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Those balances are just IOUs from one branch of the government to another. After all the internal transfers are done the check run needs to be covered by taxed or printed dollars. If the trust fund was invested in 3rd party assets would be a different story.
The nature of Treasury debt is spelled out in the terms embodied in the note itself at the time of issue. These do not change based on the identity of the note-holder. Whether that is you, me, China, or an SS or other federal trust fund makes no difference at all. The obligation of the Treasury remains the same in all cases. The "worthless IOU" meme is an example of disinformational folderol.
There is absolutely no way to pay it off.
The only 2 possible outcomes are to inflate it away or default.
Like as explained above our National Debt will never be paid off. Even down is difficult utilizing the conventional means of less central spending and/or more Federal taxes.
But if 'we the people' desired it so there is a third way, as the Executive has the power to pay down debt in good chunks in a legal but unconventional way.
The nature of Treasury debt is spelled out in the terms embodied in the note itself at the time of issue. These do not change based on the identity of the note-holder. Whether that is you, me, China, or an SS or other federal trust fund makes no difference at all. The obligation of the Treasury remains the same in all cases. The "worthless IOU" meme is an example of disinformational folderol.
A brief thought experiment:
You are an accountant at ParentCo. You put together the consolidated books for SubCoA and SubCoB, which are both owned by ParentCo. SubCoA does a bond issue. Some of these bonds are then bought by SubCoB. The bonds are a liability on SubCoA's books and an asset on SubCoB's books. When interest is paid, a cash transfer is made from SubCoA to SubCoB. All of this nets to a zero when you do the books for ParentCo.
The federal government can print dollars. Just like a business, however, there is no net effect of lending money between different subsidiaries at the parent level. Or are you averring that the Treasury is not part of the federal government?
What I am averring is a widespread misunderstanding of the basics of public debt, this often as the result of deliberate disinformation being promulgated by crackpot propaganda websites and related fake-news media. The identity of a Treasury noteholder does not in any way alter the obligation of the Treasury. The "worthless IOU's" theory is a pile of utter rubbish. It's that simple.
...There is more than one SS Trust Fund, and as of the end of February, they held balances of $2,861,747,604,000...
The federal Office of Management and Budget doesn't aim to mislead, as Washington politicians must:
These [Trust Fund] balances are available to finance future benefit payments and other Trust Fund expenditures – but only in a bookkeeping sense.... They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. (from FY 2000 Budget, Analytical Perspectives, p. 337)
There is not one penny of assets that can be redeemed in any way in the Social Security system. The $2.86 trillion dollar figure is simply the amount of Social Security taxes that Big Government politicians spent on things other than Social Security.
The federal Office of Management and Budget doesn't aim to mislead, as Washington politicians must:
These [Trust Fund] balances are available to finance future benefit payments and other Trust Fund expenditures – but only in a bookkeeping sense.... They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. (from FY 2000 Budget, Analytical Perspectives, p. 337)
There is not one penny of assets that can be redeemed in any way in the Social Security system. The $2.86 trillion dollar figure is simply the amount of Social Security taxes that Big Government politicians spent on things other than Social Security.
Completely true. But the "surplus" payroll taxes had to go somewhere... if they were just deposited in a bank account A) they'd be lent out anyway and B) would earn far less of a rate of return than inflation.
Simply put, Socialist inSecurity has always been a Ponzi scheme. It could never work. Some people believed it could, but they were wrong. Others simply saw a way to start collecting money. Today, we have millions of people who believe they've "earned" it, they're "entitled" to it, and they simply must receive their checks, no matter what.
That system will fail. It will collapse. That is inevitable. The only questions are when, how spectacularly, and precisely who will be hurt the most.
In a sane world, we'd start to unravel it today. Do our best to pay out as much as possible to current retirees while saving as many still-working people as possible. Spread the pain... retirees get less than they expected, working people still have to pay something. treat it like a bankruptcy. But we won't do that, so my hope is it either explodes terrifically tomorrow so I can stop paying in, or that it lasts as long as possible so I can get as much back out as I can. either way, though, SS is not part of my retirement strategy. I'm assuming it'll be gone and I'll lose every penny of the ~$250,000 it and MedisCare have taken from me over my lifetime so far. Any checks I ever actually get will be a bonus.
The federal Office of Management and Budget doesn't aim to mislead, as Washington politicians must:
These [Trust Fund] balances are available to finance future benefit payments and other Trust Fund expenditures – but only in a bookkeeping sense.... They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. (from FY 2000 Budget, Analytical Perspectives, p. 337)
There is not one penny of assets that can be redeemed in any way in the Social Security system. The $2.86 trillion dollar figure is simply the amount of Social Security taxes that Big Government politicians spent on things other than Social Security.
It is all bookkeeping. The importance being the only word in the English language with 3 double letters. In a row, no less!
I don't think that any USD's are 'real' economic assets. After all they are fiat, and can be conjured out of thin air by central authorities. They certainly have value and can be exchanged for real assets, but in and of themselves they are simply guarantees that they can be so redeemed.
It is all bookkeeping, exactly as the Trillion Dollar Proof coin suggests.
Completely true. But the "surplus" payroll taxes had to go somewhere... if they were just deposited in a bank account A) they'd be lent out anyway and B) would earn far less of a rate of return than inflation.
Simply put, Socialist inSecurity has always been a Ponzi scheme. It could never work. Some people believed it could, but they were wrong. Others simply saw a way to start collecting money. Today, we have millions of people who believe they've "earned" it, they're "entitled" to it, and they simply must receive their checks, no matter what.
That system will fail. It will collapse. That is inevitable. The only questions are when, how spectacularly, and precisely who will be hurt the most.
In a sane world, we'd start to unravel it today. Do our best to pay out as much as possible to current retirees while saving as many still-working people as possible. Spread the pain... retirees get less than they expected, working people still have to pay something. treat it like a bankruptcy. But we won't do that, so my hope is it either explodes terrifically tomorrow so I can stop paying in, or that it lasts as long as possible so I can get as much back out as I can. either way, though, SS is not part of my retirement strategy. I'm assuming it'll be gone and I'll lose every penny of the ~$250,000 it and MedisCare have taken from me over my lifetime so far. Any checks I ever actually get will be a bonus.
The system hasn't failed in nearly 200 years. It didn't fail in the 1930's. It didn't fail due to WW2, it didn't fail in 2008. What do you think our National Debt will be in 8 years? 100 years?
There is no money in your checking account. The bank has taken it all and used it for its own purposes. All you have is the "worthless IOU" inherent in the bank's unsecured promise to honor your checks as they are presented. Welcome to the real world, a place in which -- despite all the confused and baseless babble -- SS sits on $2.86 trillion worth of the most secure assets in the world.
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