The future of Social Security presents not just a crisis for America, but an even bigger opportunity. For Social Security reform done right is a huge opportunity for a historic breakthrough in the personal prosperity of working people.
On July 30, Art Linkletter will be celebrating his 96th birthday at a Hollywood party at his home in Beverly Hills. But the famed TV personality and Middle America "icon" won't just be throwing a party, he is a man with a mission.
The evening will be devoted to a new book, "Stop the Raid," by Dennison Smith and Peter Ferrara. Linkletter contributed a foreword to the book, which explains how the federal government has raided the Social Security trust fund over the years, using the money for other government spending.
For example, in 2007, 88 percent of total Social Security tax income was spent immediately for current benefits and expenses, leaving a surplus at $80.3 billion. What happened to that surplus money? The federal government borrowed it and spent it on general budget expenditures. In return, Social Security got Federal IOUs, which promise to pay the money back, with interest. Over the next five years, from 2008 to 2012, the federal government will continue to raid (borrow) another $410 billion from the Social Security trust funds.
The problem is that the federal government has no assets or other cash to back these IOUs. When Social Security starts running deficits in 2017, the government will have to tax workers again to get the money to pay these IOUs back, so all Social Security benefits can continue to be paid. The book reports that from 2017 to 2041, when the trust funds are currently projected to run out, taxpayers will have to shell out an additional $6 trillion, besides the payroll tax, because of the raid on the Social Security money, to cover all the IOUs.
The issue is not that the government will default on the IOUs, but that paying them off will be an additional heavy burden on working people.
Linkletter writes in his foreword, "What was a much-needed means of social security in the 1930s has become an ATM machine for Congress rather than securing and guaranteeing a portion of our retirement."
The authors argue for prohibiting the feds from raiding the trust funds for non-Social Security expenditures. But what do we do with the surplus money if Congress doesn't take it and spend it?