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View Diary: Ronald Reagan: 'Social Security has nothing to do with the deficit' (81 comments)

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  •  So -- have there been any changes to Social (1+ / 0-)
    Recommended by:
    JerryNA

    Security since Reagan's days, or was he just talking the same talk that Democrats do with regard to Social Security?

    However it worked then, the way it works now is that the Social Security Trust Fund holds US debt instruments, the money for which Congress obligingly spends. Technically speaking, it is the Congressional spending that drives up the debt and the deficit, not Social Security directly.

    It all kind of works so long as Social Security collects more than it pays out -- except for the fact that the federal budget is adjusted to include those surpluses.

    Once the surplus is gone, and those t-bills come due, however, they have to be paid.  A double whammy:
    no more money coming from surpluses, plus money going out to pay benefits == borrowing even more.

    LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

    by dinotrac on Wed Dec 19, 2012 at 09:53:57 AM PST

    •  social security is not T-bills (2+ / 0-)
      Recommended by:
      Aspe4, JesseCW

      You don't buy the debt on the market.  They are special bonds which are paid back with small interest due.  Guess what?  They always have been paid back.  Are we really planning on reneging?  Bad idea!

      "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

      by noofsh on Wed Dec 19, 2012 at 10:27:55 AM PST

      [ Parent ]

      •  Tomato, tomahto, but they are not negotiable -- (0+ / 0-)

        only the federal government can hold them.

        As to being paid back, that wasn't the point.
        The point is that Social Security surpluses end up in the general fund, getting spent, and contributing to deficits and debt.

        LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

        by dinotrac on Wed Dec 19, 2012 at 11:08:17 AM PST

        [ Parent ]

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