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From his 1984 debates with Walter Mondale:

“Social Security has nothing to do with the deficit. Social Security is totally funded by the payroll tax levied on employer and employee.”

“Social Security has nothing to do with balancing a budget or erasing or lowering the deficit.”

Again, he wouldn't make it past a Republican primary these days.

Originally posted to MRDFS on Thu Nov 15, 2012 at 06:50 PM PST.

Also republished by Social Security Defenders.

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Comment Preferences

  •  What was once, is no more (1+ / 0-)
    Recommended by:
    VClib

    Of course, Social Security is now being partially funded from general revenues, owing to the payroll tax cut.  And this will become even more so, when we get a bipartisan agreement not to restore the payroll tax to its previous rate.

    So, we can no longer make this righteous claim that Social Security does not contribute to the deficit, thanks to Saint Obama.

  •  Still don't like the sumbitch (1+ / 0-)
    Recommended by:
    MRDFS

    Even a broken clock is right twice a day

    Happy just to be alive

    by exlrrp on Thu Nov 15, 2012 at 07:35:41 PM PST

  •  MRDFS - this is an accounting issue (1+ / 0-)
    Recommended by:
    notrouble

    Because the SocSec Trust Fund holds billions of US Treasury bonds you can make the case that from an accounting perspective SocSec isn't part of the deficit at all. However, from a cash perspective the SocSec system has been buying Treasury bills with its surplus for decades thereby lowering the amount the Treasury has to borrow in the open market. Now that SocSec is cash flow negative it is cashing in some of its Treasury bonds which required the Treasury to fund the annual deficit PLUS the amount the SocSec Trust Fund has cashed in.

    "let's talk about that"

    by VClib on Thu Nov 15, 2012 at 09:11:33 PM PST

    •  Pretty much what VCLib says. The US government (0+ / 0-)

      has borrowed from Social Security, the SS Plan participants actually, by selling T-bills (notes of obligation, close to $2 Trillion outstanding currently) and thereby OWES the SS Trust Fund.
      The SSTF is merely redeeming some of those T-bills recently because of a slowed cash inflow (which has been exascerbated by that phony SS tax cut). Perfectly acceptable behavior for a creditor/asset holder.

      This was all predicted and planned for in the SS Plan changes of the 1980's, which actuarily (sp?) calculated these necessary asset overages (without those recent somewhat unplanned negative cash flow excursions caused by a severe recession and the 'temporary' FICA tax cuts).
      That built-in asset overage allows for the bulge of Baby Boomer recipients to receive the standard payouts without any reductions on the agreed amount. It was known and planned that the SS payouts would likely exceed payins at this time, roughly coresponding to the retirement of large numbers of Baby Boomers. This isnt news.
      An economic recovery and the dimunition of the BB cohort (we're going to all croak sometime) over the next decade will balance it all out and SS will have a positive cash flow again. Which will result in it purchasing more T-bills than it redeems once more.

      Think of it as a bank or brokerage (SS) loaning out accumulated cash reserves (to the Fed gvt) by buying T-bills.
      The reserve starts getting a little tight (actuarily, not actually), the firm, SS, simply redeems a few extra assets or calls in a few loans early (T-bills) as needed, a simple margin call if you will. The note terms allow this, and the Feds must comply by choking up the called cash however they can.
      If it takes a tax increase to pay those loans down, tough. They've had enough fun spending like drunken fools since about 2002, part of which was excess SS money, (spending on tax cuts, unfunded wars, etc., etc.).

      The federal government must honor those T-bills by paying them back, or else. No matter if they are held by the SS Trust Fund, or foreign and domestic creditors, a default is unthinkable.

      How the Federal government raises the money to meet its' obligations is its' problem, not Social Security's.

      The Rethugs, some Dems, most media, and a whole horde of Catfood Commission types are doing the best they can to obfuscate this whole thing. Eff 'em all.

      "Double, double, toile and trouble; Fire burne, and Cauldron bubble... By the pricking of my Thumbes, Something wicked this way comes": Republicans Willkommen im Vierten Reich! Sie haben keine Bedeutung mehr.

      by Bluefin on Thu Nov 15, 2012 at 11:38:38 PM PST

      [ Parent ]

  •  Booyah!! (0+ / 0-)

    eom

    mittens=edsel. no matter how much money is spent to promote it, if the product sucks, no one will buy it.

    by wewantthetruth on Thu Nov 15, 2012 at 09:22:56 PM PST

  •  Your point here is so important that I'd like (0+ / 0-)

    to steal the Reagan quote to repeat as needed to some of my relatives, so to be sure I remember it, I changed my sig line!

    “Social Security has nothing to do with balancing a budget or erasing or lowering the deficit.” -- Ronald Reagan, 1984 debate with Walter Mondale

    by RJDixon74135 on Thu Nov 15, 2012 at 11:10:36 PM PST

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