Giuliani’s Social Security Statement
10/17/2007
Paul Munnis
Bill Rood posted an article in “Letters to the Editor” concerning “The Ongoing Social Security Crunch.” The article was from Counterpunch a b-log with considerable readership. In the article it says:
“So the first thing we need to understand is this: There is no Social Security crisis. If there is a crisis, it's with the total aggregate Treasury debt, not with Social Security. If Social Security benefits are significantly reduced in the future, it will be because Congress http://zfacts.com/p/336.html chooses to do so, not because the Trust Fund is bankrupt.”
Today Rudy Giuliani came out and said that he opposes raising taxes to cover Social Security. Thus he is ruling out a key solution for Congress to repay its debt. Remember that the money owed to Social Security is money borrowed from the payees into the SS Trust Fund. It is a debt that must be repaid. It is backed by the full faith, trust, and credit of the Unites States Government by virtue of its taxing and borrowing authority.
Now one can hear this statement by Giuliani in one of two ways. Either he is telling the voter that he refuses to allow the U.S. government to pay its debt to Social Security in which case he is unelectable. Allowing the Federal Government to renege on its debts is a formula for destroying the credit of the U.S. Government. No sane person would vote for a president having such an agenda. Other investors will want a refund and will rush to cash in their Treasury notes and obligations faster than a tsunami wave comes ashore following a storm. The U.S. Treasury would be destroyed, our currency trashed, all trading would stop with the U.S.A. and the wealth of nations would be wiped out. That is the consequence of reneging on Social Security debt.
Or, perhaps Giuliani is saying that he will repay Social Security in another way that avoids taxes. That would have to be with more borrowing such as selling additional Treasury notes to cover the debt and on a schedule that matches the Social Security demand curve. If that is what he means than he is totally irresponsible and he should not be considered for office. He would be working in the GOP tradition though of passing off today’s debt to tomorrows children to repay and continuing this neo-con shill game.
This game is not a cornerstone of the GOP however, for in Clinton’s time and with a Republican Congress in control, a bi-partisan plan to pay off the American debt was designed and adopted and implemented. The result was a government surplus when Bush took office and a significant pay-down of the National Debt. The U.S. Treasury was getting ready to pay-off Treasury bonds and to retire our debt in a systemic manner. It was the Social Security Trust Fund money that went into this effort and it made a huge difference. When Bush took office there was still a huge annual surplus (and there still is) but he ended the use of the money to retire national debt and he redirected it in order to support war. The GOP neo-cons countenanced this behavior in Congress and as the GOP has changed over time more power has gone to neo-cons ad we have seen more and fiscal irresponsibility from them in order to cover this ugly war in Iraq.
We have two great opportunities now. One is to throw the neo-cons out of office, the other is end the cash drain to Iraq. When we do that, and we will soon or later, then fiscal sanity can return and Social Security can be recovered to fiscal balance for the next 75 years or so.
The Counterpunch article is right on when it says this is a problem for the government and not for Social Security. We the people made the loan to our government and in good faith we contracted that it would be repaid and now we will soon need our money back to cover baby-boomer retirees who paid into Social Security and who provided the overages for the loans to the government.
Sadly there is a third way to listen to Mr. Giuliani’s little speech. That is to say that he really doesn’t care what comes out of his mouth as long as it sounds good and gets votes.
That was my experience with this guy in New York when I lived there. He will say anything to anyone to garner a vote. An hour later he’ll be cross-town telling another group the opposite story. He is what we call a “slippery” character in our Minnesota Nice way.
Among all of the GOP candidates running for office he is one of the worst in my opinion. That so many GOP Party operatives think he can be elected shows that they put winning ahead of a quality President for America. They seek to win with a loser. I can’t say its impossible but I think the voters are wiser now. I have had enough of the GOP bad quality experience. Me, I’m voting for a Democrat.