Lois Thompson – 3/1/09

This page was last updated on March 1, 2009.

Don’t touch Social Security; Lois Thompson; Beaver County Times; March 1, 2009.

Below is a detailed critique of the subject letter.

“President Barack Obama promised not to mess with Social Security.

“His individual tax cuts of a refundable tax credit of up to $400 a year for individuals and up to $800 a year for families for 2009 and 2010 will be done by adjusting Social Security taxes so take-home pay is higher.”

[RWC] Note, a “refundable tax credit” is no more than welfare in disguise. So-called RFCs result in cash payments to people who have no tax liability.

“Also, in his speech to the joint session of Congress Tuesday, he stated, ‘Now, to preserve our long-term fiscal health, we must also address the growing cost in Medicare and Social Security. Comprehensive health care reform is the best way to strengthen Medicare for years to come, and we must also begin a conversation on how to do the same for Social Security, while creating tax-free universal savings accounts for all Americans.’

“We do not need to start a conversation on how to reform Social Security. Funds taken from Social Security should be replaced, and Social Security should not be a part of the general fund.”

[RWC] Ms. Thompson writes, “[w]e do not need to start a conversation on how to reform Social Security,” then proposes two reforms.

First, funds taken from Socialist Security can’t “be replaced” by law. The original SS legislation required “surplus” funds be used to purchase Treasury bonds. Second, Socialist Security isn’t really “part of the general fund,” but that’s how it’s been accounted for since the Johnson administration.

Finally, doing what Ms. Thompson wants wouldn’t help anything anyway. SS has been a Ponzi scheme from the beginning and, as designed, SS requires an ever-growing SS taxpaying population and a high multiple of current SS taxpayers relative to current SS beneficiaries, and/or ever-increasing SS tax rates, and/or ever-decreasing benefits. Any such system has failure built in.