As I’ve tried to imply in my previous few posts, I’m paying less attention to what’s going on in America lately simply, I believe, because I’m getting worn out being disappointed with my country’s “leaders.”  I shouldn’t be – I’ve read several books recently on American history, and the polarization among leaders we’re experiencing in this nation today is nothing new.  And, the willingness of the parties with tangible interests in the “outcome” of, for example, the dispute over the “debt ceiling” to fabricate information to aid their cause is also nothing new.  Through America’s short history there’s been many a partisan “fight” which included fabrications by those involved in the disputes.  For example, looking at a major contemporary issue, today I looked up on the net info on the Social Security trust fund.  Now, anyone who’s been paying attention to American politics for any length of time knows that the republican party has been trying to get their GREEDY hands on all that “trust fund” money for MANY years. 

The original intent of the trust fund was to keep the program solvent (which it has) and to keep the politicians “hands” off the money.  It’s grown to be a large sum of money – by today’s estimates it’s grown to 2.6 TRILLION DOLLARS.  And, I’ve heard, like everyone else watching or listening to or reading the news that the Social Security trust fund is nothing more than a pile of IOU’s.  Also, today I read a column at Forbes.com, I think the author’s last name was Merrill, who was obviously a proponent of “privatizing” Social Security and who was claiming that there was no money in the trust fund – that it had all been borrowed.  So, what’s the deal?  Democrats say it’s solvent for the next 25 years.  Who’s telling the truth (if anyone)?

According to the Social Security’s own website, the fund is there and it will be there for that “another 25 years,” at which time, if there are no modifications to the system it would be able to pay out about 75% of the accrued benefits – not broke, but not completely solvent.  There are NO “IOU’s,” unless you consider the “special” government securities which the trust fund invests in as “IOU’s.”  (the securities are also purchased by state governments, retirement funds, and other large “conservative” investors) These are similar to US savings bonds, they are special securities that have always been paid back WITH INTEREST by the federal government.  Now, I’m not an expert on how our government functions financially, but they do generate money by selling savings bonds.  In fact, I can remember when I was a child (the fifties) it was considered patriotic to purchase savings bonds.  Many parents, mine included, purchased savings bonds for their children – I believe mine matured in 7 years and was then worth $50!  That is why, apparently, whoever’s in charge of the Social Security trust fund says the fund is solvent and backed by the “full faith and credit of the United States.”  Things are starting to make sense to me now.

 The person who was writing at Forbes.com (Merrill?) was lamenting that “had we privatized Social Security” we wouldn’t have to worry about whether or not the checks would go out on August 3rd (as President Obama postulated regarding possible effects of congress failing to “act responsibly”) – should the House republicans follow through on their threat to refuse the raising of the debt “ceiling.”  He’s (Merrill) saying the money would still be in the stock market and Seniors wouldn’t have to worry about it.  As I’m writing this, I’m wondering how some of these people manage to get jobs writing for business sites like that – honestly.  Of course, my first thought was – now, try to picture me responding to the Forbes.com author – “What do you think the stock market is going to do if the federal government defaults on its obligations?”  Again, I’m no expert – but the implication I took from that article was the guy was suggesting funds will be safe on Wall Street if the federal government defaults.  I’m going to try not to get too animated and simply say ARE YOU KIDDING ME?????

But, here’s another thought:  Do you think all these “tea partiers” (many who are collecting Social Security and enjoying the benefits of Medicare – I’m not kidding when I say I’ve met some devout “right wing” whackos who despise “government run health care” and “big government” while they are dependent on Social Security and Medicare – REALLY!) in Congress believe the way to destroy Social Security and Medicare is to force the government into default?  In reality, the Social Security trust fund IS backed by the “full faith and credit of the United States,” so if you attempt to destroy that “full faith and credit” maybe you could succeed.  Although, I believe there is a fundamental problem with that philosophy as well.

