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The Democrats should run on Social Security

If Democrats really want to rally their base and win over voters who are either on the fence or thinking of sitting this midterm election out, they'd be smart to start talking Social Security.

You won’t find a lack of enthusiasm at the grassroots when it comes to protecting a program that for 75 years has lifted millions out of poverty and provided dignity for the elderly and for other vulnerable Americans.

Sen. Bernie Sanders (I-Vt.) has noted that Social Security provides the majority of income for two-thirds of the elderly population, and one-third receive nearly all of their income from it. And let's be clear: despite all the right-wing and neoliberal rhetoric, it isn't going bankrupt. According to the Congressional Budget Office, if no changes were made to Social Security it would still be able to provide full benefits to every recipient until 2039, and approximately 80 percent of benefits thereafter.

So it's stunningly bad politics and bad policy that at this moment -- with record poverty and economic inequality, and a shrinking middle-class -- Republicans and ConservaDems are looking to slash benefits under the guise of deficit reduction. It’s quite possible they will vote on a plan -- via the White House National Commission on Fiscal Responsibility and Reform -- to do just that in a lame duck session of Congress come December.

But the Strengthen Social Security Campaign (SSSC) -- a coalition of over 125 national and state organizations, representing over 50 million of Americans -- and their congressional allies are pursuing an effective inside-outside strategy to stop that plan in its tracks and protect Social Security for American workers, seniors, children, and people with disabilities.

At the grassroots, activists are focused on petitioning to protect benefits and pressing members of congress and candidates to declare their positions on ideas like raising the retirement age, privatization, means-testing, and changing the cost of living adjustment (COLA) formula -- all of which are (not so) stealth ways to cut benefits.

Inside Congress, 105 Members have signed onto a letter from Reps. Raúl Grijalva (D-Ariz.), John Conyers (D-Mich.), and Dan Maffei (D-N.Y.) to President Obama stating their opposition to these and any other efforts to cut Social Security.

Sanders and eleven cosponsors introduced a resolution that "put the White House commission on notice that raising the retirement age, privatizing the program, or cutting benefits would meet stiff opposition on Capitol Hill." The Senate resolution notes that Social Security has run surpluses for the last 25 years, currently has a $2.6 trillion surplus, and "has not contributed a dime to the federal budget deficit or national debt."

"Benefit cuts should not be proposed as a solution to reducing the federal deficit," the resolution reads.

Coalition members -- including the AFL-CIO, National Council of Women's Organizations, MoveOn, Alliance for Retired Americans, AFSCME, Campaign for America's Future, NAACP, Food Research Action Center, SEIU and others -- are already reporting results that belie any so-called "enthusiasm gap."

That's not surprising, since poll after poll show overwhelming opposition to cuts in Social Security -- huge majorities of Democrats, Republicans, Independents, even Tea Party supporters don't want to see benefit cuts.

In a conference call with reporters last week, Sanders -- who was joined by Sen. Sherrod Brown (D-Ohio), Grijalva, Conyers, Maffei and other coalition leaders -- said, "It is important for the American people, as they go to vote in this important election, to have a sense philosophically of where the different members and parties stand on this issue."

It’s time to start talking Social Security now.

By Katrina vanden Heuvel  | October 4, 2010; 11:37 AM ET
Categories:  vanden Heuvel  | Tags:  Katrina vanden Heuvel  
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Comments

A little clarity from the 2010 Trustee's Report summary: :Although the combined OASDI program passes the short-range test of financial adequacy, the DI program does not; DI costs have exceeded tax revenue since 2005, and trust fund exhaustion is projected for 2018, two years earlier than was projected last year. In addition, OASDI continues to fail the long-range test of close actuarial balance. Projected OASDI tax income will be sufficient to finance about 75 percent of scheduled annual benefits in 2037 through 2084 after the combined OASI and DI Trust Funds are projected to be exhausted."

Additionally, the "deficit reduction" group will likely recommend significant changes to Social Security - Democrats will look silly to tout SS now and slash it later.

Posted by: kitchendragon50 | October 4, 2010 11:53 AM | Report abuse

LIE - "has not contributed a dime to the federal budget deficit or national debt."

$2.6 trillion is part of the national debt, at least according to the US Treasury.

Posted by: kitchendragon50 | October 4, 2010 12:06 PM | Report abuse

Running on an idea that is 75 years old seems kinda stale to me.

Wasn't it just last year that the Democrats were saying the Republicans were out of new ideas.

Ditto to Democrats!

Posted by: battleground51 | October 4, 2010 12:07 PM | Report abuse

It's not that the Democrats don't have some good ideas. They have a few under their belts.

It's just that they have so many negatives that they get in the way of the positives.

High taxes

Huge spending/huge debt & defict

Pro-ILLEGAL immigration

Bent over backwards for homosexuality

Seemingly pro-Islam and anti-Christian

Socialist tendencies

Soft on criminals

Anti-military

There's more but you get the drift.

Posted by: battleground51 | October 4, 2010 12:14 PM | Report abuse

TO: battleground51 who wrote:
“…High taxes
Huge spending/huge debt & defict
Soft on criminals
Anti-military…”

^^^^^^^^^^^^^^^^^^^

What a phony pack of crap.

Your taxes have NOT changed by even one red cent, it was the Republicans who turned a $450 billion dollar surplus into the largest deficit in the history of the world, and it was the Republicans who let the biggest criminal in the history of the world get away, if they didn’t outright help him.

If it weren’t for the Democrats, our wounded warriors would still be living in squalor with the roaches over in Walter Reed.

Get your story straight.

Republicans are ALWAYS trying to take credit for other people’s work.

You know for yourselves that Republicans wouldn’t lift a finger to do ANYTHING for America.

The GOP is strictly for foreign corporations only.

Posted by: lindalovejones | October 4, 2010 1:08 PM | Report abuse

Americans should open their eyes and ears. As a country, if we can't properly management social security, we are doomed.

There is nothing wrong with social security, it is the management. We have allowed all politicians to slide on the management issue.

Health Care, Social Security are going are not going to be repealed. But if certain voters don't wake up, their social security benefits are going to be disrupted by a bunch of tea bag politicians
who want to destroy the constitution, and run the country on bible verses.

IDIOTS.

Posted by: COWENS99 | October 4, 2010 1:28 PM | Report abuse

Yes great idea !

