Over at the house blog of the Institute for Truth in Accounting, they have a nice side-by-side comparison of the Madoff scheme and the Social Security one. And yet the AARP and the National Committee to Preserve Social Security and Medicare are pushing to have Social Security left out of the deficit commission’s deliberations. According to Congressional Quarterly:
“Social Security has not contributed one thin dime to the current deficit,” former Rep. Barbara B. Kennelly, D-Conn. (1982-99), who is president of the National Committee to Preserve Social Security and Medicare, said during a conference call with reporters. “It should not be used as a piggy bank to pay our way out of the fiscal hole we find ourselves in.”
Then she should have made sure that the federal government didn’t put its dirty hands on the alleged “lock box” in which payroll taxes were supposed to be held to pay for future retirements. That money – roughly $2.5 trillion for the Social Security trust fund alone, and $4 trillion once we add the other “trust funds” — is long gone. It’s been used to pay for wars and education and Head Start and such. Granted, the cash has been replaced by IOUs from the federal government, but, in order for the federal government to pay back Social Security, it will have to borrow the money from the public, increasing the deficit and the national debt, or tax Americans once again. This seems like the biggest rip-off ever.
Megan McArdle, over at The Atlantic, touches on the issue here.