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Thread: Budget deficit sets record in February

  1. #21
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    Re: Budget deficit sets record in February

    Quote Originally Posted by Lord Tammerlain View Post
    So you are being taxed for Social Security, money that goes for Social Security, the surplus of which is used to purchase US government debt.

    You end Social Security, you no longer are going to be taxed to fund Social Security. No more Social Security revenue. No revenue for the government.

    Meaning a new and different tax other then SS
    The bonds used with SS are non marketable.
    They are just used to mark how much the government owes itself.

    They are essentially worthless and can only be used to determine how much additional taxes will be needed to fully fund the program in the future.
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    Re: Budget deficit sets record in February

    Quote Originally Posted by Harry Guerrilla View Post
    The bonds used with SS are non marketable.
    They are just used to mark how much the government owes itself.

    They are essentially worthless and can only be used to determine how much additional taxes will be needed to fully fund the program in the future.
    They indicate how much the Federal Government owes Social Security, they pay a low interest rate, and can not be traded, but if they are worthless then all US government debt is worthless
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  3. #23
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    Re: Budget deficit sets record in February

    Quote Originally Posted by Lord Tammerlain View Post
    They indicate how much the Federal Government owes Social Security, they pay a low interest rate, and can not be traded, but if they are worthless then all US government debt is worthless
    Not exactly true.

    This particular debt is not the kind that is traded in the open market and they can adjust what is owed at anytime they want.

    They other, marketable, securities have a much greater effect on the countries credit rating than these do.
    If the government cut benefits tomorrow it would be reneging(partially) on their debt owed but it wouldn't necessarily reflect poorly on the countries credit rating.

    Edit: In theory, it can have an effect but if they balanced the budget by cutting SS payouts, that would probably raise the countries credit rating.
    Last edited by Harry Guerrilla; 03-11-10 at 03:56 PM.
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    Re: Budget deficit sets record in February

    Quote Originally Posted by Lord Tammerlain View Post
    They indicate how much the Federal Government owes Social Security, they pay a low interest rate, and can not be traded...
    Yes. An accountng mechanism to show where the money for the outlays came from. Nothing more.

    but if they are worthless then all US government debt is worthless
    No more so than your mortgage is worthless because you decided you were't going to put that $20 back in your wife's purse.

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    Re: Budget deficit sets record in February

    Quote Originally Posted by Lord Tammerlain View Post
    You end Social Security, you no longer are going to be taxed to fund Social Security
    Thats only if you repeal the outlays AND the tax.
    Reducing or even eliminating the outlays, as we are duscussing, in no way necessitates eliminating the tax.

  6. #26
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    Re: Budget deficit sets record in February

    Quote Originally Posted by Lord Tammerlain View Post
    Are government bonds worthless? Is the trillion dollars of US government debt the Chinese own worthless, how about the trillion or so the Japanese own worthless, or the hundreds of billions of US government debt various Americans own?
    The "special issue" bonds the US government "owns" are nothing more than a representation of how much SS money was spent funding other aspects of government.

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    Re: Budget deficit sets record in February

    Quote Originally Posted by Harry Guerrilla View Post
    Not exactly true.

    This particular debt is not the kind that is traded in the open market and they can adjust what is owed at anytime they want.

    They other, marketable, securities have a much greater effect on the countries credit rating than these do.
    If the government cut benefits tomorrow it would be reneging(partially) on their debt owed but it wouldn't necessarily reflect poorly on the countries credit rating.

    Edit: In theory, it can have an effect but if they balanced the budget by cutting SS payouts, that would probably raise the countries credit rating.
    Or think of it this way

    If the US government announced it was going to default on the debt it owes to the SS, it would generally indicate the US is having trouble paying its debt.

    Not a good sign to people investing in US government debt

    The only way the government could get away with this is by making a massive change to Social Security, basically eliminating it as a program.

    Any other attempt to refuse to pay the debt owed to the SS fund will be seen as a default and result in a dramatic decrease in the US government credit rating. Not to mention having millions of voting elderly upset
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    Re: Budget deficit sets record in February

    Quote Originally Posted by Goobieman View Post
    Thats only if you repeal the outlays AND the tax.
    Reducing or even eliminating the outlays, as we are duscussing, in no way necessitates eliminating the tax.
    How can you tax for something that doesnt exist?

    If SS doesnt exist you can not tax for SS

    It would be fraud, and I would sue to government over it

    Meaning the government would have to pass a new tax to replace it
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    Re: Budget deficit sets record in February

    Quote Originally Posted by Lord Tammerlain View Post
    Or think of it this way
    If the US government announced it was going to default on the debt it owes to the SS, it would generally indicate the US is having trouble paying its debt.
    Only to people that do not understand that those 'bonds' are just an accounting mechanism -- which, no offense, means almost no one except you.

    The only way the government could get away with this is by making a massive change to Social Security, basically eliminating it as a program.
    Reducing SocSec outlays by 40-50% necessitates no such thing and in no way eliminates the program.

    Any other attempt to refuse to pay the debt owed to the SS fund will be seen as a default and result in a dramatic decrease in the US government credit rating.
    See response #1

    Not to mention having millions of voting elderly upset
    I thougt we were speaking outside political realities.
    Same argument can be made for reducing the defense budget by 40% as you suggest -- it will piss off a lot of voters.

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    Re: Budget deficit sets record in February

    Quote Originally Posted by Lord Tammerlain View Post
    How can you tax for something that doesnt exist?
    If SS doesnt exist you can not tax for SS
    Who said anyting about -eliminating- SS outlays?

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