Wednesday, July 27, 2016

[NJFAC] Social Security: If It Ain't Broke ...

Social Security: If It Ain't Broke ... and It Ain't, and It Never Will Be, Mike Norman Jul  20, 2016

Back in 2005, when Paul Ryan was still only a congressman from Wisconsin and not speaker of the House, he asked a question of then-Fed Chairman Alan Greenspan in a hearing for the House Budget Committee. Ryan asked Greenspan if there was a way to ensure the solvency of Social Security through the use of personal retirement accounts.

Greenspan's response was eye-opening. He told Ryan, "There's nothing to prevent the federal government from creating as much money as it wants and paying it to someone." He goes on to add that the real question is whether there is a system in place to ensure that the real assets are there for the benefits (money) to purchase. You can watch the exchange here in this short YouTube clip.

Watch Ryan's face when Greenspan is explaining and you will see that the whole explanation goes right over his head and, I'm sure, right over most people's heads.

Yet what Greenspan said is not only the truth, but the real crux of the entire Social Security debate. (Or, false debate, I should say.) As Greenspan correctly states, there is no inability for the government to create the money ("it can create as much as it wants"), the only thing that we need to be focused on is whether or not we have sufficient quantities of the food, shelter, clothing, hospitals, medicine, medical care, maybe leisure activities, etc., that all people will need and consume in their retirement. Greenspan correctly explains that it's not about the money. "It's nice to have the money," he says, "but you need the assets." ....

-- June Zaccone National Jobs for All Coalition