The Cookie Jar That Once Contained Social Security

Always tempting, that cookie jar and politicians not daring to increase taxes have had their sticky little fingers in your and my retirement fund.

They don’t call it that. They simply tell us the lie that the fund is running out and the only solution is to cut benefits or increase the age for getting what we paid for.

Shameless, but when was shame ever a problem for the Congress?

Hardly anyone remembers Newt Gingrich or Grover Norquist, but they are the Bonnie and Clyde tag-team of America’s financial disfunction. Don’t blame ‘too many old people’ or ‘longer life expectancies’ for Social Security going bust, any first-year economics student could have seen it coming.

Time for a brief history of shameful politics

In 1979, an impoverished Georgia college professor named Newt Gingrich became a Member of Congress and proceeded to make himself a very rich man. A co-author and architect of the "Contract with America", Gingrich was a major leader in the Republican victory in the 1994 congressional election. In 1995, Time named him Man of the Year for his role in ending the four-decades-long Democratic majority in the House. An ethics violation ended his career in 1999, but the ‘Contract” promised to reduce the size of government, cut taxes, and initiate tort and welfare reform.

For his part, Grover Norquist (who was never an elected politician) railroaded Republican candidates for office by what he called a Taxpayer Protection Pledge, whereby both candidates and incumbents make a written commitment to oppose any and all tax increases. It’s worth knowing that Norquist’s 45 year reign-of-terror was endorsed by Ronald Reagan, and remains in place for Republicans. Enforced by successfully funding opponents to those refusing to sign, the pledge has become practically required for Republicans seeking office, and is a necessity for Democrats running in Republican districts.

Offered to every candidate for state and federal office and to all incumbents, nearly 1,400 elected officials, from state representative to governor to US Senator, have signed the Pledge. Norquist swore to “shrink the federal government to a size where it could be drowned in a bathtub.”

Words spoken like a true patriot. I’m not really sure I want my government drowned in Grover’s bathtub.

Bathtub or not, it takes money to run a government

Back in olden times (the 60s and 70s), our government financed itself through corporate and personal income taxes, plus social security taxes, customs duties, earnings from the Federal Reserve System, and various fees and charges. Yet, almost every U.S. president since the tax pledge has run a record budget deficit at one time or another. The largest deficits in U.S. history were run by former President Donald Trump and his two immediate predecessors, Presidents Barack Obama and George W. Bush. Bill Clinton was the only president to run a surplus. Between 1998-2000, the publicly held debt was reduced by $363 billion—the largest three-year pay-down in American history.

All eyes turn toward China and the cookie jar

I might, or might not, come as a shock that our bold defenders of democracy in Washington began to print and sell government bonds just to tide us over. Although our own government is the largest holder of American debt (as of December 2023, total federal debt was $33.1 trillion; $26.5 trillion held by the public and $12.1 trillion in intragovernmental debt), both China and Japan are in the game. Currently Japan has a little over $1 trillion, China $890 billion, the U.K., with $668.3 billion, Belgium holding $331 billion and Luxembourg slightly behind Belgium with $318 billion.

Essentially, we owe ourselves ten times as much as we owe anyone else, but it all accrues interest. As Pogo said, so accurately in 1970, “We have met the enemy and he is us.”

Where does the cookie jar come in?

The cookie jar is Social Security money paid in to the account and, perhaps like your kids’ piggy bank it was—and always has been—overflowing with money. Until Bonnie and Clyde (Gingrich and Norquist) broke it into pieces and used the money to replace what they took away, both by law and by intimidation.

Who the hell can run a government, without increased funding, in a world four times bigger than it was? Republicans seem to believe so.

As of 2021, the Trust Fund contained (or alternatively, was owed) $2.908 trillion. The Trust Fund is required by law to be invested in non-marketable securities issued and guaranteed by the "full faith and credit" of the federal government. These securities earn a market rate of interest.

Now, pay attention

There is no shortage of money to continue social security at its same age and payout rate. None.

It has simply been taken hostage by your government in order to make up for its own (largely Republican) deliberate act of betrayal. In Congress, 42 senators and 189 House members are still signed to the pledge. All are Republicans, which means that 86 percent of GOP senators and 85 percent of the party’s House members have signed on to participate in a permanent stranglehold on policymaking.

Simply put the cookies back in the jar, all $3 trillion of them

Or are disgraced Gingrich and unelected Norquist still running the United States Government, nearly half a century past their sell-by date?