Help me understand something about Social Security

[wryter2000]

This is an honest question...

* has been raiding Social Security to make his deficits look smaller than they are, right?

There are still lots of T-bonds in that "file cabinet," right?

So, why are the T-bonds still there. Has he stolen some of the money but not all of it?

I keep waiting for a wing-nut to figure that out (okay, they'd have to be pretty bright :evilgrin:), and I want to have a good answer.

[flamin lib]

1. The SS funds were in the General fund and were replaced with

T bonds which will be cashed in later. That's the way the Govt borrows money. T bonds are sort of like a promissory note or maybe an IOU except that they have the full faith and credit of the US behind them. If the T bonds are no good we've got bigger trouble than a SS shortfall . . .

[wryter2000]

7. Thanks

:yourock:

[ibid]

15. Correct - payroll tax is collected and spent on defense, roads, where FIT

money - because of the Bush Tax cuts and the Bush Budget size - can not cover the bill. Indeed all FIT shortfalls are covered by borrowed money that is spent - and lender gets a US Bond.. So Social Security monies are spent.

To pay a bond back FIT must be raised so as to get the money to give to the bondholder.

If you do not intend to raise FIT taxes in the future, you are not intending to pay back the money borrowed.

I believe that is called stealing.

The Bush tax cuts for the rich are being partially financed by the payroll tax surplus. The increase in the National Debt can be viewed as a birth tax on our children that is growing under Bush.

[donco6]

2. He's using it to balance the revenue side.

That's why the deficits keep getting bigger.

Example: Your expenditures per month are 3000. You're income is 2500. But you have this college savings plan invested in long term treasuries - not really accessible, therefore should not be recognized as revenue. But you pull it into the equation anyway, just to fool yourself into thinking you're covered for the month. You spend your 3000, and wind up in the hole 500.

Lather, rinse repeat.

[wryter2000]

8. If I understand you right

He isn't actually spending the money, but he's putting it in the books as money that could be spent so the books look good. Is that about it?

Not trying to be :dunce: here. It comes naturally.

[donco6]

11. Yes, that's right.

It's still invested, but really shouldn't be part of the equation in the first place.

Gore had it right with the lockbox idea. It should be a totally separate fund account.

[wurzel]

3. No one says what the real SS problem is!!

The real "problem" is what happens when Social Security contributions no longer supply the surplus that supports the budget. That mean taxes will then have to be raised to pay the "bonds" or IOUs" accumulated. That is the real, and never mentioned, problem. Especially since Bush has robbed the trust fund to finance tax cuts for his wealthy cronies. The only people who will actually have a taxable income by that time will be the very rich. And Bush wants at all costs to protect them because by that time the Bush and Cheney families will be billionaires.

Bush's SS program robs the diminishing number of working people who still earn a living wage to support the growing numbers workers who no longer earn a living wage.

[wryter2000]

9. You got that right

Thanks!

[eallen]

4. Intragovernmental bonds are not counted as part of the deficit.

Since social security is part of the government, the treasury bonds bought from the trust fund are not counted as part of the "on budget" deficit. That's bogus, of course, since they represent a liability outside the government, to the beneficiaries. And as long as you know what numbers include what accounts, you can add this back in.

[wryter2000]

10. Thanks everyone

:yourock:

[BillZBubb]

5. Your question is confusing.

Every president since Reagan has been using the social security surplus to make the federal deficits look smaller. Before that, the accounts were separate.

The Social Security trust fund is made up of US bonds.

He hasn't stolen anything. The bonds are still all there. The problem is that the huge borrow and spend binge the Republicans have been on, will make paying off those bonds when they come due much more difficult. That's because we'll have that debt to pay in addition to the mountain of other Repug generated debt. It won't be easy--and future politicians will have to worry about it--not the Chimperor.

[wryter2000]

6. Thanks

My question is confusing. Before *, I never thought about SS too much. I never thought the government would deliberately try to sink it before.

[Warpy]

12. He's pretty much promised a default on those T-bills

All the money has been long looted and squandered. They just keep reissuing those T-bonds, paying the interest every time they turn over. The whole shell game keeps going because of the interest those bonds are generating. It will collapse as soon as people try to cash them in at maturity and retrieve the principal.

The principal is long gone, used to fund the Imperial military in the absence of support from the class that benefits from it: the rich.

It's an unsustainable system. Whether working class people will stand for being screwed out of all hope for any sort of retirement is anyone's guess.

In any case, the first step to regaining long term solvency will be to take our overpayments OUT of the general fund.

[xray s]

13. "Whether working class people will stand for being screwed ..."

They will, as long as they can keep watchin' the TV.

[wryter2000]

14. Thanks

I'm glad I started this thread because it's really clarified my thinking.

I imagine what will happen is we'll get a responsible President at some point who'll raise taxes on the rich to recoup the money. (At least, I hope that happens.) At that point, the Novakulas will start screaming "biggest tax increase in the history of the world!" again and the responsible people in Congress will pay at election time, just as they did in 1994.