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Social security is self-funded. It has literally no impact on the deficit or our ability to pay off debt. By statute. Edit: i am flabbergasted at how low liter

• JumpCrisscross 1y ago
  > Social security is self-funded. It has literally no impact on the deficit or our ability to pay off debt Technically, yes. Practically, it’s a pair of income and expense streams. Slashing social security payouts to pay for some nonsense is tempting.
  • fkfyshroglk 1y ago
    Sure, practically I can also rob people at gunpoint.
    • JumpCrisscross 1y ago
      Material difference when we’re discussing what a legislative body would and would not do! My guess is we’ll stick it to Gen X.
      • fkfyshroglk 1y ago
        Maybe you're right. But then I'll be telling anyone who will listen that they're being sold up the river to finance the military and the wealthy against all reason.
        • JumpCrisscross 1y ago
          > I'll be telling anyone who will listen that they're being sold up the river to finance the military and the wealthy against all reason. My cat's incredibly convinced of a global scheme against his caviar budget, that doesn't really cause any consequence.
          • fkfyshroglk 1y ago
            Ok, but you could say the same thing about people being paranoid about social security bankrupting "us", if "us" indeed has any meaning without a welfare state. Ignorance plagues all quarters of society.
• gruez 1y ago
  Maybe for now, but it's eventually going to run out of money, and what do you think is going to happen? You think all current and future retirees are just going to shrug and say "oh well, it was good while it was lasted", and not lobby their politicians? https://en.wikipedia.org/wiki/Social_Security_(United_States)#Demographic_and_revenue_projections https://en.wikipedia.org/wiki/Social_Security_(United_States...
  • fkfyshroglk 1y ago
    No, the SURPLUS will run out. The fund will not.
    • gruez 1y ago
      From wikipedia: >Without legislative changes, trust fund reserves are projected to be depleted in 2033 for the OASI fund.[16] Should depletion occur, incoming payroll tax and other revenue would be sufficient to pay 77 percent of OASI benefits starting in 2035.
      • fkfyshroglk 1y ago
        Paying out 77% of benefits is not the same as running out of funds. You are still guaranteed payments while anyone in this country is making income.
        • johngladtj 1y ago
          Try paying only 77% of your mortgage and let me know if the bank thinks that you're not in default.
          • fkfyshroglk 1y ago
            Again, social security is not a mortgage and is not even remotely comparable to one.
            • 1y ago
• siliconc0w 1y ago
  It's actually not, most retirees receive more in benefits than they've contributed.
  • fkfyshroglk 1y ago
    How does that contradict anything I said? If you have issues with what it is, that's fine. But it still doesn't impact our deficit or ability to pay off debt.
  • ndsipa_pomu 1y ago
    Isn't that expected due to some people dying before retiring?
    • const_cast 1y ago
      Right, and of course, growth. The same is true for a 401K - you're going to get a lot more out than you contributed.
• djoldman 1y ago
  ? Self-funded to me means an entity or process that itself takes in income sufficient to fund all of its operations. Social security itself does not take in any income whatsoever. Social security is a debt. Therefore it itself directly affects the US' ability to pay off it's debts.
  • fkfyshroglk 1y ago
    Social security is funded with a social security tax. 6% of your paycheck is paid by you, 6% by your employer. (Or 12% by you if you are self-employed.)That by law can only go to fund social security and nothing else. Similarly, the fund is by statute guaranteed to only fund social security payments. It is completely separate from the rest of the federal budget.
    • djoldman 1y ago
      Ok, let's chalk the "self-funded" part up to semantics. > It has literally no impact on the deficit or our ability to pay off debt. By statute. This however is wrong. As a simple proof: let's just up social security payments by 3000x... social security is still "self-funded" and "separate" but that would be an untenable debt and the US would immediately default on that obligation. The amount and structure of social security debt matters to the US' ability to pay. Social security is a promise to pay an amount of money in the future and it is backed by the "full faith and credit" of the US government. The bigger it is, the bigger the debt, the hard it is to pay off. It's a big impact. Just because it's specifically funded and tied to a precise specific tax does not make it immune from debt considerations.
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      • watersb 1y ago
        It says here [0] that the Social Security Trust currently holds about $2.6 trillion is US Federal securities. https://www.ssa.gov/cgi-bin/investheld.cgi https://www.ssa.gov/cgi-bin/investheld.cgi Cash money from payroll tax is sitting there collecting interest and being drawn down by Social Security disbursements. So we pay taxes, that revenue holds a gun to Congress and forces them to buy another aircraft carrier... That's semantics for you. Sorry. The aircraft carrier thing is bitter sarcasm on my part. But I'm put off by dismissing the funded nature of Social Security as the root cause of the Federal debt. The root cause is deficit spending.
