In this day and age of information zooming pell-mell down the electronic highway, often faster than the public can assimilate, there should not be any surprise at people’s varied, and sometimes off base responses to news which affects them in serious and alarming ways.
One outrageously provocative issue is the future of Social Security in the US. Everyday, in one or more publications, or on multitudes of social media pages dangers, threats, fake news, and histrionic reactions play out. The public, especially those who depend now, or will in the near future, on Social Security Benefits are alerted, confused, and quite possibly frightened into a state of rage at, and mistrust of their government and lawmakers.
An enormous challenge to the retired at this stage of Who’s On First, in a jumble of facts or fiction, is the message that President George W Bush, borrowed $1.37 trillion from the Social Security Trust Fund during his presidency, and spent it on wars, bailouts, and assorted government expenses. And he never paid it back.
The presidencies have moved on, and the monies borrowed by those next in office have increased, with a total now hovering around $3 trillion. It is very disturbing when someone trusted dips into, borrows,
and mishandles one’s future, that was paid for and anticipated receiving back by workers since the 1930s. How could they?
The reality is, no one has done anything wrong, nor inappropriate. As a matter of fact, what has happened was, and is, mandated by law.
For about fifty years, Social Security paid out, yearly, close to what it took in through annual payroll taxes. However, in 1982 President Ronald Reagan saw the surge in Baby Boomers gaining on their retirement age, and initiated a payroll tax hike to cover the impending increase in payouts. As a result, Social Security began accruing a surplus.
Herein lies the cause of today’s and tomorrow’s dilemma. By law, the US Treasury is required to take the surplus, and in exchange, issue interest accruing bonds to the Social Security Trust Fund. In the meantime, the Treasury uses the cash to fund government expenses. The Treasury has to repay the monies whenever the Social Security Commissioner wants to redeem them.
Unfortunately, the Trust Fund stopped running in surpluses in 2010. There still is enough cash in the Fund to pay benefits until
around 2020, or with some juggling, 2026. Therefore, the bonds have not been cashed in, and evidently will not be until then.
The end of the line and call to action will come sometime in the 2020s. At this point, there is no mystery. The bonds will have to be redeemed, and the taxpayer will be faced with that job. Perhaps, provisions will be made ahead of time, and a plan put in place for this repayment; all in positions of power being fully aware this day will be here in possibly three short years.