More lies about your Social Security benefits

The following SUN SENTINEL Editorial was written by Opinion Editor Steve Bousquet, Deputy Opinion Editor Dan Sweeney, editorial writers Pat Beall and Martin Dyckman, and Editor-in-Chief Julie Anderson.

It contains the usual misstatements about Social Security and its imminent “shortfall,” i.e., the Big Lie in economics.

It’s the Big Lie the rich want you to believe because it sets the stage for widening the income/wealth/power Gap between the rich and you. If you believe the Lie, this permits the rich to chip away at your SS benefits while increasing your FICA taxes.

Use good sense, not slogans, on Social Security shortfall

If only the Sun Sentinel editors followed their own advice. This editorial is filled with false slogans and barely an ounce of good sense.

Social Security is not a Red-Blue issue. Although wrapped in Washington rhetoric about the budget deficit, at its heart, it’s not a political issue, either.

For millions of Americans, Social Security is a matter of survival. It’s especially true for the growing number of South Florida seniors relying on Social Security checks to keep a roof over their head and food on the table.

Left unaddressed, a budget shortfall could leave retirees with roughly 79% of their benefits starting in eight years.

This is all true, with one slight caveat. There is no shortfall. The federal government has infinite dollars to fund Social Security.

Key political figures would like to place the burden of that failure and any fix on the backs of beneficiaries. Cut benefits, goes the argument, because only that will solve the problem.

Don’t believe a word of it.

Good advice. Don’t believe a word of it because there is no shortfall. It’s an invention of those who want to destroy Social Security or perhaps merely privatize it to the benefit of rich insurance companies.

The shortfall is serious. It is also manageable without taking money away from people who earned it.

But you wouldn’t know it to hear the rising chorus of budget axe-wielders.

The shortfall is non-existent, but you wouldn’t know it from reading the Sun-Sentinel

Rep. Rich McCormick, who represents one of Georgia’s wealthiest counties, announced it was time to make “some hard decisions.”

“We know how to do it,” he said. “We just have to have the stomach to actually take those challenges on.”

Utah Sen. Mike Lee, once on Donald Trump’s short list for attorney general, railed against it on X, decrying it as a Ponzi scheme, a term Donald Trump once used.

Donald Trump said it. That pretty much proves it’s a lie, doesn’t it?

A Ponzi scheme is a fraudulent investment operation where returns to earlier investors are paid from the contributions of newer investors rather than from profit earned by the operation of a legitimate business.

Social Security would be a Ponzi scheme if benefits were paid by FICA taxes. But they are not. Federal taxes fund nothing. ALL federal spending is funded by new dollar creation. 

While state and local taxes do fund state and local spending, federal taxes have much more limited purposes:

1. They help the government control the economy by penalizing what the government wishes to discourage, and by giving tax breaks to what the government wishes to reward, and
2. They help create demand for the U.S. dollar by requiring dollars be used for tax payments.

To pay its bills, the federal government sends instructions (not dollars) in the form of checks or wires to creditors’ banks, telling the banks to increase the balances in the creditors’ checking accounts.

When the banks do as instructed, new dollars are added to the M2 money supply measure.

This is the government’s primary method of creating dollars, and no tax dollars are involved. Because the government has the infinite ability to create laws and send instructions, it has the infinite ability to pay for anything without levying taxes.

This often is referred to as “printing” dollars, but the so-called “printing” is just number manipulation in checking accounts.

Former Federal Reserve Chairman Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. It’s not tax money… We simply use the computer to mark up the size of the account.”

“Interesting thread,” replied Trump-whisperer Elon Musk, who has done his own railing against “entitlement” programs as he searches for $2 trillion in budget cuts on Trump’s behalf.

“Everyone’s going to have to take a haircut,” said Musk, the richest man in the world. (Everyone, except Musk).

Musk not only is the richest man in the history of the world, but he gives very little to charity.

Yet his first thought is to cut benefits to the poor and middle-classes.

Trump has pledged to eliminate Social Security taxes while leaving benefits untouched.

It would be a well-intentioned disaster, generating pennies in benefits.

“Well-intentioned”?

While unelected Musk discusses “haircuts” for those who need money most, Trump makes promises he could keep but won’t.

Financially, the federal government could and should eliminate Social Security taxes. They fund nothing.

But even with Trump’s control over Congress, his rich backers and ignorant media like the Sun Sentinel won’t let him do it.

So Trump will pretend to try to eliminate FICA but he will surrender to “them.” Instead, benefits will be cut, probably via the same older qualification ages.

Household incomes between $32,000 and $60,000 would get an average break of just $90. Only households with income of $5 million or more would get a solid break of about $2,500.

