“Social Security is totally funded by the payroll tax levied on employer and employee. If you reduce the outgo of Social Security, that money would not go into the General Fund to reduce the deficit. It would go into the Social Security trust fund. So, Social Security has nothing to do with balancing a budget or erasing or lowering the deficit.”
– Ronald Wilson Reagan, 07 October 1984, Louisville, Kentucky, Presidential Debate (the first Reagan-Mondale debate)
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For those whom may be unaware, the Social Security Trust Fund continues to be used as a virtual "slush fund" from which Congress takes to pay for their "pet" projects back home. To draw a mental image of what it’s like, it’d be like a $100 "Petty Cash Fund" in a lockbox at work. The money is used to pay for small or occasional items, like a lunch, parking money, postage, snacks, laundry, or other small incidental expenses. The money withdrawn is replaced with an IOU, and always repaid, often before a pay period ends. The IOUs and Cash on Hand MUST equal $100 – the beginning cash balance.
But, if only there are only IOUs, and they total $100, the books balance, but there is no money.
That’s what’s been going on with the SSTF.
Congress has been taking money from the SSTF to pay for their pet projects, and replacing the money with Federal Reserve Notes – which is a federal IOU, backed by the full faith and credit of the United States government – that is payable in the future.
If Social Security was made a HANDS OFF ACCOUNT, to be used EXCLUSIVELY to pay for claims upon it, i.e., Social Security, it would become solvent virtually overnight.
In his presidential debate with then-former Texas Governor George W. Bush on 04October2000, Former Vice President Al Gore said :
"I will keep Social Security in a lockbox, and that pays down the national debt and the interest savings I would put right back into Social Security. That extends the life of Social Security for 55 years.
"You know, Social Security is a trust fund that pays the checks this year with the money that’s paid into Social Security this year. The governor wants to divert one out of every six dollars off into the stock market, which means that he would drain a trillion dollars out of the Social Security trust fund over the, in this generation, over the next 10 years, and Social Security under that approach would go bankrupt within this generation.
"His leading adviser on this plan actually said that would be O.K. because then the Social Security trust fund could start borrowing. It would borrow up to $3 trillion.
"Now, Social Security has never done that, and I don’t think it should do that. I think it should stay in a lockbox, and I’ll tell you this, I will veto anything that takes money out of Social Security for privatization or anything else, other than Social Security."
Posted by SouthernBreeze on 2012-11-30 01:34:06
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Tagged: , 2012 , Southern Breeze , MBP , CS5 , budget , federal , Social Security , Ronald , Reagan , president , presidential , debate , 1984 , retirement , money , debt , deficit , fiscal cliff , payroll , tax , employer , employee , T , Social , Security , Trust , Fund , SSTF , Social Security Trust Fund , payroll tax , General Fund , Ronald Reagan , lockbox , lock , box , CSPAN , Louisville , Kentucky , KY
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