Loaned. Since the primary alternative is having the money sit around, do nothing, and lose value to inflation, and since the intergovernment loans are included in the debt-to-GDP ratio, and since we'd just have to borrow the money anyway, I don't have a problem with the intergovernmental loans.You have no problem paying FICA(Payroll Taxes) for SS and Medicare only to have that money spent to pay for things not SS or Medicare related?
(We could invest some of it in the stock market; that's a common suggestion for increasing revenues.)
There is nothing sacred about FICA taxes. It's merely a legal construction, and a political convenience, that we specified that those taxes be used for SS/MC. If we aren't collecting enough via FICA to provide SS/MC, then our options are limited. We will have to raise taxes and/or cut benefits and/or borrow. No one really likes the first two, which is why we so often end up doing the 3rd.
...yes, and we're already in the process of paying it back. Trust fund bond terms range from 1 to 15 years. Any funds borrowed before ~1999 are already paid back.For decades we had more money coming out than going in and yet that money was spent, replaced with IOU's which someday have to be funded.
You prefer we conjure the funds from thin air?You believe they will come from other revenue or from borrowing on which we have to pay interest?
We're going to have to do something, and it's politically impossible to cut SS enough to make it solvent. We will likely have to raise revenues and cut benefits, as I've already suggested.
I hate to break it to you, but: It looks like you're the one who doesn't understand it. Again:That is what is wrong with this country, you have no concept of debt service, no problem with the general fund paying for your retirement, no understanding of SS and Medicare, no understanding of budgeting, no understanding of a Ponzi scheme in which someone else will pay for your retirement with their money because your money was spent?
• CURRENT payroll tax revenues pay for CURRENT SS expenditures. That's been the case from the start.
• Intergovernmental loans are not reducing the size of the trust fund, and do not jeopardize the funds.
• There is no serious reason to believe the government won't be able to pay back the intergovernmental loans.
• There is no "Ponzi scheme."
I also do understand debt service... in particular that government debt doesn't function the same way an ordinary person with a credit card. As long as the federal government can cover its interest payments, federal debt isn't a big issue.
Or, if you actually read what I wrote, you'd see how I have REPEATEDLY acknowledged that revenues will be less than expenditures in the near future. The expectation is that the trust fund will be gone by around 2032. Funny thing about that -- as we draw down from the trust fund, there's less to pay back! It's a problem that solves itself.You obviously didn't read the article about the SS IOU's because if you did you would understand that there isn't enough revenue coming in to pay for SS and Medicare expenses along with the rest of the U.S. Budget. something has to give.
Thank you for proving my hypothesis: You don't understand how SS is funded.Sorry but it your logic that doesn't make any sense and that is the way that our govt. wants it. There is a reason that people retiring in 1990 were paid for by someone else's payment. The money was spent and someone else has to pay the expense due. That by definition is a Ponzi scheme. People go to jail for that
The benefits paid in 1990 were collected in 1990. The surplus of the program in 1990 was loaned to other parts of government, and has been paid back by now. Whatever else happens, it's highly unlikely the US government will default on its debt obligations any time soon. If it does, SS will probably be one of the least of our worries....
Horse sense is the thing a horse has which keeps it from betting on people. ~W.C. Fields
Let me see if I have this right, we have no wars, no recession, a self proclaimed liberals booming economy and Obama proposes a record budget? That apparently only makes sense to a liberal who never believes the govt. spends enough on social programs that create nothing but dependence. Do I have that right, Obama supporters?
"If you can't stand the way this place is, Take yourself to higher places!"
Break, By Three days grace
Hilliary Clinton/Tim Kaine 2016