Social Security benefits are not guaranteed. This isn’t my opinion. It is the opinion of the Supreme Court, Flemming V Nestor.
In its ruling, the Court held that entitlement to Social Security benefits is not a contractual right. Benefit levels are what Congress says that they are. The Social Security Administration recognizes the case. PolitiFact delivers research on it. Notch Babies provide evidence of it. There is no guarantee.
See more at: http://www.fedsmith.com/2015/07/06/social-securitys-missing-guarantee
The piece looks at the specifics of the case, and how they affect you, your parents, and beneficiaries in general. Nestor sets an unusual precedent. Nestor was retired at the time that his benefits were reduced, and no longer participating in the Communist Party.
Tuesday, July 7, 2015
Friday, July 3, 2015
What Happened to the $2.6 Trillion Social Security Trust Fund?”
This
is part of a series of articles in which I look at other articles on the
internet that are forwarded as reasoned thought. Just because you read it on the internet,
does not make it true.
Many want to
believe that Social Security Trust Fund is a scam. No matter how reasoned the counter-argument,
they eventually cite a piece from Forbes blog, “What
Happened to the $2.6 Trillion Social Security Trust Fund?”
Readers tend to think that the article says that the Social Security Trust Fund is a scam. That isn’t what the article actually says though.
Readers tend to think that the article says that the Social Security Trust Fund is a scam. That isn’t what the article actually says though.
The article contains some fact problems. The author states that the Social Security Trust Fund is the source of benefit checks. This is factually wrong. The primary resource of revenue for the system is payroll taxes. So it is factually wrong to suggest that the only way for Social Security to get cash is from the general fund or incremental borrowing. The Trust Fund is little more than a parking lot for excess cash.
The article has reasoning problems. This statement is a false dichotomy.
·
“Well, either Obama and Geithner are lying to us now, or
they and all defenders of the Social Security status quo have been lying to us
for decades. It must be one or the other.”
It is unlikely to be either.
Anytime you deal with politics you are dealing with words that have many meanings. Here is the quote, "I cannot guarantee that those checks go out on August 3rd if we haven't resolved this issue. Because there may simply not be the money in the coffers to do it."
The writer has chosen to read that sentence as social security checks might not go out because there may not be money in the Social Security Trust Fund." If that is what the President meant, then the answer is simple: the President doesn't understand how Social Security works. The benefits of Social Security are funded by the payroll tax. If checks didn't go out, it would mean that payroll tax collection had entirely ceased. The Trust Fund serves as a buffer for Social Security rather than a primary source of cash.
Moreover, the Social Security Trust Fund is exempt from the discussion of the debt ceiling. The government has the power to refinance any bond held by the Trust Fund because refinancing debt does not increase overall debt levels. The government issues a bond and uses the proceeds to retire a bond. The impact is a wash on the level of Federal debt.
One fact that Matthews fails to mention is that Secretary Geithner is the managing trustee of the Social Security Trust Fund. It is his responsibility to build cash reserves necessary to pay bills in the face of foreseeable events. If Geithner is telling the truth, he is effectively pleading guilty to the largest breach of fiduciary responsibility in the history of mankind.
It is highly unlikely that the asset structure of the Social Security Trust Fund would be the cause the government's inability to deliver checks – nearly zero. The primary source of revenue is payroll taxes. It is virtually impossible to believe that the Trustee would have failed to build the necessary cash reserves if the Trust Fund was going to be needed.
The problem here is that no one in Congress or the media took the statement seriously enough to drive out the meaning of the President's words. The writer attributes meanings to the words that the President cannot mean. I have seen a number of other interpretations about the statement.
There are two things that we know for sure: Coffers clearly can't mean the Social Security Trust Fund. If checks didn’t go out on that August 3rd, it would have been a matter of priority rather than financial resources.
At best for Matthews’ argument, the President is woefully uninformed about the mechanics of the system. The idea that ‘real assets’ would have changed the President’s statement is simply false.
The writer has chosen to read that sentence as social security checks might not go out because there may not be money in the Social Security Trust Fund." If that is what the President meant, then the answer is simple: the President doesn't understand how Social Security works. The benefits of Social Security are funded by the payroll tax. If checks didn't go out, it would mean that payroll tax collection had entirely ceased. The Trust Fund serves as a buffer for Social Security rather than a primary source of cash.
Moreover, the Social Security Trust Fund is exempt from the discussion of the debt ceiling. The government has the power to refinance any bond held by the Trust Fund because refinancing debt does not increase overall debt levels. The government issues a bond and uses the proceeds to retire a bond. The impact is a wash on the level of Federal debt.
One fact that Matthews fails to mention is that Secretary Geithner is the managing trustee of the Social Security Trust Fund. It is his responsibility to build cash reserves necessary to pay bills in the face of foreseeable events. If Geithner is telling the truth, he is effectively pleading guilty to the largest breach of fiduciary responsibility in the history of mankind.
It is highly unlikely that the asset structure of the Social Security Trust Fund would be the cause the government's inability to deliver checks – nearly zero. The primary source of revenue is payroll taxes. It is virtually impossible to believe that the Trustee would have failed to build the necessary cash reserves if the Trust Fund was going to be needed.
The problem here is that no one in Congress or the media took the statement seriously enough to drive out the meaning of the President's words. The writer attributes meanings to the words that the President cannot mean. I have seen a number of other interpretations about the statement.
There are two things that we know for sure: Coffers clearly can't mean the Social Security Trust Fund. If checks didn’t go out on that August 3rd, it would have been a matter of priority rather than financial resources.
At best for Matthews’ argument, the President is woefully uninformed about the mechanics of the system. The idea that ‘real assets’ would have changed the President’s statement is simply false.
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