General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsSocial Security has ZERO to do with the Deficit.
Cuts to SS, using Chained CPIs or any other cuts, using any other kind of deceptive language, will do NOTHING to bring down the Deficit.
Why? Because the SS Fund is not part of the Federal Budget.
And the Government has no right to touch it without the permission of those who own it. None, whatsoever!
SS is a fund OWNED BY those who paid into it during their working years, an INSURANCE fund that provides a safety net for retirees and now for the disabled and orphaned children.
Raiding this Insurance Fund has become a habit of Warmongers and the Wealthy who want to keep THEIR taxes as low as possible.
When they raid the SS Fund they have to provide US Govt Bonds to ensure that what they borrowed will be paid back.
They don't WANT to pay it back! They want to Privatize it and gamble with on Wall St. We know what has happened to Pension Funds when they were placed in the hands of the Wall St. Gamblers.
This must never happen to the SS Fund.
You will hear lies claiming that the fund is 'empty' and needs 'fixing'.
If that is the case, then every creditor of the US Govt holding those bonds, including China, need to worry that those Bonds have no value.
The US Government CAN NOT default on its creditors, INCLUDING THE AMERICAN PEOPLE who are among those creditors, without dire consequences to this country.
As one of those creditors, the SS Fund receives interest on the Bonds it holds every year.
Even during the recission the SS Fund continued to show a surplus.
The Fund has an over 2 Trillion dollar surplus.
The Bonds it holds are backed by the Full Faith and Credit of the US Government.
The Fund is NOT empty, it is owed trillions by the US Government.
Money that is safe so long as the US Govt honors its debt to its Creditors.
You might see some attempts, even here on DU, to use the CBO report to try to create the impression that SS Benefits need to 'cut' in order to help with the DEFICIT.
Nothing could be further from the truth.
Because the SS FUND HAS ZERO TO DO WITH THE DEFICIT.
Therefore cutting benefits will have ZERO EFFECT ON THE DEFICIT.
Raise the Cap on SS and focus on creating jobs and the SS Fund will be good for another 100 years.
Anyone saying otherwise has one giant ulterior motive.
Thanks FDR for the Social Safety Nets that have saved the lives of countless numbers of Americans.
NO DEMOCRAT should ever participate in doing anything that would jeopardize those protections for the least among us.
Just thought this needs to be said periodically, even here on DU.
Hands OFF Social Security!
Pay for your wars and your Tax Cuts for the Wealthy with your own money!
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
Cleita
(75,480 posts)We can't repeat this message enough until it saturates through the brains of everyone even the most stubborn tea bagger.
sabrina 1
(62,325 posts)which is why I do intend to keep repeating the facts so long as I see the Heritage Foundation talking points appearing on Democratic Forums regarding SS.
Thanks for your comment, Cleita!
Laelth
(32,017 posts)-Laelth
MH1
(17,573 posts)However there is a projected deficit in Social Security itself at some point in the future, due to demographic changes - too little paid in to pay promised benefits for the beneficiaries who will be alive at that time. If we don't address the projected deficit in SS funding before it occurs, then SS does begin to draw from the general budget, OR benefits have to be cut at that time.
Before anyone jumps on me, I'm not claiming to be an expert and I don't recall what the latest projections are. I'm just stating the facts as I understand them about what the argument is. ANYONE who is claiming that we need to cut SS now to address the current deficit is speaking inaccurately, whether from ignorance or a deliberate attempt to mislead.
sabrina 1
(62,325 posts)out all of its obligations (which it is currently doing and projections vary from 23 to over 40 more years based on the CURRENT ECONOMY) there will always need to be enough workers to pay into it.
The way to keep it going therefore is for our Government to focus on job creation, which is something the Government should be doing regardless of SS anyhow.
We are still in a very bad economy and those who want to privatize SS are as expected, trying to use the current numbers, which are still okay btw, to scare people into cutting benefits, which is not only NOT necessary, it would be better to INCREASE benefits right now which would put more money into the economy, money that will not be hoarded, but spent, which in turn creates more jobs.
It is probably one of the best fiscal programs ever and the Government should be doing everything in its power to protect it.
Raising the cap is the most obvious and logical first step to keeping the fund going for many more years.
Thank you for your comment, we don't disagree at all.
bhikkhu
(10,711 posts)and with a healthy economy, pretty much all the problems go away. The massive debts that WWII resulted in were cured by an economic boom. If the repugs would get out of the way and allow things like the American Jobs Act to get done, we'd be a long way to solving our problems. There is currently a record number of 19-25 year olds in college, hoping for solid careers. If we can build and economy to give that to them, that's a big part of the long-term answer there.
jtuck004
(15,882 posts)some place we aren't even at war with, but to get by a temporary demographic bump all of a sudden we have to starve seniors?
Pathetic. Maybe people should grow a spine, before they, if they are lucky, grow old and find themselves under a bus too.
bvar22
(39,909 posts)Last edited Sun Sep 22, 2013, 04:04 PM - Edit history (1)
Is an unambiguous statement like THIS too much to ask?
Man, that really drives home how FAR the Democratic Party Leadership has lurched to the Conservative Right.
No wonder the ConservativeDemocrats are so happy with the Democratic Leadership and the direction of the "New" 3rd Way Democratic Party.
[font color=firebrick][center]"There are forces within the Democratic Party who want us to sound like kinder, gentler Republicans.
I want a party that will STAND UP for Working Americans."
---Paul Wellstone [/font][/center] [center]
[center] [/font]
[font size=1]photo by bvar22
Shortly before Sen Wellstone was killed[/center][/font][/center]
You will know them by their [font size=3]WORKS.[/font]
sabrina 1
(62,325 posts)Now, apparently it has become extremely difficult just to state the facts about SS.
L0oniX
(31,493 posts)DeSwiss
(27,137 posts)sabrina 1
(62,325 posts)I've searched, but can't find it stated so clearly myself.
DeSwiss
(27,137 posts)But I did find this:
[center]Tweak Social Security like Reagan did, but keep entitlements[/center]
Q: Do you see a major difference between the two of you on Social Security?
OBAMA: I suspect that, on Social Security, we've got a somewhat similar position. Social Security is structurally sound. It's going to have to be tweaked the way it was by Ronald Reagan and Democratic Speaker Tip O'Neill. But the basic structure is sound. But I want to talk about the values behind Social Security and Medicare--what's called entitlements. You know, the name itself implies some sense of dependency on the part of these folks. These are folks who've worked hard, and there are millions of people out there who are counting on this. So my approach is to say, how do we strengthen the system over the long term? And in Medicare, what we did was we said, we are going to have to bring down the costs if we're going to deal with our long-term deficits, but to do that, let's look where some of the money's going. (Source: First Obama-Romney 2012 Presidential debate, Oct 3, 2012 )
[center]Must capture new revenue; no new Social Security Commission[/center]
OBAMA: We’re going to have to capture some revenue in order to stabilize the Social Security system. You can’t get something for nothing. And if we care about Social Security, which I do, and if we are firm in our commitment to make sure that it’s going to be there for the next generation, and not just for our generation, then we have an obligation to figure out how to stabilize the system. I think we should be honest in presenting our ideas in terms of how we’re going to do that and not just say that we’re going to form a commission and try to solve the problem some other way.
CLINTON: With all due respect, the last time we had a crisis in Social Security was 1983. President Reagan and Speaker Tip O’Neill came up with a commission. That was the best and smartest way, because you’ve got to get Republicans and Democrats together. That’s what I will do.
OBAMA: That commission raised the retirement age, and also raised the payroll tax. So Sen. Clinton can’t have it both ways. (Source: 2008 Philadelphia primary debate, on eve of PA primary , Apr 16, 2008 )
- If he wants to ''stabilize'' the system they could start by paying back all the money they've already stolen from the system.truebluegreen
(9,033 posts)into Social Security--as was done by St Ronnie and Tip O'Neill--a "tweak."
DeSwiss
(27,137 posts) - One man's tweak is another man's rent.
rhett o rick
(55,981 posts)
Enthusiast
(50,983 posts)acknowledged that the late 1990's "surplus" was comprised almost entirely of FICA contributions that were "owed" to seniors. This was during one of the debates with Gore. It was one of the very few correct statements Bush made.
Of course after he was selected to the presidency he went on to slash taxes on the wealthy because of said surplus. Stealing the Social Security trust fund is only part of the planned theft that is an ongoing operation.
sabrina 1
(62,325 posts)Commission and slamming Hillary, rightfully imo at the time, for proposing one. I believe he called such Commissions 'end runs around the Constitution'.
Then he did exactly that.
I keep waiting for him, a Democratic President, to say that SS should not be mentioned by that Commission whose sole purpose is supposed to be to fix the Deficit. But I'm still waiting.
joeglow3
(6,228 posts)It is all one pot. No amount of Chinese walls will stop that.
sabrina 1
(62,325 posts)clear to me .....
wercal
(1,370 posts)Since the 1980's, the federal government has been robbing Peter (the SS trust fund) to pay Paul (annual obligations paid out by the general fund).
Well now we sit and Peter doesn't have any money. Peter needs some of his money back. And from here on out, he'll need a little bit more back every year.
How does the federal government pay back Peter?
The money will be borrowed. And it will increase the deficit. Absolutely no question about it. If more people retire early and take benefits early...the deficit will increase to pay Peter back quicker. Its a direct causal relationship.
So the two are absolutely related, and its a case study in denial to pretend they aren't.
Now considering our deficit, and in particular our total debt, cannot balloon forever, you correctly have looked for one way to make SS more solvent (raising the cap). This is because, despite your protestations, you instinctively know that Peter is never getting his money back at a fast enough rate (because it is directly tied to the deficit). Your idea is on the revenue side (raising the cap)...and you are quite confident it will work....but you dismiss out of hand any suggestion that changes on the expense side (benefits) would have any effect. That is deliberately putting one's head in the sand.
