Quote:
Originally Posted by mike1003
This shows just how Social Security got where it is today. Sad commentary on leadership in the US
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It's a propaganda video and you bought into it hook, line and sinker.
The correct answer is no party drained it because there was never at any time anything to drain.
The really sad commentary is that your own apathy doesn't even allow you to do your own research.
If you bothered to read the Social Security Act of 1935 then you would understand how it worked and you wouldn't get suckered into propaganda.
Nothing has changed.
This is how the process has worked from Day #1:
1) Employers place FICA taxes in an escrow account;
2) the money in the accounts is transferred to the Social Security Administration in a given month;
3) in the month following, the Social Security Administrations uses the revenues to pay all benefits owed;
4) If payment of benefits results in leftover revenues, the Social Security Administration transfers the surplus to the General Fund and the Treasury Department issues a non-marketable treasury security to the Social Security Administration in the amount of the surplus;
5) If payment of benefits cannot be made due to a shortfalls in revenues, the Treasury Department effectively buys back a non-marketable security in sufficient amounts to cover the shortage and transfers that money to the Social Security Administration for payment.
6) The Treasury Department "buys back" the non-marketable securities from monies in the General Fund. If no money is in the General Fund, then the government deficit spends for that month.
Do you even understand that the non-marketable treasury securities have interest rates up to 13%?
Do you even understand that if the government has to buy back a non-marketable security through deficit spending that the T-Bills put up for auction by the Treasury Department will have an interest rate far less than 13%?
It's not rocket science.
$1 Million at 13% interest versus $1 Million at 2.15% interest. Which costs the US tax-payer more?
It's a no-brainer.
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