Democrats can run as supporters of the unsustainable, underfunded, increasingly bankrupt Social Security system ! Marvelous !

Only problem... the New York Times found that the majority of Tea Party supporters actually SUPPORT social security ! those extremists !!

Tea Party folks, conservatives, independents, and Republicans are winning... because they want REFORM and REPAIR to America' broken liberalized special-interest and BIG Gov. economy.

Its the economy stupid !

Posted by: pvilso24 | October 4, 2010 2:39 PM | Report abuse

Coalition members -- including the AFL-CIO, National Council of Women's Organizations, MoveOn, Alliance for Retired Americans, AFSCME, Campaign for America's Future, NAACP, Food Research Action Center, SEIU and others -- are already reporting results that belie any so-called "enthusiasm gap."

Wow, it a who's who from the libturd left! Moveon, naacp? Just regular Americans? The fact that you cited the good old boys here is enough for most people to run away screaming!

Posted by: elcigaro1 | October 4, 2010 3:41 PM | Report abuse

The Social Security Administration have failed all Americans. Minorities now view it as nothing but hush money, for the democrats proventing minorities from participating in the American Dream. Social justice comes from the failure of the SSA along with welfare, food stamps, and public housing. Minorities have been oppressed by the civil servant unions, their interfaith leaders partners, and the government entities designated to provide hush money.
The so called civil rights organizations, equal rights advocacy groups, and human rights associations are no more than shells for the democrat party, civil servant unions, and the poverty pimps of the pulpit. A check once a month, a food stamp card filled once a month, and residence in public housing only create government dependents, not productive members of society. But that is all some liberals ever want minorties to be. Now it is not racism is amazing to me, becuase the most influential elected official advocating such is usually a minority himself.
The electronic lynching that Justice Thomas warned blacks and other minorities about is what has led the opposion being ignored by moderate republicans, blue dog democrats even those who do not support nor advocate such prejudice discrimination. Then there are the deviants which do not dpend on the hush money of the government at all and they demand a larger portion of the what they call the American Financial Pie.
The American Dream always have included the opportunity to life, liberty and the pursuit of happiness and not necessary in the United States. Contrary to the lies of the US media and the democrats their are people not from they US with dual citizenship of multiple countries. If you ever watched the Olympics there is usually more than a couple athletes that competed in a game for one country than for another four years later. They did not need a failed system of fraud, waste and corruption which social security have become. Drug addicts use their addiction as a medical disability, bipolar disorder is the new quick road to social security. And social security is now the fastes road away from the American Dream, self depence and being a positive role model for others.

Posted by: phjesuswarrior7 | October 4, 2010 4:21 PM | Report abuse

The ability to choose how the retirement funds are invested, is by far a better solution than the current social security system. No ones ever wins with the current system, and are we not about winning the right to a quality retirement. Some how every evil in the country, is now trying to be solved by Social Security. Social Security was suppose to be a retirement suppliment not the primary income of no American.

Posted by: phjesuswarrior7 | October 4, 2010 4:33 PM | Report abuse

I think SS benefits will need to be cut (along with raising SS income).

SS taxes were increased during RR's term (1985 or so). At about 2028 the SS trust fund will reach its maximum. That's some 43 years. Then during the next ten years or so it gets drawn down to zero. I think saving for 43 years and having it gone in ten is not such a good plan.

The SS trust fund should be treated like an endowment - keep its value over two trillion and allocate its interest to supplement OASDI taxes. Then the trust fund can last for decades (and not suffer the 25% reduction in benefits in the late 2030's).

Yes to increase the retirement age, yes to cuts in COLA, yes to endowment. No to treating the trust fund like a Pinata, when it gets broken the goodies get quickly gathered up by those close to it (the ones retired).

Posted by: pippop120 | October 4, 2010 4:44 PM | Report abuse

Ms vanden Huevel; all DIMocRATS,

face it, in just a little less than FOUR WEEKS the DIMocRATS regime from the local courthouse to the WH will be functionally OVER, DONE, KAPUT, FINISHED.

NOTHING that ANY DIMocRAT (especially BHO) can SAY/DO will stop the tidal wave that is headed straight toward the brain-LESS, pitiful, DIMocRATS. NOTHING!
(when your party passed "obamacare", against the desires of 70+% of the voters, you committed political suicide & for NAUGHT!)

otoh, you did one positive thing for the USA, though unwittingly. = you caused the rise of the TEA PARTY & made us the MAIN political power in the USA for the foreseeable future.- for that service, we Tea Partiers thank you!

yours, TN46
coordinator, CCTPP

Posted by: texasnative46 | October 4, 2010 5:52 PM | Report abuse

Posted by: texasnative46 | October 4, 2010 5:52 PM
=============================

You baggers are one overconfident lot. Don't believe everything the corporate media tells you.

In fact, Rassmussen is already beginning his dance to the left, in order to have valid election predictions (as opposed to pushing the GOOPER narrative, which he does until one month to go).

http://www.washingtonmonthly.com/archives/individual/2010_10/025975.php
~

Posted by: ifthethunderdontgetya | October 4, 2010 8:03 PM | Report abuse

", if no changes were made to Social Security it would still be able to provide full benefits to every recipient until 2039, and approximately 80 percent of benefits thereafter."

I agree wholeheartedly with the sentiments that Katrina vanden Heuvel expresses but, unfortunately, this is one more article that spreads the misinformation about the true status of the trust fund. It ignores the fact that corrupt politicians from both political parties have looted every dollar of the approximately $2.6 trillion in surplus revenue generated by the 1983 payroll tax hike and spent it on tax cuts, wars, and other government programs.

It is an irrefutable fact that the Social Security trust fund contains no real assets with which to supplement the payroll tax revenue that will become permanently deficiant beginning in 2016. The payroll tax hike has generated enough surplus to pay full benefits until at least 2037, if the money had been saved and invested as was the intent of the 1983 legislation. But when the first significant surpluses from the tax increase began to flow in during the second Reagan term, Reagan's people decided that, since it would be 30 years before the money would actually be needed to pay Social Security benefits, why not just divert the surplus over to the general fund and use the money for other purposes. President George H.W. Bush continued the practice, but not without opposition. Senator Daniel Patrick Moynihan was so outraged that he introduced legislation to repeal the 1983 tax hike and return Social Security to a pay-as-you-go system. But President Bush would have no part of any legislation that deprived him of his large secret slush fund. Bill Clinton seemed to think that if his predecessors had used the Social Security money for non-Social Security purposes, why should he buck the trend. George W. Bush did the same thing for eight years, and now President Obama is participating in the great Social Security scam that I consider to be the greatest fraud ever perpetrated against the American people by their government. I have spent the past ten years researching and writing about Social Security funding. I invite you to visit my website at www.thebiglie.net to learn more about the "fraud of the century."