Surprise! The rich will benefit more from the Trump administration (though it was the poor and middle-income people who voted him into office. Ah, the price of ignorance.

Worse, Medicare reserves would run dry in five years instead of 11, leading to payment cuts. Social Security checks would be shorted starting in 2032, not 2033.

There are no “Medicare reserves” because there is no Medicare Trust Fund. To quote from the Peter G. Peterson Foundation web site:

A federal trust fund is an accounting mechanism used by the federal government to track earmarked receipts (money designated for a specific purpose or program) and corresponding expenditures.

The largest and best-known trust funds finance Social Security, portions of Medicare, highways and mass transit, and pensions for government employees.

Federal trust funds bear little resemblance to their private-sector counterparts, and therefore the name can be misleading.

A “trust fund” implies a secure source of funding. However, a federal trust fund is simply an accounting mechanism used to track inflows and outflows for specific programs.

In private-sector trust funds, receipts are deposited and assets are held and invested by trustees on behalf of the stated beneficiaries.

In federal trust funds, the federal government does not set aside the receipts or invest them in private assets.

Rather, the receipts are recorded as accounting credits in the trust funds, and then combined with other receipts that the Treasury collects and spends.

Further, the federal government owns the accounts and can, by changing the law, unilaterally alter the purposes of the accounts and raise or lower collections and expenditures.

Thus, the federal government can do whatever it wishes with the “trust funds.” It can add to them, subtract from them, or change them from the wrongly presumed mission of supporting federal expenditures.

At the click of a computer key or the passage of a law, the balance in the federal “trust funds” could be changed to $100 trillion or $0, and neither would affect taxpayers.

With the clock ticking, ideas abound on how to pick current and future recipients’ pockets.

1. Lower cost-of-living increases.
2. Paying a flat amount below the average benefit, currently less than $2,000 a month.
3. Gamble the entire Social Security Trust Fund by putting it into the stock market and pray that stocks won’t slide.
4. Or let people use their Social Security benefits in an individual retirement account, so that they can personally gamble their futures on the market.
5. There’s the widows-and-orphans solution: Cut survivor benefits for minor children, widows and widowers. All were floated by the General Accounting Office. (But there are other ideas, and Florida members of Congress and senators have an obligation to seriously address them before any talk of cuts.)
6. First, significantly raise or eliminate Social Security’s cap on taxable wages. Right now, anyone earning more than $176,100 doesn’t pay payroll taxes on income over that amount. One piece of legislation addressing the cap could help extend the program’s ability to pay full benefits by 32 years, the Social Security Office of the Chief Actuary estimated last year.
7. It is just one idea among many with broad support, the University of Maryland found. Closing the billionaire borrowing tax loophole would raise $100 billion.
8. Closing just one aspect of the death tax loophole would raise another $100 billion over 10 years, largely from millionaires and billionaires.
   

   
   

The one thing missing from the list is the real solution: Have the federal government pay for Social Security the same way it pays for Congressional salaries, the White House, the Supreme Court, the military, and almost every other one of the thousand federal agencies: By voting and budgeting.

There are no fake “trust funds” for the military, Congress, SCOTUS, etc. Congress and the President vote, and the money magically appears.

That is exactly how Social Security and Medicare should be funded.

Don’t expect automatic sympathy for those options by the 11 billionaires and near-billionaires tapped for key posts in the incoming administration — among them, Frank Bisignano, the multi-millionaire tapped to head the Social Security Administration.

And certainly don’t expect sympathy from President Trump and his $400 billion whisperer, Elon Musk.

Your financial problems mean nothing to them. Their sole concern is power, not yours, theirs.

They do not have the life experience of having to stand in line at a food bank, where increasing numbers of Florida seniors can be found.

And don’t be distracted by bad arguments. The old are not robbing from the young by insisting on benefits.

Correct. FICA dollars paid by young workers do not fund Social Security or Medicare.

Fighting for the program now will keep it solvent for young people when they retire. Nor is it unfair to subject people with six-figure incomes to fork over the same payroll taxes tens of millions of lower-income Americans already pay.

It may not be unfair, but it is unnecessary. Payroll taxes are a waste of money and are recessive. They remove growth dollars from the economy.

Whatever the proposed fix, it will wind up on the Resolute Desk for Trump’s signature. He won the right to sit at that desk in part because he pledged to ease the economic burdens of ordinary people. It’s a pledge we expect him to honor.

They expect Donald Trump to honor his pledges???!!! THEY EXPECT DONALD TRUMP TO HONOR HIS PLEDGES???!!!

Are these people really that naive?

When will you get angry enough to pick up the phone and call your Congressperson?

Ever?

Rodger Malcolm Mitchell

Monetary Sovereignty

Twitter: @rodgermitchell

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