Monday, March 15, 2010

Social Security to start cashing Uncle Sam's IOUs

During the 90's, I can remember telling people that there wasn't any money in the Social Security fund, only government IOU's. I was told I'm crazy, I'm just anti-government and all sorts of things. Well, as usual, the Main Stream Media is now reporting this when it's to late.

For those of you out there who still think we should trust Washington D. C. to handle our Health Care, you better pay attention.

By STEPHEN OHLEMACHER, Associated Press Writer – Sun Mar 14, 7:19 pm ET

PARKERSBURG, W.Va. – The retirement nest egg of an entire generation is stashed away in this small town along the Ohio River: $2.5 trillion in IOUs from the federal government, payable to the Social Security Administration.

It's time to start cashing them in.

For more than two decades, Social Security collected more money in payroll taxes than it paid out in benefits — billions more each year.

Not anymore. This year, for the first time since the 1980s, when Congress last overhauled Social Security, the retirement program is projected to pay out more in benefits than it collects in taxes — nearly $29 billion more.
Sounds like a good time to start tapping the nest egg. Too bad the federal government already spent that money over the years on other programs, preferring to borrow from Social Security rather than foreign creditors. In return, the Treasury Department issued a stack of IOUs — in the form of Treasury bonds — which are kept in a nondescript office building just down the street from Parkersburg's municipal offices.

Now the government will have to borrow even more money, much of it abroad, to start paying back the IOUs, and the timing couldn't be worse. The government is projected to post a record $1.5 trillion budget deficit this year, followed by trillion dollar deficits for years to come. FULL STORY

1 comment:

Anonymous said...

Now the chicken come home to roost - this is the beginning of inevitable sovereign default and bankruptcy, after which even these IOUs are worthless. Siphoning money out of Social Security via these IOUs in effect will just mean you were paying a higher, non-redeemable income tax all those years.