Allen W. Smith, Ph.D.
Professor of Economics, Emeritus
Eastern Illinois University
Phone: 1-800-840-6812

Posted by: ironwoodas | October 4, 2010 8:53 PM | Report abuse

think SS benefits will need to be cut (along with raising SS income).

SS taxes were increased during RR's term (1985 or so). At about 2028 the SS trust fund will reach its maximum. That's some 43 years. Then during the next ten years or so it gets drawn down to zero. I think saving for 43 years and having it gone in ten is not such a good plan.

The SS trust fund should be treated like an endowment - keep its value over two trillion and allocate its interest to supplement OASDI taxes. Then the trust fund can last for decades (and not suffer the 25% reduction in benefits in the late 2030's).

Yes to increase the retirement age, yes to cuts in COLA, yes to endowment. No to treating the trust fund like a Pinata, when it gets broken the goodies get quickly gathered up by those close to it (the ones retired).

Posted by: pippop120 | October 4, 2010 4:44 PM | Report abuse

-----------------------------------------
The Social Security Trust Fund is already at its maximum--$0.00

Relying on such people as PResident Clinton's Comptroller of the Currency and the head of the Office of Management and Budget, there are no real assets in the Social Security Trust Fund that can be used to pay any Social Security claims.
All Social Security Taxes go to one of two places: 1. Paying current beneficiaries; and 2. Paying current operational expenses of the federal government, and in return the United States puts a promise to pay beneficiaries at a later date, using a magic "non-negotiable" Treasury Bond (which has none of the characteristics of a real Treasury bond and is merely an accounting gimmick of no real value). As noted, all taxes are either paid for surpluses or current expenses. It has been this way not since 1968, or 1984, but 1939. What money which has already been spent are you counting in the Social Security Trust fund. It's been spent.
The 80% number cited in the article sounds nice except: The government will pay you 80%, but will demand 100% of your taxes in return.
I am afraid that the writer of the article either missed or ignored the real problem, there's not a cent in the trust fund. Each and every one of the alleged surpluses have been spent. If people believe that there is a real surplus, my response would be that they have been hustled, and if they keep believing it, I question the motives for their beliefs. Those who want to keep the current system are more interested in giving money and power to the federal government rather than keeping people out of poverty.

Posted by: PALADIN7E | October 5, 2010 12:51 AM | Report abuse

I can't even read a Katrina vanden Heuvel OpEd without laughing hysterically. She is the poster child of the "Do as I say, Not as I Do" Liberals. Her family went so far as to go to federal court to avoid paying estate taxes. Now she is the reformer of the social services.

Amazing how you are all for everybody paying their fair share, once you've already cashed out and are set for life.

Nevermind the fact that she never actually made her own money just inherited it from mommy and daddy.

Posted by: d-35 | October 5, 2010 3:18 AM | Report abuse

Great idea Katrina run on a Social Security that is broken and illustrates how liberal ideas much like "ponzi" schemes don't work forever. They just work for the pepople who get in early while the rest of us are going to get nothing and be saddled with a lot of debt.

Posted by: wbindner | October 5, 2010 6:05 AM | Report abuse

Dummycrats are too stupid to know that Social Security is a Ponzi scheme - does the name Bernie Madoff ring a bell Dummycrats? He had a Ponzi scheme too.

There is no money in the "SS Lock Box" - Dummycrats stole it long ago.

There is $14,500,000,000,000 owed SS retirees and we don't have the money to pay the bills.

So yea, go ahead Dummycrats; run on SS.

SS is just as bankrupt as you Dummycrats' immoral behavior.

Posted by: PerryM1 | October 5, 2010 7:07 AM | Report abuse

This poor neophyte should stick to politics and stop embarrassing herself when trying to write about economics. The issue is to make social security solvent. It's a huge problem that Congress decided to use social security money for general spending instead of using it specifically for social security. This writer just ignores the elephant issue of unfunded future liabilities. Could the Post please hire someone who can at least address the problem? The writer fiddles while Rome burns.

Posted by: greendayer | October 5, 2010 7:09 AM | Report abuse

Social Security is a myth. Congress long ago stole every penny ever "contributed" to Social Security and replaced the funds with worthless IOUs. At best it is a Ponzi Scheme that, as all Ponzi Schemes do, is running out of new suckers sufficient to fund those already hoodwinked into the process.

But you are correct that Social Security is the perfect issue to base our votes on in 2010. Our Founders were prescient enough to strictly limit the authority of the federal government and to specifically deny it the authority to directly tax Citizens. History proves their wisdom and it is time to restore these protections that have been eroded over the past 150 years. Social Security exemplifies that our elected representatives will steal anything that isn't tied down; and now that they've stolen everything possible in the present they are stealing from our future.

To restore America, restore Constitutional governance.

Posted by: fbanta | October 5, 2010 7:38 AM | Report abuse

Social Security is a myth. Congress long ago stole every penny ever "contributed" to Social Security and replaced the funds with worthless IOUs. At best it is a Ponzi Scheme that, as all Ponzi Schemes do, is running out of new suckers sufficient to fund those already hoodwinked into the process.

But you are correct that Social Security is the perfect issue to base our votes on in 2010. Our Founders were prescient enough to strictly limit the authority of the federal government and to specifically deny it the authority to directly tax Citizens. History proves their wisdom and it is time to restore these protections that have been eroded over the past 150 years. Social Security exemplifies that our elected representatives will steal anything that isn't tied down; and now that they've stolen everything possible in the present they are stealing from our future.

To restore America, restore Constitutional governance.

Posted by: fbanta | October 5, 2010 7:39 AM | Report abuse

Frankly, I don't believe this lady; Her numbers are clearly reminiscent of the CBO numbers during the obamacare jam down. Liberals lie.

What is wrong with letting young people have some control over their retirement investments? Why does this threaten liberals? Why are wealthy liberals so intent on spending other people's money... and controlling how it gets spent? Why don't they spend their OWN money instead?

I think people like Katrina vanden Heuvel are obsolescent... what they say no longer makes any sense.