• jack_h 1y ago
  It does have an impact on intergovernmental debt. Here's a good explanation from GAO[1]: > Intragovernmental debt holdings represent federal debt owed by Treasury to federal government accounts—primarily federal trust funds such as those established for Social Security and Medicare—that typically have an obligation to invest their excess annual receipts (including interest earnings) over disbursements in federal securities. > Debt held by the public represents a claim on today’s taxpayers and absorbs resources from today’s economy, meaning that when an investor buys Treasury securities it is not investing that money elsewhere in the economy. > Intragovernmental debt holdings reflect a claim on taxpayers and the economy in the future. Specifically, when federal government accounts redeem Treasury securities to obtain cash to fund expenditures, Treasury usually borrows from the public to finance these redemptions. From memory I believe we're at ~100% publicly held debt to GDP and ~122% gross debt to GDP. [1] https://www.gao.gov/assets/gao-25-107138.pdf https://www.gao.gov/assets/gao-25-107138.pdf
  • fkfyshroglk 1y ago
    Well, perhaps you're right. I am not a finance guy and it seems to me you can probably pull debt out of any kind of relationship if you squint right. But it certainly is not to blame for our inability to balance the budget, which seems easiest to explain with nearly sixty straight years of cutting marginal tax rates while claiming to be fiscally conservative.
    • jack_h 1y ago
      > you can probably pull debt out of any kind of relationship if you squint right. No, this is pretty explicit. To rephrase what the GAO said when the Social Security Administration takes in more than it sends out it invests the difference in special Treasury securities (that's the trust fund(s)). The money the Treasury gets is spent on general government operations (education, healthcare, etc). The treasure must pay this money back, with interest. > But it certainly is not to blame for our inability to balance the budget When the Treasury pays the principal and interest it needs to either have enough tax dollars (higher tax rates or spending cuts) or issue debt to the public. So yes, it does factor into a balanced budget. It still must be paid back and the taxpayer will foot the bill one way or another, now or in the future. > which seems easiest to explain with nearly sixty straight years of cutting marginal tax rates while claiming to be fiscally conservative. This is a gross oversimplification. If you think just one side is the issue you're not going to be able to fix the problem.
• senectus1 1y ago
  not entirely true, American social security is paid for by the current generation. They'yr not paying for their own, they're paying for the receivers of it. The debt has already accrued. and worse yet, those that did not pay for the social security they're receiving are now living longer and costing more. Its like a "life interest".
• mgh95 1y ago
  > Social security is self-funded. It has literally no impact on the deficit or our ability to pay off debt. By statute. There is a very real problem that social security is project to be no longer solvent in 2035. (see here: https://www.congress.gov/crs-product/RL33028 https://www.congress.gov/crs-product/RL33028) It may require either transfers from the general budget or structural changes to remain solvent.
  • const_cast 1y ago
    To be fair, republicans have been saying SS will go insolvent from the moment it was written into law. It's been almost a century. After a certain point, we have to call a spade a spade and just admit there's a lot of people ideologically opposed to SS and that's it.
    • mgh95 1y ago
      > To be fair, republicans have been saying SS will go insolvent from the moment it was written into law. It's been almost a century. After a certain point, we have to call a spade a spade and just admit there's a lot of people ideologically opposed to SS and that's it. Actually, SS was going to go insolvent when it was first written. The benefits were far too generous for what was affordable, even with the population pyramid at the time. Then it actually was going to go bankrupt and the benefits were reduced in real dollars, because it turned out at one point we were dramatically overestimating inflation, and we couldn't afford it. If social security was an actual insurance or pension plan, it would have been shut down by a state regulator or the PBGC. It's a horrifyingly bad plan for the simple reason that it's structurally insolvent. Even the concept of "uncap the tax" just kicks the can down the road: you now need to pay those people benefits. The issue is we don't actually know what we want from it, which I alluded to in another comment. If we want some sort of "social insurance" plan where you just get back a portion of what you pay in, we have it and it's functionally in default. If we want a social safety net, we need to have a serious discussion about means testing.
  • fkfyshroglk 1y ago
    The surplus won't be solvent; the program itself is fine by definition. The entire concept of "social security solvency" is fear-mongering by people who want you to think of the entire country like a sack of gold rather than a proper economy.