SOCIAL SECURITY IS NOT GOING BANKRUPT

Just as Republicans are too fucking dumb to figure out that the raising the debt ceiling is about paying for things already done, and not about incurring new debt for new programs, they also fail to understand that Social Security is not welfare. It’s not an “entitlement.” It’s a “return on investment” made by working people throughout their working lives, to provide retirement income so we don’t have massive poverty among the elderly as was the case before 1935.

Both of sets of facts seem simple, but when you have to qualify for membership in the party by flunking the IQ test low enough to be below ambient room temperature, it may be too complex for those who failed reading comprehension in junior high to understand.

Every ten years or so, we have to suit up to defend Social Security from its Republican foes, who have been dead-set on destroying it since it first became law in 1935. You hjave to give them credit for persistence

Given the feral pre-adolescents who were elected to the House Republican caucus, this will be an ongoing fight for the next two year. And if the country is insane enough to reinstall Trump in the White House with a Senate and House majority, it will be the fight of fights for another four years.

Republicans always talk about the system being a “ponzi scheme” like Ron Dumber-that-Shit Johnson has been calling it; they talk about it being “insolvent” and headed for “bankruptcy.” Just to be clear, none of that is true. This is just scare talk designed to convince people that big cuts to the program are necessary and inevitable. It’s simply not true.

It doesn’t help that the over-educated, overpaid, under-intelligent, otherwise-unemployable trust fund babies of the DC Press Corpse either cannot or will not see through the flimflam of Republicans’ schemes to cut or dismantle Social Security.

We can thank Marjorie Traitor Goon and the rest of the feral kindergarten kids and their ridiculous antics at the State of the Union Speech for being such a public embarrassment that the event forced some of the MSM to do some fact-checking on what Biden had to say about Social Security and the Republican fever dream to kill it, and whattya know? They found out Biden was right. Not only that, but they have said so publicly, proving the truth of the old saw that even a blind pig can find a truffle.

Republican claim again and again that in X years, Social Security will become “insolvent.” Not true! Being generous to them as one is supposed to be when dealing with the mentally challenged, it’s possible to say that at best, it’s a totally misleading way to describe how the federal government pays for things.

Social Security and Medicare are funded by a payroll tax of approximately 15% on wage and salary income up to a statutory cap, which currently stands at $160,200. That tax is split between the employer and the employee (unless you are self employed, in which case you pay the whole thing). That tax funds both programs. A few generations ago, Congress increased the amount of tax to build a surplus in order to pay for the benefits going to the boomers. That’s the “trust fund.” Gubbermint Accounting and allowed Social Security to “lend” that the surplus funds to the rest of the federal government by purchasing government bonds. At current expenditure rates, the Trust Fund will run out of bonds to cash in the mid-2030s, according to current estimates.

This is when Social Security supposedly becomes “insolvent.”

That, however, is a meaningless term. The law says that the federal government has to pay its promised benefits and if they can’t all be paid by payroll taxes, the balance can and will be paid out of general revenues. This was the assumption about what would eventually happen back when the program was founded almost a century ago.

However, that doesn’t make the topic a non-issue. At the current level of taxation and expenditure, there will be a funding gap, but it’s not “insolvent.” This is just a budgetary issue to be resolved. It’s not “insolvent.” That’s just scare talk. Now, how can the funding gap be resolved? The remainder can be paid out of general revenue - the payments for income, corporate, capital gains and other taxes not tied to any specific program.

Alternatively, the payroll rate could simply be raised, but this is a bad idea both politically and economically, since the payroll tax is really regressive. An employee pays about 7.5% on the first dollar of income to $160,200. No deductions. Every dollar. In fact the employees are actually also paying the employer’s 78.5% because that’s money that goes to the cost of employing people that would otherwise go to the employee. Low- and middle-income workers who make less than the cap are paying a flat tax of 15% on every dollar they make.

The simpler and more equitable solution is just to raise the cap.

You can raise the income cap from $160k to say $200k or $250k. More equitably, you could leave it at $160k then have it kick back in at $500k, which would put most of the burden on very high income earners.

This of course is anathema to the feral pre-schoolers.

Republicans want to leave the rate where it is and start cutting benefits. That, however, is a question of societal values more than a question of economic. Income inequality is key on every front, as a matter of equity, since rising income inequality has been responsible for weakening Social Security financing. It’s simple: as more income is pushed into the higher tax brackets,that additional income has been removed from the Social Security tax base.

Republicans claim what they want do do is “strengthen” Social Security, and of course they will never kill it. And if you believe that, you should definitely go invest in cryptocurrency as a safe harbor for your hard-earned money.

South Dakota Republican Senator Mike Rounds Rounds said on CNN State Of The Union: “I kind of look at security the way I would at the Department of Defense and our defense spending. We’re never going to not fund defense.” He said that after admitting that Republicans want to fund Social Security year to year, which open the door every year to killing the program.

Technically, what Rounds was suggested wasn’t cuts themselves, but the first step to cuts. If Republicans ever get the Senate majority back, they want to make funding Social Security a regular program that must be voted on. Republicans want kill Social Security through privatization and cuts, and they are telling anybody who listen that the goal is to harm the program. When he first ran for the Senate in 2010 Mike Lee told supporters: “It will be my objective to phase out Social Security, to pull it up by the roots and get rid of it.”

Guess what happens after Republicans decide not to fund Social Security?

The program will die.