Posted by: wilsan | October 5, 2010 8:05 AM | Report abuse

Look at how desperate they are to keep this treasonous party of criminal frauds in power. The democrat party of lying thieves are incapable and UNWORTHY or running this Country. Democrats are no political party, they are a gang of criminals who belong in prison. Lying SOS all of them.

Posted by: RobLACa | October 5, 2010 8:08 AM | Report abuse

Social Security may have been a good deal for people who are currently receiving payments or have since passed on. But the rate of return for future retirees is pathetic.
I currently do not pay Social Security, i have a private 457 account which my employer the City of New York allows me to participate in. Without any employer match funds, my account currently can buy an annuity for age 65 more than what Social Security is offering and i am only 44 years old.

This is why a privatization is needed for the system. As for the people currently in Social Security the Government needs to raise taxes to pay what was promised those retirees. But let us allow people to get out of the Ponzi scheme that is Social Security.

Posted by: RMcFeeley | October 5, 2010 8:26 AM | Report abuse

Katrina, help me out here. I am a little confused about this running on Social Security thing. Should the Democrats 'run' on Social Security because:

1) they need to make up for gutting medicare with their health care plan?

2) they really think they can win back seniors (demographically, mostly old white people) after spending the last 2 years calling them stupid bigots?

3) it changes the subject (for about 2 seconds) from the 10% unemployment, record foreclosures, record poverty level, record debt, and the fact that state and local governments are growing broke and cutting services for seniors so they can keep giving pay raises to the public sector union goons that donate to Democratic campaigns?

4)it is what Democrats always 'run on' when they are losing?

I am guessing #4, but like I said, I am confused.

Posted by: TECWRITE | October 5, 2010 8:26 AM | Report abuse

Oh my -- "dignity" for the elderly -- yes, just what Big Government provides. They take your money and give it to other people, but not before spending it on other projects. Social Security is broke, my friends. And no bleeding heart rhetoric will change that.

Posted by: npsmith | October 5, 2010 8:28 AM | Report abuse

Leaving aside the question of "running on social security" as a good or bad idea, I have to call fbanta on a flat error:

fbanta's statement:
_________________________________________

But you are correct that Social Security is the perfect issue to base our votes on in 2010. Our Founders were prescient enough to strictly limit the authority of the federal government and to specifically deny it the authority to directly tax Citizens. History proves their wisdom and it is time to restore these protections that have been eroded over the past 150 years. Social Security exemplifies that our elected representatives will steal anything that isn't tied down; and now that they've stolen everything possible in the present they are stealing from our future.

To restore America, restore Constitutional governance.
_________________________________________

BBBBZZZZZTTTTT!!!!! Wrong!

Quoting from the U.S. Constitution, Article I, Section 8:
"Congress shall have the Power To lay and collect Taxes, Duties, Imposts and Excises, to provide for the common Defence and general Welfare of the United States, but all Duties, Imposts, and Excises shall be uniform throughout the United States..."

The U.S Constitution, Amendment XVI:
"The Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."

Translated: whatever else one may think of Social Security, Medicare, or taxes in general--Congress has that authority under the Constitution, and can in fact directly tax citizens.

So please, stop waving the banner of "Returning to Constitutional Governance" without actually reading the Constitution.

Posted by: Banzai45 | October 5, 2010 8:30 AM | Report abuse

Katrina, why don't you just pay your inheritance taxes, without fighting them all the way up the court system? Liberal style "do as i say, not as i do"? you're not believable Katrina, because you believe the rules don't apply to you, because you were born rich and connected. you, and your ilk, make us sick.....

Posted by: subframer | October 5, 2010 8:48 AM | Report abuse

Katrina, absolutely right. Democrats should continue to foster the fiction that Social Security is sound, that it's not a pyramid scheme, and that our children and grandchildren won't be shackled with a yoke of debt to keep their elders' social security checks coming.
Or better yet, Democrats don't need to run on Social Security: they just need to run...away. Please go with them.

Posted by: SavingGrace | October 5, 2010 9:13 AM | Report abuse

Exclusive: CBO predicts Social Security cash deficits in 2010-11; Update: Too much sunny optimism at CBO?

"Now, however, the CBO has determined that Social Security will run cash deficits next year and in 2011, and by 2016 will be more or less in permanent deficit mode. Hot Air has exclusively obtained the summer 2009 CBO report sent to legislators on Capitol Hill but not yet made public, which shows that outgo will exceed income for the first time since the 1983 fix on an annual basis in 2010:"

http://hotair.com/archives/2009/09/22/exclusive-cbo-predicts-social-security-cash-deficits-in-2010-11/

Posted by: LMW6 | October 5, 2010 9:26 AM | Report abuse

Suppose I gave you $2.5 TRILLION to keep for the American people. What would you do with it. Well, you could put it in your mattress, only to see
inflation eat it up. You could invest it it, but in what? All investments
have risks, some more than others. So you would probably pick the safest
investment with the lowest risk. It is generally agreed that this is US
government bonds. Just ask the Chinese or the Arab oil sheiks. That is
exactly what has been done with the Social Security Trust Fund.

As for the argument that these bonds which are backed by the full faith and
credit of the US government are an accounting trick, here is what Wikipedia
says:
"To escape paying either principal or interest on the "special" bonds held
by the trust funds, the government would have to default on these
obligations. This cannot be done by executive order. The Congress would
have to pass legislation to repudiate these particular government bonds.
This action by Congress could involve some political risk and, because it
involves the financial security of older Americans, seems unlikely."

My understanding is that this is similar to regular treasury bonds.
Congress (and the country) can always default. Or course, any default on US Treasury bonds would canse a worldwide panic.

You do realize that 16 times in the past, SS revenue has been less than
expenditures and some of the bonds were redeemed with no problem at all.
You may feel that we have too much debt (counting the SST bonds), but that
is a different problem entirely.

Posted by: lensch | October 5, 2010 9:33 AM | Report abuse

Suppose I gave you $2.5 TRILLION to keep for the American people. What would you do with it. Well, you could put it in your mattress, only to see
inflation eat it up. You could invest it it, but in what? All investments
have risks, some more than others. So you would probably pick the safest
investment with the lowest risk. It is generally agreed that this is US
government bonds. Just ask the Chinese or the Arab oil sheiks. That is
exactly what has been done with the Social Security Trust Fund.

