Krauthammer on the Obvious

Charles Krauthammer is once again forced to explain the obvious: The Social Security “lockbox” is a fiction.  A point I made in 1998 when the Social Security guy came to us in Seminary and explained the wonders of paying 15% of everything I will ever earn to others, so that others down the line can pay it to me.  My objections were twofold:

1) Sounds like a Ponzi scheme.  Aren’t those illegal?

2) We were assured that, thanks to recent bargains made in congress, the fund was solvent until 2037.  That would be the year I turn 65.  So, it was solvent until I attempt to retire.  I wasn’t sure how that was supposed to reassure me, but he seemed pretty proud of it, so we didn’t want to make him sad by pointing out the obvious.

3) The solvency only applies if you ignore the money going out faster than it comes in starting in about 2015.  In other words, the government has to come up with the difference.  How is the government funded? It’s not like they will simply sell more cars to remain profitable. Even if it did, they couldn’t do that right.  But in fact, the government gets its money from the taxpayer.  In other words, to make up the shortfall, taxes have to go up.  So, Social Security is only “solvent” through 2015.

But (and here’s the really ‘funny’ part), welcome to the future!  Thanks to the recession, receipts have dipped.  Meaning, we’re out of money now.

In retrospect, if the guy had come to the sem trying to sell us swampland in Florida with these parameters, he probably would have been arrested for fraud.

Anyway, glad to see that others are now taking notice.  And of course, Krauthammer says it more eloquently than just about anyone.

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