Well - T-bills are “IOUs” but they are money! But social security revenues and related should be a stand-alone deal, and not part of the general budget. I see this same sort of thing in local government, they will raid solvent or “surplus” entities to pay for other areas of government that are short. I’m no accountant but it doesn’t seem like a very smart thing to do.
These IOUs are non-market T-bills. All they represent is an obligation of the USG to pay that amount in benefits when they are redeemed. There is a reason why the SSTF is included in the $9 trillion national debt. The SSTF IOUs are not money.
But social security revenues and related should be a stand-alone deal, and not part of the general budget.
Disagree. We need to end this phony bookkeeping scam. I would prefer partial privatization, but if not, we should make SS a line item on the federal budget, much the same as being done with Medicare B. All the SSTF represents is the good faith of the USG to pay. And SS is not sustainable as currently structured. In 1950 there were 16 workers for every retiree, today there are 3.3, and in 2030 there will be 2. And in 2030, because of the baby boomers, there will be 70 million retirees, twice as many today.
I see this same sort of thing in local government, they will raid solvent or “surplus” entities to pay for other areas of government that are short. I’m no accountant but it doesn’t seem like a very smart thing to do.
The problem with SS is that it can't be solvent without raising taxes and reducing benefits. And SS is on automatic pilot with annual increases being tied to a fixed formula. The stated rationale for taking the SS "surplus" and issuing T-bills in the amount of the "sutrplus" for deposit into the SSTF is that this money must be put to use somewhere and that it is cheaper for the USG to "borrow" the money from SS than it is from the public. And the interest on the SSTF is a paper transaction, i.e., more non-market T-bills are issued to cover the interest. 17 cents of every federal dollar expended is to service the debt. And Medicare will be facing enormous problems beginning in 2012 or 2013.