As for the argument that these bonds which are backed by the full faith and
credit of the US government are an accounting trick, here is what Wikipedia
says:
"To escape paying either principal or interest on the "special" bonds held
by the trust funds, the government would have to default on these
obligations. This cannot be done by executive order. The Congress would
have to pass legislation to repudiate these particular government bonds.
This action by Congress could involve some political risk and, because it
involves the financial security of older Americans, seems unlikely."

My understanding is that this is similar to regular treasury bonds.
Congress (and the country) can always default. Or course, any default on US Treasury bonds would canse a worldwide panic.

You do realize that 16 times in the past, SS revenue has been less than
expenditures and some of the bonds were redeemed with no problem at all.
You may feel that we have too much debt (counting the SST bonds), but that
is a different problem entirely.

Posted by: lensch | October 5, 2010 9:33 AM | Report abuse

-----------------------------------------
Not correct: The "investment" (sic) of the money in current Huntington, West Virginia Bonds (which are merely an accounting gimmick according to the head of Office of Management and Budget) violates the rule of self-dealing, and in fact with 12 trillion dollars of debt violates good faith processing of the income.

Actually the safest investment with the lowest risk is an across the board investment in stocks, bonds, small business stocks, and international stocks. Investment in Treasuries only is considered a poor investment due to rate of return.

They aren't "obligations", because they could be cancelled, modified, or added to without any due process rights owed to people to whom the money is owed. Social Security is a plain vanilla tax program, with the debt marker gussied up like a pig by someone calling it a "non-negotiable" Treasury bond, so as to make some people feel more comfortable. Who says--Supreme Court.

The bonds weren't "redeemed": money was transferred from one account of the Treasury to another without any real economic effect.

Beginning in about 2015, when the Social Security Trust fund will have to begin borrowing from the Treasury permanently to pay its obligations (no money in the account to make payments), cuts will take place. Choose higher taxes, cut programs, or inflation.

Posted by: PALADIN7E | October 5, 2010 10:28 AM | Report abuse

Suppose I gave you $2.5 TRILLION to keep for the American people. What would you do with it. Well, you could put it in your mattress, only to see
inflation eat it up. You could invest it it, but in what? All investments
have risks, some more than others. So you would probably pick the safest
investment with the lowest risk. It is generally agreed that this is US
government bonds. Just ask the Chinese or the Arab oil sheiks. That is
exactly what has been done with the Social Security Trust Fund.

As for the argument that these bonds which are backed by the full faith and
credit of the US government are an accounting trick, here is what Wikipedia
says:
"To escape paying either principal or interest on the "special" bonds held
by the trust funds, the government would have to default on these
obligations. This cannot be done by executive order. The Congress would
have to pass legislation to repudiate these particular government bonds.
This action by Congress could involve some political risk and, because it
involves the financial security of older Americans, seems unlikely."

My understanding is that this is similar to regular treasury bonds.
Congress (and the country) can always default. Or course, any default on US Treasury bonds would canse a worldwide panic.

You do realize that 16 times in the past, SS revenue has been less than
expenditures and some of the bonds were redeemed with no problem at all.
You may feel that we have too much debt (counting the SST bonds), but that
is a different problem entirely.

Posted by: lensch | October 5, 2010 9:33 AM | Report abuse

-----------------------------------------
Not correct: The "investment" (sic) of the money in current Huntington, West Virginia Bonds (which are merely an accounting gimmick according to the head of Office of Management and Budget) violates the rule of self-dealing, and in fact with 12 trillion dollars of debt violates good faith processing of the income.

Actually the safest investment with the lowest risk is an across the board investment in stocks, bonds, small business stocks, and international stocks. Investment in Treasuries only is considered a poor investment due to rate of return.

They aren't "obligations", because they could be cancelled, modified, or added to without any due process rights owed to people to whom the money is owed. Social Security is a plain vanilla tax program, with the debt marker gussied up like a pig by someone calling it a "non-negotiable" Treasury bond, so as to make some people feel more comfortable. Who says--Supreme Court.

The bonds weren't "redeemed": money was transferred from one account of the Treasury to another without any real economic effect.

Beginning in about 2015, when the Social Security Trust fund will have to begin borrowing from the Treasury permanently to pay its obligations (no money in the account to make payments), cuts will take place. Choose higher taxes, cut programs, or inflation.

Posted by: PALADIN7E | October 5, 2010 11:01 AM | Report abuse

I don't know what Vanden Heuvel is smoking but the fact that she uses Bernie Sanders as a source for her numbers tells me it's real good stuff.
The harsh reality is that the unfunded liability for Social Security is $14.5 Trillion and growing. Anyone who thinks that the system is sound is living in a fantacy world.

http://www.usdebtclock.org/

Posted by: harryvederchi | October 5, 2010 11:02 AM | Report abuse

The GOP has committed itself to:

Stripping away the Middle Class Tax Cuts passed by the Democrats in the Stimulus Plan and giving them to the ultra-rich to the tune of $731 BILLION, and;

Gutting Social Security by "privatizing" it and giving it over to their Wall Street Masters, and;

Destroying Medicare by giving it over to their health insurer overseers to run on a "voucher" basis so the insurers can ration health care in America.

If you want to live under a bridge eating cat food and being rationed medical care in your retirement, vote GOP!

Posted by: timothyhogan | October 5, 2010 11:11 AM | Report abuse

Paladinize -

1. Are the special bonds backed by the "full faith and credit" of the USA?

2. Can they be modified without an act of Congress?

3. Do you understand the concept of gambler's ruin? If you do, how can you say investment in stocks and bonds is "safe"?

4. Isn't it true that when the bonds were redemmed, the money was not just transferred, but paid out in SS benefits?

5. You do understand that the reason we have such a huge SS Trust fund is because in 1983, they saw the coming retiremnet of the boomers and provided for it. It was expected that the Fund would be drawn down until the number of people retiring returned to normal.

6. Your faith in the projections of the SSA and the CBO is touching, but have you checked to see how accurate they have been in the past?

I am a mathematician, and I can tell you that the projections of the CBO and the SSA have been no more accurate in the past than looking at the entrails of a goat. As you probably know, the SSA makes three projections, and people only talk about the middle one, but the high one has been consistently more accurate in the past. It projects that the Trust Fund will never go to zero (so all the bonds will not have to be redeemed) in the next 75 years, all promised benefits will be able to be paid and there will be a huge surplus at the end of the period.

