMENT ACT OF 1990).  Adding another law, I don't think will do it.  Maybe some of you will have an idea. 

I said it was simple and it is, but it is not easy.  The only way that this can happen is, IF THE PUBLIC GOT SUFFICNTLY UPSET ABOUT WHAT HAS BEEN HAPPENING TO DEMAND THAT THIS BE CHANGED

This, of course, is what my objective is.  I can't get it done by myself obviously, Dr. Smith has been trying for ten years without getting enough support to get it accomplished, but if there are enough of you, out there, that read this and agree, or disagree, maybe, just maybe we could all work together and get a movement started and expanded.  It's nothing to me, personally, as whatever happens isn't going to affect me, but it will my kids and grandkids.  It may very well affect you personally. 

Let me hear from you, whether you agree or not.  I'm open minded.  Just think about it.  The only problem I have with criticism is that it should have something to offer in place.

The matter of SS adjustment is going to come up in Congress in the very near future.  Tell your friends about my Blog and ask them to read it and see what they think and ask them to ask their friends etc.

I realize that all of this is so hard to believe, that our Government would do such a thing. Next week, I will provide proof by a Presidential Candidate and a sitting President who have both openly, in public meetings, told of this problem

SEE YOU NEXT MONDAY JAN. 17, 2011

Floyd