H O W A R D S B E N D

Quite honestly, I do not like Rick Perry and have no faith or belief in any of his prayers or proposals to solve our nation’s problems.  However, I do believe that he was correct when he stated that “Social Security is a Ponzi scheme.”

The world, represented by the media, reacted with shock and horror at such an outrageous claim.  His fellow Republicans seized the opportunity to attack the perpetrator of this comment as an evil man who would deny our retired senior citizens their just rewards after many decades of hard work while contributing religiously to their retirement fund through their social security payroll deductions.  The Democrats sneered among themselves that the number one Republican candidate for 2012 just shot himself in the foot.  The Democrats are the absolute defenders of the Social Security system while Republicans want to deny retirees their well-earned retirement benefits.

However, most of us know that there is no Social Security Trust Fund that contains real money.  This Trust Fund is filled with a collection of government IOUs in the form of Treasury bonds.  This situation is the same as a private company that takes out retirement funds from its employees’ paychecks and forms a trust fund that invests the dollars back into the same company.  The expectation of receiving one’s retirement is directly tied to the economic performance of the company in which these funds were invested.

The situation is the same with Social Security except our funds are being invested in the US government and our ability to receive our retirement benefits is totally dependent on the future credit and good standing of the US government.  The government which is running approximately a $1.3 trillion annual deficit must continue to borrow to pay all its obligations including Social Security payments.  It seemed absurd until about six months ago that the good credit standing of the US government would every be in jeopardy.  We have gone through two fiscal crisis in the past six months where a government shutdown threatened to send the US into default on its debt obligations.  Under a default scenario and the inability to continue to borrow to meet its shortfalls, the federal government would have to pick and choose which obligations it would continue to fund.  Social Security payments would have definitely been on the “cutting board.”  The Republicans again this week are again holding the federal government hostage for an additional $3 billion payment to FEMA refusing to give the government additional funds without offsetting cuts in the federal budget.  Again the government shutdown is a possibility and again Social Security payments are threatened.

Even if the government averts this immediate crisis and the next twenty crises  , the Democrats have made it known, in an effort to deal with the longer term mounting federal debt,  that they will be willing to make changes to the Social Security payments.  Therefore, the social contract that we believe that we agreed to when we started having funds withdrawn from our paychecks many years ago will be changed.  We are now being told to expect to work more years and get less annual benefits for this additional work.  It is like buying an annuity that promised to pay 5% beginning in year ten and instead being told that this annuity will pay 3.5% beginning in the 15th year, maybe.  This sounds like a Ponzi scheme to me.

As summer draws to a close, President Obama asks his two girls, Malia and Sasha, to join him at the kitchen table to discuss some family policy…

President:  Girls, you know the summer comes to a close this weekend, and therefore I hope you agree that we cannot further extend the very late-night bedtimes that you enjoyed for the past few months.

Sasha:  Daddy, I have to disagree with your point.  These late nights are  very stimulative for our growth, as many great TV shows do not come on until late at night.

President:  Over the past summer, we have granted you the additional freedoms that come with early adulthood and instituted a very liberal bedtime policy. This bedtime policy was instituted to stimulate your non-academic endeavors.   However, Labor Day is the deadline for this policy, and we will not extend your late night privileges any longer.   I think that 9:30 is a fair bedtime given both your ages.

Malia:  Daddy, first and foremost, I am three years older than Sasha and will never consent to having the same bedtime as my younger sister. 9:30  is simply ridiculous! I am NOT budging from 12:30.

Sasha:  Daddy, there is no debate.  You are absolutely wrong.  I say 12:30 as well.

President:   Labor Day is our deadline, and this must be worked out by then.  I agree 9:30 might have been a little too early, how about 10:00 for Sasha and 10:30 for Malia.

Sasha:  Daddy, you are not neogtiating fairly and I don’t accept any of your premises.  I’m leaving!

President:  Sasha, please come back.  Come on, Sasha, please come back to the kitchen table.

Malia: I cannot believe you’re just sitting here as Sasha walks out.

Prsident:  I will deal with Sasha later, but I think 10:30 is fair for a 13-year-old.

Malia:  Dad, I am not giving up Jon Stewart who comes on 11:00. It’s the only way I get my news!  And you know I have to see the Letterman monologue! I always watch his first guest.  That takes us to midnight…and then Sasha and I usually have a little snack before bed.  By the time we brush our teeth and put on our pajamas it will be 12:30!

President:  OK, tell Sasha it is 12:30.  I am glad we had a chance to discuss the matter and come to a fair compromise.