As you know (I hope), these are projections, not predictions. There are based on 14 assumptions which depend on future events. For example, one is the average growth in the GDP. The middle projection assumes a 1.78% growth; the rate for the last 75 years has been 3.1%. If you change that one assumption to 2.7% (or larger), and keep all the other middle assumptions the same, them the middle projections yields similar results as the high one.

Try again.

Posted by: lensch | October 5, 2010 11:18 AM | Report abuse

ABC News/WaPo Poll: By 68% to 29% Margin, Americans Believe Obama’s Stimulus Bill Was a “Waste”…

Posted by: jpalm32 | October 5, 2010 11:24 AM | Report abuse

And for years 70% - 85% of Americans believed they will pay estate tax when less than 2% did in 2000 and less than 1% did in 2009.

Your point is?

Posted by: lensch | October 5, 2010 11:32 AM | Report abuse

They have cr@pped on it, they might as well run on it! Democrats, sorry I mean Socialists are finished. The only thing I can thank BO for.

Posted by: bill_r | October 5, 2010 12:19 PM | Report abuse

ifthethundergetsya,

PLEASE CONTINUE calling the DECENT people of the Tea Party your hate-FILLED names. = every time you do that you send more decent people into the TP, where we welcome them warmly & put them to work.
(fyi, i was a "street-activist" in the 1960s & like most of the other "boomers" of the TP, i have not forgotten how to organize our "troops".- we won the civil rights struggle against the racists then; the DIMocRAT "ruling class" is about to be DEFEATED/HUMILIATED/marginalized, too.)

what i posted about the coming tidal wave that will sweep every DIMocRAT/leftist/"progressive" from power at every level of our government was 100% accurate.= the DIMocRATS will be as dead politically after 11/02/10 as the Whigs are.

the TRUTH is that we "ordinary voters from flyover country" have fully heard & understood what you "progressives" want/feel/think & we do NOT accept it as truthful. further, we do NOT trust you "wunnerful, wunnerful DIMocRATS" to protect out nation/freedom, so "pack your bags" & get ready to be VOTED OUT & completely IRRELEVANT.

yours, TN46
coordinator, CCTPP

Posted by: texasnative46 | October 5, 2010 12:46 PM | Report abuse

This article displays either tone deafness or desperation...probably both…..

Posted by: chubster30 | October 5, 2010 12:47 PM | Report abuse

Dear Ms Hovel:

Since you are wrong on almost everything almost all the time, I think the Democrats trying to create an imaginary issue out of social security is a wonderful idea.

Posted by: scifi0425 | October 5, 2010 1:08 PM | Report abuse

What do you mean should? The Democrats have already been trying to scare people about Social Security. When everything else fails the Democrats always dig out Social Security. Its just so old and tired!!! What the American people need to know is that the real danger to Social Security is the massive corrupt spending and debt Obama and the Democrats have piled up in Washington. Their is no Social Security lock box....the money was all borrowed and spent. The nations ability to pay Social Security benefits depends on the nations ability to pay all of its bills. At the rate Obama and the Democrats are going most of us will be UNEMPLOYMENT and there will be no money to pay anything!! We have to fire every Democrat on the ballot in Nov to restore balance and sanity to our Government! Before its too late!!!

Posted by: valwayne | October 5, 2010 1:13 PM | Report abuse

Yes, let's highlight a government program that takes 6.2% of your gross income, as well as the same amount from your employer (a total of 12.4%), for 40 working years or more, and returns you an average monthly benefit payment of just $1,050 (according to the Social Security Administration itself); let's compare that to a 40-year return on a mutual fund, IRA, or 401k account with the same withholding.

Certainly, let's discuss how there are currently 2-3 workers for every 1 retiree (down from the 18:1 ratio in 1950), and that soon, that ratio will be reversed as Boomers retire in waves, creating a strain on the system never before seen.

And sure, let's talk about how the federal government borrows against the social security tax receipts every year, and that by 2015, the government is expected to have borrowed nearly $3.25 trillion against the Social Security Trust Fund, leaving nothing in the coffers but IOU's, just as annual expenses begin to exceed the tax receipts.

And finally, let's talk to our young people, in particular, who are facing a lifetime of taxes to pay back all of this unfunded borrowing - which is hilariously being called "surplus" by the government - and who even now think it more likely that we will be visited by UFO's than to collect a dime of social security benefits in their lifetime.

C'mon, Democrats, go ahead, start bragging on that system. What are you waiting for?

Posted by: INTJ | October 5, 2010 1:27 PM | Report abuse

You want to talk Social Security Katrina, let's talk Social Security.

Let's talk about how every election cycle where they're getting their collective heads handed to them, the Democrats will trot out the "Don't vote GOP, they're going to take away your Social Security Check" lie in a shallow attempt to frighten seniors into voting Democrat.

Let's talk about how no Republican, ever, under any circumstances, has ever proposed a serious plan to do that. Let's talk about how the Republican's proposal that we be allowed to keep a whopping 1/3 of the insufficient-to-fund-20-years-of-retirement social security deductions is met with Democrat wailing that the end is near, and Grandma will have to eat cat food for the rest of her short life.

Let's talk about how the system started when the retirement age was 2 years later than the average male lifespan. About how there used to be 16 people paying in for every person drawing benefits, and now there are only 3.

Let's talk about how it's the biggest single federal expenditure. How the "Social Security Trust Fund" is a giant, Enron-Style accounting trick to hide the fact that THERE IS NO TRUST FUND, and congress spends FICA money as though it were general funds, and replaces it with worthless IOUs.

Lets talk about how Democrats are not only ok with this, but fighting to support and expand it.

Yes Katrina, let's talk Social Security.

Posted by: devildog_jim | October 5, 2010 1:35 PM | Report abuse

Republican and deficit hawks record while in charge of government (We will NOT raise taxes, but we are willing to borrow, spend, and pass the debt down to our kids and grandkids):

Created the Bush Tax Cuts -- financed by the Social Security surplus and borrowing from China, plus interest.

Started the War in Afghanistan -- financed by the Social Security surplus and borrowing from China, plus interest. Hid the costs off budget to make the deficit look smaller.

Started the Iraq War -- financed by the Social Security surplus and borrowing from China, plus interest. Hid the costs off budget to make the deficit look smaller.

Passed the Prescription Drug Plan for seniors -- financed by the Social Security surplus and borrowing from China, plus interest.

