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+--- Thread: How come the government can take money out of Social Security and spend it? (/thread-51508.html)
Pages: 1 2
- lillycoo - 12-16-2012 03:23 AM
we may thank James earl carter for that debacle
- BekindtoAnimals22 - 12-16-2012 03:23 AM
Good point. I believe this began under George H.W. Bush and has not been discontinued since. They just send out the checks to the recipients and put the rest of the money in the general fund while they tell us Social Security is going broke.
- DeathsToy - 12-16-2012 03:23 AM
It was said that the treasury could borrow money and it seems the treasury in uneducated as the do not know that what you borrow must be paid back.
I wish one day we could have a government that would close that door and collect the debt and put a seal on that door that can never be reopened.
- Scott L - 12-16-2012 03:23 AM
Would you rather they borrow even MORE money and make the debt that much larger?
Besides the Social Security Trust Fund is still there, the rest of the government services just "borrowed" the money. But you should see how much our debt is when you factor that in.
The deficit is shrinking right now but it will explode soon, Social Security still makes a surplus, which will end in 2019 as predicted today (it was predicted to change in 2020 last year. I can't wait personally, because the poo will finally hit the fan and we might actually have some meaningful debate because the US public won't accept raising the tax rate by 100% across the board (doubling taxes).
- igi - 12-16-2012 03:23 AM
crooked
- jeeper_peeper321 - 12-16-2012 03:23 AM
OK, lets kill the myth.
Just where would you want the federal government to keep all the excess SS revenue ?
Should they invest it in the stock market ? And maybe lose it all if the market crashed?
Hide it in mattress's ?
All excess SS revenue is used to purchase US Treasury Bonds.
The same bonds anyone Else is allowed to invest in.
The government doesn't dip in the SS revenue, they don't borrow from it.
The government just doesn't treat the income generated from the excess SS revenue's purchase of US Treasuries, any different than they do any other kind of revenue.
But, just as the federal government must redeem US Treasuries that have matured, they have to redeem the US Treasuries that were purchased with excess SS revenue.
Right now, the US government has about 3 trillion dollars worth of Treasury bonds from excess SS revenue.
These treasury bonds will be cashed in and used to keep paying full SS benefits starting around 2017, when there no longer are any excess SS revenues, because we will be paying out more in SS benefits than we collect in SS tax revenue.
When SS started, there were 15 people paying into SS for every person collecting benefits, today there are 5 people paying in for every person collecting benefits.
In another 20 years, there will be 3 people paying into SS, for every person collecting SS benefits.
That is because people are living about 25 years longer now, than they did back in the 1930's.
So for a answer to your question,
All excess SS revenue, is invested,
It is invested in US Treasury Bonds instead of the stock market.