https://www.huffingtonpost.com/robert-p-stoker/social-security-does-not-_b_2577963.html
The Congressional Budget Office explains that our nation has two types of debts; those owed to the public and those the government owes itself. Debt to the public is owed to investors who have purchased Treasury securities. Debts the government owes itself are IOUs held by various government trust funds that have had surplus revenues in the past. Of the estimated $16.3 trillion debt the federal government had accumulated by the end of 2012, $11.5 trillion was held by the public and $4.8 trillion was held by various government trusts. The largest trust, the OASDI Trust Fund, had estimated “assets” of $2.7 trillion.
Of course, the idea of a trust fund “asset” is controversial. After all, this is money the government owes itself. I think of it this way. Trust funds are not assets to the federal government because the assets in any given fund are exactly offset by liabilities owed by the Treasury Department; their net value to the federal government is zero. However, the OASDI Trust Fund (for example) is an asset for the Social Security Administration. That is, it represents a legitimate claim on the treasury backed by the full faith and credit of the U.S. government.
When the Social Security program has a cash deficit (as it does currently), the Social Security Trustees request repayment for some of the Treasury securities (the IOUs) they purchased in the past. As the fact checkers have correctly observed, the Treasury Department must borrow money to finance these payments. However, the new borrowing does not increase total debt because this transaction is more akin to refinancing existing debt than accumulating new debt.
Suppose you owe a $5,000 credit card bill and you take a home equity loan to pay off the credit card debt. You have not changed your total debt; you have refinanced the debt, transferring it from one financial instrument (and one creditor) to another. Much the same can be said about repaying the OASDI Trust Fund. The fund’s assets are composed of debts already accounted for as part of the nation’s total debt. When the Treasury Department borrows money to pay current Social Security benefits, the debt owed to the Social Security Administration is repaid, refinanced, and transferred to whoever purchases Treasury securities.
Of course, the cost of refinancing the debt is a key concern. However, the only scenario in which repaying the OASDI Trust Fund can increase the nation’s debt is if interest rates are higher now than they were when the original debt was incurred. Interest rates are presently quite low (the rate on 10-year Treasury Bonds is around 2 percent). Given current market conditions, the more plausible argument is that refinancing OASDI Trust Fund debt has reduced the nation’s debt slightly by reducing interest costs.
Although current and future cash deficits in the Social Security program do contribute to the annual federal budget deficit, they do not contribute to the nation’s debt. The new deficit spending is offset by reductions in old debts. This will remain true so long as the OASDI Trust Fund has “assets” that are counted as part of the nation’s accumulated debt and interest rates on Treasury securities remain low.
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According to this, Social Security ALSO does not contribute to the budget deficit. That is the law. http://cepr.net/blogs/cepr-blog/factcheck-gets-it-wrong-on-social-security-and-the-deficit
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What HAS happened - and what's going on here - at least according to this guy - is that our money was STOLEN from the SocSecurity surplus - and now Republicans don't want to remove the cap or raise taxes or do anything to PAY. IT BACK. They just want to raise the retirement age and cut benefits:
https://dissidentvoice.org/2010/07/was-the-social-security-money-%E2%80%9Cborrowed%E2%80%9D-or-%E2%80%9Cstolen%E2%80%9D/
. . .Over the past 25 years, five presidents, and the members of Congress, have participated in the great Social Security scam. All Social Security contributions made by working Americans, except the amount which was needed to pay current retirement benefits, has been funneled into the general fund and used for non-Social Security purposes. Some like to say that the government just “borrowed” the money during the time period when it was not needed to pay benefits.
But borrowing implies repayment, and no provisions for repayment have been made. The government did not enact future tax increases that would automatically kick in when the Social Security money was needed. Neither did they enact legislation that would end other spending programs once the Social Security money was needed so the money could be transferred to the trust fund. The government spent the Social Security money, pure and simple, without making any provisions for future repayments. The IOUs in the trust fund are not marketable, and they could not be sold to anyone even for a penny on the dollar. The Social Security trustees confirmed the worthlessness of the IOUs in the 2009 Social Security Trustees Report with the following words:
Neither the redemption of trust fund bonds, nor interest paid on those bonds, provides any new net income to the Treasury, which must finance redemptions and interest payments through some combination of increased taxation, reductions in other government spending, or additional borrowing from the public.
In order for Social Security to pay full benefits after 2016, it will be necessary for the government to begin repaying the money it has spent on other things. This will mean increased taxes and/or additional borrowing. Neither of these is politically popular, and there is no assurance that future politicians will be willing to raise taxes to pay for the irresponsible behavior of past politicians. If the money is not repaid in full, with interest, it will have been stolen by the government from working Americans who paid into the fund.
Since Social Security would be fully funded until at least 2037 if the government had not used the money for other things, the only reason that politicians are advocating cuts in Social Security benefits is the fact that the government does not have the money with which to pay its debt to Social Security. Given the fact that Section 13301 of the Budget Enforcement Act of 1990 made it a violation of federal law to use Social Security revenue for non-Social Security purposes, it is hard to justify using the word “borrow” to refer to any of the Social Security money spent after 1990, even if it is eventually paid back.
I've heard people say that this is not correct -- that money was not taken from Soc Security trust and used for other things and not paid back. But if that's so, why did Al Gore want a LOCKBOX put on the money? I suspect it's because politicians couldn't keep their hands off of it. I think perhaps they STOLE some of it and now don't want to pay it back.
= new reply since forum marked as read
reveres their surname and will stand up for it.