Bailed out the Banking and Derivatives industry with no accountability provisions -- financed by the Social Security surplus and borrowing from China, plus interest.

Result #1: Largest deficit in history.
Result #2: Deepest Recession in history that accelerated the loss of federal tax revenue and increased the costs of supporting the unemployed—further increasing the deficit.

PLEDGE TO AMERICA (we will NOT raise taxes):

Extend the Bush Tax Cuts to top 2% of earners -- financed by borrowing from China plus interest and then making major cuts in Social Security, Medicare, Medicaid, and other social safety net programs in order to pay for it—further increasing the deficit.

Block all Democratic initiatives to help small business by providing community banks with the capital to make these loans—large banks who received bailout are unwilling to do this.

Maintain legislation that gives tax breaks to businesses that outsource jobs and manufacturing facilities, creating unemployment, reducing tax revenue and increasing the deficit.

Lying about the Stimulus not helping the economy and creating jobs, then doing photo ops in their states as Stimulus funds are spent on infrastructure projects that stimulate the local economy and create jobs.

Lying about health care benefits and costs (CBO says it will save $1T over 10 years) with no plan to cover 50 million (and growing) uninsured or underinsured.

Which of the priorities in the PLEDGE shows any evidence of having a significant chance to create jobs and grow the economy?

Who’s kids and grandkids will be footing the bill plus interest for all these policies?

Posted by: CJfromPA | October 5, 2010 1:56 PM | Report abuse

I'm not sure that the left wants to dig too deep in to how Social Security started being looted


"Many people make the mistake of thinking that President Lyndon B. Johnson started using Social Security Trust Funds to finance other government programs. In 1969, Johnson started combining the financial data of the Social Security program with the financial data of the federal government for the purpose of reporting the budget. Up until that time, when the federal government reported its budget, it treated Social Security consistent with the fact that its finances are separated by law from the rest of the federal government. In 1969, the federal government was running a deficit and the Social Security program was running a surplus. By adding the two together, Johnson was able to tell the American people that the federal budget had a surplus, while in reality, it had a deficit."

And if that wasn't bad enough, we have a recent record of the left resisting necessary reforms.

"In 1999, Republican Congressman Wally Herger sponsored a "lockbox" bill in the House of Representatives. This law would have restricted Congress from using money borrowed from the Social Security program to spend on other government programs. It passed the House by a vote of 416 to 12. In the Senate, Republicans attempted to bring this bill up for a vote. To do this, 3/5 of the Senators must agree to do so. The motion to bring this bill up for a vote failed. 100% of Republicans voted for it. 100% of Democrats voted against it."

http://www.justfacts.com/news.impactSS.asp

Posted by: MrMeaner | October 5, 2010 1:57 PM | Report abuse

Another liberal/marxist lie. Their is no social security trust fund. If their is, Bernie Madoff is unjustly in prison because he ran his ponzie scheme exactly following the SS blueprint. This "trust fund" is made of of nothing but treasury bonds. The actual money was spent long ago. These IOU's are being redeemed using your tax money today or even worse, money borrowed from China. So its either borrowed money or the current general fund being robbed in order to make up for the short fall in SS income funds. As to the BS that CBO says its solvent is an even larger lie. CBO is a sock puppet or a calculator if you like. It takes whatever rectal extraction numbers congress gives it and adds them up. That the be accurate or even something other that a fantasy is immaterial. They are every bit as accurate as anything Bernie Madoff sent to his investors. The only difference between Madoff and the Feds is that Bernie just like them ran out of money but the government can put a gun to our heads and say pay again or they can just add another 3 trillion to the debt which is what they are doing. Vanden Heuvel and Sanders are Marxists. To believe anything they say is foolish. And another even larger lie is the lie that we ever had a real budget surplus under Clinton or any other President for the past 80 yrs or so. To create the BS of a balanced budget, the government took a bunch of things "off budget" and added the SS trust fund money into the lie to create the illusion of of balance. Never happend Bernie and Kristina and both of you liers know it.

Posted by: MikeM17 | October 5, 2010 2:55 PM | Report abuse

Katrina-you make a simple issue complex, because if you told the truth you could not fashion the argument. I am 55. In my working life I have contributed about $175,000 to social security, my employers a like amount (not counting the Medicare Tax). If I work until I am 65 I will have contributed (at the current tax rate) a total of $250,000, $500,000 for my employer and me. My projected payment at age 65 is $21,600 per year. Not including the interest lost during the past 30 years, or the interest lost over the next 10, I would have to live well past my LE to break even. Social Security is nothing more than an inter-generational wealth transfer. We can debate whether this is an appropriate policy or not. But please try and get your facts straight. The reality is that had I been given the chance to invest even 25% of this money myself I would already be retired.

Posted by: Pelican3 | October 5, 2010 3:32 PM | Report abuse

Pelican3 is correct, this is just another wealth transfer. Trust me, very soon those who were smart and saved for retirement will be means-tested out of any social security benefits (despite paying in to the system their whole lives). On a positive note, maybe all of those retired government workers that were handed fat pensions by their corrupt government cronies will be means-tested out of their social security benefits as well. Alas, probably not. They and their union buddies will be exempted.

Posted by: john10280 | October 5, 2010 3:53 PM | Report abuse

"The Democrats should run on Social Security"

That's like saying that Jesse James should run on bank robberies.

The dems stole 110 trillion---yes, dear, trillion---from the Social Security Fund. A fund which, by law, was to be untouchable. They sold the Fund *non-negotiable* treasury bonds (again, by law), i.e. 'borrowed' 110 trillion dollars from the Fund, and gave it worthless paper which it can not sell on the open market---non-negotiable means only the Treasury Dept can cash the bonds for the Fund. Now we have 14 trillion debt which the Treasury is already running. And Obama's Budget Office has projected that next 15 years, accorrding to obama's mischief, they will be adding at least 1.5 trillion to that debt. Ergo, as far as Social Security Fund is concerned, the only bank in town, which robbed its money, is itself being robbed, and is already 14 trillion in red. Net effect---the government stole 110 trillion of your and mine money that social security automatically deducts from the paycheck. To make it sweeter, the SS was supposed to spend more money than it collects beginning 2016. Thanks to obama's insanity, that fortunate circumstance happened *this* year---in 2010. So SS itself is running its own deficit, governmnet its own, AND ss can't cash its bonds. Any questions?

