dagblog - Comments for "Oh, Lord . Time for another boring lecture"

Yes. Certainly has been for

Flavius — Fri, 18 Feb 2011 11:02:19 +0000

Yes. Certainly has been for the last 70 years when the Government has been happily sopping up the excess ss withholdings and paying interest at derisory rates. If it had been paying market rates the Trust Fund would still be well in the black.

It is a class war, and our class is losing. ..

Shorter version: cash is

Verified Atheist — Fri, 18 Feb 2011 00:06:37 +0000

In reply to "Either SS gets adjusted or

Shorter version: cash is fungible.

"Either SS gets adjusted or

Flavius — Thu, 17 Feb 2011 23:59:00 +0000

In reply to What they actually do is take

"Either SS gets adjusted or we have to some mix of raising taxes, "borrowing from the public, or reducing benefits or other expenditures".

My point is that the steps we must take are exactly the same whatever the amount written down in Delano/the Trust Fund.

o If the actuaries tell us there's a surplus in the trust fund but the Treasury is unable to issue bonds, it won't be able to pay the benefits.

o if the actuaries tell us that that the trust fund "has run out of money" but the Treasury is able to issue bonds, it will be able to pay the beneftts.

Whether the trust fund is "solvent" or has "run out of money" today is completely irrelevant. Whether it may run out of money at some point in the future, more so.

As of Jan 1 of each year every government program has run out of money. They then are provided the cash by the Congress.With the exception of social security none of the other programs have a trust fund. And it doesn't matter.

With the greatest respect the steps you describe in your first sentence-purchase of non negotiable bonds etc.-are an empty formality.Whatever the objective was supposed to be, the effect is to confuse the voters . In particular by making them think that social security is "safe" when the amount in the Trust Fund is actuarially sufficient and unsafe when it's not. Where as in fact it doesn't matter.

The voters have the right to be told that their chance of enjoying the promised benefits are entirely dependent upon the willingness of future congresses to provide the cash when it's needed. And that no amount of money they pay into the social security Trust Fund between now and then will make it more , or less, likely that when the time comes the government will supply the promised benefits.

What they actually do is take

Elusive Trope — Thu, 17 Feb 2011 17:25:37 +0000

In reply to Oh, Lord . Time for another boring lecture

What they actually do is take the surplus and purchase non-negotiable United States Treasury bonds and U.S. securities. So when they need money from the trust fund they seek to redeem these bonds and securities in a claim to the Treasury. The only way for the Treasury (i.e. government) to make the payment would be by raising taxes, borrowing from the public, or reducing benefits or other expenditures.

We have spent more and taxed ourselves less, it can be argued, because of this increase flux of revenue from SS Trust Fund purchases of these bonds. This really became a problem during the Reagan administration when he, Greenspan et al. upped the FICA amount taken to generate a large windfall. Now in a sense the chickens are coming home to roost. Either SS gets adjusted or we have to some mix of raising taxes, "borrowing from the public, or reducing benefits or other expenditures." Given the size of our debt, borrowing is pretty much out of the equation, so it leaves raising taxes and reducing benefits and other expenditures elsewhere in the budget to pay SS. Exactly where is where the dialogue is going on now.