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This doesn't even make financial sense for the government. If you are guaranteeing that federal student loan debts will be deducted from social security payment
by aphextron 10y ago
This doesn't even make financial sense for the government. If you are guaranteeing that federal student loan debts will be deducted from social security payments, why not let me make those payments pre-tax before retirement? Why would you take one third of my paycheck into social security, which may or not pay out for me in decades, rather than just sending it straight to my loan balance?
- nickff 10y agoThe reason that the government takes your money up front instead of letting you use it against your debt is because the government has liquidity/solvency issues. Social security is a wealth transfer program, not a retirement saving program. Social Security takes money from the young, and gives it to the old; this is exacerbated by the fact the 'current old' did not 'pay-in' as much as they will be taking out, so they need your money right now.
- rqebmm 10y agoThe Social Security Trust Fund has no looming liquidity issues for the next 20 years or so[1]. Solvency is a different issue, and has nothing to do with student debt payments. [1]https://en.wikipedia.org/wiki/Social_Security_Trust_Fund https://en.wikipedia.org/wiki/Social_Security_Trust_Fund
- nickff 10y agoI said the government has liquidity/solvency issues, and it does; the SSTF is supposed to peak in 2021, but its largest holding is US Treasury bills, so the government will either have to 'run a surplus' by then (to pay off the treasuries) or default on debt, in order to continue paying out Social Security. Do you believe that the federal budget will be running a surplus by 2021? None of this is directly due to student debt payments, I was trying to explain why the government resists deferring Social Security taxes.