Tag Archives: federal spending

Max Brantley acts as if there is money in Social Security Fund

Max Brantley brags about the Social Security fund lasting till 2033, but here are the cold hard facts:

Sometimes, Governments Lie (6th Anniversary Ed.)

Posted by Michael F. Cannon

(This blog post first appeared at Cato@Liberty following the release of the 2006 Medicare and Social Security trustees’ reports. I repost it, with updated links and “exhaustion dates” because sadly nothing else has changed.)

Sometimes, Governments Lie

Year after year, federal officials speak of the Social Security and Medicare trust funds as if they were real.  Yesterday Today, the government announced that the Social Security trust fund will be exhausted in 2040 2033 and that the Medicare hospital insurance trust fund will be exhausted in 2018 2024— projections that the media dutifully reported.

But those dates are meaningless, because there are no assets for these “trust funds” to exhaust.  The Bush administration wrote in its FY2007 budget proposal:

These balances are available to finance future benefit payments and other trust fund expenditures—but only in a bookkeeping sense. These funds…are not assets…that can be drawn down in the future to fund benefits…When trust fund holdings are redeemed to pay benefits, Treasury will have to finance the expenditure in the same way as any other Federal expenditure: out of current receipts, by borrowing from the public, or by reducing benefits or other expenditures. The existence of large trust fund balances, therefore, does not, by itself, increase the Government’s ability to pay benefits.

This is similar to language in the Clinton administration’s FY2000 budget, which noted that the size of the trust fund “does not…have any impact on the Government’s ability to pay benefits” (emphasis added).

I offer the following proposition:

If the government knows that there are no assets in the Social Security and Medicare “trust funds,” and yet projects the interest earned on those non-assets and the date on which those non-assets will be exhausted, then the government is lying.

If that’s the case, then these annual trustees reports constitute an institutionalized, ritualistic lie.  Also ritualistic is the media’s uncritical repetition of the lie.

Senator Pryor asks for Spending Cut Suggestions! Here are a few!(Part 125)

Senator Mark Pryor wants our ideas on how to cut federal spending. Take a look at this video clip below:

Senator Pryor has asked us to send our ideas to him at cutspending@pryor.senate.gov and I have done so in the past and will continue to do so in the future.

On May 11, 2011,  I emailed to this above address and I got this email back from Senator Pryor’s office:

Please note, this is not a monitored email account. Due to the sheer volume of correspondence I receive, I ask that constituents please contact me via my website with any responses or additional concerns. If you would like a specific reply to your message, please visit http://pryor.senate.gov/contact. This system ensures that I will continue to keep Arkansas First by allowing me to better organize the thousands of emails I get from Arkansans each week and ensuring that I have all the information I need to respond to your particular communication in timely manner.  I appreciate you writing. I always welcome your input and suggestions. Please do not hesitate to contact me on any issue of concern to you in the future.

Therefore, I went to the website and sent this email below:

Here are a few more I just emailed to him myself.

Reform entitlements. Spending cannot be restrained without reforming entitlements, which comprise two-thirds of all federal spending and threaten the country’s long-term finances. (See Chart 2.) These programs are projected to grow by 6 percent annually for the next decade. Table 1, which displays the spending restraint needed to balance the budget by 2014, shows that all scenarios to balance the budget by 2014 require reducing the 6 percent annual growth rate of mandatory spending. Lawmakers seeking to rein in spending should put all entitlement spending on the table, including the 2003 Medicare drug bill and the 2002 farm bill.

  • From 2000 to 2010, real federal spending will have increased from $21,875 per household to $30,543 per household.
  • In 2010, the federal government will spend $30,543 per household, collect taxes of $17,879 per household, and run a budget deficit of $12,664 per household.
  • Under President Obama’s budget, deficits from 2010 through 2020 would total $82,219 per household.
  • Surging Social Security, Medicare, and net interest costs are set to crowd out spending on other programs.