Bob, I’ll be glad to visit your blog. I’ve provided the following re your comments:

(1) What do you think of “privatization” of social security? – Privatization, as used by the Administration is a way to separate out part of the Social Security contributions currently used to loan money to the Federal Government since they are purchased by the Social Security Trust Fund and isolate them to the contributor for redemption at age 67 (or whatever) and allow them to be passed on in their estates.

This reduces the available Social Security funding and will move in the current (2017) date that the Social Security Trust Fund has to start redeeming US Treasuries and move in the current (2049?) date when all US Treasuries have been redeemed.

The Administration is stating that privatized funds will be returned to the Social Security beneficiary or their estate, but that the rest of the Social Security contributions will be at the whim of the US Government, regardless of what people were told.

It is essentially a deliberate attempt to have the Social Security begin making redemptions of US Treasury securities they hold that will then allow the politicians who dislike the concept and actuality of Social Security to scream that the baby boomers are sucking the Treasury dry and something has to be done.

Their real goal is to turn Social Security into a means-tested charity program for the non-privatized payments and a giant boondoggle for the Financial Services industry and investment banks that want to get control of the privatized retirement funds.

Note: I do not understand why either increasing the total FICA payment from 15.3% to 17.3% or decreasing benefits by 20% (or a combination of both) to keep the Social Security program financially solvent indefinitely is bad, but telling Americans that there is nothing wrong with doubling fuel prices every 3-4 years and increasing health insurance costs by 15% a year (if they will write coverage) is perfectly OK.

The opponents of the Social Security program keep saying it is a “lousy retirement program”, notwithstanding that you know what the payouts will be and that it provides disability and survivor benefits until you reach the eligible age (67 or so). They don’t seem to tell the foreign countries that purchase US Treasury securities that they are making a “lousy investment”.

It is important to remember that the Financial Servicers providers and consultants that want control of ALL retirement funds are many of the players who participated in the Savings and Loan scandals of the 1980’s, the decimation of defined benefit pension plans that started in the late 1990s, and the subprime and undocumentated mortgage scandals that started in 2004 and exploded in 2006 (taking Trillions of Dollars of value out of investments held in mutual funds, and brokerage accounts, and Trillions of Dollars of reduced home values and an esitmated 10,000,00 Americans with negative equity in their homes).

(2) How do you feel about the governmnent being involved in something like Social Security? – The government, including Congress, is authorized by Federal law to determine the amount of benefits, disbursement of benefits, and methods of funding.

Retirement systems are based on accumulating contributions over a for 30 – 50 year period of active work, followed by payouts that could run from 10 – 35 years. The total elapsed time period period for contributions and payouts can easily run from 60 – 70 years.

The question you have to ask, would you rather rely on the full faith and credit of the United States Government or to guarantee retirement programs that can span a 60 – 70 years, or Financial Services industry that has had multiple large scandals affecting the life savings, personal investments, pension plans, retirement benefits, and now home mortgages of millions of Americans.

Basically, they both bear close watching. The difference is that very few Federal officials or politicians have gone to jail for deliberate, large scale malfeasance and no individuals have lost their pensions or health care. The guarantee of Federal plans is the reliance on “Full Faith and Credit” which means the ability to tax. If a program is not financially sustainable, the government can reduce benefits, increase taxes, or an appropriate combination of both.

The guarantee of private financial investment plans and programs is sadly lacking as evidenced by the hundreds of billions of dollars of bonds rated as Triple-A by American financial institutions that border on being worthless. Triple-A must refer to how fast the promoters moved their profits and fees to the Cayman Islands while they went on to the next scam.

It is unfortunate that quite a few state, municipal, and private retirement plans have incurred losses on investments in Triple-A rated subprime mortgage, collateralized bond offerings, and other complex derivative financial instruments.

(3) Is your “lack of ethics” statement referring to paying interest and returning principal to Saudi Arabia/China vs. Americans? or are you speaking of the hypocrisy of saying one is right and one is wrong? – I am speaking of the unmitigated hypocrisy and gall to say that we have an obligation to pay back principal and interest to Saudi Arabia, China, and every other foreign that has accumulated our US Treasury securities but that it is unpatriotic and selfish to pay back principal and interest to US Treasury securities purchased by the Social Security Trust Fund and the Medicare Trust Fund.

