Interesting Quotes
David Brinkley
This Week with David Brinkley (ABC News)
August 16, 1992
[To President Bush:] You mentioned Social Security. The trust fund consists,
increasingly, of IOU's sent over by Congress, which keeps spending the money.
Lars-Erik Nelson
Newsday
March 5, 1995
. . . [A] s this week's debate over the Balanced Budget Amendment should have shown,
Social Security taxes are being used to offset the federal budget deficit. The Social
Security trust fund is operating in surplus, taking in $70 billion more this year than it is
paying out. The extra revenues are used to buy Treasury bonds that finance the general
operating costs of government.
Such use of Social Security revenues, as Sen. Daniel Patrick Moynihan (D-N.Y.) once
said, is theft.... By making the deficit appear to be $70 billion smaller than it actually is,
this "embezzlement" of your FICA contributions (a word used by the late Republican
Sen. John Heinz of Pennsylvania) also reduces pressure to increase income taxes on
wealthier Americans.
Editorial
The New York Times
March 18, 1991
If Congress had acted responsibly, it would have used the trust money to lower the
deficit, thereby pumping billions into private capital markets, or to finance public
investments. Either choice would have sparked economic growth and raised the income
of future taxpayers which is the only way Congress can lighten the burden of paying
future retirees. But what Congress did instead was to use the trust funds to pay ordinary
bills. The Treasury has borrowed from the trust, in effect masking a high and rising
Federal deficit. Senator John Heinz of Pennsylvania has labeled these loans
"embezzlement," but his accusation is hyperbolic. Come 2020, Congress will have to
raise taxes to pay off the loans. Ultimately, taxpayers, not the trust fund, protect future
retirees.
Editorial
USA Today
May 30, 1996
"Should Social Security go private? . . . Its trust fund is a fraud used chiefly to mask the
size of the federal deficit . . . Social Security surpluses now are spent immediately on
other federal programs. The trust fund's assets that opponents to change count on are
nothing but a pile of federal IOUs. Boomers will have to depend on the generosity of
workers to pay thousands more in taxes. Or of lenders to loan the government trillions of
dollars at reasonable rates. Or they'll see their benefits slashed a third."
Speaker Newt Gingrich
Nationally televised address
April 7, 1995
In fact, the money the government has supposedly been putting aside from the Baby
Boomers' Social Security taxes is not there. The government has been borrowing the
money to pay for the budget deficit. The Social Security Trust Fund is simply IOUs from
the U.S. Treasury.... [Social Security] would be fine if the government would stop
borrowing the money.
Senator Ernest "Fritz" Hollings (D-South Carolina)
Congressional Record
April 24, 1991
The truth is that the Social Security Trust Fund has already been stripped bare. There is
no trust and no fund.
It is a lot like the S&Ls. The savings and loans had a lot of real estate on the books, a lot
of property, a lot of shopping centers, a lot of deposits, and everything else, until you
looked inside and found out there was nothing there. The assets were mostly on paper....
Meanwhile, the Social Security cupboard is bare.
|
What Can We Do to be Faithful to the American Worker?
Now, the $250 Billion Dollar question:
In order to pay excess benefits after the year 2012, where will the Federal government
get hundreds of billions of dollars each year to redeem the non-negotiable bonds
in the Trust Fund?
The ratio of workers paying Social Security taxes to retirees receiving benefits
is getting worse.
There were 16.5 workers for each Social Security recipient in 1950. Today there are
only 3.2 workers per recipient. According to current projections, in 2030 there will
be fewer than 2 workers per recipient.
How will fewer workers be able to bare the
burden of paying for the increasing number of Social Security recipients?
Two facts are critical:
- The United States population is not increasing fast enough to supply the additional
workers required to support the "baby boomer" Social Security recipients.
- The number of Social Security recipients will increase as the "baby boomers"
begin to retire.
The solution must respond to those two critical points. The solution must
do the following:
- Increase the number of workers who can pay into the Social Security system to
accommodate the increasing number of recipients.
- The number of recipients must be reduced from projections beginning by the year 2028.
We must make some hard choices to keep the faith that workers have in
the Social Security system.
The following are the policies I believe can help to save the Social Security
system in the near term and reduce our dependence on Social Security in the long run.
Increase Employment
We must allow additional Employment Based immigration of young, professional college educated
workers who, through their employer contributions will continue to support Social Security.
