Re:Half of the US government's financial assets are student ...
by lotsofpulp on Friday January 12, 2018 @08:18PM
(#16137699)
It doesn't matter whether or not Social Security has a nominal surplus or deficit, the important part is what that dollar of Social Security benefit will buy you. Unless there is a secular shift in the tax base such as much more immigration, much higher incomes, or many more children, demographics suggest a smaller portion of the country working to pay for a larger portion of the non working country.
Other countries are already seeing this, but there is no escape from raising the retirement age, and the best way to slash benefits, which is to keep them behind real inflation. Also, medicare is an even bigger problem as it has no upper limit on spend, which will also have to be cut somehow.
Bottom line is, the more resources you spend on the past, such as aging people and infrastructure, the less you can on the future, such as for you and your kids. That is unavoidable.
Re:Half of the US government's financial assets are student ...
by wahern on Saturday January 13, 2018 @02:55AM
(#16138681)
I think you're missing a step. The surpluses are invested in Treasury securities, which is where the "IOUs" tripe comes from. Figures for the national debt invariably _include_ these securities, which is worthwhile to point out lest people think the liability is somehow hidden with shell games.
I think the latest figures for the national debt are just shy of $14 trillion, of which about $3 trillion is owed to the Social Security trust funds.
The right wing frame is that the surplus "doesn't exist" or is full of "IOUs" or something. It's hogwash.
Here's how it really works. When Social Security is in surplus, more money comes in from payroll taxes than is paid out in benefits. Payroll taxes come from people who get W-2 income and pay FICA.
That surplus is then used as part of the general fund to pay for various things including thing like tax cuts for lower capital gains. In reality, the general deficit is larger, because the surplus money isn't allocated for those purposes - the surplus continues to exist to pay for social security when it goes into deficit.
If we then pretend that that surplus "isn't actually there", then it means that we've effectively used payroll taxes to fund tax cuts for people that are richer than the people who have paid their payroll taxes. It's a two-step con. It's also false.
Social Security has also transition from surplus to deficit and back to surplus in the past as well.