It is important to remember that these are only two of the trust funds established by the US Government that are required to place all of their their incoming revenues in US Treasury Contributions.

When the US Congress goes through its periodic circus and complaining about road construction projects or airport construction projects, and more, along with the associated costs, they rarely mention that most of it is paid for with accumulated fees and revenues that are kept in trust funds that have the same US Treasury IOUs issued to Social Security and Medicare. Their real complaint is that the various programs asked to redeem their accumulated fees and revenues now invested in US Treasury securities to use for the authorized programs and services.

I sincerely hope that you will join the discussion on healthcare that I initiated today over at http://www.leadershipturn.com. I believe that you could add substantially to it.

The Social Security program has been working out very well over the last 70 years and is currently at a point that the accumulated Social Security surplus represented by about $1.8 Trillion Dollars in US Treasury bonds is sufficient to pay Social Security benefits with no reductions in benefits or changes to the FICA tax rates required for approximately forty additional years.

In addition, The Social Security Trust Fund will continue purchasing US Treasury bonds through 2016, meaning that they have been accumulating US Treasury securities since the overhaul of Social Security and Medicare financing in 1983.

Unfortunately, many conservatives are very upset that the Social Security Trust Fund has indicated it anticipates beginning to redeem the US Treasury securities in 2017.

It is somehow un-American to redeem the securities purchased by the FICA contributions of working Americans, including the retirees that still work, when they come due. These concerns don’t apply to the US Treasury securities purchased by Mid-East oil potentates and China when they redeem US Treasury securities.

Many Americans deliberately ignore that the current (working and retired) demographic of the entitlement program of Social Security has paid in $1.844 Trillion Dollars more than has been paid out by Social Security. The excess has been BORROWED AND SPENT by the Federal Government to cover ongoing non-Social Security expenditures since 1986. The US Government has issued US Government Bonds to be held by the Social Security Trust Fund which are no different than those purchased by China and Saudi Arabia in very large amounts).

Regarding Medicare, the current (working and retired demographic) for the entitlement program of Social Security Medicare currently has accumulated $338 Million Dollars more than has been paid out for Medicare B expenses. As above the accumulated surplus of $338 Million Dollars has been BORROWED AND SPENT by the Federal Government to cover ongoing non-Medicare expenditures since 1986.

The “full faith and credit” of the US Treasury securities applies to Saudi Arabia and China, and anyone else who buys US Treasury securities, and they are perfectly free to redeem their US Treasury securities and bonds when they come due.

Unfortunately, far too many people feel that the “full faith and credit” of the U.S. Government does not apply to the US Treasury securities and bonds amounting to $1.844 Trillion Dollars held in Social Security Trust Fund and the $338 Million Dollars held in various Medicare Trust Funds.

Perhaps the politicians complaining how unfair it is for Social Security to redeem bonds don’t realize that the redemption of US Treasury securities by China, Saudi Arabia, and other Mid-East countries is accomplished by selling new bonds that total or exceed the bonds redeemed. In other words, the National Debt goes down by the amount of US Treasury bonds redeemed by Social Security, China, Saudi Arabia, etc. and up by the amount of new bonds sold to cover the redemptions.

Reminder: The US Treasury has not redeemed any of the various US Treasury bonds held by the Social Security Trust Fund since 1983 and is not expected to begin gradually redeeming any of them before 2017 (a 34-year period). In contrast, the bonds held by China, Saudi Arabia and our other overseas lenders are issued for a maximum period of 10 years. To the best of my knowledge, the US Treasury has been successfully processing redemptions of US Treasury securities since the U.S. Government floated the first U.S. Treasury bond.

I don’t understand why it is bad for the US Treasury to pay interest and return the principal on funds borrowed from American worker FICA payroll tax contributions, .i.e. the Social Security Trust Fund and Medicare Trust Fund proceeds, but it is good to pay interest and return principal to countries like Saudi Arabia and China?

Perhaps it has something to do with a combination of Fair Trade, greed, and an abysmal lack of ethics and morality on the part of the political, business, and financial leaders of our country.

I am not surprised since most of the allegedly leaders complaining about the redemption of US Treasury securities held by the Social Security Trust Fund and Medicare Trust Fund are not willing to serve in the Armed Forces to defend our Liberty and they are not willing to pay the taxes to support our defense needs (or any other needs). With that being the case, why would they be willing to pay back money they borrowed from the FICA payroll contributions of working Americans?