CE Week #8: “Social Security ‘raise’ unwarranted” Oct. 24th
by Froma Harrop
The Spokesman-Review
Social Security is a glossy piece of paper on which nearly every politician wants to finger-paint an agenda. But Social Security has no need of ornament. It is a very grown-up program. Put some other toy into the political playpen.
Come January, for the first time since 1975, Social Security payments will not be ratcheted upward for inflation. The reason is simple: no inflation.
But now President Barack Obama is pushing Congress to send every senior a $250 check to compensate for … for … for what? For the fact that some Social Security recipients expect a “raise” every year, whether or not it is warranted? They saw a 6 percent hike in their benefits last year. But that was not a “raise.” It was a cost-of-living adjustment to maintain (not increase) the buying power of their monthly checks.
If the president wants to hand out checks to stimulate the economy, why make them age-specific? Money sent to low-income people, whether young or old, would make far more sense. And the still better stimulus is government spending on roads and other worthy projects. That money gets shot right into the economy.
Sending an extra check to Social Security beneficiaries is also about pandering to older voters. But politicians should first ask themselves, “How many other Americans got 6 percent ‘raises’ last year?”
There is another proposal to cut payroll taxes. The plan is foolish and reckless – and has drawn bipartisan support. These taxes pay for Social Security and Medicare. Cutting payroll taxes puts those programs in jeopardy, which is why some liberal economists, such as Robert Reich, should hang their heads in shame for wanting to monkey with them.
On the right, meanwhile, there is growing affection for the idea. First off, many conservatives hold that cutting taxes solves all problems. (That did wonders for the deficit, didn’t it?) Secondly, fooling with payroll taxes could undermine the public’s faith in Social Security by lending ammo to the false charge that the program’s trust fund is all a fraud.
You see, the Social Security taxes now paid by workers and their employers support current beneficiaries. What’s left over goes into the trust fund to be tapped in future years, when a surge in retirees puts pressure on the program. It’s been a conservative talking point that the Social Security trust fund doesn’t exist; the government has spent the money.
Not quite. The Treasury bonds in the trust fund are real IOUs representing real money taken from real workers for more than 25 years. No matter what the federal government did with that borrowed money, it still has to pay it back.
Make the argument, if you must, that the Treasuries sitting in the trust fund’s file cabinets are not like the super-safe government securities traded around the world – that the Treasury doesn’t have to make good on them. The truth is that these special Treasury bonds are different, but they still cannot be defaulted upon without a vote by Congress.
So here’s an assignment for anyone who calls the trust fund’s Treasuries “worthless pieces of paper”: Find me one member of Congress, Republican or Democrat, who vows to vote against Washington’s promise to honor them. I’ll buy lunch.
According to the Social Security trustees’ latest report, payroll taxes will cover all of the retirees’ promised benefits until 2016. After that, the trust fund can make up for any shortfall until 2039. That is 30 years from now. We can worry about Social Security’s finances in 20 years.
You know what children with paint want to do with a clean sheet of paper? They want to mess it up. Social Security is a clean program. Let’s keep it that way.
Froma Harrop is a columnist for the Providence Journal.
A. I don’t know very much about the current state of this program, only it’s history, so I found some of the main points of this article interesting. First of all, it was interesting how he brought up the idea of tax cuts proposed to raise money. Correct me if I’m wrong, but isn’t that akin to murdering to heal? I know, I know, I have just betrayed my own party. However, I also liked learning about the Treasury bonds. I didn’t know anything about them until I read this article.
B. I hate Social Security. There, I said it. Angry crowd of old people, you may now grab your torches and pitchforks. However, I see why it was created. It was a necessary program when it was first created, but it has been around for 74 years even though it was created for a short, 5 year term. No wonder it’s going bankrupt, the people who started it are ALL DEAD! In addition, we now have only three workers paying for every one Social Security beneficiary. To put this in perspective for you, the average American laborer makes $48201 per year (United States Census Bureau). The average American male has 2.59 children and a wife. They are also paying for one third of an old person. It is estimated that in 5 to 10 years, that number will be one half of an old person. That means that Each worker gives approximately 16,000 for Social Security (in a fair society where the social security beneficiary receives the same amount as the other 4.59 people).
