On Mon, 15 Aug 2011 13:25:52 -0400, Kurt Ullman
wrote:

In article ,
Han wrote:

Kurt Ullman wrote in
m:

In article ,
Han wrote:

" wrote in news:90cad85b-
:

The problem today is that people retiring are getting
significantly more out of SS and Medicare than they
ever paid into it. And with the baby boomers now
collecting, the Ponzi scheme is coming undone.

I think you leave out inflation adjustment and interest earned.

What interest earned?
on the treasury notes of course.

And where is that money supposed to come from? It doesn't just appear,
ya know. Heck, I haven't a really good explanation of where the money to
pay back the notes, let alone the interest, is going to come from. Yet
another instance of Washington's Magical Thinking about money.

It's not that you don't have an "explanation," it's that you don't
like the explanation. I've explained it before.
U.S. government debt can only be paid by levying taxes.
And how Social Security works is all over the internet.
The accounting is simple and thorough.
That's why those ideologically opposed to Social Security have had no
success in killing it.

To answer your real or feigned confusion once again, Social Security
benefits gets paid with the same entity with which it was funded to
its surplus, Treasury bonds in the Social Security Trust Fund.
Those bonds won't be fully redeemed - current projection - until 2037.
At that point benefit payouts will be reduced to SS tax receipts
received. I saw recently that it's projected to be 70-80% of current
benefits.
Laws can be revised to change that, or not
U.S. government debt is paid by levying taxes.

Though payouts are figured differently, it's no different in
accounting for SS than any other simple bond type financial
instrument.
Let's take a Red Chinese U.S. Treasury bond holder.
He pays for U.S. Treasury interest bearing bonds.
What he paid and expected interest is an asset on his books, and a
debt on the U.S. government books.
All participants are identified, and payment schedules are identified
by law.
U.S. government debt is paid by levying taxes.

Now let's take an American dishwasher, accountant, nurse, fireman,
cop, engineer, etc. They pay half 6.2% of their wages, and their
employer kicks in the same amount.
That money goes into Treasury interest bearing bonds.
That's a loan to the U.S. government.
The total of what employee and employer paid is an asset on the
employee's books, and a debt on the U.S. government books.
All participants are identified, and payments identified by law.
U.S. government debt is paid by levying taxes.

Whether it's a Red Chinese or an American Viet Nam veteran dishwasher,
they lent money to the U.S. government.
Both sides of the ledger are identified - by law.
U.S. government debt is paid by levying taxes.

What's your problem in understanding that?
Maybe you don't want the U.S. to pay its debt?
Is that it?
So who will you stiff, the wealthy Chinese commie or the American
dishwasher?
You can take your pick. Just get the laws changed.
Winning determines whether you're a traitor or a patriot.
Same can go with the law determining whether you're a deadbeat or not.
To some people, anyway.
Happens all the time.
Until then, U.S. government debt is paid by levying taxes.

--Vic