So the latest story concerning the fiscal cliff the US is facing is news that some Republicans in Congress are thinking of being flexible when it comes to their 'Grover Norquist' no tax increase pledge. However, I think this issue brought out a huge lie pushed by Democrats in general but said by Illinois Democrat Senator Dick Durbin. He said that
'Social Security does not add one penny to the debt. Not one penny.'
His statement was in response to Republican demands that entitlement spending reform be on the table . Basically Senator Durbin is claiming that there is no need to reform Social Security Entitlements because Social Security is not a part of this nation's spending/deficit crisis. Unfortunately, this is not the case and Senator Durbin for sure knows that this is a lie. Zero Hedge explains:
This statement is a lie that is covered over by a dopy accounting system called the Unified Budget. In this magical world, the deficits driven by entitlements are hidden. The reliance on this accounting fiction is a dangerous path for liberals to take. The fact is, SS (and the other government retirement programs for Federal workers and the Military) are running billion dollar cash deficits today and will run Mega-Trillion dollar cash deficits for the next seventy-five years. Every penny of those deficits will result in more borrowing from the public.
These deficits may be “Off Budget” in the magical world of Unified Accounting, but they do add to the publicly held debt on a dollar-for-dollar basis. The Rating Agencies are part of the Cliff discussion (like it or not); those folks are no dopes and they fully understand that Senator Durbin is all wet with his talk of Off Balance sheet debt. - Zero Hedge
If a publicly traded company did this sort of accounting gimmickry, shareholders would eventually lose their investments and people would go to jail. Ironically, Democrat politicians would then be crowing to every TV camera how we need even more laws to prevent this kind of criminal behavior, all the time committing a much larger theft right out in the open.
Worse, the Social Security Trustee report notes that Social Security will run out of money around 2033, unless Social Security taxes are raised (or benefit rules reformed).
Finally, the Trillions of dollars in assets that the Social Security Trust fund has are currently held in the form of US Treasury Bonds. In short, the money was given to the Government and spent. The Government will then have to redeem the bonds as the money is needed to pay Social Security recipients. This means that they will have to get the money from somewhere. Given that the Government plans to run a deficit into the sunset, that means that they will either have to print or borrow the money.
Graphs pictured above were taken from the US Government's own Government Accountability Office. The article is titled 'Federal Debt Basics'. Clearly, this is a topic Senator Durbin and many of his follow Democrats would fail if a grade was given. Unfortunately, it is we who suffer as a result of their incompetence and criminal behavior if they had to be judged the same way that they demand businesses be held to account.