We were robbed, but how did it happen?

[ThomWV]

This isn't about who or when, its just about how.

Where did the Social Security Trust Fund go, how did we lose it, or was it stolen, or was it misplaced, and maybe was misplacing it the same as stealing it?

Somehow I had it in a fog in the back of my mind that the way it worked was something like this: Let's say the Department of Defense was building a new aircraft carrier and was low on cash, so they would write an IOU (sell a bond) to the Social Security Administration and take the money they wanted out of the fund. And the DOD would do it, and the DOE would do it and USDA would do it, and so on, and then eventually they had all taken everything that came in and the "lock box" was just full of IOUs.

But that's not how it works at all.

In fact its the Treasury that issues the IOUs and its not last money in to cover short-falls in Federal funding, its the first money in on which the budget is based. If the budget for a year is one zillion dollars and contributions to Social Security are one third of a zillion dollars then the Federal Government takes that one third of a trillion to finance the budget and then with a combination of taxes and borrowing raises the other two thirds. The point is that the Social Security portion of the money was always going to be used as the first money in, the basic funding that could always be counted on, a ready source of cash and that it wasn't stolen to be used on any one's pet project. No, in fact it a part, a small portion, of every single Federal expenditure, that it was evenly distributed completely across the full spectrum of spending. This isn't like you put your money in a bank and then one day a robber came along and stole it all - no - this is more like you make regular deposits into your bank account and every time you do your banker just shovels your money out the back door. There is no such thing as a "trust fund" or any sort of "lock box", it all goes directly to the general fund and its used to pay for everything.

[DURHAM D]

1. How did it happen?

We do not have an informed electorate.

Now voters are trained by the MSM. The training is simple - pick on personality and ignore policy positions.

[dkf]

2. Two articles you should read...

http://articles.latimes.com/1989-12-30/news/mn-974_1_social-security

http://www.nytimes.com/1990/10/11/us/budget-battle-senate-kills-moynihan-s-proposal-reduce-social-security-taxes.html?src=pm