why ss will never be abolished

[historian]

It is free money for congress to borrow from and to spend on stupidities. In reality the social security is made up mostly of iou's. If those assholes in congress had left it alone all these years just gathering interest the fund would be in the black to the tune of several trillion dollars.

[dysfunctional press]

1. the money has been drained over the years to pay for the huge cuts in the top marginal tax rates.

it's seems pretty fucking obvious where the money has to come from to repay it.



those that have gotten the benefit of the policies should also be getting the bill.

[damntexdem]

2. Al Gore wanted to put it into a 'lockbox' -- we saw what the Rethugs did with it instead.

But those IOUs will be redeemed -- they are as good as any other government security, and the world economy would collapse if the U.S. defaulted on any such securities.

Further, based on those securities, SS is in the black, though only in billions of dollars, not trillions. It's not just that the monies are used to hide deficits, government investment of those funds has been resisted with the claim that it would give the feds too much control over the economy. That, of course, ignores that fact that state and county pension funds are invested; but it is true that investing SS funds would greatly concentrate public investment. But this is likely a smoke screen, anyway -- it is more likely that pols of both parties like to have SS taxes treated as government revenues they can play with.

[Igel]

3. "they are as good as any other government security"

"they are as good as any other government security" -- true.

"the world economy would collapse if the U.S. defaulted on any such securities" -- false.

They're special securities, issued only for SS funds and held only by the US Government. In other words, it's money borrowed by the government from the government. Congress could default on them and nobody notice; or it could reduce the widget budget to redeem these securities and immediately appropriate the money from the SSA for, well, widgets. There are other kludges that Congress could pull off to avoid the problem. But it's not just a huge problem and says nothing about the faith and trust the US government has to entities outside the US government.

The self-containedness of the borrowing matters greatly both in terms of what repayment means as well as what effect default would have.