" wrote in
:

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

Doug Winterburn wrote in
aweb.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

see my other reply.


--
Best regards
Han
email address is invalid