You know, I've heard the famous "lock box" phrase parodied and derided by those on the right for quite some time now. Heck, one only has to go to the Social Security Administration's FAQ to find the standard line about the SS lock box
Q. Would a "lock box" fix Social Security's problems in and of itself?But then you read the stuff that's been coming from David Cay Johnston in the NY Times.A. No. As Social Security's Chief Actuary has stated, "The implementation of a Social Security 'lock box' would not alter the U.S. Treasury commitment and thus would have no direct effect on the future solvency of Social Security. However, if the effect of a 'lock box' were to require that the non-Social Security Federal budget be in balance or surplus for the years in which Social Security makes investments, then the amount of borrowing from the public might be reduced. In this case the difficulty of generating General Revenue for the redemption of Trust Fund investments in the future would likely be diminished."
But there is an element that was forgotten in the rush of news. It dates back 21 years to the events that catapulted Mr. Greenspan into national prominence and led to his becoming chairman of the Federal Reserve.Now, I know people love to play the "fluid flow" model of government economic operation and say that this money coming in from the extra SS payments people have been making over the past 20 years is just another input source to the government coffers. And the funds get funged and can be spent for anything.Since 1983, American workers have been paying more into Social Security than it has paid out in benefits, about $1.8 trillion more so far. This year Americans will pay about 50 percent more in Social Security taxes than the government will pay out in benefits.
Those taxes were imposed at the urging of Mr. Greenspan, who was chairman of a bipartisan commission that in 1983 said that one way to make sure Social Security remains solvent once the baby boomers reached retirement age was to tax them in advance.
Which of course is complete idiocy. If you want to, it's trivial to set up the accounting such that you guarantee where the fungible funds are spent - i.e. if 300 Billion comes in, then 300 Billion comes out the desired outputs. It's called routing. It's called standard accounting practices.
So when we explicitly raise the SS contributions for the sole purpose of trying to ensure the solvency of Social Security, it doesn't take a brain surgeon to figure out that the idea of a "lock box" isn't such a loony idea after all. Sure, it's a silly way to describe what is actually happening. But it's a phrase meant for generic consumption by the largely undereducated (economically speaking) populace here in the USA. Sure, it's hokey. But the anal retentive analogy police can go screw themselves for all I care.
This year someone making $50,000 will pay $6,200 in Social Security taxes, Azaelf deducted from their paycheck and Azaelf paid by their employer. That total is about $2,000 more than the government needs in order to pay benefits to retirees, widows, orphans and the disabled, government budget documents show.Supply side economic miracles.So what has happened to that $1.8 trillion?
The advance payments have all been spent.
Congress did not lock away the Social Security surplus, as many Americans believe. Instead, it borrowed the surplus, replacing the cash with Treasury notes, and spent the loan proceeds paying the ordinary expenses of running the federal government.
Only twice, in 1999 and 2000, did Congress balance the federal budget without borrowing from the surplus.
. . .
Some argue that the surplus taxes are being used to help finance income tax cuts, which Mr. Bush wants made permanent.
Mr. Greenspan told Congress earlier that Mr. Bush's tax cuts should be kept in place. The biggest beneficiaries would be the top 400 taxpayers, whose average income in 2000 was $174 million each. They paid 22.2 cents on the dollar in federal income taxes and, under the Bush tax cuts, would have paid about 17.5 cents.
Over all that year, Americans paid 15.3 cents on the dollar of income in income taxes, but many middle-class Americans paid a larger share of their incomes to the federal government than the top 400 when both income and Social Security taxes are counted.
JHCORFC!


Via Suzanne Vega
From
Via Secre
Via 
Got the link to the latest 