Raising the cap is a good idea...probably should go back to when the cap went into place and index it to today. That will keep it going a little longer. The next logical steps will include means testing on the benefits side - morphing SS into a progressive tax structure, instead of insurance. But it can't be called an insurance plan for much longer anyway. Back to the original comment about accounting...in many states, SS would not meet the requirements of that state's insurance laws. The fund has essentially lent most of its reserves to a deadbeat borrower...a borrower that can use the power of the money supply to decrease the value of the dollar and reduce the value of the repayment. That would not be even close to acceptable in any other insurance venture, in many states.
Oh yeah - similar to my suggestion on indexing the cap, one can count on the minimum age to start to get ticked up. Its going to happen, you can count on it.
SS has always had one fatal flaw - its lack of control of its reserves. The fund is not at all autonomous...and it has made some very bad 'investments' by lending to the federal government. That deed has been done. It cannot be undone. Our future will see raised caps, raised minimum age, means testing of benefits, and a perverse redefining of COLA, to reduce benefits over time.
I'm just the messenger on this...flame me if you want...but people have to realistically know what to expect.
Recursion
(56,582 posts)Pretending it's otherwise is absurd.
Higher SS payouts will produce higher deficits. Lower SS payouts will produce lower deficits.
Pretending this isn't so makes us look stupid.
In the long run, because we'll be borrowing dollar for dollar to redeem already existing bonds, payouts will not affect net debt, but that's not what sabrina is saying. She's saying SS will not affect deficits which is absolutely false.
wercal
(1,370 posts)sabrina 1
(62,325 posts)to cover its debt, and by doing so, raises the Deficit, THAT is NOT the fault of its creditors. It is the fault of the Government.
That kind of reasoning is the equivalent of the following
After some time YOU need some of your money back.
He doesn't have it so he has to borrow from someone else. Now he has to pay interest on another loan.
Who is to blame for the extra money he now has to spend? For the additional debt he has run up??
He didn't HAVE to get into more debt. YOU certainly didn't force him to.
SS does not add a single dollar to the deficit. The Government doesn't have to use the money they borrowed to add to the Deficit either. But they have and they will continue to so and then they will try to blame their Creditors, well mostly they will try to blame ONE of their creditors, fudge the numbers, so that the Heritage Foundation/Wall St can use those fudged numbers to fool people into PRIVATIZING SS.
SS did not contribute to the Deficit and it is false to make that claim.
Recursion
(56,582 posts)It raises the deficit. Period. Cash outflows do that.
HuskyOffset
(888 posts)because the fucking rich assholes use their wealth-backed political power to prevent the government from raising their taxes to where they should be. If we taxed those selfish fucks appropriately, we wouldn't be in this mess.
Making SS payments causes the federal government to spend money. How the federal government gets that money is its problem, not SS. How about we do it this way. When making the budget, the first thing that gets paid is SS, and the last thing that gets paid is the defense budget. If you do it that way, guess what is causing deficits? Yeah, that's right, the goddamn defense budget. Holy shit, we have to cut the defense budget, it's causing huge deficits! You'll never hear a republican say that though, it's always SS and programs that help poor people that cause deficits, not ever the hugely bloated defense budget.
It fucking pisses me off no end that the SS trust fund got used to lower taxes on the wealthy and now they don't want to pay that back, so it's the poor and disadvantaged that have to pick up the tab. I guess if I was a rich selfish fuckhole with no empathy I would feel differently.
Sorry for the rant.
oldhippie
(3,249 posts)... so they resort to politics and blame, which is the first priority.
sabrina 1
(62,325 posts)money on Wars they cannot afford, on Tax Cuts for the Wealthy, they cannot afford, on Subsidies for Mega, obscenely wealthy Oil Cartels, they cannot afford.
What has SS spent money that it cannot afford??
Recursion
(56,582 posts)
sabrina 1
(62,325 posts)that it cannot afford that has cause any part of the Deficit?
dairydog91
(951 posts)As long as yearly revenue through the payroll tax exceeds yearly disbursements to SS recipients, SS remains largely insulated from other spending. However, when yearly revenue is less than yearly disbursements, SS must draw on its trust fund. Since the trust fund consists of non-marketable securities, the very act of SS cashing in its securities will result in a draw on federal revenues.
sabrina 1
(62,325 posts)to make sure SS is always well funded.
One, and the most obvious one, is to raise the cap.
Two is focus on jobs here in the US instead of providing subsidies to Corporations who outsource those jobs, among other things.
Three, no more tax cuts for the wealthy, no more bailing out failed Corporations and no more Wars for profit. Those three things alone caused the 'borrowing' the Fed Govt is responsible for from the SS Fund and elsewhere.
We've been hearing that SS is in 'danger of having to draw on the General Fund for decades now. But it hasn't and never has to, unless it is ALLOWED to happen in order to use it as an excuse to tie it to the Deficit, however remotely, and convince the public it needs to be privatized.
It is now up to Democrats to once again stop any talk of SS/Deficit and push for the raising of the cap, as a start.
SS has other sources of revenue, one being the interest on the bonds and even in these difficult economic times, it has STILL shown a surplus every single year.
The Deficit Commission needs to focus on WHAT CAUSED the deficit and leave SS out of it.
Even under the worst scenario, SS will not need to draw on the General Fund for at least 25 more years, giving those we have elected plenty of time to do the little things necessary to keep the fund going for another 100 years or so.
Yo_Mama
(8,303 posts)They don't want to hear them and they will not deal with them.
sabrina 1
(62,325 posts)If you disagree with the facts presented in the OP, then let's talk about them. But these 'they don't understand the facts' comments do nothing to refute the facts.
Yo_Mama
(8,303 posts)The OP was pretty much all wrong.
The SS trust fund is what's called an "intragovernmental trust fund", just like the highway fund, the disability fund, the medicare fund, one of the federal government retirement funds, etc.
There is not any actual separate money or securities in the Trust Fund, just as there aren't in any of the others. There are special securities that by law cannot be sold.
The only way the SS Trust can withdraw "money" from its fund is to take one of those special bonds and hand it over to Treasury, which then has to get actual money to give the SS administration so they can pay benefits. They do so either by taking money out of general funds (if the general fund is running a surplus), or by borrowing it, (if the debt limit hasn't been exceeded and they still have the authority to do so).
Now if the taxes being paid in and the contributions being paid in were still enough to fund SS benefit payments that wouldn't be true, but that is no longer true and apparently won't be true for decades.
So, in fact, SS does add to the current deficit. Right now it doesn't do so by very much, but the time when this was supposed to happen was supposed to be later - nearly a decade later.
If the Fed never stops buying Treasuries, the buying power of the dollar will be diluted but benefits could be paid for a very long time to come. If the Fed stops buying Treasuries, the situation becomes more difficult.
sabrina 1
(62,325 posts)for those bonds is because the FED GOVT BORROWED from the very self-sufficient SS FUND.
So your whole argument collapses right there when you state, correctly, that when, IF, SS ever gets to the point where it has 'call in its debt' which means, cashing in some of those bonds, (which it so far has not need to do, even in these terrible economic times) it will cost the Fed Govt something.
But that has zero to do with the SS Fund. It has to do with the Fed Govt needing to borrow from the SS Fund in the first place.
This is a Heritage Foundation argument. Playing with numbers, leaving out pertinent facts.
What should be done with any surpluses is to INCREASE benefits, give it those who earned it. Instead it is being as a constant source of loans for a Govt that spends on Wars and Tax Cuts for the wealthy.
joeglow3
(6,228 posts)And no amount of calling it "right wing logic" will change it. My accepting the common sense facts for what they are doesn't make me right wing.
Your logic appears to be "since the federal government shouldn't have been able to raid the trust fund....." Too late. It happened.
sabrina 1
(62,325 posts)Doe China know this or any of our other creditors? Or is it just the Bonds held by the SS Fund that have suddenly become worthless?
The SS Fund receives interest payments on those Bonds. Maybe you better tell someone they don't need to.
I wouldn't pass an Economics class in High School if I made the claims you are making.
joeglow3
(6,228 posts)sabrina 1
(62,325 posts)to do with SS? SS has shown a surplus over the past number of years despite the Recession and has no need to call in its debt. China otoh, seeing claims such as the one you made, that SS's Govt Bonds are 'nothing', might decide its time to turn in some of their bonds.
Additionally, you seem to be blaming SS for how the Fed Govt decides to conduct its financial business.
SS is a CREDITOR of the Fed Govt, like China. Neither is to blame for the fact that the Govt chooses to spend so much money on tax breaks for the wealthy (over 2 trillion over the past decade) or that the Govt chooses to spend trillions on the Military. Or billions in subsidies to Oil Companies and Corporations that don't need it, for taking jobs out of the country.
If you want to connect anything to the Deficit, how about Oil Subsidies or Corporate Tax Breaks as they outsource jobs, or Wars or Tax Breaks for the Wealthy. All these things DIRECTLY affect the Deficit.
Social Security does not.
joeglow3
(6,228 posts)Using your logic, we are collecting enough money with the IRS because if we look at ONLY the IRS, it is a huge money maker. However, SNAP just costs us money and needs to be cut or done away with.
The reality is the days you are referring to are long gone (ie a sunk cost).
sabrina 1
(62,325 posts)are saying.
SS was not meant to be a 'huge money maker'. It was meant to do exactly what is doing.
Try to stay on topic at least. We are talking about a Fund that has zero to do with the Fed Budget. Unlike the IRS.
joeglow3
(6,228 posts)oldhippie
(3,249 posts)Admission is the first step in the recovery process.
