Not sure what your point is here.
Maybe the simplest way to think about it is assume that instead of Trust
Fund bonds there is a just a number, call it X. Every year X grows by the
program surplus plus interest credited to the balance. In a few years the
surplus will be zero, and X plus interest will be reduced by the program's
cash shortfall (payroll tax plus income tax on SS benefits minus benefit
costs), though X will continue to grow. The shortfall is made up by general
revenue and the proceeds of borrowing (all fungible in the Federal budget
proper). At a certain point in the late 2020s, the annual shortfall begins
to exceeds the interest credited to X in that year. Henceforth X decreases
in absolute terms, until 2030-something, when X is zero. At that point the
only thing preventing the program shortfall from being filled by general
revenue, as before, is politics. Prior to year zero, politics supported the
transfer since the Trust Fund debts were being paid off. After it could get
dicey.
The Obama people want to increase pre-funding, pushing year zero off past
the 75 year window, if not to eternity, on the grounds that politics will
protect the program. I am afraid the Right will try to destroy the program
no matter how fat the Trust Fund looks ("It's all IOUs!"), so I'd just as
soon bank on the political power of seniors to keep their full scheduled
benefits after the Trust Fund balance is exhausted.
On Wed, Apr 27, 2011 at 5:46 PM, Matt Cramer <[email protected]> wrote:
>
> It sounds like you do not see the distinction? And maybe I am
> misrepresenting the difference between SSA and its FICA/payroll/bonds -
> vs. Gen. Fund and income tax (etc.). When we look at data on gov't
> costs, Social Security is listed right there on the same line as
> Defense, so maybe it isn't helpful to say it is something seperate.
>
>
> Thanks,
>
> Matt
>
>
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