Many chose rural Sharp County for their retirement because of low taxes and cost of living, as well as the beauty of the area; these residents are the ones who have the most to lose if they do not receive their Social Security checks. While many have other retirements to fall back on, a large percentage depend heavily on these funds for their day-to-day necessities.
With Congress debating on partisan solutions to the crisis, the golden hour has nearly approached. On July 13, many American retirees depending on Social Security were disturbed when President Obama stated, "I cannot guarantee that those checks go out on Aug. 2 if we haven't resolved this issue, because there may simply not be the money in the coffers to do it." Many fear veteran, disability and military checks may also be in trouble. The one place we can be sure this money isn't going to come from is those elected officials' pockets as they run deep, and, as for Social Security, this is something no one in Washington will ever have to rely on, thanks to their cushy, high-paying insurance and ridiculous retirement, including an amazing $180,000 annually for a former president.
Many jokingly say, "Fire off the printing presses and print more money," while others agree it is time to face the consequences and realize the country cannot continue to spend and spend and continually raise the debt ceiling. On Aug. 3, $90 billion in treasury bonds are also due to mature with massive amounts of interest due to our Asian neighbors, who, like those receiving Social Security, are interested to see if they receive what is also due them.
The Social Security state also raises many red flags that demonstrate the manner in which the government has made the American worker dependent upon funds for retirement and has taken the power to privatize retirement out of workers' hands.
The fact is, Social Security should realistically not even be considered as a part of governmental spending because the Social Security administration is a standalone entity, separate from other government programs. This implies it should be operated in just that way, but, as with any seeming excess of money, it simply does not sit and wait to be spent. The government has its hands in workers' retirement savings and the money has been invested in treasury bonds.
When more Social Security taxes are collected than are needed to pay benefits, the funds are converted to these bonds, backed with what many think is the full faith and credit of the government. They are then held in reserve for when revenue collected is not enough to pay the benefits that are due.
But the problem seems to be that the government's massive debt includes money spent from workers' Social Security taxes.
In fact, it was President Obama's current Budget Director Jacob Lew who best described the situation as he was quoted in a recent USA Today editorial saying, "For years, the surpluses in the Social Security trust fund have helped to mask our deficits elsewhere.
"Now that we are paying Social Security back, the problem is not with Social Security, but with the rest of the budget. In 2001 and 2003, Washington cut taxes for the wealthiest Americans and later expanded Medicare without paying for it. Blaming Social Security for our fiscal woes is like blaming you for not saving enough in your checking account because the bank lost all the depositors money."
This is essentially how Social Security became grouped into items in the federal budget, because the money from Social Security has been used to fund other things in the budget.
This has been done by "investing" Social Security funds in treasuries. The government is funding current payouts with borrowed money, which is what treasury securities are, debt instruments.
Even years earlier, when Lew was budget director for then President Bill Clinton, he was quoted explaining the positive balances in the Social Security trust fund are "nothing more than a bookkeeping device." He further states, "To the contrary, they do not consist of any real economic assets that can be drawn down in the future to fund benefits."
Many Sharp County residents are confident the benefits they have paid in for many years of their working lives will be there for them as they need them, even after Aug. 3.
This remains to be seen. But, whether the system bounces back or not, one should also realize 76,000,000 baby boomers were born between 1946 and 1964, and in January 2011, the oldest members turned 65, the largest number of the American population in history.
This group will have made up a third of the entire workforce in the country. Forty-six million Generation X workers now are taking their place; this is 30,000,000 fewer contributors than the Baby Boom generation contributed to the fund.
It is also important to consider the reason for the creation of the Social Security Administration in the Franklin D. Roosevelt post-Depression days. During this time, there were 16 contributors to every Social Security beneficiary. Currently the ratio is nearly four to one.
In 2030 when nearly all American Baby Boomers will be of retirement age, the ratio will be two to one. This seems to be a system with little thought of the future or consideration for decreasing population and increasing life expectancy.
When the administration was created, the life expectancy was 65, which essentially meant contributors would draw upon their benefits for a mere year or so, while currently the life expectancy is 77, and the year in which workers collected has only increased by two years.
Many also agree the mentality Social Security has created discourages private saving and places the brunt of retirement savings on the government.
By taking money from workers and putting it into the Treasury, or "trust fund" as it has been deemed for redistribution as politicians see it fit, this is taking the money that could be invested into the private sector out of workers' hands, at the tune of about $560 billion annually, according to the most current numbers available.
Although there is no simple way to save Social Security as it is currently operated, there is no doubt Generation Y and younger workers will be required to pay more Social Security taxes and be prepared to receive less in benefits.
Although Social Security was never intended as a sole retirement income, many still rely heavily on the funds to help pay for daily necessities like medicine and food. Social Security's future remains to be seen, but there is no doubt, an overhaul is needed if the administration will continue operating.