Social Security funds are 100% separate from the deficit. Look at your paycheck - taxes are one

[grahamhgreen]

Charge, SS is separate.

Stop this meme now.

That is all.

[DJ13]

1. The elites (aided by our politicians) are determined to steal it

Gotta pay for those billionaire tax cuts.

[suston96]

2. Unfortunately, there is only one US Treasury checkbook.

All cash collections, including Social Security and Medicare contributions, go into that checkbook.

All cash payouts by the US Treasury for all debts that require payments come from that checkbook.

Again, unfortunately, too many people do not understand that Social Security and Medicare are NOT any part of the annual deficit but just happen to be part of the bookkeeping involving that US Treasury checkbook.

Most of us have checkbooks, so I think this should be pretty clear.

[PSPS]

3. The point is that social security contributes nothing to the national debt

Republicans, as well as their surrogate corporate media, always throw social security into the discussion about the debt not because it contributes anything to it but, instead, to create the false impression that it does. Their sole purpose, of course, is to scuttle the program. That's been their desire ever since FDR started the program.

The fact is that social security has a surplus in the trillions and is fully solvent for at least another 30 years, perhaps much longer. With some slight tweaks, it will be solvent in perpetuity.

Obama's slanted catfood commission will also try its best to scuttle social security, given that its members were all selected because of their history of hostility toward it.

[suston96]

5. What you say is true about SS and the national debt......

But we, and so many others, are talking about the annual deficit which is another area where the Repubs and their minions attack Social Security.

Because of that universal checkbook the US Treasury uses to pay ALL the US government bills, SS and Medicare loom as the voracious burdens they most certainly are not.

SS and Medicare contribute heavily to the checkbook balances.

[Igel]

6. Yes, no, and maybe.

Until recently FICA contributed negatively to the national debt: The excess money collected was used to buy special-issue treasury bonds; the money was then used for general revenue purposes. Result: A lot of the deficit was financed and is owed by the government to the Social Security Administration, which is to say, by the government to the government.

Currently there are no FICA excess funds. In fact, they're dipping into reserves.

Now fast forward 20 years, to when the SSA will have been spending more than revenues. The money they spend will be the "trust fund," which means that they will be redeeming those special issue treasury bonds. That means that Congress will be using the "general fund" to buy them back.

Now, imagine that we have a budget not too dissimilar from the budget we had a few years ago--$400 billion in the red. Now we have to pay an additional $100 billion to buy back the special bonds. We can cut general expenses, raise general taxes, or we can fund buying those special t-bills with non-special, general issue t-bills. Or we can forgive ourselves the special issue debt and tell the SSA to take a hike--and either hike FICA taxes to cover the full amount of SSA expenses or cut SSA expenses.

Perhaps having a few trillion dollars "in the bank" would have been a good idea. But it would have been invested somewhere--and then the US government would have to decide whether to politicize the investment, what to do when investments failed, etc., etc. There's no provision for that, and I doubt most people want partisan governments having that much ownership of private corporations.

[grahamhgreen]

11. The point is we can not let them conflate SS with the deficit. The way to cut the deficit

is by increasing the tax on the ultra rich to Eisenhower levels - we could eliminate the the deficit, and the debt in 10 years.

[girl gone mad]

7. The US Treasury doesn't need a checkbook.

We have a fiat currency.

[BeFree]

14. I had a fiat once

It was the worst car, ever. Junk. Just like our currency. No wonder it's called fiat. <grin>

[FarCenter]

4. Most current collections are used to pay for current benefits

SS tax collections that are not used to pay for current benefits are invested in US Treasury bonds, i.e. they are used to fund the Federal deficit.

SS was not designed to be a plan where contributions are invested. If Americans all saved and invested enough to pay for their retirements, there would be a huge asset price bubble. Instead, current workers pay for current retirees, and future worker will pay for future retirees. The "trust fund" is supposed to be enough to smooth out varying numbers of workers in different age groups.

[eridani]

17. Wrong. Baby Boomers prepaid their own retirement

http://blog.buzzflash.com/hartmann/10015

Coincidentally, the actuaries at the Social Security Administration were beginning to get worried about the Baby Boomer generation, who would begin retiring in big numbers in fifty years or so. They were a "rabbit going through the python" bulge that would require a few trillion more dollars than Social Security could easily collect during the same 20 year or so period of their retirement. We needed, the actuaries said, to tax more heavily those very persons who would eventually retire, so instead of using current workers' money to pay for the Boomer's Social Security payments in 2020, the Boomers themselves would have pre-paid for their own retirement.

Reagan got Daniel Patrick Moynihan and Alan Greenspan together to form a commission on Social Security reform, along with a few other politicians and economists, and they recommend a near-doubling of the Social Security tax on the then-working Boomers. That tax created - for the first time in history - a giant savings account that Social Security could use to pay for the Boomers' retirement.

