To the Editor:
Re: “Keep them honest” by Judith Vandenboom (It’s Your Write, April 21).
Nothing is real in “La La Land,” not even the AARP.
From the Daily Reckoning website: “Are you the only one who believes in the accounting farces that are the Social Security and Medicare ‘Trust Funds’? Every dollar in both of those funds has been spent by the U.S. Treasury.”
The government is not using the payroll taxes to build retirement nest eggs or to insure the elderly and disabled. Rather, it’s used to sustain government itself. Not a dollar is set aside for you, just debt. Indeed, your government-sponsored retirement fund has all been spent already.
The entire balance of the Social Security Fund has been borrowed by the government. Upon receipt of payroll taxes (that fund Social Security), the Treasury converts them to “special issue Treasury bonds.” It’s simply money taken out of the “trust fund” and replaced with an IOU.
Since the government holds these IOUs, a measure of how much money the government owes the “trust fund,” it says nothing about where the government will get the money to pay back those IOUs.
Even if government can find a way to redeem the IOUs, the “trust fund” surplus will be exhausted by 2040. At that point, Social Security will have to rely solely on revenue from the payroll tax, and that revenue will not be sufficient to pay all promised benefits.
Yes, government thinks we’re too stupid, and it’s up to the tea party to keep them honest.