Archive for February 10th, 2013

In a previous story, I outlined some of the misconceptions about President Ronald Reagan. See https://johnhively.wordpress.com/2013/02/06/myths-and-accomplishments-of-president-ronald-reagan/. However, President Reagan had some positive accomplishments even if modern day conservatives and liberals are loath to admit them.

For example, when Reagan was president, the long term outlook for the Social Security Trust Fund did not look good. So Reagan appointed a committee to overhaul the system. The committee’s recommendation included a massive increase in the payroll tax, which mostly hits the 99 percent. Reagan approved and signed the deal.

Today, both Republicans and corporate Democrats (which are 80 percent of the Democratic Party in DC) tell us through the corporate media that Social Security is broke, that it’s filled with worthless IOU’s, and that it needs to be privatized so that recipients can receive less benefits and Wall Street can steal money from the fund. But the Social Security Trust Fund is not broke.

The Trust Fund has a $2.7 trillion dollar surplus invested in US treasury bills, the most secure investment in the world since the US government has never failed to pay its debt when the bill comes due. Those treasury bills collect about $120 billion dollars a year in interest. Even when tax receipts to the fund are less than payouts, the Trust Fund has a positive net flow. For example, in 2010, Social Security paid out $42 billion more than it took in tax receipts. The corporate media reported a crisis, saying Social Security was broke! They lied. They refused to count the interest Social Security received on its treasury bills. The Trust Fund had a $78 billion surplus that year, if you count the interst it was earning.

Thank you President Reagan! One should suggest, perhaps, that this retirement program should be called the “FDR/Ronald Reagan Social Security Trust Fund.” That would be appropriate.

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