August 31, 2013 10:50 AM
Monday, the government opened the season of its favorite sport: terrorizing the elderly and the infirm. Washington wants more money. So it threatens the most defendless in our society.
This is the same Secretary Jaboc Lew who signed a letter to Congress a few months back that said the Social Security Trust Fund had enough cash by ITSELF to pay benefits for more than three years (page 4). The latest figures show that the trust fund has roughly $2.8 trillion in assets. The only possible way that Social Security will not have cash sufficient to meet its bills for years to come is if the man running it is completely.
For all of its long-term financial problems, Social Security has a very solid network of near-term funding sources. The bonds held by the Social Security Trust Fund can be refinanced without adding to the total level of government debt. If the Secretary feels that the government might not be in a position to refinance the debt, he should build a cash reserve today in preparation for that possibility. On top of the trust fund, the system collects a portion of payroll taxes. If there were any truth to the letter, Secretary Lew would be fired for breach of his fiduciary responsibility.
Here is proof that reality is stranger than fiction. When Social Security has excess cash, it is required to invest it in government securities. Unfortunately, the government will not be able to issue more debt. So any excess cash would sit uninvested, while the rest of the government is unable to borrow it.
It is time to remove politics from Social Security. The system needs an independent managing trustee who does not view the elderly and infirm as cattle to prod. The idea that Social Security might not have cash to pay benefits in October is meant to create fear in the elderly rather than inform the public. It is despicable behavior.