Ron is Wrong
"Russ Feingold and politicians from both parties raided the Social Security Trust Fund of trillions and left seniors an IOU. They spent the money. It's gone."
Ron Johnson, Republican nominee for US Senator from Wisconsin (1)
Annual revenues from Social Security taxes now exceed the annual payout to seniors and disabled people, and the surplus is invested in special US treasury bonds. These bonds, like US savings bonds and treasury bills sold to the public, are backed by the full faith and credit of the United States government. Since this government started borrowing money during the Revolutionary War, the US has never defaulted on a debt. That is why American treasury securities are considered the "gold standard" of a safe investment by investors and foreign governments all over the world. China is not our best friend in the world today, but it holds more US debt than anyone else.
So is the money gone, as Ron Johnson says? Only if the federal government defaults on the treasury bonds, which is unlikely, since the treasury can simply print more US currency whenever needed. (2)
What would Johnson do with the surplus Social Security revenue? Keep it in a vault in Fort Knox or similar storage facility? That way it would not be spent, but it would not provide any interest either, so less money would be available to pay future benefits. Invest it in bank accounts, stocks or corporate bonds? That would be more risky than using treasury bonds!
The Republican nominee is also willing to consider voluntary partial privitization of Social Security. (1) The trouble is that too many people would make bad investments with their retirement money, and would be destitute in old age. The public pressure to bail them out would be irresistible, so the taxpayers would probably be stuck with the cost of their benefits.
Johnson's campaign commercials say he is for less government, and no wonder. As a straight, white, male Christian, he never encountered discrimination, so government civil rights laws did him no good. As a business owner, he did not need the Wagner Act to protect his right to join a union. As a multi-millionaire (at least before he bought all those TV ads), he has no need for Social Security, Medicare, Medicaid, Badgercare, food stamps, or even public schools. For wealthy people like Ron Johnson, the federal government means regulation and income taxes, so the less the better.
Wisconsin's other senator, Herb Kohl, is vastly richer than Ron Johnson, so he certainly has no need for all those government benefits. But the difference is that Kohl cares about the well-being of those much less fortunate, so he wants government to be big enough to help them.
Ron Johnson is good at running a plastics company (3), and I hope that he continues to do that well.
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(1) Milwaukee Journal Sentinel, Sept. 16, 2010, page 5B (continuation of page 1B story).
(2) The benefits would then be paid in ruinously inflated dollars, but they would be paid.
(3) Johnson's firm Pacur started operations after a man in The Graduate urged Dustin Hoffman to pursue "plastics." Coincidence? Maybe.
Ron Johnson, Republican nominee for US Senator from Wisconsin (1)
Annual revenues from Social Security taxes now exceed the annual payout to seniors and disabled people, and the surplus is invested in special US treasury bonds. These bonds, like US savings bonds and treasury bills sold to the public, are backed by the full faith and credit of the United States government. Since this government started borrowing money during the Revolutionary War, the US has never defaulted on a debt. That is why American treasury securities are considered the "gold standard" of a safe investment by investors and foreign governments all over the world. China is not our best friend in the world today, but it holds more US debt than anyone else.
So is the money gone, as Ron Johnson says? Only if the federal government defaults on the treasury bonds, which is unlikely, since the treasury can simply print more US currency whenever needed. (2)
What would Johnson do with the surplus Social Security revenue? Keep it in a vault in Fort Knox or similar storage facility? That way it would not be spent, but it would not provide any interest either, so less money would be available to pay future benefits. Invest it in bank accounts, stocks or corporate bonds? That would be more risky than using treasury bonds!
The Republican nominee is also willing to consider voluntary partial privitization of Social Security. (1) The trouble is that too many people would make bad investments with their retirement money, and would be destitute in old age. The public pressure to bail them out would be irresistible, so the taxpayers would probably be stuck with the cost of their benefits.
Johnson's campaign commercials say he is for less government, and no wonder. As a straight, white, male Christian, he never encountered discrimination, so government civil rights laws did him no good. As a business owner, he did not need the Wagner Act to protect his right to join a union. As a multi-millionaire (at least before he bought all those TV ads), he has no need for Social Security, Medicare, Medicaid, Badgercare, food stamps, or even public schools. For wealthy people like Ron Johnson, the federal government means regulation and income taxes, so the less the better.
Wisconsin's other senator, Herb Kohl, is vastly richer than Ron Johnson, so he certainly has no need for all those government benefits. But the difference is that Kohl cares about the well-being of those much less fortunate, so he wants government to be big enough to help them.
Ron Johnson is good at running a plastics company (3), and I hope that he continues to do that well.
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(1) Milwaukee Journal Sentinel, Sept. 16, 2010, page 5B (continuation of page 1B story).
(2) The benefits would then be paid in ruinously inflated dollars, but they would be paid.
(3) Johnson's firm Pacur started operations after a man in The Graduate urged Dustin Hoffman to pursue "plastics." Coincidence? Maybe.
Labels: "Ron Johnson", social security
posted by Gerald S Glazer at 9:49 AM
2 comments
