The amount of money that the Treasury will need to raise each year to pay to the Social Security Trust Fund will explode in the not too distant future. The Social Security Administration admits this:
Social Security’s expenditures exceeded non-interest income in 2010 and 2011, the first such occurrences since 1983, and the Trustees estimate that these expenditures will remain greater than non-interest income throughout the 75-year projection period. The deficit of non-interest income relative to expenditures was about $49 billion in 2010 and $45 billion in 2011, and the Trustees project that it will average about $66 billion between 2012 and 2018 before rising steeplyAnd things only get worse down the road, even the phony IOUs run out. SSA again:
After 2020, Treasury will redeem trust fund assets in amounts that exceed interest earnings until exhaustion of trust fund reserves in 2033, three years earlier than projected last year. Thereafter, tax income would be sufficient to pay only about three-quarters of scheduled benefits through 2086.The system is clearly on the edge of collapse. It needs to be junked and individuals need to once again become responsible for their own savings and retirement plans. SS is about nothing but screwing the average forced-participant, with the Washington D.C. bureaucracy spending the money put into the program.
Rand Paul, however, has a different view. He wants to save the program that does nothing but distort retirement funds and drive them through the D.C. bureaucracy. How does he want to "save" Social Security? By raising the retirement age and means testing SS. In other words, he wants to decrease payouts and backdoor increase the tax burden.
In the clip below[starts at 2:50 mark], Rand told CNN's Wolf Blitzer on Monday that if Obama took steps to deal with entitlements, such as by instituting the SS plan Rand outlined, that Obama could go down in history as a great leader. Yikes.
This is simply shocking. It points once again to the likelihood that the role that Rand is playing is a role that will dilute the libertarian message. It's not the first time this has occurred. Ronald Reagan played that role. While talking small government, government grew and grew under Reagan's watch. Indeed, during his presidency, Reagan "fixed" SS by doing something similar to what Rand proposes. Murray Rothbard explained:
We should also say a word about another of Ronnie’s great "libertarian" accomplishments. In the late 1970’s, it became obvious even to the man in the street that the Social Security System was bankrupt, kaput. For the first time in fifty years there was an excellent chance to get rid of the biggest single racket that acts as a gigantic Ponzi scheme to fleece the American taxpayer. Instead, Reagan brought in the famed "Randian libertarian" Alan Greenspan, who served as head of a bipartisan commission, performing the miracle of "saving Social Security" and the masses have rested content with the system ever since. How did he "save" it? By raising taxes (oops "premiums"), of course; by that route, the government can "save" any program. (Bipartisan: both parties acting in concert to put both of their hands in your pocket.)Read that last paragraph again. How does that not apply to the developing role being played by Rand? He wants to "save" SS. He wants to institute some type of background check for frequent flyers. He wants to "end" foreign aid, but not for all countries at the same time. All the while, he sucks in more and more of the libertarian movement. Not good.
The way Reagan-Greenspan saved Social Security is a superb paradigm of Reagan’s historical function in all areas of his realm; he acted to bail out statism and to co-opt and defuse any libertarian or quasi-libertarian opposition. The method worked brilliantly, for Social Security and other programs.