The American Dilemma and How We Can Fix It

Posts tagged ‘government accounting’


Well the news is in.  The Social Security Administration has announced that our population of seniors (and other beneficiaries) of the Social Security Trust Fund will receive a 1.7% increase in the size of their checks in 2013 from the present amount they are receiving.

For the last statistical data I was able to find, ending in calendar year 2009, that meant 33.5 Million people or so will receive this increase in their benefits.  The number has undoubtedly grown in the three years since that data was published by SSA as more “Baby Boomers” have retired.

I happened to be speaking with a friend who is 70 years old and this subject came up.  Because of her age, she is one of the last of those who can actually do arithmetical computations without the benefit of a calculator.  And she mentioned an interesting point to me.

When she received her last benefit increase, it was actually less than the 1.5% amount that was widely reported – both in the media and by SSA.  I asked if she were sure of this and she went to her desk and from a drawer took out a sheet of paper on which she had done the computation in longhand and showed it to me.  Her math was impeccable.

In addition to all the problems the government has to address there is one that goes unheralded and unreported.  I’m here to correct that problem.  You see, apparently government computers are fine when it comes to millions and billions and trillions of dollars.  But they have a problem with “cents”.  All Social Security checks are now created in even dollar amounts only.

You are probably one of those thinking individuals who says, “Well, if it comes out to $.51 or more, they round up to the next dollar.  If it is $.50 or less they round down.”  That would be reasonable and fair..

But in my friend’s case, that isn’t what happened.  Her last increase would have meant that she earned a dollar more than she receives per month were that the case.  But her actual check is for a dollar less than what it would be if the above assumption were true.

This, of course, prompted my curiosity.  And with an SSA office only about a ten minute drive away, I decided to stop in and pay my public servants a visit and inquire about their accounting practices.

So I called to find what time they opened and was there fifteen minutes before the doors were unlocked.  I was about 20th in line when I arrived.  As I waited for them to begin their business day, I thought it was interesting that there were only two people ahead of me who appeared that they would qualify to receive benefits due to age.  I don’t know why the others were there, unless they thought it was “Free Donut Day” at SSA.  Or maybe they were there doing investigational reporting.

So we filed into the typically grim and dismal government building and each of us took our turn taking a number.  There were some uncomfortable pressed-material chairs available for our seating and since I had brought a copy of “Atlas Shrugged” with me and remembered to take my reading glasses, I was prepared for the wait however long it would be.  As it turned out, it wasn’t all that bad – about an hour.

When my number was called, I dutifully went to Window 8 which was where I was informed by the automated, robotic announcer I belonged.  A very nice lady in her 50’s asked how she could help me.  So I explained that I was there to gain an understanding of how increases in Social Security benefits were computed.

She explained that SSA no longer issues benefits with cents.  (I had figured that out).  All checks were rounded out to even dollar amounts.  So I pulled out the sheet of paper that my 70 year old friend had handwritten and asked why she had not been “rounded up to the next dollar amount” instead of being “rounded down”.

The answer was that all benefit amounts were “rounded down” to the next whole dollar amount.  (By contrast, my friend who has Medicare “Part B”  and is presumably paying $99.90 for this insurance is actually charged $100.00 for it – so I know that government computers are smart enough to round up – if they are told to do so).

Now this may sound trivial to you.  If it does, you are probably not a senior who is living on an occasional dose of cat food to supplement your meager income because you’ve run out of money before you’ve run out of month.  But let’s consider the overall picture for a moment.

Assume that the average amount that is being withheld from recipients is $.50 per person per month.  That’s not much – only $6.00 per year per person,  multiplied by 33.5 Million people equals about $200 Million a year.

In other words, our senior citizens, through this little accounting gimmick are financing the $80 Million or so that we pay Congress, the salary of the President and Vice-President, the salaries of the members of the Supreme Court, the entire Cabinet and there is still money left over to invest in companies like Solyndra.

Government accounting.  You gotta love it.

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