Social Security Facts - #2:
There is no Trust Fund, Lock Box, ETC., in fact, there is NO MONEY!
The Social Security TAX on the young (workers) is simply sent out at the same time you pay it to the old (retirees).
Any EXCESS is used for other GOVERNMENT EXPENDITURES - or -
ADDITIONAL TAXES are REQUIRED if there is a SHORTAGE!
Everything else you hear is simply ACCOUNTING GAMES to support POLITICAL POSTURING!
The Social Security TAX on the young (workers) is simply sent out at the same time you pay it to the old (retirees).
Any EXCESS is used for other GOVERNMENT EXPENDITURES - or -
ADDITIONAL TAXES are REQUIRED if there is a SHORTAGE!
Everything else you hear is simply ACCOUNTING GAMES to support POLITICAL POSTURING!
posted by Jim | 10:42 AM
2 Comments:
I'm going to challenge your Fact #2.
I don't see how the situation differs very much for the sale of US Treasury Bonds to China (or anyone else). When we sell a bond, the money is spent. Yet the buyer gets an asset which is an obligation to pay in the future. Do we say that the holder of the bond has a worthless asset?
Whether the Social Security Fund holds the bond or China holds the bond, it is an asset.
Now I don't dispute that we have a problem in that the government spends more than it takes in. But beyond the issue of Social Security (which is just one relatively small part of the future problem), that's not something that the Republican leadership seems to be very concerned about in general at the moment. But it will certainly cause more and more problems down the line if we can't get things in better balance.
It is an accounting game.
China buys bonds in a market (governmental/commercial) that is competitive. Their bonds show as a debt on our books.
Social Security is simply called a "bond" with some ficticious yield, and is not shown on our books as debt. The Government simply makes sure payroll taxes are large enough to cover the current social security payments.
You can accept this as a legitimate monetary transaction if you wish, but if you think it through I think you will see the point.
It is as if I took by check and spent it, giving myself a "bond", and when I get my next check I redeem the bond and spend that and issue another bond. When I don't get a check, I'm in trouble!!
An "accounting game."
Social Security is WELFARE, plain and simple!
Post a Comment
<< Home