(I'm sorry, but I couldn't resist. You set yourself up.
)
sabrina 1
(62,325 posts)And I'm still waiting for the reasons why SS is the cause of the Deficit. At least you're developing a sense of humor, which is progress. No point in being angry imho!
oldhippie
(3,249 posts)... As the SS is not the cause of the deficit and no one here has tried to say it was. You just changed the argument (again).
You cannot seem to understand the difference between debt and deficit, and other accounting terms. Several people here have tried to explain it to you. Others get it, you don't, and I suspect you won't. Because you don't want to.
Alas, my amusement is waning. I'm going to bed.
sabrina 1
(62,325 posts)TO THE DEFICIT! See the Deficit Commission.
SS did not cause nor contribute to the Deficit. We KNOW what caused the Deficit. THAT is what this OP is referring to. YOU changed the topic and then chose not to defend your position. That is your choice.
I will continue to oppose anyone who tries to tie SS to the Deficit, no matter how 'subtly' they think they are doing it.
Igel
(35,274 posts)And shouldn't.
They're special bonds. China can't own any of them. I can't own any of them. Only the SS trust fund can own them. And only the Treasury dept. can buy them back from the SSA.
DeSwiss
(27,137 posts)
- Do they write this stuff for you? Or do you just make it up as you go? Please don't tell me they taught you this in school!
oldhippie
(3,249 posts)... and some people (the "they" being spoken of) just will not accept the fact that the SS expenditures do affect the deficit. They just keep going back to "SS is fully funded." No explanation of how it actually works will move them.
sabrina 1
(62,325 posts)SS 'adds to the deficit'.
I'm not wasting my time. Yo_Mama did a pretty good job, but you won't accept that.
sabrina 1
(62,325 posts)made in his post. If that is YOUR argument that SS adds to the deficit, then you are just plain wrong. Unless you have some other argument, I will assume that Yo Mama's argument is yours and suggest you read my response to 'him/her'. Or not, as you please.
The fact is that SS has ZERO to do with the Deficit and cutting SS benefits will do NOTHING to help reduce the Defiicit, in fact it will most likely do the opposite.
oldhippie
(3,249 posts)Thanks, and goodbye.
sabrina 1
(62,325 posts)so I'll take that as an agreement. Thanks for your comments
oldhippie
(3,249 posts)Those who understand, will. Those who won't, won't. I (and you) made my point.
sabrina 1
(62,325 posts)Lots of people read DU even if they do not post so it's an opportunity to present facts to people, when you have them. It is a discussion forum. If I am wrong and someone can show me where, I am more than willing to concede the point to them.
But I have had this discussion over SS for years arguing against the same points and so far, no one has presented a credible argument FOR the claim that SS is in 'dire danger' of not being able to pay out its full obligations due to the Fund being 'empty'.
Anyhow, your choice ... thanks for the comments!
oldhippie
(3,249 posts)I wouldn't argue against that, either.
But your OP is about a different subject, about SS having ZERO effect on the deficit, about which, you are wrong.
But that was a nice little interesting sleight of hand you just tried. So typical. I guess that is how you build post counts.
sabrina 1
(62,325 posts)so not a change of subject.
But, for your benefit, to be specific.
When the 'the fund is empty' scare didn't work, due to Democrats making sure to educate people, they went to the false 'Deficit' connection. And when that fails, they will come up with something else.
As I said, NO ONE has yet proven to me that SS has ANYTHING to do with the Deficit.
Democrats will continue to fight the anti-SS Heritage Foundation lies as they always have. This is just the latest, but won't be the last.
oldhippie
(3,249 posts)As was mentioned up at the start of this sub-thread.
sabrina 1
(62,325 posts)support that claim.
joeglow3
(6,228 posts)I am done pissing in the wind.
oldhippie
(3,249 posts).... LALALALALALA! They just won't hear it and no sense wasting time on them. Maybe some new people will understand.
juajen
(8,515 posts)I'm new; however you're both full of it; so, its a good thing you are not in charge of the SS fund.
sabrina 1
(62,325 posts)I am wrong and can no longer defend them.
Igel
(35,274 posts)It's silent.
Try this. My wife has a cookie jar to save up for a trip to her mother's. (She doesn't; let's pretend.) (The federal government has a trust fund.)
Every month for 11 months she puts $100 into it. After a year she should have $1100 in it. (Every month the SSA puts extra money in the trust fund.)
But I come along and every month write an IOU and put in the cookie jar, taking the $100 and using it for other things. (Every month the federal government comes along and replaces the $ with special-issue bonds.)
Now, at the end of the 11 months she goes and finds the IOUs. Strictly speaking, we owe the money to ourselves. (The SSA is a creature of Congress; all its monies are Congress'.)
Since it's owed by us to us, it can't affect our credit card balance. Except that when my wife charges the plane tickets for her and our son and asks me for the IOUs to pay off the credit card bill my only recourse is to borrow the money because I spent it. (So when the SSA asks Treasury to buy back bonds, Congress has to cough up the money. If Congress has no money, it has to borrow it.)
Now for the sleight of hand, because there's a catch. Just like the IOUs to my wife is a kind of family debt, so the SSA trust fund is a kind of public debt. Intragovernmental debt, all in-house. It's listed in some public debt figures. But it's not listed in others. When we pay interest on that debt it goes to the SSA which gets used or converted into more special-issue bonds. But that intragovernmental debt doesn't show up on other measures of public debt, the ones that are usually cited.
So borrowing to redeem the bonds won't matter on some ledgers. It will matter on others. For example, the debt will have to be truly public--you and I or China or France will buy the debt, and then interest won't go from one government fund to another and all stay in house but will actually be expensed. Just as when I go to repay the IOUs to my wife I have to take out a loan and pay the bank.
In other words, redeeming those bonds adds to the deficit in every way that matters: in terms of actual money owed to actual people. It doesn't matter in other, purely internal-to-government ways.
As for it's being money "owed" to the people, it's not. It's a tax. There's no special Constitutional dispensation for FICA. It's an income tax that has a cap placed on it and which has been earmarked by Congress in special ways. For a while it was a separate, quasi-independent agency. Then Congress changed its mind and it wasn't a separate agency. Then Congress changed its mind again. The point is that Congress can do what it wants with the Trust fund, and does so every year when it resets SS distribution rates. It did so when it added disability claims, for adults and for minors. The money is Congress' legally. It's no more owed to people than the money that the Congress reserves for franking privileges. They could cancel the debt tomorrow, and since all the money is in special issue bonds it wouldn't affect one single bond holder apart from Congress, the bond holder. But they won't because it would be political suicide, whatever else it may be.
sabrina 1
(62,325 posts)And the continuous flow of money into the jar combined with the interest you put in making it unnecessary, so far, to borrow from outside the family with enough there to pay for the trip.
Because SS has not cashed in any bonds.
And the fact that the Fed Govt has messed up its finances to the point where it has to keep borrowing, from the People's SS Fund, from China, and wherever else they are borrowing from, has zero to do with the SS Fund anymore than it has to do with China.
Let me ask you this. What about the contribution to the Deficit, DIRECTLY, of the Pentagon Budget?
How about the Bush Tax Cuts for the Wealthy which did not create the jobs we were promised and cost the Treasury over 2 Trillion Dollars?
I could go on with all the direct causes of the Deficit, but you get the idea.
So why do hear the words SS/Deficit so often, but so rarely hear 'Pentagon Budget/Deficit so rarely when that is a DIRECT Cause of the Deficit?
I have my opinion of why that is, I'd like to hear yours.
Curmudgeoness
(18,219 posts)Many companies invest some of their cash assets into another affiliate company. And it is legal.
And how would you post that transaction? It is a receivable/asset on the investor company's books. And it is collectible. What is illegal about this?
joeglow3
(6,228 posts)I would bet my life you would be pissed as a recipient of said pension and wouldn't consider it solvent with all the company's IOU's.
Curmudgeoness
(18,219 posts)household finance or government finance with corporate accounting. It is a different animal. And the one thing about government is that they have the ability to "set their prices", raise taxes, if they need more money....not something that sits well with me, but I get the point.
No one will convince me that corporate IOU's are the same thing as US Treasury Bonds.
joeglow3
(6,228 posts)I agree it can't run as a for profit company. However, there are plenty of not for profits that run under a similar model.
Now, to the topic at hand, the reason people state what you did is because the government can just print more money or issue new bonds. However, those are things the topic creator said wont happen, as they claim SS has nothing to do with the national debt.
Phlem
(6,323 posts)excellent post sabrina 1
-p
pa28
(6,145 posts)Now let's see if he's a man of his word.
sabrina 1
(62,325 posts)as The Deficit. It would be nice if he would simply state the fact, as even Ronald Reagan did, that SS has nothing to do with the deficit.
But we'll see. Hopefully he will drop the idea of the Chained CPI eg which as everyone now knows, IS a cut to SS.
Spitfire of ATJ
(32,723 posts)sabrina 1
(62,325 posts)business and paid, in the case of most Democrats, willingly into the SS Fund has not forgotten at all.
Spitfire of ATJ
(32,723 posts)sabrina 1
(62,325 posts)public don't know, but the issue is the claim that SS has anything to do with the Deficit, which it does not.
Spitfire of ATJ
(32,723 posts)They claim the money is all gone and all that's in there is a bunch of IOUs.
They tell people the program is a case of the nanny state not trusting you to save for yourself and that "the government" looted the money to pay for things like bike paths and turtle crossings.
One of the things they don't tell people is the boss kicks in too. This nugget blows their whole talking point and reveals their motive for wanting to kill the program.
