Vail Daily letter: How it really works
Vail, CO Colorado
While I applaud Mr. Le Vine’s recent positive spin on Social Security, here is how I understand it really works. Each year, money is collected from all workers who pay into the system and from the amount that is collected, all Social Security recipients are paid.
What is left over is what Mr. Le Vine said has been placed into the Social Security trust fund. In actual fact, no money exists in such a fund. The excess over that required to pay current Social Security recipients is put into the general fund and has always been spent by the politicians who represent us.
The fact that the surplus is getting smaller and smaller is what worries our politicians, for at least two reasons.
One, they at some point in the future won’t be able to pay all recipients out of the collected funds, so they will have to come up with the difference themselves (either via taxes or cuts in benefits – there is no bank account like “Social Security fund” from which to draw).
And two, they are receiving a smaller and smaller amount of excess money to dump into the general fund and spend. As the spendable excess gets smaller and smaller and eventually becomes nonexistent, the government will have to obtain that amount of money through higher taxes or cuts in non-Social Security programs, neither of which makes politicians very popular.
So, while Social Security may not yet be adding to our national deficit, eventually it will not provide the slush fund of excess money that politicians have been spending. And what effect do you think this will have on our future deficit?
Bill Saunders, Edwards