Letters: Taking from ‘working Peter’ and giving to ‘retired Grandpa Paul’ – The Advocate

Letter writer Ron Eldridge, as a retired CFO, would, I hope, know the meaning of the words transfer payment. In economics, this is a payment made as a redistribution of income by government.

That is what Social Security is and always has been. Social Security takes money from working Peter and gives it to retired Grandpa Paul.

Im fine with that and believe that it is important and should continue. It is one of our basic promises to all Americans.

But Eldridge seems, like many Americans, to believe it is a savings account. It is not. Any payroll tax money left over after paying benefits was given to the federal government for U.S. Treasury bonds. This money was then spent by the federal government immediately.

It is as if you had money left after paying your bills, so you wrote yourself an IOU and then spent the money. A cookie jar full of IOUs to yourself is not a savings account.

If Social Security stopped collecting payroll taxes for a number of years as Eldridge suggests, and tried to use funds from the sale of U.S. Treasury bonds to fund Social Security benefits, the money to redeem these government IOUs could be found in three ways: Increase other federal taxes, sell the bonds to someone other than the federal government (China, perhaps) or print the money. I dont see why we would want to do any of these things; they would all hurt the American people.

Instead, we must face the simple truth that we, the American people, allowed Washington to use excess payroll taxes as another source of revenue for the past three generations. We have a Social Security system that still works the way it always has, where people like me who are working pay our payroll taxes so that the retired Eldridge can collect his Social Security check.

ROBIN MOULDER

engineer

Baton Rouge

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Letters: Taking from 'working Peter' and giving to 'retired Grandpa Paul' - The Advocate

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