Here is a program that business pays into that is a direct benefit to people that aren't working and it drives them crazy.
sabrina 1
(62,325 posts)Always willing to learn, so thanks for your perspective!
PowerToThePeople
(9,610 posts)
Jefferson23
(30,099 posts)cuts, period.
Paul Krugman: Stop Obsessing Over The Future Of Social Security
http://www.nytimes.com/2013/06/03/opinion/krugman-the-geezers-are-all-right.html?ref=paulkrugman
K&R
sabrina 1
(62,325 posts)what used to be Republican talking points right here on DU, ie, 'it's just filled with worthless IOWs'.
Thanks for the Krugman link. Nearly every decent Economist has pointed out the fallacies we are being fed on a regular basis, but still they persist. Which is why we must also persist in refuting them. They never give up, they've been trying to privatize SS for half a century, and failing to do so hasn't stopped them.
So it really is up to the people to educate themselves and not to fall for their lies and deceptions.
Jefferson23
(30,099 posts)b/c I don't trust what they'll do if they're not called out on it.
You're welcome on the link. Krugman does a great job of getting the word out, others
do too...I tend to rely on him more than other economists. I like the way he gets pissed
off in print, lol.
Uncle Joe
(58,284 posts)Thanks for the thread, sabrina.
JDPriestly
(57,936 posts)
Half-Century Man
(5,279 posts)in the country.
Enthusiast
(50,983 posts)Of course I disagree completely. Thieving bastards! Social Security is the only aspect of the entire government that is adequately and completely funded by employee contributions. Unbelievable.
7962
(11,841 posts)You cant buy groceries with IOUs.
Enthusiast
(50,983 posts)
sabrina 1
(62,325 posts)for several decades even we do nothing about it right it now. If only the Fed Govt were run by such an efficient Financial system it would have to keep borrowing from the SS fund and then having to pay out interest on those loans costing the Tax Payers even more money.
Btw, what do you mean by IOUs?? Sounds odd to see that here frankly where people are generally very well informed about these matters.
7962
(11,841 posts)In the end, those have to be redeemed one way or another, or just defaulted on. Its all tax money in the end. We can keep spending more than we take in or stop it. A Treasury bill is just an IOU from the govt.
sabrina 1
(62,325 posts)fears that these T Bills are worthless. If they ever do get that feeling we will have more to worry about than SS. And since the SS Fund is just another creditor, and so far, the Treasury HAS paid out the interest promised to the SS Fund as it has to its other creditors, I don't see why you are so concerned.
bvar22
(39,909 posts)Don't tell that to Wall Street.
Buying stuff with IOUs it the American Dream.
BTW: You DO know that a Dollar Bill is an IOU?
7962
(11,841 posts)The fact is, Congress has emptied SS whether anyone here likes it or not.
bvar22
(39,909 posts)....because it is backed by the "Full Faith and Credit of the US Treasury,"
just like your dollar bill.
Really, dude, stop spewing the Right Wing Anti-Social Security BULLSHIT at DU.
We KNOW better,
and are laughing at your BS.
7962
(11,841 posts)Your check is cashed with TODAYS money that is currently enough to cover the outflows. The bonds have to be paid in the FUTURE with FUTURE money.
I hope you're young enough to see the train wreck coming in a couple decades.
Curmudgeoness
(18,219 posts)Just stop! The whole point of this OP is to ask us Democrats to stop buying into the GOP plot to destroy Social Security, and to stop repeating the lies.
7962
(11,841 posts)The govt is issuing an IOU form one branch of the govt to another. Is that a lie? Every debt the govt owes is paid off with tax money. Is that a lie?
The GOP hating SS has nothing to do with the STATE of SS right now. I'm merely stating the truth about how the govt treats our money. They (the GOP) surely would love to get rid of it, but public opinion will never let that happen.
Lets all just hold hands and say everythings fine if we can get rid of the GOP. While other things might improve without them, the state or our SS fund will still be the same. Full of T-bills.
Curmudgeoness
(18,219 posts)It is a lie to say that "SS is broke". It is not. In fact, if this country were to go back to tax rates from the Clinton years, and would put a stop to the slide of the middle class and working class by bringing jobs back to the US, we would not have the deficit problem that we have now....and we wouldn't have to worry about how to get the money to pay the bonds.
You are fighting the wrong fight.
7962
(11,841 posts)when the money will be worth less than today. Again, Gore's lockbox comes to mind
Igel
(35,274 posts)They're special issue. They have one purpose, one possible owner, and only one possible buyer.
Treasury issues them. SSA hands over the money. SSA gets the bonds. If the SSA needs money, it can only present them to Treasury for redemption. It can't sell them. And if it tried, nobody else could legally buy them.
If they were cancelled, it would be Congress cancelling debt issued by a branch of the government to the government. Ultimately Congress would be cancelling debt owed to itself. It would be both the party doing the wronging and the person wronged--or the person doing the forgiving and the person forgiven. No difference.
Curmudgeoness
(18,219 posts)I feel as if I am having this discussion with my right wing neighbors. Your excuses are the same as I hear from them. I am saddened to think that my own party is using the same argument as the party who wants to destroy SS.
That is the whole point of the original OP.
7962
(11,841 posts)If people on DU are supposed to look at things with blinders on, then thats a shame. It seems I'm not the only one on this thread saying this. The money has to be paid back, but where does THAT money come from? Will they just print more money? Increase taxes? If I pay my electric bill with money that was supposed to pay my house payment, I STILL have to pay my house payment with something.
If I'm wrong, then SHOW ME that every penny we send to SS is staying in the SS trust fund and only being used to pay out SS benefits. I'm not from Missouri, but show me where thats the fact. I'll admit I'm wrong. Gladly. But the FACT as I know it, is that the fund has no money in it, only "special bonds" which is just a "promise" to pay. I'm sure the promise will be kept, but again, where will the money come from?
My idea? Raise the wage cap, means test payouts and safeguard inflows. Yes, that sounds exactly like what the GOP would do, doesnt it?
sabrina 1
(62,325 posts)comments so far indicate that you have no idea how this fund works.
Here's a perfect example:
But the FACT as I know it, is that the fund has no money in it, only "special bonds" which is just a "promise" to pay.
Are you serious? The SS Fund receives revenue on an ongoing basis, not just from payroll taxes collected exclusively FOR the fund, it also receives revenue from other sources, ONE OF THEM BEING Interest on the Bonds.
BECAUSE is constantly receives income, it has not only paid out 100% of its obligations EVEN during one of the worst recessions in recent times when employment was low, it has done so WITH A SURPLUS every year.
So the 'FACT' you 'KNOW' is not a 'FACT' it IS the usual, decades old Right Wing, Heritage Foundation falsehood and as others have said here, it has no place on a democratic forum.
The Fund ALSO has more than a two trillion dollar surplus. The Fed Govt has messed up ITS finances forcing it to borrow from various sources, China, Japan, the SS Fund. Bonds have been issued to secure those loans, BACKED BY THE FULL FAITH AND CREDIT of the US Government. Far from reneging on its promise, the Fed Govt has never failed to pay interest on the loan from SS.
So far, the SS Fund has had NO reason to cash in any of those bonds and even under the worst scenario is not projected to have to do so for at least over a quarter of a century.
Additionally, once the economy improves, that time frame will extend.
To extend it further, all the Govt has to do is raise the cap on SS and focus on creating jobs.
And, the Fed Govt needs to stop its wild spending on Wars, on Bush Tax Cuts for the Wealthy which cost the tax payers two trillion dollars over the past decade.
So please learn something about this issue. You ARE repeating the very old and proven to be false, claims of the enemies of these Democratic Social Safety Net Programs.
7962
(11,841 posts)And those bonds have to be paid back with tax money. I understand the govt will not default because the public (and the world) would go nuts. But having bonds isnt the same as having the cash. Cash coming in is used to pay out benefits and the surplus is invested in those "special issue" bonds.
I'm not repeating anything right wing, go to the govt website and theyll tell you the same thing. The fact that the govt has never defaulted on a bond payment has nothing to do with what I'm saying. Its all still tax money paying off the bonds.
sabrina 1
(62,325 posts)it has borrowed from??
from?
7962
(11,841 posts)sabrina 1
(62,325 posts)on a Democratic Forum before.
Curmudgeoness
(18,219 posts)I made my point, and I am not going to continue to engage. Some times, it is a waste of time to go further. 
But it does worry me that so many Democrats are buying into this.
eridani
(51,907 posts)mythology
(9,527 posts)It would be catastrophic to the economy.
eridani
(51,907 posts)Oh, wait........
joeglow3
(6,228 posts)We will all be billionaires living like Gates. GREAT IDEA!!!!
(I hope a sarcasm tag isn't needed)
7962
(11,841 posts)Dragonfli
(10,622 posts)because it will hurt his deficit for expenditures He made? Cool!
I will borrow from you from now on!
Got 500 dollars? It will be cool if I never pay it back because I gave it away to rich people and bought a lot of cool guns at the gun show right? Of course it would!
Fuck the loan contract, that is as meaningless as US Treasury bonds which I hear are not backed by the full faith of the Government as they falsely claim but are akin to napkins given you by a drunk you never should have loaned to in the first place.
7962
(11,841 posts)Thats the whole point I've been trying to make. The money we paid in IS NOT THERE. "Special issue" notes are there that the govt has to pay in the future. The fact that THOSE will be funded by tax dollars too remains true.
The SS fund is being, and has been, raided.
The money we have been paying in, should have been going out only to pay benefits.
Dragonfli
(10,622 posts)Last edited Tue Sep 24, 2013, 01:36 PM - Edit history (1)
funded misinformation campaigns put forth by the well healed Pete Peterson groups that have been trying to weaken and eventually destroy SS for a long time.
