OK, this was helpful. Mainly I want to try and do a good job of
explaining why the "economic fiction" argument, "It's all IOUs!, "left
hand borrowing from the right", etc. is unrepresentative.
Thanks for the replies.
On 04/27/2011 07:07 PM, Max Sawicky wrote:
> 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]
> <mailto:[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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