This is a my original letter to the editor published in the March 25, 2011 edition of Chicago Tribune. The Tribune links are at the bottom of this blog.
People smarter than me can point out the lack of merits of Mr. Charles Krauthammer’s argument that the Social Security “lockbox is empty” and we must either increase the tax or reduce the benefits for future social security payments (his latest commentary “it bears repeating: The lockbox is empty, March 21, 2011 edition of Chicago Tribune). But I do have two questions Mr. Krauthammer:
- If the social security lock box is always emptied by the politicians on whatever they feel like spending, then why should I, a tax payer, pay any money to go into the lock box? Mr. Krauthammer has clearly established that he and his friends can spend the money on anything they want, not just social security.
- If the social security box – for which there is a specific tax revenue – is empty, then what about lock box related to other programs like war spending, subsides for corporations and farms, to name a few? I assume all those boxes are empty as well and Mr. Krauthammer should have no problem increasing taxes related to those boxes or cut expenses. Of course, he would never suggest any such taxes or cut programs related to corporations.
By tying the deficit to social security (which makes up a very small portion, if any, of current deficit) and not addressing other major programs (war, Medicare, corporate subsidies etc.) causing the current deficit Mr. Krauthammer demonstrates why there will not be any serious discussion regarding deficit.
Here are the links to the commentary by Mr. Krauthammer:
Here are some of the facts regarding social security and deficits:
- Actual deficit for fiscal 2009 was $1.414 trillion; social security tax revenue was $654 billion and benefit payments were $678 billion. That is social security portion of the deficit was $24 billion or less than 2% of federal deficit. And this is the first year of deficit for social security and this deficit is covered by the social security surplus (of over $2.5 trillion) over the past several years.
- Federal debt at the end of fiscal 2009 was $11.9 trillion; this includes $2.5 trillion held by social security trust fund. In other words, social security trust fund holds more than 20% of national debt. This $2.5 trillion is the balance in the lock box that Mr. Krauthammer claims to be empty as it was spent on other programs and not available for social security payments in the future.
You can read the boring details of these other statistics in this Congressional Budget Office publication.