The money we contributed legally and specifically for no other purpose should have been used to pay benefits, you are absolutely correct, I agree completely. Where the misinformation comes in is that it has been used that way, no other money besides our contributions have been used to pay these benefits.
The root of the conservative con job (and it is a con, a theft, a raid, however you wish to put it) is that during the early 80's it was projected that the system of pay as you go using only present contributions to pay present beneficiaries would run into a generational numbers problem when retired "baby boomers" would outnumber those still a generation behind creating the potential issue where for the first time there would not be enough contributors to cover the retirees benefits during the same time. It was known it would be a temporary population issue that would pass, but an issue nonetheless that could and should be planned for in order to avoid the need to use money from the budget and not just our workers retirement and disability fund (FICA) to fund our retirement and disability insurance. It is actually illegal to use budget money for such a purpose so such would not even be a viable solution anyway.
The decision was made to collect more to cover the potential future shortfall (that's why there is an extra 2.7 trillion dollars in the fund that has not yet been used to pay only benefits, it is still that money's purpose to do just that, pay benefits, but it is planned for the time when not enough present contributions are available to cover outgoing benefit payments. Much like if you knew that in the winter you would not have enough money in your monthly budget to cover your heat bills each month and so during the summer months you decided to put a little extra in the bank so it would be there to pay the extra you would need months in the future to cover your heat bill.
We have already put the extra in the bank, we did not spend it on anything else, we wasted nothing on anything else, it is simply that the bank withdrawals are not being made by us yet, because we still don't need it.
It was placed in US bonds rather than a savings and loan because they are far more secure than any bank account and give more consistent and often better interest than a typical savings account. US bonds are backed by the full faith and credit of the United States and if those Bonds become "no good" because the creditors faith and credit are "no good" then everyone that saves using such Bonds would no longer trust our bonds and THAT would destroy our credit and economy. We sell bonds as saving instruments to many others, including foreign Governments - our credit is good and our bonds are good, our fund is fully funded in a secure account.
The Peterson and banking collaborative con job is that when the bonds were issued the money collected by the "bank" or US treasury was spent OFF BOOKS! The bank allowed the money to be spent without showing up on the budget as the deficit spending that it was at the time, this was done to spend money while making it look like the budget was not affected by the extra money spent. It made the politicians look good. It made giving money away to the richest by not collecting fair taxes look good. It made fighting wars without raising taxes (as used to be proper form to fund wars) look good. That is the con. Our money is still ours, the bonds are good (our Treasury can not default on them without destroying the value of all bonds).
It is a crooked group of bank managers in my analogy falsely telling you that the money put away in the summer for your heat bills was spent by his other clients when he approved their loans and so you should not make a withdrawal to pay your heat bill out of your savings account but should cut your use of heat instead. An absurd suggestion by a crooked bank manager that is running a con to make himself look better than he might for loaning too much of the bank's customers money and trying to jimmy the books to hide it.
The "bank" has the money. It is SS money in a SS savings account, still pigeonholed to be used on the analogous "heat bill" but it would make the bank managers (politicians) cooked books look bad and maybe get them fired if they can't trick you into not making your pre-planned withdrawals. As an added frustration, the Petersons just think it is wrong for you to have heat because they like the extra tax cuts the con provides them and are helping to con you into thinking your savings account is spent because the bank loaned money to other people (even tho it doesn't work that way as we all know). By continuing to make it appear that the tax cuts they get do not increase the budget, but rather your withdrawing money from your own account does, they will continue to enjoy getting the cuts that they sell as not increasing the deficit even tho that is what actually would be adding to the deficit, not your withdrawing your own money set aside prudently for the winter.
Don't fall for the con, the money spent was budget money, not SS money, budget money comes from selling savings bonds to many different types of buyers, collecting taxes, and easement (printing money). They are trying to con you into believing your savings account has no money in it, it most assuredly does, it is a con, don't fall for it.
7962
(11,841 posts)But I still stand by my main point. According to the SS, the surplus money is "invested" in bonds. When that happens, the cash that was invested is spent on something else. This cash is the surplus. Below the surplus is used to pay current benefits. The 2.7 trillion you mention is 2.7 trillion worth of BONDS. Of course the govt is backing the bonds. They're "special issue" bonds instead of t-bills. But the bond, when redeemed, will STILL have to be redeemed with real money. And as the years go by, the "problem" of more people living longer is going to catch up to us. The money to redeem all those bonds has to come from somewhere.
Dragonfli
(10,622 posts)The bank uses the money from your savings account, but it is still yours, where it comes from later when you make a withdrawal is not your problem, or do you think it really does work that way? Do you really think your money should only be placed under a mattress?
It is invested in bonds because that is the most secure place to save it, they could just not spent the bond money on other things, but they do the same exact thing with standard t-bills. Is it a hand wringing issue when you cash in a t-bill your grandmother gave you on your 5th birthday? Do you wonder where the money will come from when it is time to redeem that one as well?
I don't understand why you do not see that the money was not spent on something else, but was saved for when it was needed as a cash flow device.
Your savings account does not disappear just because the bank gives the specific paper dollars you put in to someone else they do business with. Do you really think your account is empty because the paper dollars you put into it are gone?
sabrina 1
(62,325 posts)American people. That if YOU borrow from your friend and then don't have enough money to pay it back and have to borrow from someone else, YOUR FRIEND is responsible for your 'deficit'. Talk about ridiculous logic. I too want to borrow from these people who think the lender is responsible when the borrower gets in trouble, again.
sabrina 1
(62,325 posts)L0oniX
(31,493 posts)
adirondacker
(2,921 posts)AdHocSolver
(2,561 posts)The most certain way to reduce the government deficits and assure the viability of Social Security far into the future is to eliminate the so-called "free trade" agreements that make it so profitable to eliminate American jobs and send the production of goods and services to low wage countries.
The U.S. is borrowing massive amounts of money from China and other countries to buy their crap, money that we wouldn't have to borrow if the goods we buy were made by Americans who paid income taxes.
Get rid of NAFTA, the WTO and its ilk, and start taxing corporate income made by companies who profit off of Americans and keep the profits in offshore tax havens to avoid paying their share of taxes.
Instead of debating reducing payments to seniors, who already paid their dues, let's start critiquing the insanity of implementing the so-called TransPacific Partnership treaty, NAFTA on steroids, which created the deficit problem in the first place.
Nye Bevan
(25,406 posts)Discussing how we will raise money to pay SS benefits in the future, when the benefits being paid out will exceed the payroll taxes being paid in, is essentially the same as discussing how we will raise the money to redeem the IOU's in the "trust fund".
As the Office of Management and Budget put it:
These [Trust Fund] balances are available to finance future benefit payments and other Trust Fund expenditures – but only in a bookkeeping sense.... They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. The existence of large Trust Fund balances, therefore, does not, by itself, have any impact on the Government’s ability to pay benefits. (from FY 2000 Budget, Analytical Perspectives, p. 337)
http://en.wikipedia.org/wiki/Social_Security_Trust_Fund
See also:
I have been trying to expose the Social Security scam for more than a decade, now, with little cooperation from the media, until very recently. But the tide is turning. My first big break came when Allan Sloan, Fortune’s Senior Editor at Large, quoted me and referred to my book in his August 10 Washington Post column. I’m sure Allan shocked a lot of people with that column. And he became the first major media person to reveal the dark secret that the government has managed to keep hidden for 25 years.
Below is an excerpt from that column.
"Let me show you in two different ways how useless the fund is. The first is a quote from the introduction to the 2009 Social Security trustees report, the second is the graphic by my Fortune colleague Robert Dominguez that accompanies this article. Allen Smith, economics professor emeritus at Eastern Illinois University and author of “The Big Lie: How Our Government Hoodwinked the Public, Emptied the S.S. Trust Fund, and caused The Great Economic Collapse,” spotted the 2009 quote, and it is telling. It says: “Neither the redemption of trust fund bonds, nor interest paid on those bonds, provides any new net income to the Treasury, which must finance redemptions and interest payments through some combination of increased taxation, reductions in other government spending, or additional borrowing from the public.
In other words, the trust fund is of no economic value. This sentence wasn’t in the 2010 introduction, released last week. Treasury says that it stands by the statement but that the Social Security trustees decided not to include it this year because it reiterates the obvious."
Once Allan Sloan broke the ice, and reported on a subject that has been taboo for two decades, he was followed by other journalists. Below are excerpts from the Social Security writings of three mainstream journalists who have recently joined the effort to expose the awful truth about the trust fund.
"Doesn’t the Social Security trust fund cover that? No, silly. All those years of surplus in Social Security were recorded in a book entry dubbed the “trust fund”, but the non-marketable special Treasury bonds that make up the fund don’t represent any assets that can be cashed in to pay benefits".
— Eric Schurenberg from CBS Money Watch, August 19, 2010
"Your payroll taxes go into a bottomless hole. So where did all that FICA money go? Down the drain of federal spending on everything. It’s certainly not sitting in an account waiting to pay your retirement benefits."
— Terry Savage, Chicago Sun-Times, September 6, 2010
http://dissidentvoice.org/2010/09/the-awful-truth-about-the-social-security-trust-fund-is-beginning-to-emerge/
Fumesucker
(45,851 posts)When during Dick and Dubya's excellent Debauchery no one breathed so much as a word about the deficit..
Nope, Reagan proved that deficits don't matter. Someone very conservative said that.
7962
(11,841 posts)Because I'm catching hell upthread for saying the same thing! But I'm not surprised at all.
sabrina 1
(62,325 posts)goes into the SS Trust Fund every year. I wish I could find something to invest that was so 'non-marketable' it would yield that much interest.
