On 04 Aug 2011 12:02:03 GMT, Han wrote:

Doug Winterburn wrote in
web.com:

On 8/3/2011 7:37 PM, HeyBub wrote:
Leon wrote:

But in real life if the government is using your SS contributions to
run the government it is a tax. The past weeks threat of missed SS
payment checks would never have been a second thought if that fund
was a separate entity not mixed in with the general fund. Today the
SS fund is simply another Government liability account. Than you
Prez Clinton.

It IS a separate fund. Funds received by SSA go into a pile called
the Social Security Trust Fund. Those funds are prudently invested in
U.S. Treasury bonds (which pay interest). The governors of the SS
Trust Fund can redeem these bonds anytime they wish.

Today, there is about $2 trillion in the Social Security Trust Fund -
in the form of U.S. Treasury Bonds.


All true, however:

The trust fund only contains the surplus collections from over the
years. The rest of the collections are paid out to recipient and for
overhead.

The interest is paid with more bonds.

The surplus taxes collected (that $2 trillion) was spent after the
federal government traded it for the Bonds and plunked it into the
general fund.

When SS needs to redeem the bonds because of deficits (which happened
in 2010 to the tune of $49 billion), the feds need to get the money
from their only sources of money - either from the general fund with
new tax money (which they didn't have), print it (resulting in
inflation which goes by the name of qualatative easing) or borrow
(which they had to do last year and this). $4 billion of the cashed
in bonds (interest) and the additional $45 billion was borrowed and
now became public debt rather than the intragovernmental debt in the
fund.

So, every dollar in the trust fund is a dollar of national debt.

In all, there are around 150 federal trust funds holding close to $5
trillion of debt.

The dollars I paid/pay in FICA every time I get or got a paycheck are
going weither towards SS payouts or that trustfund. No way those dollars
magically turn into debt. They're assets to be used for ss payouts.

You're wrong. That money was spent and an IOU[*] left in the "trust fund".
That *is* a debt. The money was *spent*, long ago.
[*] government bond, payable by your children