Larry Blanchard wrote:
On Wed, 14 May 2008 20:55:00 -0700, Doug Winterburn wrote:

At least until recently, Social Security was running a surplus. It's hard
to blame the deficit on that.
You apparently haven't studied up on how trust funds work. Every excess
(surplus) social security dollar is exchanged to the general fund of the
US for a non-negotiable bond - IOU. The surplus is counted as revenue
by the federal government but the IOU is not counted as an expense.
However the IOU is added to the national debt - trust funds currently
accounting for over $4 trillion of the debt.

Yes, I'm aware of all that. The fact remains that money was/is collected
from us for the purpose of Social Security. The fact that the crooks in
Washington have spent (stolen?) it on other things is a reflection on
their honesty and our indifference, but it does not negate the fact that
the money was collected.

It has been the law since the inception of SS by FDR - any surplus
collections must be used to buy government bonds (debt). The liberal
"fix" to shore up SS is to raise the withholding rate so there is an
even larger surplus and consequent larger debt as well as masking even
more of the annual deficit.


Another way of looking at it accounting-wise is that the SS funds are
being used to mask the true size of the debt. It's all sleight of hand.

It masks the annual deficit, but does count in the debt. That is how
the last administration achieved a budget surplus while the debt
continued to increase.

The most amazing part of it is politicians act like there are some real
assets in the trust funds that can be drawn on when the funds run a deficit.