This is not hard. The Fed Govt owes the SS Trust Fund every penny it borrowed. It has backed its loans with Government Bonds, which are 'backed by the full faith and credit of the Fed Government'.
This nonsensical claim that US Govt Bonds held by the SS Trust Fund are worthless, (again see the interest on the Bonds as a second source of income for the SS Fund) is a right wing meme.
Maybe the reason why no one is paying any attention to this person is because he is talking nonsense.
As for how the Govt can repay its debt to SS, number one, stop all these wars, secondly, end the tax cuts for the wealthy all of which are draining the Treasury.
It is pure garbage to claim that the debt the Govt has run up from China, from the SS Fund and everywhere else they have borrowed money, is the fault of the CREDITORS or that they will not and/or cannot be paid back.
And of course the Fund is no danger of having to call in its debt right now as it has continued to show a surplus even during this recession. As the economy improves, the fund will continue to grow AND BENEFITS SHOULD INCREASE rather than keeping in a Trust Fund. That will stimulate the economy even more, providing even more jobs.
So sick of these right wing scare tactics that have been around since the inception of SS and have never once proven to be true.
Nye Bevan
(25,406 posts)If SS was simply part of the general fund (SS taxes go into the general fund, and benefits are paid out of the general fund) we would be wondering "how can the Govt pay the promised SS benefits".
But since the artificial accounting device of the "trust fund" exists, the question instead is "how can the Govt repay its debt to SS".
Which really is the same thing.
1. People have paid their SS taxes;
2. All that money has been spent on other stuff;
3. The Govt. has to figure out how to pay promised SS benefits in the future, when SS taxes being collected will be insufficient to do this.
Whether (3) is a question of "how can the Govt pay the promised SS benefits" or "how can the Govt repay its debt to SS" is a purely artificial distinction. One way or another, the money has to be raised. If it is borrowed, the deficit will indeed increase, which is why your claim that "Social Security has ZERO to do with the deficit" is incorrect. The other alternatives are to (1) reduce spending on other things, (2) raise taxes, (3) reduce future SS benefits or (4) print the money. This is basic economics, not "right-wing scare tactics".
sabrina 1
(62,325 posts)continued to pay out 100% of its obligations even during this recession.
Too bad the Fed Budget isn't run as efficiently as the SS Program one of the most effective Fiscal Programs ever in this country.
And no, the 'money was NOT all used up'. It has been paying out 100% of its obligations to all those who paid into it without calling in its debt.
You are incorrect.
And the way to ensure it continues to do what it was intended to do is to Raise The Cap, and to focus on jobs.
SS did NOT cause the Deficit and cutting benefits will do NOTHING to lower the Deficit.
What DID cause the Deficit was the Government spending on Wars and on Tax Cuts for the Wealthy and to blame SS for any deficit spending brought on by the Fed Govt's bad financial decisions, is simply ridiculous.
If the Federal Government stopped spending the outrageous amounts of money they spend on the Pentagon Budget they would not have to borrow from the SS Fund, and therefore would not have spend more money on the interest on the bonds among other things.
SS is not to blame for the Fed Govt's decisions regarding how they spend and borrow to cover their spending.
To say that SS WILL contribute to the Deficit IF the Fed Govt ends up having to repay the debt, is like blaming someone who lends you money when you misspend it and have to borrow again to repay the debt, for YOUR financial predicament. The lender is in no way responsible for your eventual financial situation YOU are. The Fed Govt is responsible for the Deficit it created. SS has nothing to do with that.
It is utterly ridiculous.
Nye Bevan
(25,406 posts)and what is left over is spent on other stuff (aka "invested in the trust fund" which means that it is handed over to the general fund to be spent on other stuff, in exchange for IOU's).
The issue is that at some point, since the ratio of retirees to workers will increase significantly, there will be nothing left over; the government will have to somehow come up with the extra money to pay the benefits that are owed.
sabrina 1
(62,325 posts)jobs leaving people here without jobs.
To raise the cap, which should have been done long ago.
To stop spending money on wars and subsidies for Oil Corps eg, making it less necessary for the Govt to keep on borrowing.
Most of all, to focus on jobs here in the US so that there WILL be enough people paying into the system.
Even without all these steps, SS has been able to continue to pay out its obligations 100% AND still shows a surplus, even in these difficult economic times.
Of course the program will need adjustments, any fiscal program does, but it is one of the best fiscal programs so far and with just a few adjustments, not even necessary right now, can continue and even improve, for the next 100 years.
The point is, SS did not cause the Deficit, and any adding to the Deficit by having to fund the program which has NOT happened yet, would not be the fault of SS, but the fault of the Fed Govt's choices to spend money it does not need to spend.
7962
(11,841 posts)For some reason, many here want to cover their ears and hum a tune simply because what I've said sounds like something some idiot in the GOP may have said at some point. The mere fact that the GOP may have said it doesnt make me (or you) WRONG.
Nye Bevan
(25,406 posts)And correcting the nonsense that is not infrequently seen in DU threads on economic issues can be a frustrating experience.
It's interesting to see the cognitive dissonance when the same person insists that:
1. Social Security has nothing to do with the deficit; and
2. To fix Social Security we need to raise taxes on the rich, abolish the cap, and reduce spending on wars.
7962
(11,841 posts)sabrina 1
(62,325 posts)has anything to do with SS contributing to the Deficit?
Let's take your points one at a time. This one I really would like to understand.
I'll clarify MY point.
The Bush Tax Cuts to the Wealthy cost the Fed Govt over two trillion dollars. That contributed directly to the Deficit.
The Fed Govt had to borrow to be able to afford those tax cuts.
If the Wealthy had paid their fair share, the Fed Govt would not have had to borrow to make up that deficit.
So I, and most Dems I know are simply asking that EVERYONE pay their fair share.
Where does SS figure in this picture??
joeglow3
(6,228 posts)If that was your original post, no one would have said a thing about SS. However, that is not what you posted.
Instead, you posted a topic about SS, claiming that in its current state, it has nothing to do with the deficit. Many of us present basic facts demonstrating otherwise. Your response was the typical defense mechanism of "that is what the right says, so you are a loon."
Give me a break.
sabrina 1
(62,325 posts)every post and I have not seen these facts that respond to the OP proving in any way that the lies being told that SS was in any way responsible for the Deficit are a fact.
SS has, had nothing to do with the Deficit. The Fed Govt created the Deficit and everything that emanates from that is the fault of the Fed Govt. If you have anything that proves that statement to be incorrect, then please present it.
'Ifs' do not apply. 'If' SS cashes in its bonds eg. SS has NOT cashed in its bonds and projections show it even if the economy remains the same, which it most likely will not, it will not have to cash in any bonds for at least the next 25 years or so.
joeglow3
(6,228 posts)Everyone agrees that the social security, in its original state, would NOT add to the deficit. However, as you have pointed out, the Federal government raided those funds, leaving nothing more than IOU's. Now, going forward, as social security begins to pay out more than it brings in, the government needs to make good on those IOU's. Given that they rest of the Federal government is alread in a deficit, those additional needed funds require the government to issue additional notes, creating a larger deficit.
We all agree this would not have happened if the Federal government had not raided the trust fund. However, in accounting terms, that is a sunk cost. We cannot change the past. We are solely left to deal with the present under the set of facts we currently have. And those facts mean that any time SS pays out more than it brings in in a given year, our external deficit increases. You can try to play semantics and say it has nothing to do with SS because under the original theory of the plan, this would never have happened. However, that theory is long gone and reality of today CLEARLY says otherwise.
It all gets back to the accounting the government allows itself. It is estimated that the NPV of all social security and medicare liabilities is about $90 trillion. Where is this on the government's financials? Why is this never included in the debt of the US? Again, if any company, not-for-profit, city government, state government, school district, ect. hid its unfunded pension liabilities in this manner, we would be ticked and calling for people's heads. When we have the same expectation of our Federal government, we are "right wing tools."
Again, it doesn't matter how social security was intended to work, how it was set up or what the government did wrong 20 years ago. What matters is where we are TODAY and the impact of actions going forward are. And the simply, basic truth, is that the state that SS has been left in means any time SS sends out more than it brings it, it adds to the deficit.
sabrina 1
(62,325 posts)Your whole post is based on 'ifs' and 'maybes'. To begin with just answer that one question, 'when did SS cash in any of its bonds' that has contributed in any way to the deficit?
And we are talking ONLY about SS. Not Medicare.
joeglow3
(6,228 posts)Where are the "ifs" and "maybes" in my post? We know for a fact that the hard cash collected over the past few generations is no longer in the hands of the government as a whole. We know for a fact the money was transferred out of SS, in exchange for special IOU's and was spent (i.e. the government no longer has that cash). We know for a fact that SS is beginning to pay out more than it brings in. We know for a fact that this requires the SS trust fund to redeem some of their special bonds. We know for a fact that the Federal governments doesn't have any excess money laying around (hence why we need to continue to extend the debt ceiling). We know for a fact, then, that these additional funds require the Federal government to borrow additional funds from sources outside the US government.
As to your question, THAT is where the fuzzy accounting begins. There are no real bonds to redeem. Instead, the goverment just credits the SS trust for the shortfall, issues new bonds and pays benefits to social security recipients.
sabrina 1
(62,325 posts)Let's start with this:
I already asked this question but I'll ask it again:
When did SS 'redeem some of their bonds'?
That should not be a difficult question to answer.
Then there is this:
The SS Fund has continued to show a SURPLUS due to the fact that it has more than one source of income. That is projected to continue to be the case for at least another 23 years, EVEN UNDER the current bad economic and employment conditions.
