Comments 1 - 3 of 3        Search these comments

1   Blurtman   2013 Jan 13, 1:56am  

Republican nutters are using the fiscal cliff and debt debates to attack SS. But it is self funding. The USG owes it $2.7 trillion. In times of cash flow negativity, when outflows exceed inflows, the SS Trust Fund cashes in special Treasuries, and funds the difference. Special Treasuries are in many respects an accounting entry, although a very real obligation. To redeem the special Treasuries, the USG must borrow money, that is, issue marketable Treasuries. Money is fungible, so from that perspective, SS can contribute to the deficit and national debt, but the money has been borrowed and must be repaid. And by adjusting payroll taxes, inflows can be brought back in line. SS is only a problem if you are for defaulting on a debt obligation.

2   mell   2013 Jan 13, 2:11am  

Blurtman says

Republican nutters are using the fiscal cliff and debt debates to attack SS. But it is self funding. The USG owes it $2.7 trillion. In times of cash flow negativity, when outflows exceed inflows, the SS Trust Fund cashes in special Treasuries, and funds the difference. Special Treasuries are in many respects an accounting entry, although a very real obligation. To redeem the special Treasuries, the USG must borrow money, that is, issue marketable Treasuries. Money is fungible, so from that perspective, SS can contribute to the deficit and national debt, but the money has been borrowed and must be repaid. And by adjusting payroll taxes, inflows can be brought back in line. SS is only a problem if you are for defaulting on a debt obligation.

It doesn't matter how you slice it and dice it and blame one or the other party. Fact is that it is only self-funding if you NEVER (whatever the circumstance may be) allow any entity to borrow from it. That's step 1 which hasn't been the case and people have been voting for the fraud to tap SS for other needs. And even then the payout may be perceived as "less" in case that inflation (e.g. in food, energy or healthcare) has outpaced the returns. So while they are being paid out what they paid in (plus any additional gains) it may be that they can afford less as a consequence of a governments monetary policy. Not much they can do about that.

3   Blurtman   2013 Jan 13, 3:15am  

mell says

Fact is that it is only self-funding if you NEVER (whatever the circumstance may be) allow any entity to borrow from it.

Incorrect. It is self funding in real time when inflows exceed outflows. Go to the back of the class.

Please register to comment:

api   best comments   contact   latest images   memes   one year ago   random   suggestions