Particularly appropriate since I believe there is a history of Social Security funds being spent on other purposes.
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Depends on how you look at it. The excess money is loaned to the government in the form of bonds. Which means the government owes itself money. Philosophically, I’m not sure how that works. Can you loan yourself money? Do you run out of money when you pay yourself back?
But it illustrates why the trust fund boogie man is a mirage. It just means all the bonds have been paid back.
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So long as income from FICA taxes covered benefits, surplus funds were put into the Social Security Trust Fund. But Congress then issued bonds for the trust so it could spend the surplus cash.
Now to pay benefits from the trust fund when income is less than benefits, Congress must come up with the cash (from the general revenue) to redeem those bonds.
In a sense we are already tapping the general revenue to pay benefits. And as the population ages (and life expectancy increases) those payments are likely to increase.
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Sure and in a pinch the Federal Reserve bank can decide to buy those bonds and fund them with newly printed cash.
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It’s kind of ridiculous to assert that Congress can come up with $1.8 TRILLION extra in 2024 to pay for stuff they want to buy without having the money, yet say that in 2030, if social security is short by $45 billion (and $60B in 2031, etc) that they couldn’t come up with the money.
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Congress makes its own choices. The need for Social Security action is so obvious its hard to explain why Congress has waited this long. I agree our Congress makes ridiculous choices. Inaction seems to be their number one priority.
Quite so. The government is replacing the special series bonds in the trust fund, with bonds held by the public. But the concept of SS being self supporting, is a convenient device. In the 80s, the trust fund was created, with a FICA tax increase to fund it, to partly paper over the deficits created by “JC” skewed tax cuts, by a regime that ran on balancing the budget. Ever since the fund started to go cash flow negative, around 2010, the drumbeat has increased to cut SS distributions, as the trust fund drawdown is increasing the deficit, for regimes that ran on balancing the budget.
Steve
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The explanation is pretty simple: They want to cut it in order to fund tax cuts for the wealthy. In order to cut it, they need to manufacture a crisis. Hence, no action.
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They don’t create jobs, so they can be chopped ASAP.