The following are the classifications of immigrants
- Restricted Categories
- Employment Based - Up to 144,000 annually (priority workers, professionals, other workers, special immigrants,
employment creation)
- Family Sponsored -- Up to 226,000 annually (unmarried adult children of citizens, spouses and unmarried adult
children of lawful permanent residents, married adult children of citizens, siblings of
citizens)
- Unrestricted
- Immediate family members of US citizens (unmarried minor children, spouses, and parents)
- Refugees / Asylees
- Other (families of legalized aliens, diversity transition visas, special Cuban migration,
persons from the former Soviet Union)
- Illegal Immigration
Currently, sponsors of new immigrants must demonstrate incomes of at least 125% of the
poverty level for the past 3 years and sign a legally binding affidavit of support.
The sponsor may be joined by other household members or by a third party who co-signs
the affidavit of support. The sponsors are financially responsible to support the
immigrant until the immigrant becomes a US citizen or completes 40 quarters of
work-related contributions to the Social Security system.
To increase the number of immigrant works capable of contributing to Social Security
through their employers and to reduce dependence on government support, we need to:
- Triple the number of employment based immigrants, primarily increasing the number
of higher earning priority workers and professionals.
- Require that sponsors of new immigrants demonstrate incomes of at least twice
(200% of) the current poverty level.
- Eliminate loopholes that allow illegal immigrants to remain in the US.
These measures will substantially increase the average earnings of immigrants and
consequently their employer contributions to Social Security. They will also increase
employment in unrelated sectors to support the increased number of workers and their families.
Reliance on Earnings Produces Wealth
The amount available in the government Trust Fund for each retiree does not
in any way compare with would could be available if the funds were invested
in the free market economy.
How can a young person starting out at age 20 can accumulate over $1,000,000?
How can a young person retire with an income of 45% of their working salary instead
of a fixed income of almost 15% of their working salary?
How?
If the Social Security (FICA) money taken out of a pay check were placed in relatively safe investments instead of being given to the government.
A young person starting out at age 20 making $20,000 a year can invest 7.5% of this income
(which would be "contributed" to Social Security trust fund).
This money could be invested in the bank, bonds, mutual funds, real estate, or other investments.
What if these investments gained
only 7.3% a year, and the worker averages a 3% increase in salary each year (including raises
and better jobs)? At age 65 your retirement fund will be nearly $756,000.
The good news is, after taking 45% of your salary (even with 3% increases each year), you will
continue to accumulate over $1,000,000 by age 84!
When a person dies, all the money in their account would go to their family,
not be kept by the government.
That's a substantial amount of wealth.
The Only Way for the Little Guy to Get Rich!
At retirement Social Security benefits provide typically about 15-20% of
the worker's annual pre-retirement income. With private savings, the retiree
could take out 45%
of his or her pre-retirement income from the account and still have over $988,000 at
age 100. And this includes a 3% "raise" in retirement benefits each and every year.
Privatization of Social Security is necessary. We must allow those aged
30 to 45 to invest a sliding proportion of their personal Social Security
contributions in regulated private investments, similar to 401(k) programs.
Social Security retirement benefits for this group would be proportionally reduced.
Those workers aged 29 and below would not receive Social Security benefits.
Instead, they would be allowed to invest at least the amount of their Social Security
contribution in private investments, again similar to a 401(k) program.
This fund would accumulate and provide a retirement benefit.
Those aged 46 and above would continue to contribute to Social Security and
receive tradition retirement benefits.
Employer contributions to Social Security must continue for the near term
to in order to support the program for those remaining in it.
Social Security, as is presently known, would be phased out as younger workers
retired using their own investments. Other programs would
be available to care for the disabled or those with low lifetime incomes.
This system is fair.
It's fair to our older folks who now depend on Social Security.
It's fair to those who are too old to really accumulate a good nest egg for
retirement. It provides them the security of the current fixed income Social Security program.
It's fair to those who can acutally accumulate a subtantial nest egg. It provides
them a real retirement fund rather than IOUs from their neighbors.
It's honest.
The truth is the government always misuses money.
Your career politicians have a strong desire to control the spending of as much money as possible.
Their honor and presteige depends on the size of the
budgets they control, not on whether they did the right things for the
people back home who elected them. That's the honest truth.
You can honestly control and manage your money better than career government politicians.
Your retirement money belongs with you, not with public servents hungry for power.
This is the best system.
Any elderly person would gladly see his or her grandson or
grandaughter retire a millionaire rather than depend on the government
for a relatively fixed income.
Those living on a fixed income know there must be a better way.
Let's listen to them!
As a young person, you know your grandparents would wish that for you.
And, you would wish that for yourself.
|