Through the years the Kansas City Star has published many letters

For many years, I wrote letters to the Kansas City Star letters column.  Most were published, but for the last several years they have been blocked.  I also wrote columns for the wholly owned subsidiary of the Star, the Lee's Summit Journal, a paper that blackballed me after I wrote a column critical of George W. Bush for planning to take the United States to war in Iraq.  From there, my relations with the Star have deteriorated to the point that the paper will print nothing that I write.  So, I will publish many of those unpublished letters here on my blog site.  The first letter, that you will find below, was written in response to a letter to the Midwest Voices column by a local banker, Chuck Mikkelsen.

This is my letter to Midwest Voices

This banker must have been absent during his class on not-for-profit organizations.  They all, including the U.S. government use trust funds.  The Social Security trust fund holds treasury bonds that earn interest.  For the last two years, because of the recession and the payroll tax reduction for workers, money has been used from the trust fund that was supplemented from general revenues.  For that matter, the trust fund uses treasury notes all year long every year to pay benefits.  Surpluses, if there are any, are invested in long term Treasury bonds  in July.  This banker just wants to divert Social Security funds into private accounts which could be exhausted whereas Social Security benefits never run out.  Social Security should not be a big issue this year.  There are enough Treasury securities in the trust to last for at least another 25 years while paying full benefits. Raising the payroll cap could eliminate any chance that the trust fund would be exhausted. 

How many know that the federal government has 155 trust funds.  All hold U.S. Treasury bonds.  Why is it that Social Security is singled out for criticism?  In 2008, the Highway trust fund was exhausted.  The fuel tax has not been increased since 1993 and Bush was certainly not going to increase the tax.  So, money for the highway trust had to be transferred from the general fund; we all know that money was borrowed and added to the deficit.  Thank you, George W. Bush.

For those who do not understand, the trust fund uses actuaries to project the life of the trust fund.  Those actuaries take everything into account, including the number of workers who are paying into the fund. They make three estimates.  One estimate is optimistic, one is less so, and one is pessimistic.  The one that is reported to the public takes the middle ground and can be slightly   pessimistic.  So, in reality, Social Security will be solvent until 2037 or beyond.  Even if no changes are made to bring in more revenue, the trust fund can never go “bankrupt” because it has borrowed no funds to pay for its operations.  All revenues for Social Security are derived from payroll taxes.