Social Security Is In Trouble

In response to a question about Social Security President Obama just yesterday insisted: "So here’s the thing. Social Security is not in crisis."

Actually Mr. President, here’s the thing… it is.

For the first time, Social Security is going to have to dip into the so-called “Trust Fund”. This year, 2010, Social Security is going into its “Trust Fund” for $41 Billion dollars. This is 7 years ahead of when it was projected to have to do so. And they’re saying that in 5 years it’s projected to have to do this more often to meet demand. How is that not a crisis?

But Paul Krugman, Keynesian Economist extraordinaire says not to worry…the Social Security Trust Fund holds $2.5 TRILLION dollars from surpluses that SSA ran for the past 25 years. According to Mr. Krugman, those surpluses were being put into a special account and “the program won’t have to turn to Congress for help or cut benefits until or unless the trust fund is exhausted…” which should be sometime in 2037 according to him.

Actually Mr. Krugman, there is no special account on which the SSA can draw.
By LAW, Social Security has to lend any surplus revenues to the US Government, which puts it in as part of the general fund and issues an IOU to the SSA for the amount. In the past 25 years, Social Security has contributed $2.5 TRILLION dollars to the operating budget of the United States Government. A government, by the way that is running record deficits.

That means that in order to give the SSA $41 Billion dollars this year, the government will have to BORROW another $41 billion from investors. That’s right, in order to pay back social security money it borrowed, the government will now borrow AGAIN, thus increasing the deficit by $41 billion dollars.

And you’re telling me that the President and/or Mr. Krugman are unaware of this?
Having read the remarks of both Mr. Krugman and President Obama, I find that I either must question their intelligence or their integrity. It’s one or the other, either they’re uninformed or they are liars.