Wednesday, July 20, 2005

Where Enron Got Their Accountants

Maybe they got them from the Federal Government. According to the SSA OASDI fact sheet the Social Security Administration took in (in round numbers) $50 billion more than it spent in FY04. This brings the SSA's Trust Fund assets up to $1.6 Trillion. Unfortunately, that money isn't anything but a number on a piece of paper. The deductions taken out of your paycheck every month (and the matching amount that your employer pays Uncle Sam) go into the General Revenue fund for the US government. And you know no politician has ever seen a tax dollar he wouldn't spend. That $1.6 Trillion is all in IOUs. There's no money. Remember Al Gore's "lock, box". That's what he was addressing.
House Republicans, who are at their best when standing on the principal that no one can screw up a situation better than the government, are set to propose a bill that would go one better. Their plan is to take the surplus out of the General Revenue budget and put it in an account with a worker's name on it.
Grow Accounts would be financed by surplus Social Security taxes that are currently diverted to feed Congress’s pork barrel habit. This money would be socked away in privately-owned accounts, creating real — not fake — retirement savings. These excess payroll tax deductions currently account for about 2% of a worker’s paycheck.

The point of all this is that right now, when expenditures top income in 2018, it has to be covered by general revenue. But, like Enron, the balance sheet says that we're solvent until 2042-45, depending on who you believe. The problem is that the balance sheet doesn't reflect reality.

Count me in: Stop the Raid, Grow my Account.