C. I would like to know about the proportions that each beneficiary receives. I don’t know anything about how much money the average person makes OFF of Social Security.
Connection- MOST New Deal programs were discontinued because they were no longer needed or they went bankrupt. Social Security lingers today because it provides a valuable and needed service: taking care of the elderly. However, there are other ways that we could save the elderly without draining the American economy to nothing.
A. What I Learned:
Social Security is not being increased this year to accommodate inflation, since there is no inflation. Due to the lack of increase Obama wants to send all people on Social Security a check for $250 to compensate, the question is what is being compensated. Another possibility besides social security is a cut in payroll taxes. Cuts in payroll taxes would cause problems with the payment of social security. The payroll taxes are viewed to cover social security until 2016. A trust fund is being established with the money not used to pay social security taxes of current beneficiaries.
B. What I Know:
I know that social security causes many problems in the country. Many politicians take a more prominent stance on issues that are related to the elderly because they are more active in voting and have a larger turn out. I know that a check sent to social security beneficiaries would be unfair to other people and the money could be more useful in different areas of the government.
C. What I want To Know:
What is the average social security income? How much has been placed in the trust fund at this point?
D. Connection:
In U.S. History last year I remember learning that politicians care more about social security and issues concerned with the elderly, because they are more active in elections.
A. Social Security seems to be a popular topic these days, especially when it comes to the effect the economy has on the program. This article taught me that Obama wants to give $250 to every senior citizen. I learned that for the first time since 1975, Social Security payments will not be increased due to inflation.
B. Social Security kind of confuses me. I always wondered why younger generations were paying for the older generation’s retirement. Why don’t we just save up for our own retirement? Therefore, I find it interesting that Obama would want to send Social Security checks to seniors for no apparent reason. Maybe he feels like Social Security recipient’s opinions of him will change if their expected “raise” isn’t fulfilled. But the fact is, they don’t need a raise to compensate for inflation because there is no inflation. I like how the article says that “if the president wants to hand out checks to stimulate the economy, why make them age-specific?” The author argues that government spending on roads and other projects would be more worthwhile.
C. I was wondering who started Social Security and if it has changed much since its inception?
D. Connection: One of the questions on the ballot for the mock election involved Social Security. We discussed in class whether or not there should be an increase in Social Security tax by 2%. It’s a risk because you don’t know if future generations will do the same for you.
A. I learned a little about the situation about social security. I have actually found this pretty interesting in the past. This taught me a little bit about it and the problems that we face in the future with this system. One of the main things that I learned was that it is now predicted to last for 20 more years at least but in 30 years it will collapse. This isn’t good. The most amusing part was that the plan is to do nothing right now and leave it alone until it is a bigger problem.
B. I think that Social Security should be better done and things should change for this program to work. Things should be done now so that it doesn’t screw with things later. Who knows what is going to happen in 20 years and what we will be involved in. Right now we have some time that we can attack this problem. I don’t believe that social security is a good thing but some do and that I can respect. However I don’t want to pay taxes into a failing system. Things are bad but they can be worse. I think that the problem should be faced now by a small bipartisan committee to resolve the issue.
C. I would like to know what the government’s official standpoint on the issue is. Also my connection is that we voted for this in the mock election. I find that interesting and I would also like to know what people think on this subject on the national level and in our school.
NO CREDIT: MISSING EXTENSION/CONNECTION
A. What I already knew was social security was just a thing we paid for now out of our pay checks and it went to the elders. Every adult pretty much said my generation would never see social security in our life times. I can see how that could be true because of our national debt. Relating to having a massive debt, it is a possibility that we will see our social security and the national debt will just be a bigger, fancier, more expensive number.
