Meet the Man Who Perversely Argues for Cutting Social Security Benefits to "Take Care of the Lesser People in Society"
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LAWSON: No flash words. I just wanted to zero in on a few things and you’ve hit most of them. The worthless IOUs.
SIMPSON: Use honesty.
LAWSON: I am. I’m being honest.
SIMPSON: No, no you’re not.
LAWSON: The worthless IOUs that actually goes back to 1936.
SIMPSON: They’re not worthless, there are IOUs in there.
LAWSON: Backed by the full faith and government, full faith and …..
SIMPSON: You’ve got it, full faith and credit.
LAWSON: Full faith and credit.
SIMPSON: That’s absolutely true.
LAWSON: There we go. They’re bonds just like any other bonds. That the government has to pay back.
SIMPSON: That’s right. But there are not people involved. It is the government and the government.
LAWSON: Well, it’s actually the government and the citizens, right? The government doesn’t actually own the bonds, it’s the government owing…
SIMPSON: Let me say things in a way so your fans will understand this, so you can go and be a hero. There is not enough in the system by the month to pay in, to pay out what comes in. In other words, there is more going out, than coming in. That happened 3 or 4 weeks ago.
So, what do they do? They go to that trust fund and say, ‘We need the IOUs out of it.’ And they say, ‘You can have them, but you have to pay for them.’ So you’re taking a double hit on your own government. Makes no sense. The government goes and says, ‘Hey, here’s that 2.5 trillion IOUs, now we need some money out of that system because we haven’t got enough to pay this month.’ And they say, ‘Great.’ So the government gets a double hit.
LAWSON: Thanks so much Senator. We obviously have a very different understanding of the system.
SIMPSON: Yes we do. But we are all involved in one thing, not secrecy.
LAWSON: No, I understand that. But in my understanding from actually looking at the 1983 commission, they actually started prefunding the retirement of the baby boom by building up that huge surplus.
SIMPSON: They never knew there was a baby boom in ’83.
LAWSON: But actually they knew there was going to be demographic issues when the set up Social Security, so they actually predicted…
SIMPSON: They never dreamed that the life expectancy from 57 years of age to 78 or 75 or whatever. Who would dream that? No one. They just died. People worked. Social Security was never a retirement. It was setup to take care of poor guys in the Depression who lost their butts, who were digging ditches, and it was to give them 43% of their wages…when they got out…and that’s what it was. It was never a retirement. It was an income supplement.
LAWSON: Well it’s actually an income insurance, right? It’s a wage insurance program to replace lost wages due to death, disability and old-age. But, it’s definitely an insurance program meaning that the people own the insurance, right, their giving money in, in expectation that it’s their money to come out.
SIMPSON: That’s right. And they’re going to get their money. But right now, to get their money, which has all been used and consists of Treasury Bills, the government has to go and get it out of there and pay it and say, ‘Here’s some money for you.’ So you don’t diminish the 2.5 trillion bucks. So it’s got your government putting up money, which increases the deficit to get this money out to go to the beneficiary.