Hands Off Social Security by Dean Baker: Cutters propose gov't default on Social Security bonds

[Better Believe It]

April 7, 2009
This is Not the Time to Touch Entitlements in the Name of Fiscal Responsibility
Hands Off Social Security
By DEAN BAKER
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of Plunder and Blunder: The Rise and Fall of the Bubble Economy.


As a result of incredible economic mismanagement and the greed and incompetence of the financial industry, the country is in the worst downturn since the Great Depression. In this collapse we have seen the most massive intergenerational transfer in the history of the world.

What do our elites, ranging from editorial boards to former Commerce secretary Pete Peterson, plan in response to this situation? At the same time that they are handing trillions of dollars to the bankers who wrecked the economy, they are proposing to cut Social Security in the name of fiscal responsibility.

This plan is even more outrageous because workers have already paid for their Social Security benefits. The Congressional Budget Office projects that Social Security, by drawing down its trust fund, will be able to pay benefits until the year 2049 with no changes whatsoever.

In effect, the cutters are proposing that the government default on the bonds held by the Social Security trust fund: U.S. government bonds that were purchased with money raised through the designated Social Security tax.

While the government has no legal or moral obligations to pay off the banks' debts to wealthy investors (who presumably understood the risks they were taking), the Social Security bonds carry the full faith and credit of the U.S. government.

It is understandable that people are angry. We have a government and an elite that never stop looking for ways to take money from ordinary workers and redistribute it upward to the richest people in the country.

Please read the complete article at:

http://www.counterpunch.org/baker04072009.html

[terisan]

1. Thank you for posting. I think Larry Summers fully fits the definition of Capitalistic Pig.

[Warren Stupidity]

2. That pesky constitution says "no".