This was a huge change. Prior to this, Social Security had always paid for today's retirees with income from today's workers (it still is today). The Boomers were the first generation that would pay Social Security taxes both to fund current retirees and save up enough money to pay for their own retirement. And, after the Boomers were all retired and the savings account - called the "Social Security Trust Fund" - was all spent, the rabbit would have finished its journey through the python and Social Security could go back to a "pay as you go" taxing system.

[FarCenter]

25. That's what I said

"The "trust fund" is supposed to be enough to smooth out varying numbers of workers in different age groups."

Since the Boomers are a large age group, the trust fund was built up to partially pay for their retirement.

[eridani]

26. Sorry. Probably confused your post with someone else's n/t

[subterranean]

8. Actually, Social Security has reduced the deficit.

For the past 30 years, the government has been borrowing from the SS trust fund to subsidize tax cuts, mainly for the rich, and make the resulting deficit look smaller than it would be otherwise. Eventually, that money will have to be paid back to the trust fund, but Republicans and Wall Street banksters want to make sure they never have pay it back. They want to keep that money. Trillions of dollars are at stake. Defaulting on the Treasury bonds held by the trust fund would amount to a massive upward transfer of wealth from the working class to the top 1%.

[Stinky The Clown]

9. The pretzel logic by which the connection is made is that since the Treasury has been stuffing . . .

. . . the SS fund with IOUs, if we reduce the SS obligation (i.e.: cut entitlements), we don't need to pay back as much of the IOUs.

Grover Norquist: Shrink government so much that we can drown it in a bathtub.

[nc4bo]

10. I'm grateful for the info and explanations in this thread. It's coming in very handy

and I've a feeling we all should have a clear understanding of how our SS system works and how it's paid for and what happens to that money once it's left our hands. The bad guys are gonna try to come down hard I fear.

So Thanks!

:patriot:

[doc03]

12. China and other countries poses IOU's from the

US government that the US government guarantees to pay back with interest. SS also has IOUs from the US government that is supposed to be paid back with interest. Simple, the US government can't default on the Chinese IOUs, but they can default on the SS IOUs. If we let them!

[grahamhgreen]

13. +1

[SammyWinstonJack]

15. Tell that to Obama.

[grahamhgreen]

16. I am so tired of him spinning this meme. Deficit and SS are seperate.

[eridani]

18. Fewer workers support retirees is also a fake invented "problem"

It is a totally bogus “problem.” By that logic, we should all be starving because of the dramatic reduction in the number of farmers as a percentage of the population over the past 70 years. Non-farm productivity has dramatically increased as well. According to the Bureau of labor statistics ( http://www.bls.gov/lpc/prodybar.htm ), 1947-1973 productivity gains were 2.8%/year, 1973-1979 gains were 1.1%/year, 1979-1990 gains were 1.4%/year, 1990-2000 gains were 2.1%/year, 2000-2007 gains were 2.6%/yearand 2007-2009 gains were 2.3%/year. Taking 1947 as a baseline year of 100, a quick spreadsheet calculation gives an increase to 396 over 62 years! Given the distinct possibility that there will not have been a single net job added to the economy between the years of 2000 and 2015, how can anyone possibly say that the main problem facing our economy is that we don’t have enough workers?

Besides which, the ratio of total number of dependents (retirees plus children) to workers will actually be significantly lower in 2030, the year Social Security is supposed to melt down, than it was in 1960, before the baby boom entered the work force. http://www.fair.org/index.php?page=1381

In addition, the increase in longevity is not a persuasive reason for raising the retirement age. Most of the increase is due to lower death rates at very early ages. Moreover, the increase is very unevenly distributed. For lower income women, longevity is actually decreased. Needless to say, low income women are by far more likely to have Social Security provide most of their income in old age.
http://www.newscientist.com/article/dn13746-no-southern-comfort-as-life-expectancy-falls.html

http://www.cdc.gov/nchs/data/hus/tables/2002/02hus030.pdf On average, life expectancy at 65 years (the only number that matters—not life expectancy from birth) is up 3.5 years for males and up 4.2 years for females.

[Motown_Johnny]

19. except that Bush already spent the money that was collected and the (R)s don't want to pay SS back

so their solution is to cut benefits so they don't need to pay it back

[Mimosa]

20. I think you got it, Motown_Johnny.

BFEE knows their stuff.

[crazyjoe]

21. you couldn't be more wrong, all the money goes into the general fund.

[sarcasmo]

22. Am I right that there is no way to opt out of SS?

[earth mom]

23. Just keep telling people they are GOING TO BE EATING CAT FOOD if the bastards in charge

AKA Cat Food Commission get their way.

Every single DUer who gives a damn should be saying "cat food" and "cat food commission" over and over again to drive home the point.

Do NOT let those fuckers sugar coat this!

This is OUR money people-NOT theirs!!! :grr:

[quaker bill]

24. Actually the social security surplus

is the only reason the deficit is as low as it is. SS taxes are still kicking in a couple of hundred billion more than is spent on benefits. In about 7 or 8 years, this will go to zero. However SS taxes have been running a surplus for 30 years. This surplus was borrowed and spent by republicans, largely on weapons systems, most of which have already been mothballed.