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Wednesday, July 13, 2011

Bear Trader Writes: Re: Threats to Social Security

Recent threats to cancel Social Security checks







The President recently said that Social Security checks "may have to be delayed" (for how long? Indefinitely?) unless the House passes the debt ceiling increase the President demands. This is untrue.

The following information comes from the Social Security website, from the Office of the Chief Actuary of the Old Age, Survivors, and Disability Insurance, commonly known as Social Security.

http://www.ssa.gov/oact/tr/2011/lrIndex.html

This following detail comes from Table VI.F7. - Operations of the Combined OASI and DI Trust Funds, in Constant 2011 Dollars, Calendar Years 202111-86. (OASI means Old Age and Survivors Insurance and DI means Disability Insurance.)

http://www.ssa.gov/oact/tr/2011/lr6f7.html

Since 2011 is not actually over this data is a projection made late last year. The "intermediate" projection is the data I have used here. This is the "most likely" scenario. The below income is the sum of OASI and HI income.

Year is 2011.

"Income excluding interest" is $692,800,000,000. This is the revenue taken in by the Federal Government from Social Security taxes. By law this money is to be used only to fund Social Security.

"Interest Income" is $114,900,000,000. This is interest owed by the Federal Government to Social Security from Treasury Bonds owned by the Social Security trust fund. The Fourteenth Amendment to the Constitution, Section Four, says that this interest must be paid in a timely fashion. This interest payment takes precedent over any other Federal Government spending (along with the interest due on all the rest of the Federal debt) whatsoever. The Federal Government must pay this interest if it means cancelling any other program to do so, from military to welfare, from firing all Federal employees to closing all the Cabinet organizations to selling off all Federal assets from buildings to lands, the National Parks, everything.

Total Income is $807,700,000,000, the sum of the two above.

Now we look at Social Security OASDI outgoing pension payments. From the Social Security website:

http://www.ssa.gov/OACT/FACTS/

The total pension payments for OASDI covered pensioners is $59,146,000,000 per month. For the twelve months of 2011 this is $709,752,000,000.

So. Social Security income this year is $807,700,000,000. Pension payments are $709,752,000,000. Paying the pensions this year will leave over $97,948,000,000 from this year's income alone without touching saved capital.

Unless the Federal Government is going to illegally steal money from Social Security assets there is plenty of money to pay all of the Social Security pensions this year. There won't be any shortage for some time, decades probably, according to the Social Security Chief Actuary. If the President steals from Social Security, oops, I mean "borrows from Social Security" he breaks the law. Social Security is being treated like a political slush fund.

We shall see if Chicago politics rules in this country. There is certain cause for impeachment if Social Security checks stop coming. The House would vote to impeach. Politicians would be so scared of the senior vote that even the Senate would convict the President and he would be out of office. These veiled gangsterish threats the President has made are nasty indeed.

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