Q.E.D.

(1)

The finances of the Social Security program are separated by law from the rest of the federal government.

(2)

The Social Security program levies its own taxes.

(3)

{FICA} Tax income is deposited on a daily basis and is invested in “special-issue” securities. The cash exchanged for the securities goes into the General Fund of the Treasury and is indistinguishable from other cash in the General Fund.

(4)

The government pays interest to the Trust Funds. The government owes the money which the {Social Security} Trust Funds have loaned to it and will have to repay it as the securities come due.

(5)

Special {Security} issues can be redeemed at any time at face value {from the General Fund}.

(6)

The GDP increase per dollar of budgetary cost is in the range of 1.6, 1.7 for things like food stamps and unemployment benefits, and in the range of .35 for extending the Bush tax cuts.

IOW:

  Expect a $1.70 return for every Bottom Up $1.00 invested,

  and ONLY a $0.35 return for every Top Down $1.00 invested.

Given those Facts what Conclusions can we deduce?

(A.) The General Fund owes a Debt to the Social Security Trust Fund, NOT the other way around.

(B.) Those who pay into the Social Security Trust Fund do NOT owe the General Fund anything, least of all anymore of our Benefits.

(C.) The workers who pay FICA Taxes have a Legal Right to Full Repayment of those Trust Funds and its Benefits, with interest.

(D.) The General Fund needs to raise its own Taxes, to repay the Trust Fund, for the Special IOUs it signed, in exchange for the use of American Workers Retirement funds.

(E.) When a Government runs up a huge National Debt, that is NOT the fault, NOR the problem, of Trust Fund participants, us, who only lent them the money.  They Owe Us — NOT vice versa.

(F.) Continuing Tax Cuts to the Wealthy, will continue to result a very poor return on that “Top Down” Investment;  and will do little to pay back the Trust Fund, what it’s owed.

(G.) Money spent on “Bottom Up” activities and on employing working class people, is a much better way to “jump start” the Economy, for the the long run — due to the Spending Multiplier effect, that such targeted spending has   [returning about $1.70 on each “Bottom Up” dollar spent].

and one more Fact to add to the Discussion:

(7)

According to a September report by the Congressional Research Service, the two wars have already cost $1.1 Trillion.

and the Conclusion?

(H.) The GOP and their Wealthy donors should be willing to LET the Bush Tax Cuts expire, and begin to pay their “fair share” — just because of the “Enhanced Security” they now enjoy … due to those IOU-Funded Wars, of the last decade.

They should be willing … IF they were indeed Patriotic Americans, duty-bound to pull their own weight, for the sake of Freedom;  and especially since Tax Cuts for the Wealthy, are such poor ROI investments for America’s GDP Economy   [returning only 35 cents on each “Top Down” dollar spent].

Q.E.D. (8)

Epilogue:

Personal Responsibility, and building a stronger Nation and a productive Future, requires more than rhetoric, it requires shared sacrifice, and “manning up” as some on the Right have been known to say.

“Manning up” includes paying your Fair Share — and NOT Running from that Personal Responsibility.  

“Paying the Piper” and “Honoring our Debts” — racked up from the last decade of GOP Credit-binging, is the challenge before the General Fund “beneficiaries”, right about now.

How they will handle that “call to action”, will be a true test of their American Character.

Caveat Emptor:

Since we are talking about Politicians here, let the weasel-faced, two-step, procrastination dance, begin.  Strength of character will no doubt, be in short supply.

As.per.usual.

Unless  Facts, Logic, and Patriotism, actually do sync up with the Fierce Urgency of Now, this time around …

======= Sources ========

(1) The Impact of Social Security on the National Debt by James D. Agresti and the Staff of Just Facts — Sep 1, 2001

(2) Ibid.

(3) Social Security Online — Trust Fund Data

(4) Fast Facts — Trust Fund/General Fund

(5) Ibid.

(6) Extending Bush Tax Cuts WON’T Create Jobs, Says Leading Economist by Laura Bassett, HuffingtonPost – Jul 28, 2010

(7) Trimming a bloated defense budget by Eugene Robinson, WashingtonPost — Nov 16, 2010

———-

(8) Q.E.D. — wikipedia

Q.E.D.  the Latin phrase quod erat demonstrandum, which means “what was to be demonstrated”. […] The abbreviation thus signals the completion of the proof.  […] A better translation from the Greek would read, “what was required to be proved.

2 comments

    • jamess on November 18, 2010 at 2:50 pm
      Author

    Ad hoc

    For this purpose.

    Ad absurdum

    To the point of absurdity.

    Ad infinitum

    Without limit – endlessly.

    Ad nauseam

    To a sickening extent.

    and without establishing your premises

    A priori

    From what comes before.

    Logical, Rational Thought eventually, becomes History too …

    Source

  1. And the fix is on, as they say at the track, and Krugman (among others) is asking all the right questions, but the bosses don’t respond.

    So how, exactly, did a deficit-cutting commission become a commission whose first priority is cutting tax rates, with deficit reduction literally at the bottom of the list?

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