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Please begin with an informative title:

First some definitional points.
Total Public Debt = Debt Subject to the Limit. Or more properly the two track precisely (Green and Blue lines in first figure).
Total Public Debt = Federal Debt = National Debt (as shown as topline number on the National Debt Clock) When you Google any or all of those terms you are likely to come up with the same $16.4 trillion.

With that settled I want to talk some policy implications below the fold, particularly as all this relates to Social Security and the Debt Limit.

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You must enter an Intro for your Diary Entry between 300 and 1150 characters long (that's approximately 50-175 words without any html or formatting markup).

The second screen shot is from the Treasury's Debt to the Penny web application. This application tracks to the literal penny Total Public Debt and its components up to the close of books the last day but one, that is the most current data available today (Friday) is from the 2nd (Wednesday).

The first thing of note is that 'Total Public Debt' is simply the sum of 'Debt Held by the Public' and 'Intragovernmental Holdings' or roughly $11.6 trillion plus $4.8 trillion = $16.4 trillion. Now 'Intragovernmental Holdings' are mostly made up of assets of the nineteen or so Federal Trust Funds of which the largest are the two Social Security Trust Funds (OAS and DI, often tracked together as OASDI), Medicare Part A (HI) plus Federal Civil and Military Retirement Trust Funds. And specifically something more than half of that $4.8 trillion is made up of the $2.6 trillion combined in OASDI.

My appointment just showed up so I will have to take this up in comments later. But let me leave you with this. Any increase in net income to Social Security whether than comes in the form of cap increases (to increase revenue) or means testing or Chained-CPI (to reduce cost) has the result of increasing Trust Fund balances. Which means increasing the investment in Special Issue Treasuries. Which increases overall Intragovernmental Holdings. Which added to Debt Held by the Public increases Total Public Debt. Which adds to Debt Subject to the Limit.

Put that series of identities together and the fatuity of dragging Social Security into a discussion of raising the Debt Limit becomes apparent. To the extent that folk want to maintain the Debt Limit as is rather paradoxically the only way to have Social Security contribute to that is to pay down the Trust Fund. Which can only be done by decreasing FICA or increasing benefits. Which to say the least are not the policy options being put on the table.

It is not true to say that Social Security doesn't contribute to the deficit or the debt. But as my previous post shows it currently serves to reduce the former and as this post shows any attempts to cut benefits actually increases the latter. So exactly why is it even on the agenda for the Debt Limit negotiations?

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