So when did the 'bringing in less than it pays out' occur in recent years?
joeglow3
(6,228 posts)As a CPA, if I employed this method of accounting at a corporate client, tax exempt client or ANY OTHER TYPE OF GOVERNMENTAL client, it would be fraud. Yet, people defend the accounting treatment with the Federal government. It is clear you will NOT move from your position and you believe any challenge to it is a right wing attack.
sabrina 1
(62,325 posts)joeglow3
(6,228 posts)And yet without that "source of income" the there would be no "money" to pay the recipients. If you paid close attention to my posts, I addressed that:
All SS recipients are getting 100% of their benefits. We are not collecting enough payroll taxes to cover that. So, where is that excess money coming from???? Accounting gimmicks - you are trying to look at accounting numbers, whereas I am looking at actual cash flow - x is flowing into the government in payroll taxes and x+y is flowing out to the recipients. Our deficit has increased by "y". You claim "y" doesn't exist because the government makes an accounting entry between two divisions of the same government. Reality is that the cash inflows/outflows related to JUST SOCIAL SECURITY are what they are and a cash flow deficit was created.
Again, as a CPA with 15 years experience, if I did this type of accounting on ANY public, private or governmental entity except the Federal government, I would lose my license for committing fraud.
sabrina 1
(62,325 posts)their wars and to help fund the outsourcing of American jobs by giving special tax breaks to Corps, costing the taxpayers two trillion dollars, not to mention the cost of the unnecessary wars, and no jobs to speak of.
Then, if that wasn't enough to cost your your license, you would lose it for trying to take money from the LENDERS to pay for the financial trouble the Fed Govt got itself into.
What you are saying is preposterous.
Social Security did not cause the Deficit.
The Fed Govt caused the Deficit. Period.
PETRUS
(3,678 posts)"the ratio of retirees to workers will increase significantly, there will be nothing left over"
Bullshit. Growth more than compensates for demographic changes.
"SS's unfunded liability is over $20 trillion."
Oooo! Scary! That could also be expressed as a percentage of GDP, which would put us in the neighborhood of - wait for it - one big whopping percent.
Why is everyone so down on Social Security?
sabrina 1
(62,325 posts)a single brain cell working, understands.
As I stated, there was so much wrong with that comment I tried to break it down to one or two items at a time.
As for the 
$20 trillion scare tactic, I hoped to get to that IF I had received an answer to my questions.
I didn't know the percentages but intended to look it up, but thank you for saving me the trouble, I very much appreciate it.
As to your last question? A majority of Americans love SS. It is the same old neo-liberals who have been spinning the numbers for decades, a small minority but with big money behind them, who are still at it.
I received an email today warning that Republicans/Tea-baggers are going to try to push for SS Benefit cuts as a bargaining chip for not shutting down the Government, or some other threat.
Dems MUST hear from the people that no way can they allow this to happen. I am not confident at all that there will be some capitulation on this considering the push even by this president, for the Chained CPI hoping we will not realize it is a cut.
Thanks again for your comment, I appreciate it
joeglow3
(6,228 posts)The one posted above is off by about a factor of hundred (ie it is over 100% of our all time highest GDP ever - in 2012).
However, your ad hominem attack speaks volumes.
PETRUS
(3,678 posts)I'd like to say "anytime," but I'm lately I'm often too busy to participate. You are right on, and tireless, and I admire and appreciate that. Your opponents are full of it. Social Security has a dedicated revenue stream and is currently in surplus. At some point in the future, it might require additional funding, but the amounts are negligible and due to the effects of productivity growth, future workers and retirees should be able to have higher standards of living even if the funding is provided via higher FICA taxes. These are the facts.
joeglow3
(6,228 posts)It is not what you seem to think it is in your post.
PETRUS
(3,678 posts)Cumulative GDP over the relevant time period is what's appropriate for a comparison. You should know this as an accountant.
joeglow3
(6,228 posts)Unless you are going out over hundreds of years. Either way, you are intentionally misleading.
PETRUS
(3,678 posts)Your $20 trillion scare number is what is intentionally misleading. GDP is about $15 trillion today. Assuming a pessimistic growth scenario of 1% per year over Social Security's 75 year actuarial horizon that adds up to more than $1.5 quadrillion.
How is is that you are so familiar with Pete Peterson sponsored talking points yet so unfamiliar with the facts or basic math?
joeglow3
(6,228 posts)Actuarial reports take into account discounting. You are taking nominal amounts and assuming they equal today's FMV. Like I said, you are intentionally misleading.
PETRUS
(3,678 posts)Your contributions to this thread amount to little more than hand waving and obfuscation. What scant "data" you've offered has been devoid of context or explanation. Harry Frankfurt wrote about this sort of thing.
My information comes from the Social Security Administration and other reputable sources such as the CEPR. There really aren't any plausible projections where the difference between revenues and outlays is much more than 1% of GDP. The American people are consistent in their support of Social Security and their willingness to pay for it, whether people like Lloyd Blankfein, Ron Paul -- or you -- like it or not.
joeglow3
(6,228 posts)nice....
PETRUS
(3,678 posts)That said, your position on this issue is what it is.
joeglow3
(6,228 posts)Like I said, this type of accounting would be blatant fraud anywhere else.
Cal Carpenter
(4,959 posts)You claim that, due to your experience in accounting, Petrus is wrong and you don't feel the need to explain why. I'm no accountant, but I'm not stupid either - if you want to convince people of something it may behoove you to explain what is wrong with his logic and math (which seems pretty solid).
It's a common tactic in discussions of economics to claim that the issue is complicated and public cannot understand it. the whole 'trust the experts' thing. Given where the economic 'experts' have gotten us, I say fuck that shit.
joeglow3
(6,228 posts)Some people will just say "fuck that shit" no matter the evidence they have been given.
Cal Carpenter
(4,959 posts)I haven't seen you explain anything that rebuts Petrus's points. In fact, he has solidly rebutted a few of yours and demonstrated that your *assumptions* are wrong, so the rest of your attempts at making an argument are irrelevent.
If you would kindly share a post # or two in which you, in fact, explain why Petrus is wrong I would appreciate it. I have read this thread pretty thoroughly and I see nothing.
And I'm sure some people say 'fuck that shit' about all sorts of things. I mostly just say it about false appeals to authority and condescending attitudes, particularly when it comes to matters of economics.
PETRUS
(3,678 posts)You're all bluster and no substance.
joeglow3
(6,228 posts)The bulk of my experience is in income taxes and GAAP accounting. However, I have also worked in managerial accounting and governmental accounting.
PETRUS
(3,678 posts)joeglow3
(6,228 posts)"He did something first."
sabrina 1
(62,325 posts)with causing the Deficit. It's simple, Govt Spending on Wars and Bush Tax Cuts for the Wealthy among other things, are responsible for the Deficit, responsible for the loans the Fed Govt has had to take out from their creditors, including the SS Fund.
To reduce the Deficit, if that is necessary, the Fed Govt has to stop spending tax dollars on things they cannot afford.
SS in no way responsible for the Deficit. Govt spending is responsible for the deficit.
The 'if they ever, sometime in the future, cash in the Bonds, THEN they will contribute to the deficit' meme means nothing because the SS Fund has NOT cashed in any of its bonds. That is the question you have not answered. So I will say it again.
The SS Fund has not had to cash in any of its Bonds so all the 'but IF it does' comments mean zero. I don't know why that question was so difficult for you to answer. It is a fact. And even if it did come to that, the Fed Govt, NOT SS, is still responsible for the Deficit, NOT the SS Fund.
Is China responsible for the Deficit btw?
joeglow3
(6,228 posts)It is because it is an accounting gimmick? You fail to address how social security can pay out more CASH then the physical CASH it is bringing in and not have a deficit. It is because of accounting gimmicks. It is claiming interest income from itself and claiming THAT covers the shortfall. The reality is that the government doesn't have the cash to pay that interest, so it needs to issue NEW debt to cover it.
You really are going out of your way to be obtuse.
sabrina 1
(62,325 posts)to pay that interest, so it needs to issue new debt to cover it'.
Finally, an ADMISSION of what CAUSED the deficit. The Fed Govt, as I said right from the beginning, is the CAUSE OF THE DEFICIT. The Fed Govt OWES the SS Fund money they borrowed.
Now, when someone owes someone else money due to their inability to manage their own finances, and they get it, such a person DOES NOT GET TO BLAME the LENDER for their problems.
This is what they have to do. They have to CUT OUT throwing money away and then borrowing more, creating MORE debt and adding to more their own deficit.
The Fed Govt DOES have the ability to find the money to pay back the SS fund, THE AMERICAN WORKERS without adding to the deficit.
I've already provided some of the ways they can do that.
They GAVE two trillion dollars to the most wealthy Americans eg, on the promise of something in return. That didn't happen. Bush lied.
So now, they can get that money back by RAISING TAXES on those who failed to keep the promise they made when took money from the SS Fund to provide those extremely expensive tax breaks.
See? SS NEVER HAS TO BE part of the deficit in any way.
And of course raising the cap is another way.
What you keep arguing is that the LENDER is to blame for the debts of the BORROWER and there is NOTHING THE BORROWER can do to pay back their loans which means the LENDER is to blame.
That is utterly ridiculous in every possible way.
joeglow3
(6,228 posts)What behavior in the past led to this is irrelevant. It is a sunk cost.
The reality is that we are where we are. I even said in my initial post that if the government didn't raid the trust, we would not be in this position. However, where we are at now means that as pays more cash than the cash it brings in, we are adding to the deficit.
sabrina 1
(62,325 posts)of the borrowers?? This is about 'cutting benefits'. Explain how cutting off money from the people who are the lenders will reduce the deficit of the borrowers????
That is the question you, or anyone else who is supporting cuts to SS benefits, have not answered.
