September 7, 2001
Dear Editorial Board:
In only one week, I have read two editorials that stated the Federal Government should focus on reducing the National Debt. However, you choose to ignore the facts regarding the true state of affairs with the Federal Budget and Debt. And you continue to withhold the facts from your readers. Why?
In today's editorial, "Cutting tax on capital gains is not prudent," you stated, "Well, it turns over the budget projections for this year were off a tad - $123 billion to be exact. That shortfall, in part because of the tax rebate, hampers efforts to fund Social Security and reduce the debt."
I have some bad news for you. The politicians have squandered the Social Security surpluses for over sixty years. Constituents, newspapers such as the Union-Bulletin, and the media in general let them get away with it, year after year.
Now, the politicians and the news media want to completely ignore the dire situation of the National Debt and Social Security. They continue to suggest to their constituencies and readers that the Debt can still be paid off and Social Security can still be saved.
The $35 billion tax rebate is insignificant when you truly look at the facts: the National Debt is $3,500 billion (the total National Debt including the Social Security trust fund is $5,700 billion).
Here's a quote from a Bloomberg magazine called On Investing. The quote is from an article called, "Do We Have a Surplus" (John B. Shoven, Ph.D., Fall 2001, page 11): "So, let's consolidate what we know. The government as a whole ran a $236 billion surplus [in 2000], but part of the government (trust funds of SS, Medicare, etc.) ran a surplus almost as large at $234 billion. That means that the rest of the government ran a relatively tiny surplus of approximately $2 billion. This number is reported in the massive US budget as the 'Federal Funds surplus,' but it receives almost no attention."
Therefore, in its best year (strong economic growth with high employment, so high that the Federal Reserve was actually increasing interest rates in the first half of the year) the Fed ran a surplus of $2 billion. It will take them one thousand, seven-hundred, and fifty years to pay off the National Debt not including the Social Security trust fund ($3,500 billion divided by $2 billion per year).
Sincerely,
Dear Editorial Board:
The top priority of the Fed and Union-Bulletin should be to inform Americans about the reality of the National Debt (ND) and Social Security (SS).
The ND is $5.7 trillion (T) with $2.2T held by the so-called SS trust fund. I say so-called because the government still has $5.7T in debt, it just owes itself $2.2T of it.
Remembering some of my basic math from Green Park: I take $3.5T (5.7T minus 2.2T) and divide that by the best case scenario for a budget surplus of $150 Billion (B) and I get 23. It will take the Fed 23 years to pay off just the ND not including the SS trust fund. (best case scenario surplus of $150B based on the following: in 1999 we had great employment, GDP growth, corporate earnings and stock market gains, and the Fed had a surplus of about $150B)
In 2015 there will be more outlays of SS and Medicare than coming in, and the government will need to dip into the trust fund, but there won't be one. In fact, I already pointed out the government is still going to be trying to pay off the $3.5T of ND. They will still have another 9 years (2015 to 2024) just to pay off that portion of the ND.
Simple math has shown that since the government squandered all the SS surpluses from the mid-thirties to now has left America in dire straights. The sooner the government and the news media admits that and passes the information on, the sooner Americans can accept the facts and save more on their own.
The Republicans are screwed up because they think SS can be saved and still give tax refunds that mostly go to the rich. The Democrats think the Republicans are just scaring the public even though the government has already increased SS taxes from 2% in the Thirties to 15% in the Eighties and increased retirement ages, e.g., someone born after 1964 has a retirement age of 67, and if they retire early at 62, they get a 30% reduction in benefits vs. only a 20% reduction for someone born before 1938. Just go to www.ssa.gov to find out your retirement age. Those born in 1964 are still 30 years away from retirement and you would have to be nuts to think they're not going to raise taxes and the retirement age even more.
Sincerely,