I don't know what Katerina vanden Heuvel (the author of this post) did at the several 'start-ups' she worked at, but if she had any financial or fiscal responsibility, you can be sure she ran 'the startt-ups' into the ground, and then poured concrete over it.

Posted by: SECREV | October 5, 2010 7:07 PM | Report abuse

The only reason polls show support for not cutting Social Security is because people feel that they have already paid into it and it is their money. Ask them if they would like to have that money back, and they will almost universally say "Give me my money back!".

Posted by: JohnDavis1 | October 5, 2010 8:27 PM | Report abuse

Paladinize -

1. Paladinize -

1. Are the special bonds backed by the "full faith and credit" of the USA?

2. Can they be modified without an act of Congress?

3. Do you understand the concept of gambler's ruin? If you do, how can you say investment in stocks and bonds is "safe"?

4. Isn't it true that when the bonds were redemmed, the money was not just transferred, but paid out in SS benefits?

5. You do understand that the reason we have such a huge SS Trust fund is because in 1983, they saw the coming retiremnet of the boomers and provided for it. It was expected that the Fund would be drawn down until the number of people retiring returned to normal.

6. Your faith in the projections of the SSA and the CBO is touching, but have you checked to see how accurate they have been in the past?

----------------
1. Actually, because they are not real bonds but accounting entries only indicating how much is owed to social security beneficiaries, there are no bonds backed up by full faith and credit. But even so, do you know what full faith and credit means (double taxes, slashing of all programs but defense and entitlements, or inflation?). The government is 12 trillion in the whole. Social security another 3--They don't have the money (see Greece).

2. There are no bonds to be modified, but the Supreme Court has said that it is a pure tax program, that can be deleted at will without any beneficiary having a claim on the assets.

3. Do you understand the concept of diversification. When risk is spread throughout the market, with dollar cost averaging, that is the greatest risk minimization. As the stocks are kept in for the long term, gambler's risk does not apply. When prices go down, more shares are purchased, when prices go up, fewer. There is no risk event for 30 years. Nice, interesting, irrelevant concept.

4. When the Treasury general fund pays the social security obligation instead of actual social security taxes (which go into the Treasury general fund) I guess that may mean something to you It's the same pot of money.

5. No huge trust fund (none in fact) The money has either been spent for current beneficiaries or current federal programs. How do you spend the same dollar twice as you are suggesting?

6. No, I just look at the current GAO figures of United States debt on an accrual basis (more than 50 trillion dollars)(2010 figures). If you want to look at the debt on a cash basis and think you can pay off the current debt when it is more than 2 times the current GDP, more power to you.

Posted by: PALADIN7E | October 5, 2010 11:24 PM | Report abuse

You're too late. Dems have already "run" on social security. They ran it into the ground by spending the money on their pet social programs instead of investing it. Imagine how much better of we would be today if the billions and billions of dollars paid into SS had been invested in American enterprise instead of government pork.

Yes, I would like my money back. That is what you promised before you "ran" away from your promises.

Posted by: CEBFburg | October 5, 2010 11:27 PM | Report abuse

Let's reduce the problem to Accounting 101. Taxpayer owes $100.00 in social security taxes. Government needs $10.00 to pay for current beneficiary expenses and $90.00 to build a rowboat)

To begin

$100 (Taxpayer Account payable--Taxes)
(Government--Account Receivable--Cash)

The government spends $10.00 for current beneficiary

$10.00 (Government Account Receivable--beneficiary)(Beneficiary--$10.00 cash)
$90.00 (Government Account Receivable--cash)

The government spends its $90.00 on the rowboat
$90.00 (Government Account Receivable--Cash--Government Account Receivable Rowboat)
$90.00 (Liability--Account Payable--Social Security (To pay them back for the money spent on the rowboat)

Every dollar is accounted for, but there is supposedly an extra $90.00 Treasury bond out there somewhere (the new asset in the Social Security Trust fund) but did it come from subspace?

Or--real accounting--$90.00 liability to be paid from future moneys collected. You know, like Madoff did.

Posted by: PALADIN7E | October 5, 2010 11:58 PM | Report abuse

By the way, gambler's ruin does not apply

Gambler's ruin requires a game that gives a probability a of winning 1 dollar and a probability b = 1-a of losing 1 dollar.

The probabilty of "winning" in a program involving dollar cost averaging with index stocks cannot be calculated. There is no event upon which to base a probabilty, there is sufficient uncertainty in the conducts of companies that Probabilty a cannot be calculated, probability b cannot be calculated. There is an expected positive return which contradicts one of the foundation rquirements for the use of the theory.

Posted by: PALADIN7E | October 6, 2010 12:11 AM | Report abuse

Paladinize -

1. Paladinize -

1. Are the special bonds backed by the "full faith and credit" of the USA?

2. Can they be modified without an act of Congress?

----------------------------
As the bonds only reflect the difference between the sums collected in total by Social Security and the sum collected for payments to beneficiaries, if the Social Security Administration determined, for example, that interest on the funds should be 3.5% instead of 3.4%, they could do that without Congressional approval.

So, the answer to your question is yes, the "bonds" (sic) could be modified without Congressional approval

Posted by: PALADIN7E | October 6, 2010 6:24 AM | Report abuse

Banzai45: Article 1, Section 9 denied the federal government authority to lay capitation or other direct tax on the the Citizens. This protection was eliminated by the 16th Amendment; that also modified Article 1, Section 2.

Article 1, Section 8 does not include capitation or direct taxes on citizens.

For the 1st 100 years, the federal government operated on revenues from duties on exports (the actual cause of Lincoln's War) because if the Southern States seceeded, Lincoln would have no funding for his beloved "internal improvements" which were a monumental waste of tax dollars.

Posted by: fbanta | October 6, 2010 10:34 AM | Report abuse

Banzai45: Article 1, Section 9 denied the federal government authority to lay capitation or other direct tax on the the Citizens. This protection was eliminated by the 16th Amendment; that also modified Article 1, Section 2.

Article 1, Section 8 does not include capitation or direct taxes on citizens.

For the 1st 100 years, the federal government operated on revenues from duties on exports (the actual cause of Lincoln's War) because if the Southern States seceeded, Lincoln would have no funding for his beloved "internal improvements" which were a monumental waste of tax dollars.

Posted by: fbanta | October 6, 2010 10:35 AM | Report abuse

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