The solution to the deficit is to make the BORROWERS pay by CUTTING THEIR SPENDING, not stealing MORE from the LENDERS.
What kind of accounting forces those who have been responsible with their finances, even lending to those who have not been responsible, to pay for the irresponsibility of the borrowers? Where does this thinking come from?
Again, the Fed Govt created the Deficit and it is up to THEM to fix it. It is not the responsibility of the lenders to fix it and no, SS is NOT contributing to the deficit, even IF they were ever to cash in their bonds. It is STILL the Fed Govt that is responsible for the deficit. No matter how they try to mess with the numbers.
joeglow3
(6,228 posts)We elected these people who stole this money. We have continued to elect them. It is OUR fault. My three boys did NOT elected these people. So, in answer to your question, yes I expect us to pay the price before I expect my kids to.
sabrina 1
(62,325 posts)of their money then protect them from being blamed for the Deficit so that greedy Right Wingers can get their hands on even more of their money!! What a ridiculous thing to say.
I have yet to receive an answer to the question:
'How will cutting SS benefit reduce the deficit'?
joeglow3
(6,228 posts)
me b zola
(19,053 posts)...I'm kicking & recc'n this thread
sabrina 1
(62,325 posts)While we are all distracted by all the other issues, important ones also, the enemies of SS continue to work hard to spread the usual lies. So it is necessary to counter them as often as possible imo.
Maedhros
(10,007 posts)there is NO REASON TO CUT IT when we allocate SO MUCH MONEY to fighting our elective wars against tiny countries that can't threaten us.
Want to shore up SS for the next century or more? Stop spending so much money on THIS SHIT:
http://www.salon.com/2013/09/05/up_next_the_administration_pivots_to_africa_partner/
yurbud
(39,405 posts)sabrina 1
(62,325 posts)They can't look at a large fund that is for the people, Education, SS or any other fund that is meant to benefit the people without trying to get their greedy hands on it. And it's shameful for any Democrat to facilitate them in any way.
yurbud
(39,405 posts)worth pursuing are those that make the rich richer.
DustyJoe
(849 posts)Remember the July 2011 Debt ceiling fight ?
Excerpt from Huff post article July 2011
http://www.huffingtonpost.com/2011/07/12/obama-social-security-checks-debt-ceiling_n_895831.html
.........................................................
.........................................................
I absolutely do not trust them not to trot out the exact same threat in the next week or so. If SS is not part of the budget then one wonders what 'coffers' were being referenced. SS is just used as a political club or football to throw around by both sides as a threat to the elderly and disabled. Disgusting ! If SS is solvent and not in the budget, then they need to drop all the threatening rhetoric.
sabrina 1
(62,325 posts)used as a political club. The Fund is not part of the budget so I too would like to know how the SS 'coffers' came to be 'empty'. I would say that if that were true, there needs to be some serious, public, Congressional Hearings to find out where OUR MONEY went.
Thanks for the comment. They DO need to STOP scaring seniors, it is absolutely cruel.
adirondacker
(2,921 posts)Recursion
(56,582 posts)But since we'll be paying off pre-existing bonds dollar for dollar, SS payouts will not affect net debt (unless we went out of our way to contrive a way for them to).
Every single expenditure always affects the annual deficit for that year. Pretending otherwise is just obtuse.
Kaleva
(36,248 posts)Nye Bevan
(25,406 posts)and that gold be stored separately in a dedicated location, then SS would indeed not affect the deficit, at least to the extent that future benefits could be paid by liquidating the gold in the trust fund. Of course, if this (true) trust fund was ever exhausted, the government would need to step in so that benefits could be paid, in which case the deficit would indeed be affected.
Such a hypothetical system would have been a true "lock box", in contrast to whatever it was Al Gore was proposing (which I have never been able to understand, but it certainly wasn't this).
Recursion
(56,582 posts)His idea was to spend surplus money redeeming outstanding SS bonds to lower the overall debt and make borrowing to fund outlays for the baby boom more affordable.
Possibly a decent idea fiscally, certainly a horrible idea given the reality of Congress. And in no sense a "lock box".
7962
(11,841 posts)I figured he meant all money coming into the SS fund would stay there to pay future recipients.
pa28
(6,145 posts)The fed could purchase treasury securities offered by the SS trust fund just as they purchase billions every month in long term government debt instruments.
I find it really curious that promises to Social Security members are often called "worthless IOU's" while we have the resources and obligation to fulfill them just like any other faith and credit debt.
Recursion
(56,582 posts)They also represent revenue that will need to be raised through easing, taxing, and borrowing.
pa28
(6,145 posts)But you must admit that easing does not affect the deficit.
Recursion
(56,582 posts)At least according to pre-zero-bound models.
Frankly IMO we have absolutely no idea what a widespread fiscal monetization would result in.
pa28
(6,145 posts)The old theories were thrown out with QE 1,2 and 3 and the actual confiscation of savings in Cyprus among some other things.
If you believe redeeming treasury instruments through easing will add to the deficit that is your opinion and theory and you are entitled to it.
It does not make the OP obtuse or wrong.
Recursion
(56,582 posts)I also don't imagine a political landscape where we raise $2.5 trillion by easing and taxation with no borrowing.
sabrina 1
(62,325 posts)way responsible for the Fed Govt's spending on wars etc., forcing it to borrow from various sources including the SS Fund, IS a lie!
The follow-up lie is that cutting SS benefits will lower the deficit. If anything, taking money OUT OF THE ECONOMY will do the opposite.
SS did not run up the debt. The Fed Govt did that. The Govt alone created the deficit and it needs to stop spending Tax Dollars on Wars and on Bush Tax Cuts for the Wealthy which after a decade has cost the Tax Payers over two trillion dollars.
Raising benefits would do more for the economy, to help create jobs, than cutting them. Those receiving benefits are likely to spend that money. A raise in benefits would be one way to create a Stimulus Package that would not be coming from the General Fund.
Recursion
(56,582 posts)It's not not "responsible" for it in some moral sense. Cool. We're on the same factual page now.
sabrina 1
(62,325 posts)To lower the Deficit is simple. Stop funding unnecessary wars and stop subsidizing Corporations that are exporting jobs. And let the wealthy pay THEIR FAIR SHARE.
Explain how cutting SS benefits will lower the Deficit?
AnotherMcIntosh
(11,064 posts)
raouldukelives
(5,178 posts)
leftstreet
(36,098 posts)
BlueJac
(7,838 posts)if the government wouldn't of borrowed 7 trillion dollar from SS, nobody would ever be talk shit about deficit!
SomethingFishy
(4,876 posts)The opposition to your OP is basically saying that it is part of the deficit because the money was stolen and now needs to be replaced.
So suck it up middle class taxpayer. Now you can bail out S.S. too.
It's a sick fucking world. Seriously.
sabrina 1
(62,325 posts)deficit are simply amazing. Someone is working very hard to try to cut SS Benefits and it will take huge resistance to stop them.
dairydog91
(951 posts)Deficit is the excess of government spending over government revenue. More to the point, if SS benefits exceed what SS gets in revenue through the payroll tax, SS must draw on its trust fund. The trust fund has legal value, but it's "worthless" in terms of removing SS from other government spending because it contains non-marketable assets. If SS held commodities, or stocks, or something else that was marketable, it could sell them to third parties in exchange for cash. It can do no such thing with what it actually has. Hence, in order to cash in the assets in its trust fund, SS must exchange them with the Treasury for tax revenue, borrowed money, or printed money. I'm really wondering how people can claim that a government program directly drawing money from Treasury is "not part of the deficit". Just because there is a legal obligation for Treasury to hand out money when SS comes calling for it does not somehow mean that SS is not drawing from government revenue. As it is, the SS non-marketable securities can only be cashed in with the government, and the government has a legal obligation to exchange them for cash. It's a good guarantee for people on the SS program, since it ensures that trillions of dollars will be coming to them unless the government refuses to honor those securities, but cashing in the securities will very much be a part of federal spending, and hence "part of the deficit".
PoliticAverse
(26,366 posts)The $2+ trillion in the Social Security trust funds represents roughly the amount Social Security revenue
has decreased the federal deficit over the years.
sabrina 1
(62,325 posts)been self-sufficient with no need to cash in any of its bonds, in any way, contribute to the Deficit?
'If' SS sometime in the future etc'. We've been hearing that for decades. So when did SS draw on the General Fund? If it has not, and no it has not, then SS has zero to do with the Deficit.
The Fed Govt has spent money they didn't have to spend and then borrowed from various sources, one of the them the SS fund, another China.
Is China responsible for the Deficit?
Orsino
(37,428 posts)SS is simply of of the last few remaining enormous piles of money not in private hands. The kleptocrats want to steal it.
wildbilln864
(13,382 posts)steve2470
(37,457 posts)I'm all for all the facts. Let the posters who disagree make a thread completely laying out all the facts. Until then, I'm going
with sabrina1 here.
One_Life_To_Give
(6,036 posts)IIRC It was President Johnson who first rolled the numbers from SS in with the federal budget. Essentially this was done to hid the federal deficit resulting from Vietnam. In the years since tit has become customary to keep them displayed that way as it further obscures the true budget balance. As you note SS has been running a surplus for decades even more so in recent years in preparation for the baby boomers. However that won't remain as the number of retirees explodes. Then both the Federal Budget and SS will be running in deficit.
If we separate the two as should have been done all along. Cries will go up to do something in the form of raising taxes, reducing spending or probably both. While leaving it as is allows congress to kick the can and let a future congress deal with the inevitable.
Oilwellian
(12,647 posts)
KoKo
(84,711 posts)out there being Pumped by Think Tanks and Lobbyists of all kinds....even on our Dem Side, sadly.
