Government Lies?

[Paul Mackin]

On Thu, 19 Oct 2000, Terrance wrote:
> 
> Well, they were always deceitful, manipulative tales, just
> like Charity and Welfare. And nobody told them better than
> Reagan, except JFK's ghostly image and TV good looks and
> LBJ's whip cracking foul mouthing and bottle of Scotch. Just
> tales in the American dream.  But with all the nosiness
> peddled by the powered establishment, including the
> nostalgic/guilty media in search of a heroic generation, the
> tale of the U.S.  economy, now  a Six Trillion dollar
> economy is the story of common men and women and They Are
> Still Coming To America.


Not sure where Terence is taking this but my point was simply that the
special pension fund and the special unemployment fund to be derived from 
taxes on payrolls was a scheme devised by the Franklin Roosevelt
administration to provide for an obivious need for what has proved over
the years to be a very successful and necessary program.  The idea 
was that workers were in effect saving money into the fund while
they were working so that it would be there for them when they
became too old to work or were unemployed. As others here have noted, this
has never been at all the way income and outgo to and from the funds
have worked--rather the pay-as-you-go idea is more realistic. In any case
whether the  myth was deceitful  and sinfully manipulative will depend I
suppose on how strictly one wants to adhere to St. Augustine's view that
no distortion or embellishment of the raw truth is ever justified
regardless of the good to be realized from it. Few today would think that
purely.

The raw truth truth back then, in the 30s, was that income maintenance for
the aged and the unemployed was an unmet essential need and the federal
government was the only body up to the task. This however flew in the face
of the conventional wisdom that such matters were none of the federal
government's business. The complete story is quite complex,  involving
constitutional questions, etc., etc., but nobody wants to go into that
here so I'm vastly oversimplifying. (The social insurance story in Europe
was quite different by the way) 

One way to think of the SS trust fund is to liken it to a family's
Christmas fund--where the family puts money it can spare throughout the
year in a special bank account (or a sugar bowl) to provide a Merry
Christmas for all at the end of the year. Without the special fund
Christmas would have to be financed out of general family funds. In any 
case the money is all equally real and fungible (as economists might
say) and in the end will be spent in any way the family elects and
needs to spend it. To carry the analogy a bit further the special fund can
be "borrowed" from and "paid back" into if such is deemed appropriate.

That's the way I've always understood it anyway.

		P.