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."
The sad truth about Social Security is that the issue is constantly being falsely framed as one in which one day the government is going to run out of money. That's totally bogus. You have crazy ideologues, people like Pete Peterson and David Walker, along with total propaganda organizations like Fix the Debt, going around scaring everyone into believing the country is going to run out of money. It's shameful.
In 2008, I had a radio show on Biz Radio Network and I interviewed Walker, the former controller general. I am the only person, ever, who got him to admit the checks were never going to bounce and that there was no issue with solvency. Listen to an audio clip.
Yet to this day, Walker goes around telling everyone the system is facing insolvency.
As Alan Greenspan explained and as this lying David Walker admitted, it's not about solvency at all, at least in a financial sense. You can argue whether or not we are going to go "broke" in terms of the real assets -- the food, shelter, clothing, medical care, etc. -- but that's never something we hear. It's never part of the discussion. The discussion is always about how we "fix" Social Security when there is nothing wrong with it. Not a thing.
These people are just lying through their teeth and the reason they are willing to spend millions on these fear campaigns is because they stand to gain a lot, lot more. They want that money for themselves. It's killing them that they don't have it already. They want those trillions that are slated to be paid out over the next 15-20 years. That means they want Wall Street and the financial sector to get it. They want to play with it, pay themselves enormous salaries and bonuses for playing with it, and then, of course, blow it out as they always do. That's when we, the taxpayers, will be called upon to make them whole once again. It is disgraceful.
Social Security is not broke. It can never be broke. Ever. And if it's a question of whether or not we have the real assets for those benefits to purchase like Greenspan said, that's easy enough to do. You just make sure the government provides the investment needed to create those assets, or design some incentives for the private sector to create them. Once that happens, everything is settled. That's what we need to be talking about as a nation, not how to "fix" some made-up non-problem.
