It is amazing how much utter nonsense otherwise respectable news outlets will repeat about Social Security. The country is suffering the worst downturn in 70 years because the geniuses who run the Fed and Treasury could not see an $8 trillion housing bubble and let the Wall Street crew run wild with fraudulent loans and complex derivative instruments.
What do we do by way of response? Go after Social Security. As a result of the incompetence of the people running the economy, unemployment has soared and tax collections of fallen. Now Social Security must draw on the bonds in its trust fund (which MoneyWatch perversely calls "IOUs) to pay current benefits.
Of course the reason for accumulating the bonds was to deal with periods in which benefit payments would exceed tax revenue, so there is no obvious reason that anyone should be alarmed about that event occurring now. We have great reason to be concerned about the 9.7 percent unemployment that is the cause of Social Security's current shortfall, but the fact that Social Security is providing a secure income to tens of millions who would otherwise be in poverty -- this is about as much as you could ask for from a government program.
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