The Social Security Trust Fund now totals $2,892,000,000 – just about the highest amount in history, and some scolds are still sad.
To promote their austerity charade, the front groups of the Koch Brothers (descendants of the co-founder of the John Birch Society) just released their attack dog, John Stossel.
J. S. rants on FOX News about silly things, even suggesting everyone should save some 20% of their wages for retirement and maintaining that the poor don’t need luxuries like public schools or highways.
Social Security is running out of money. You may not believe that, but it’s a fact. That FICA money taken from your paycheck was not saved for you in a “trust fund.” Politicians misled us. They spent every penny the moment it came in. – Stossel (worth $4 million) laments.
Anyone with even half a brain, including J. S., knows the Trust Fund is part of the national debt (see graph). This is the same type of financial obligation – treasury bond – that is owed to China or the merry band of Federal Reserve bankers. We wouldn’t default on Goldman Sachs bonds, Treasury Notes held by the Clintons and Trumps, or not pay back billions to Mao’s minions – so the Trust Fund is absolutely safe.
But not really safe. If the elite can confuse us to not use the trust fund for owed pensions, Congress will happily hoard it in a slush fund.
Many projections of the financial health of Social Security include such a provision, assuming trillions in trust fund dollars always remain unused for pension benefits. Politicians hide the truth that it was the taxpayers who overpaid FICA to create the Trust Fund in the first place.
All dire Trust Fund predictions assume a pitiful GDP growth rate and much higher unemployment than in recent years. They factor in even lower than current (2.97%) interest paid by Congress for borrowing the Fund assets. In other words they cook the books.
But even with all that frying and baking and flipping the numbers, the deficit projected in 75 years is an actuarial one percent of the GDP by 2093. In today’s numbers that would be $193 billion, or a little more than one-quarter of the current Defense Department budget.
Did anyone just say: a few less $13 billion-dollar aircraft carriers, instead of hiking everyone’s retirement age from 67 to 70 (if you live long enough to collect)?
But since the establishment-touted rule is you can’t spend more on earned Social Security benefits than you raise in FICA taxes (now 35% of all federal income), what happens if we apply the same requirement to our Defense Department?
How do we pay that $700 billion expense? There’s no defense income tax. No defense sales tax or payroll tax.
For sure there is no defense tax on pensions of Congress folks, who merrily retire at 50 or 62.
Members of Congress are eligible for a pension at the age of 62 if they have completed at least five years of service. Members are eligible for a pension at age 50 if they have completed 20 years of service, or at any age after completing 25 years of service. – Congressional Research Service
If the rule is that you can only spend what you raise in taxes, the military has a big problem
Since the department has no dedicated income, it therefore faces an annual deficit of $700 billion. In 75 years the military financial tragedy will be even worse – an accumulated Defense unfunded obligation of $52.5 trillion. The interest expense alone will be $1.56 trillion in today’s dollars every year.
If the new rule is “spend only what you raise in taxes” the Defense Department could be reduced to one former general of canine persuasion, plus three pugnacious pups to insure a chain of succession. A kennel in the rear of the White House may be all that’s needed for offices and sleeping quarters. That expense might be met by a private GoFundMe campaign to endow perpetual puppy chow, plus rubber toy cannons for weapons’ education and chewy fun.