Social Security Woes In A Microcosm

NEW JERSEY PENSION FUND AND SOCIAL SECURITY
Thursday, April 05, 2007
What's happening to the New Jersey Pension Fund For Teachers , reported by the NYT, is a microcosm of the U.S. Social Security entitlement program.
New Jersey has been diverting billions of dollars from its pension fund for state and local workers into other government purposes over the last 15 years, using a variety of unorthodox transactions authorized by the Legislature and by governors from both political parties.
[...]
State officials say the fund is in dire shape, with a serious deficit. It has enough to pay retirees for several years, but without big contributions, paid for by cuts elsewhere in the state’s programs, higher taxes or another source, the fund could soon be caught in a downward spiral that could devastate the state’s fiscal health. Under its Constitution, New Jersey cannot reduce earned pension benefits.
Social security has the same future and the solution is to raise SS taxes, increase the retirement age and/or cut benefits.
New Jersey may have a $56 billion deficit. If New Jersey is drawing scrutiny from Congress,
Members of the United States Senate have asked the Government Accountability Office for a review of public pension operations and whether new rules are needed.
the SEC
in New Jersey like San Diego, officials put false information about the pension fund into bond offering statements. After an investigation, the S.E.C. found it amounted to securities fraud.
and the IRS, in New Jersey
like San Diego, the city was using its pension fund to pay other expenses, like retiree health care costs. The money in pension funds gets preferred tax treatment and must be spent solely on pensions.
then Social Security should face the same hard looks by the respective agencies.