Re: Bush busts Social Security with massive deficits

From: sinister (sinister_at_nospam.invalid)
Date: 09/26/04 

Date: Sun, 26 Sep 2004 21:01:02 GMT

"Igor" <jjweatherby@houston.rr.com> wrote in message
news:PuD5d.14760$Gk4.4066@fe1.texas.rr.com...
> Jerry Okamura wrote:
>> Go to the Social Security web site. Read the trustees report.
>>
>
> Exactly, this is the confusion people have. They don't understand the
> budget system. Republicans and democrats are now trying to intentionally
> confuse people.
>
> Here is how it works. First look at your paycheck. You will see three
> taxes.
>
> 1. FICA This is the tax that is used for the general budget. This is the
> budget that is in deficit.

No, FICA is the SS and Medicare payroll tax portion combined.

>
> 2. Social Security This is a completely seperate budget. All social
> security taxes go to the social security budget. This is the budget that
> is in surplus.
>
> 3. Medicare is combined with Social Security.
>
> Now the confusion. Deficit number are calculated as the sum of all
> budgets. This is incorrect. Currently the Republicans want this because it
> makes the deficit look smaller. Democrats go along with because they can
> spook people about Social Security. Here is how the budgets are handled.
> When the general fund deficit is FICA - expenditures. When expenditures
> are greater than taxes a deficit results. This is much larger than
> reported. Why? Simply because Social Security is a seperate budget. The
> Social Security surplus is locked away and never used to finance a
> deficit. Yet Politicians include the surplus in the calculation of the
> deficit although Social Security surplus are put away and not spent. How
> do they finance the deficit? They sell treasury bonds mostly to the
> public. A small number of these bonds are bought by Social Security and
> other government agencies less than 10% of all bonds.
>
> Think of the general fund deficit as your credit cards and the Social
> Security surplus as money you put in your retirement account. Ok now say
> you make $10,000 from 2 sources. 1. Is your job and 2. Is some sort of
> annuity that pays you a certain amount every year. You set aside the
> annuity to place in an account for just bills, excluding credit card
> bills. You can not spend it on anything else. Now say you spend $6,000
> dollars a year from your job money and $2000 a year on bills. You finance
> $1000 through credit cards. Yes you are spending more than you make,
> increasing your debt but you are still puting a portion of what you make
> back in another account to make sure bills are paid. Becuase you can't
> draw from your retirement, lets assume you can't, your deficit
> (Expenditures over your income) still exist and your debt is rising but so
> is your equity in your retirement account. So although you are going
> deeper into debt your also increasing a stock of wealth that be drawn on
> for retirement. The government doesn't use the retirement account to pay
> debt it borrows to pay it. The government treats FICA like your job
> income and Social Security like the annuity income. Neither affects the
> other.
>
> Now if we calculated your deficit like the government does it would mean
> you are saving $2000 dollars a year. It would imply that you are using
> your bill money for play. This is incorrect but it implies you are paying
> off your debt. You are not in reality you are $1000 deeper into debt every
> year. Although your savings account is rising by $3000 a year. The truth
> is a lot of people do this the "bills" account is a retirement account
> like a 401k which they can't touch. The other account is for everything
> else.
>
> If you look at the OMB's numbers you will the difference between the
> dollar amount of bonds sold and the reported deficit equals roughly the
> social security surplus. What does that tell you? The deficit was financed
> solely through bond sales the social security surplus was never touched.
> It was the sale of bonds that financed the deficit. This is not exactly
> good for the economy but the Fed can and often does reverse the effect by
> buying the bonds. The problem is that although interest rates don't rise
> you get a monetary injection and slightly higher inflation.
>
> In short Social Security has its own budget in which payroll taxes are
> used ONLY for social Security expenditures. Look at the numbers and will
> see Social Security has a huge amount of money stockpiled. Those stock
> have risen every year for a long time regardless of the deficit situation.
> The problem is they have risen because the workforce has been so much
> larger than the retired population. This will start to reverse soon and
> Social Security will go into deficit. Those huge stocks will pay the
> deficit for a few years. After that only 3 solutions are possible.
> 1. Sell bonds to finance Social Security
> 2. Raise Socail Security taxes This can also be accomplished by keeping
> the current rates but eliminating the cap on taxable wages. A quick
> question was does John Kerry who says the rich should be taxed more and
> the middle class get a break not propose making people who make over
> $60,000 pay payroll taxes on all their income? Currently if you make
> $400,000 a year you only have to pay taxes on the first 60,000. So why
> doesn't mister middle class hero call for the rich to pay social security
> tax on all their income?
> 3. Cut benefits.
>
> Socially security has a larger surplus. Deficits do not and by law can not
> affect. However, that surplus will not last forever. Neither Bush, Kerry,
> any republican nor any democrat have a plan to fix the problem. They are
> all living in Social Security never never land expecting funds to fall
> like manna from heaven.
>
> The plan of Kerry and the Democrats assumes we have an unlimited surplus.
> If we just do what we do now all will be ok. That is put back the surplus
> and not spend it that is what is being done.
>
>
>
>> "Lasally Allbrite" <lasalall-@no-spam.hms> wrote in message
>> news:jf75d.253197$mD.96524@attbi_s02...
>>
>>>The reason Bush doesn't care in the least about the massive federal
>>
>> deficit is
>>
>>>because he want to run it up to purposely bust Social Security.
>>>
>>>For people about 40 years of age and older, this is going to be a
>>>terrible
>>
>> sock
>>
>>>in the stomach when they start wanting to retire and you get absolutely
>>
>> zero
>>
>>>money back for all the social security payments you have been making all
>>
>> these
>>
>>>years. And even people currently collecting social security, Bush is
>>
>> busting the
>>
>>>budget so darn fast, it is even going to effect them. Bush and the ruling
>>
>> elite
>>
>>>could care less, because them and theirs is taken care of. The don't need
>>
>> Social
>>
>>>Security.
>>>
>>>So if you actually think Social Security is a good safety net for the
>>>less
>>>fortunate in our society, definitely vote for anyone but Bush.
>>>
>>>What especially makes me mad about the way Bush is busting Social
>>>Security
>>
>> is
>>
>>>the way he is giving this trust fund to his rich buddies in the form of
>>
>> huge,
>>
>>>massive tax kickbacks. He throws a few peanuts to the poor and middle
>>
>> class,
>>
>>>which the richest 1% of America gets the whole bloody banquet.
>>>
>>>If you are young, in your twenties for instance, and you hate social
>>
>> security,
>>
>>>vote for anyone but Bush so you won't get drafted into the army and get
>>
>> you ***
>>
>>>blown to smithereens in North Korea, Iran or Pakistan. Bush has a grand
>>
>> plan,
>>
>>>and it is going to take a lot of young peoples blood for him to achieve
>>
>> his
>>
>>>bizarre world domination fantasy.
>>>
>>>So that covers almost everyone, except the richest 1% of America. You fat
>>
>> cats
>>
>>>can vote for Bush because you are the only one he is helping.
>>>
>>>
>>
>>