Your Opinion: More on Social Security
Tuesday, November 8, 2011
Mr. Smith, I do not hate Social Security; that is an assumption on your part. Your statement about President Reagan and Greenspan is correct; they did put the excess money into treasury notes. At the time the United States had a AAA rating for any debt that it incurred. It was the safest places to put money in the world. What is our rating now? It has been downgraded to AA+ caused by a trillion dollar deficit.
Bernanke printed money to buy treasury notes, weakening our notes. Reports say we may be downgraded again. Our Congress needs to put its financial house in order to save the value of the treasury note.
You asked the question — do we pay China or Social Security? The answer is if you fail to pay China or any other treasury note holder the treasury notes will have the same value as a junk. In your personal life to you pick and chose which debts to pay? You pay them all on time or your credit rating drops. The consequences are no further credit or paying high rates of interest.
You accuse me of using scare tactics. I only quoted what President Obama and the Democrats said about not raising the debt limit that Social Security checks might not go out. Are you saying they used scare tactics to increase the debt limit? I think that they knew that they would have to make the decision to cut spending in a dramatic way or stop sending Social Security checks out unless the debt limit was increased.
You also stated that the debt ceiling was automatically raised due to inflation over the last century. Over the last three years there has been little inflation. In some areas of the economy we have had deflation. Yet our debt ceiling from 2008-2011 has increased by about 30 percent. That weakens our treasury note. Social Security inflation increase was 3.6 percent over the same three years.
I never used the word ponzi scheme because Social Security is not a ponzi scheme. It is a generational transfer of money from one generation to another as a social decision to protect people.
My worry is with the treasury notes that are supporting the Social Security trust fund. Treasury notes are only backed by the ability of our government to tax. With the excessive spending and borrowing of our government will be able to sustain the current Social Security system? Like many other people I depend upon its success.
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