Fortunately, at present in my life, I’ve been able to pay all of my bills on time – for several years now.  However, there have been times in my lifetime (yes, I’m a “baby boomer”) when that hasn’t been the case.  And, guess what, EVERY time I’ve been late on paying a bill, the BILL DOES NOT GO AWAY!  So, should the “tea partiers” succeed in failing to raise the debt limit by the “due date” (actually, the due date has passed and Tim Geithner is juggling the books to forestall the issue) the problem won’t go away.  In fact, based on my previous experience, EVERYTHING will get worse.  I’m not claiming the world will stop revolving, but it makes total sense to me that the result will be that the debt will INCREASE because the interest on the TOTAL debt will increase, thereby increasing the annual budget deficit – that these republicans have suddenly become so worried about.  I really can’t see the United States simply saying that we won’t pay these debts – they’ll still be due – including the special securities owed to Social Security’s trust fund.  The “tea party” will simply have succeeded in proclaiming to the rest of the world that an irrational minority with the proper financial backing can bring America’s “great experiment” in self governance to its knees!  (by the way, as I was checking this all out, I found that many states invest in these “special government securities” as well, because they are so “safe.”  These “tea partiers” are really messing with a lot of trouble – national AND local – I actually heard Michele Bauchmann say defaulting on the debt wouldn’t be a big problem – It should be no surprise that she’s running for president on the republican side!)

In fact, it only requires a quick check on the internet to discover that the so-called “Obama budget deficit” of something approaching 1.5 TRILLION dollars for fiscal year 2011 is comprised of over $400 BILLION in interest payments on debt that accrued before he ever took the oath of office.  When you add over $400 BILLION for the “Bush tax cuts,” and over $200 BILLION for Iraq and Afganistan, it’s easy to see that the problem, while still significant, is much beyond Obama’s control (although, if you’ve read many of my previous posts, you know how I feel about him extending those tax cuts).  And, if congress decides to default on August 2, those interest payments could double – thereby making the debt problem MUCH more serious. (if you haven’t noticed, interest rates are at unbelievable lows at the time of this writing)  Oh yes, I must throw in here that the Social Security Administration has not contributed in ANY WAY to that national debt which is causing those huge interest payments – so why would it even be part of this discussion?

Here’s another thing I find interesting (and, since I’ve given President Obama some grief previously on this site, I think he deserves some credit for how he’s pushed this issue to the front).  While I was researching the debt I discovered that even during the last four years of the Clinton years the total national debt was increasing.  Well, they were telling us WE were running a surplus – which, technically, we were.  That is there was more revenue coming in than what was going out (do you remember, that was the original rationale for Bush’s tax cuts – the “people” could better spend that money) – EXCEPT for the interest.  When you calculate the interest, the total debt was going up about $100 billion in each of Clinton’s “surplus” years due to interest payments of over $300 BILLION (rates were higher then) which were not included in the “deficit” discussion.

George W Bush followed the same approach of not including the interest payments as part of the budget reportings so that his “deficit spending” – even though it was REALLY BAD – looke a whole lot better without the $300 – $400 BILLION in interest which was accruing each and every year he was in office.  To make matters worse, Bush/Cheney didn’t include the WARS in their budget projections and reports.  They included EVERY cent of the Afghanistan and Iraq FIASCOS on “supplemental” budget requests and that tactic made their deficits look smaller as well.  President Obama discontinued all these “accounting” misdemeanors and therefore his budget deficit looks HUGE compared to Bush/Cheney.  It’s larger, but when you consider how Bush/Cheney were hiding things, it’s not that much larger and – when you consider the economy Bush/Cheney left Obama with – it could be A LOT worse!

I’m pretty much unhappy with most of America’s political leaders (exceptions such as Bernie Sanders, Sheldon Whithouse, Dennis Kucinich, Alan Grayson, and Peter DeFazio to name a few) but it’s the people like the guy on Forbes.com who are driving this corporate takeover of our government who really bug me.  I have no idea where the guy got his information, but it doesn’t take long to look up the topic(s) when people like that are blasting one part of our government or another.  I’m OK with questioning what the government’s doing – in fact, I believe that is an obligation of America’s citizens – but, this effort to destroy the government for “privitization” is nothing more than a push toward fascism.  In this instance, Social Security’s trust fund really IS solvent – AND – despite the FACT there could be some kind of interruption in checks going out – should the “tea partiers” succeed in pushing the default – the debt (or assets, however you want to look at it) will still be there – presumably the change will be the interest on the debt will increase – and the checks will still be due.  Trying to “fix” government is one thing, trying to destroy it is quite another!  Since the day Grover Norquist made the famous quote about “drowning government in the bathtub” republicans have been busy trying to destroy the greatest national experiment of self rule in the history of the world, and it’s up to “we the people” to make sure they DON’T succeed!