It’s not just that they have in favor of cutting or phasing out Social Security and Medicare for decades. They now demand that President Biden agree not to say this is what their policy is. Despite the fact Republicans have been demanding cuts and a phase out for decades and will continue to do so after the current burst of media attention abates, Biden must stop telling voters about this because Republicans have agreed to deny what their policy is.

Of course, the funny thing is how many Republicans can’t help restating their demand for cuts even while denying their demands for cuts. And they do it on camera!

There are so many examples of this it’s hard to know where to start. It’s a target-rich environment.

But here’ a few:

RonJohn denies President Biden’s claim Republicans want to cut Social Security. But immediately after saying this, he called Social Security a “legalized Ponzi scheme” and said Congress should no longer automatically pay Social Security benefits each year but rather decide each year whether to pay them and how much the benefit should be. “That doesn’t mean putting on the chopping block. That doesn’t mean cutting Social Security. But it does mean prioritizing lower priority spending.”

Majority Leader Steve “David Duke without the baggage” Scalise also denies President Biden’s claims that Republicans want to cut Social Security. But even while insisting the President was lying he endorsed yet more cuts. “We want to strengthen Social Security by ending a lot of those government checks to people staying at home rather than going to work.” He wants to put a “work requirement” on a retirement plan.

Senator Rick Scott proposed sunsetting every federal program, including Social Security and Medicare, after five years. He back that up after being called out on it by not only President biden but Senate Minority Leader Mitch McConnell, which led to him saying on Friday in an op-ed that he certainly didn’t mean ending Social Security, Medicare, veteran’s benefits, or defense spending. It must have finally gotten through to him that pushing this is not the road to re-election as a senator representing the state with the highest percentage of voters being people who live in Social Security and use Medicare, not in 2024.

So what are the options? For years, the Republican policy of choice was converting Social Security into a 401k-like system of private accounts. Jurate’s 401k retirement was all Disney stock, which dropped in value 45% between December 2021 and November 2022, when Bob Iger came back and got rid of the genius he put in as CEO when he left two years ago. Since Iger’s return, the stock has gone back up 7%. Do you want to make year to year projections of how you can life and what you can do, based on the performance of the average moron sitting in the CEO’s corner office of whatever corporation your retirement has been invested in by a government directed by politicians for sale to the highest corporate bidder?

A 401k places all the risk on the individual rather than socializing the risk, which is the heart of what social insurance is. Social Security is a form of social insurance.

That’s typical Republican “Southernomics”: socialize risk and privatize profit.

In modern thinking, ideally you want to retire with three things: Social Security, savings in a 401k or other tax deferred system and a pension. Few people have pensions these days, so it mostly comes down to one and two. (There’s also the option I took: “What is this ‘retirement’ you speak of?”)

The other approach Republicans propose is to leave the structure as it is and reduce the benefits.

The usual Republican proposal is simply to increase the age of eligibility, which has some surface logic since people live longer than they did when Social Security was first created. It’s still a cut, since fewer years of eligibility means fewer total dollars you receive.

Another proposal, which Obama was dumb enough to chase after in search of his “grand bargain” with people who wanted him dead, back in 2011, is to change the formula that determines the annual increases which allow security benefits to keep up with the cost of living. There is some real debate about whether the current cost of living formula - “chained CPI” - is the most “accurate” way to calculate cost of living and purchasing power.

I think anyone reading this who is on Social Security now will agree with me that “chained CPI” (Consumer Price Index) does absolutely nothing about keeping Social Security benefits up with actual price increases for the things seniors actually buy - none of which are on the list of what is considered CPI, by the way.

The third broad category is “means testing.” Advocates of this idea like to point out that everyone would agree that Bill Gates doesn’t need his Social Security check, that this protects the people who really need it while saving a lot of money. This changes the perception of the program into something more like welfare, reducing support for it. Preserving broad based political support for the program is crucial to maintaining it. — as purely economic.

In practice of course, it has to apply to a lot more people than just Bill Gates, otherwise you’re not saving any money. It likely reserves the program for people who have no private savings or means of support and would be literally destitute or starving without their monthly check. That’s not how most people see Social Security. Ideally, it’s part of a mix of income sources that allow people to live comfortably if not lavishly during their retirement years. Regardless, a cut is a cut.

Fortunately, the White House is ignoring the Republican demands to stop accusing them of seeking cuts to Social Security and Medicare; President Biden has been doubling down on his attack on the feral bedwetters.

Republicans are convinced that finding alternative ways to reduce or end Social Security is a winner for next year’s campaign.

Current beneficiaries aren’t safe in GOP plans either. No cuts for anyone over, say, 55 fails to deal with the fact that Social Security is an inter-generational compact. If younger workers are told they will get lower benefits for the same tax contribution, support for current beneficiaries weakens. How do you feel about working the next 35 years at the current tax rate to support current beneficiaries when your own benefits will be cut dramatically?

Republicans are way too late trying to go the John Kerry route - “I was against it before I was for it” - and that will work as well for them as it did for him. Democrats should “beat them bloody” with every video of them saying what they really think, used in every campaign commercial. Mke them dread turning their TVs on.

The road to victory in 2024 is to remember that older voters are the most reliable voters and make sure they know in their bones what the Republican threat is.

If you want to save Social Security, elect Democratic majorities next year to pass a raise in the income cap, such as that proposed by eithe Senator Elisabeth Warren, whose planned increase would keep the current cap and then kick in at over $400,000, which is President Biden’s “red line” in his promise not to raise taxes on anyone with income under that level.

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