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I'm sorry, but this statement is not true. These numbers require the use of the Social Security trust fund. The Social Security trust fund is a "special issue t
by jeremyt 10y ago
I'm sorry, but this statement is not true. These numbers require the use of the Social Security trust fund. The Social Security trust fund is a "special issue treasury bond" in which money is deposited and then spent by the US government.
So, when the trustees say that Social Security can pay 75% of the benefits, what they mean is that there are enough IOUs in the trust fund to pay 75% of the benefits. But when we start redeeming the IOUs, we will quickly discover that the money isn't in existence. We are going to have to raise taxes or cut spending or otherwise get the money from somewhere else. The trust fund is just a very very clever way of obfuscating the fact that the government has no money saved at all for Social Security.
- dlp211 10y agoAll you are saying is that the US needs to continue to service its debt without defaulting. Since there is no sign that we will default now or later, this is simply more fear mongering.
- jellicle 10y agoActually, the 75% number is when there is no trust fund whatsoever and all outgoing payments are funded directly by incoming payments. > But when we start redeeming the IOUs You are aware, I'm sure, that said IOUs have been redeemed every year of SS's existence.
- jeremyt 10y agoUntil they aren't. Bear Stearns paid its bills every year until it suddently didn't.