B. What I think about this article is it has a great amount of trust in the government. Not that it is a bad thing, but I have to question how much trust in it is good for a person until it is naive. Like I said, if my generation does have our social security by the time we are in our upper sixties and seventies, it will probably be like it is now with the national debt, but with much bigger numbers.
C. What I would like to know is how much money do people get for their social security that they have worked for their whole lives? Is it a decent amount?
Relations~
The banks make IOU pieces of paper also. They use peoples money in the bank for the building, inside and out, and other various reasons, but the bank still has to give people their money when they want it.
What did I learn?
President Barack Obama is pushing Congress to send every senior a $250 check to compensate
“Sending an extra check to Social Security beneficiaries is also about pandering to older voters.” If that’s what our President is doing I can say, with ease, he’s a coward who’s only thinking of himself. However, I don’t think he’s doing that, but we’ll see.
“According to the Social Security trustees’ latest report, payroll taxes will cover all of the retirees’ promised benefits until 2016. After that, the trust fund can make up for any shortfall until 2039. That is 30 years from now. We can worry about Social Security’s finances in 20 years.” So basically… this isn’t going to keep working, and lets just be done with it Obama.
What do I want to know?
I want to know what Obama score on his SAT, his IQ, and why he really cares about Health Care and all the Senior Citizens.
Is he just waiting for a re-election?
NO CREDIT: MISSING EXTENSION/CONNECTION
What I know: Social Security is a very expensive program that a lot of conservatives do not agree with. It is intended to be self-funded in that taxes are taken from the working’s pay and then given to the elderly; however, the “baby boomers” have come in and caused a lot of strain on the system.
What I think: Social Security, just like welfare, needs a complete overhaul. It is expensive and doesn’t necessarily do its job. Also, I don’t think that the elderly should be getting this little bonus – at least not right now. Sure, free money is great and I’m sure the elderly love it, BUT is this really wise in such a fiscal crisis? There hasn’t been inflation and yet they get money due to expectations and tradition. It is rather irrational. Regardless, I don’t think Social Security will exist in its present form by the time I reach that age.
Question: What is the current average amount for a social security check?
Connection: I doubt there are really any Congressmen who vow to not honor social security money because the elderly make up the greatest chunk of the voting bloc. It is simple, politicians want to be liked and they need to get the elderly vote. It’s a shame that the youth don’t step up to the plate even though they outnumber the elderly.
TELL ME WHAT YOU KNOW ABOUT THE TOPIC ADRESSED:I will not go so far as to say that I know a whole lot of numbers about the subject at hand in this article, but I do somewhat know what’s going on. I found that I understood what the issue is, but I have a hard time finding a position on the subject because I don’t know enough about it to completely understand both sides. All I know is that I want to still have social security for when I am ready to retire.
TELL ME WHAT YOU THINK ABOUT THE ARTICLE: I found that I did not like the article very much; I feel that the author is so set in her ways that she is completely closed minded to any information or opinions that do not stay strictly in line with her own. I also think that she is wrong about the treasuries IOUs being just as good as money. When the local diner accepts IOUs for a sandwich, is when IOUs are as good as money. I thought it was ignorant of her to say that we can worry about social security’s finances in 30 years. In 30 years I will be 48 and not nearly ready to retire, by that time the system may be too far gone to be fixed, and people like me who will have been pumping tax dollars out of our paychecks into social security will never reap the benefits. Maybe she will be dead and gone by then and then she won’t have to worry about it, but I am going to worry about it until I have sufficiently reaped my rewards from the system and am ready to peace-out-rainbow-trout, if you know what I mean.
WHAT DO I WANT TO KNOW ABOUT THE SUBJECT: I want to know how much money is left in the treasuries and how anyone who agrees with this author plans to pay back that money into the social security system?
CONNECTION: The opinion set in this article reminded me of trying to debate politics with my uncle, who is very stubborn and would not concede a single point no matter how many good points were made against his position that he could not defend.