An Open Letter to the FactCheck dot org Editor
I just sent this off to FactCheck. Wherein I take them to task for buying into the “Social Security is bad because it contributes to the deficit” meme. Read on for the actual letter…
Subject:Democrats don’t deny that Social Security is in the red.
Sent Sunday, February 27, 2011
Posted to the Author’s blog: sjdorst.wordpress.com
In your recent article: Democrats Deny Social Security’s Red Ink, your title mischaracterizes your own article!
You spend the beginning of the article with much number juggling showing how Social Security is paying out more than it is taking in, but none of the Democrat’s you quote deny that!
Social Security, on a yearly basis, is in the red. Yes. No Question. But there is a huge trust fund balance that is intended specifically for this. The problem with Social Security is that adjustment is needed either upward on the amounts paid in, downward in the benefits paid or by delaying the retirement age. NONE of this has anything to do with the Federal Deficit!
Social Security, like every other person, corporation, or government, doesn’t keep it’s funds in cash. They invest them. The trustees (rightly in my opinion) have chosen to invest in the US government through various US Treasury debt instruments.
Even if there were no Federal debt, and with a balanced budget (no deficit), the Treasury would still issue debt instruments for cash flow reasons, just like any other business. They would also issue debt instruments when Congress and the President choose to fund projects that extend beyond the current budget year.
Does the US have a deficit? Yes. Do interest payments on funds loaned to the Treasury (the debt) make up a part of this? Yes. Do some of these interest payments go to Social Security? Yes. So what? Should Social Security NOT invest it’s trust funds in the Treasury?
Is this somehow the fault of Social Security? Hell No! (At least, not until the trust fund is exhausted AND Congress chooses to make pay principal into Social Security).
You make the basic mistake of combining Social Security and the rest of the Federal Government. They are separate. Intentionally.
The fix for our financial problems – which include the Debt, Deficit, Unemployment and a whole host of other scary words – needs to come from policy, from the act of governing wisely, not from the current atmosphere of sound bite politics. Demonizing Social security is part of the latter.