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View Diary: Hell, No! Social Security Contributes Nothing To Deficit (119 comments)

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  •  i'm not sure your original assertion is quite (1+ / 0-)
    Recommended by:
    theotherside

    correct.

    "Hell, No! Social Security Contributes Nothing To Deficit"

    what happens if FICA tax receipts are less than required SS payments for the year? wouldn't that mandate the redemption of bonds, held by the SS Trust Fund? if the gov't already has to borrow, to meet its obligations, wouldn't part of those borrowed funds be used, to redeem those trust fund bonds? in turn, that cash would be used to make required SS payments. theoretically, the FICA shortfall would then become part of the overall deficit, would it not?

    •  You got it right (0+ / 0-)

      The diary is correct in so far as the SS portion of the FICA tax covers the current expense of beneficiaries.  But as soon as that is no longer true (which happened briefly a few years ago and will soon happen again) SS will be causing the deficit to increase.

      In addition, a lot of people confuse the date when the "trust fund" is exhausted with the date when SS starts adding to the deficit but they are not the same.

      But you seem to have a good grasp on the reality of the situation.  

      I personally think that the diary and the title are extremely misleading.  It's like saying "Hell no!  Not paying your mortgage doesn't lead to foreclosure"  Just because it won't do so immediately doesn't mean that it won't happen in the very near future and the fact is that SS will add billions to the deficit/debt.

      How you choose to address that fact is where the debate should be and not whether or not the SS system is currently adding to the deficit because, AFAIK, no reputable person makes that argument.  IOW, it's a strawman argument.

      We cannot solve our problems with the same thinking we used when we created them. Albert Einstein

      by theotherside on Tue Apr 09, 2013 at 06:54:34 AM PDT

      [ Parent ]

    •  Ooh, you're almost there (0+ / 0-)

      You missed out the part where the debt to Social Security (a considerable part of the national debt) goes down by an amount that is necessarily exactly equal to the value of its bonds redeemed in the process you describe.

      Paying out from the SSTF makes zero difference to the national debt.  It makes a difference to who owns that debt, but zero difference to the total.

      Fake candidates nominated by the GOP for the recalls: 6 out of 7. Fake signatures on the recall petitions: 4 out of 1,860,283.

      by GeoffT on Tue Apr 09, 2013 at 06:59:41 PM PDT

      [ Parent ]

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