Found this on aol this morning showing how Social Security works...

[Historic NY]

notice how the wheel barrow keeps taking money away and leaving IOU's, this is the problem that needs to be fixed.

http://cdn.digitalcity.com/dailypulse/social.swf

[thoughtanarchist]

1. those "IOU's" are bonds

Correct me if I'm wrong, but last I checked, the US has not defaulted on any bond certificates to date...

[Historic NY]

3. No and they haven't repaid what has been borrowed either.....it

gets dumped into the budget out or sight out of mind.

[boneygrey]

4. I'm trying to understand

this whole social security thing. The IOUs. Is that not akin to robbing Peter to pay Paul?:shrug:

[Historic NY]

5. Yes........

The so called "trust fund" or "lock box", was greatly debated in the 2000 presidential election has been filled with worthless IOUs that the government has issued against itself, even as it spent excess revenues entering the program from payroll taxes. This process of spending excess revenues generated by payroll taxes began in the 1980’s when Congress raised the payroll tax rates, generating more revenue than needed to pay the current beneficiaries of the program. Instead of setting the money aside and purchasing assets, the government embarked on a spending spree and put nonnegotiable U. S. Treasury bonds what was termed a "trust fund". Nothing so far has ever been repaid, the thought of giving tax relief by rolling back the payroll tax would remove a readily tapable source of funds. Eventually these so called bonds would in theory would have to be repaid but none of our leaders are willing to step up to the plate. How do you repay social Security Trust fund, when you already have used the taxpayers funds? Do you tax them a second time for money already contributed? Had Bush used the surplus to repay the trust fund instead of sending us back checks it might have been a real start at reform. Its time for the tap to be turned off. It is foreseeable for these so called worthless bonds never to be paid back, he'd have to raise taxes in order to do so. It is time to make changes to the accounting practices.

[boneygrey]

7. Thanks for the info n/t

[Vincardog]

2. OK what happened to the TRILLION dollar surplus?

[wicket]

6. interesting....