[sickoflibs]

For the past two years of this tax cut much of this was the SS admin was redeeming the ‘trust fund’ IOUs to the treasury at a much faster rate than before/without it.
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No, that is not the way things work. SS is a pay as you go program, i.e., today's workers pay for today's retirees. SS has been running in the red, i.e., benefits paid out exceed revenue, since 2010. In order to make up the shortfall, non-market, interest bearing T-bills are redeemed by the General Fund so benefits can be paid.

Except the SS trust fund T-bills are not really T-bills, they are just IOUs the SS dept got from the treasury dept when they transferred FICA taxes to general revenue to spend back when FICA collected more than benefits.

In contrast T-bills are those bills that the Treasury sells to get the money, they can be bought and sold.

Actually one congressman on Cavuto today played up the joke like he was serious. He said that SS and medicare benefits can be paid without increasing the debt limit. They can be paid out of the ‘trust fund’. I loved it, I suggested that line in 2011.

let Dems argue against that one.

[kabar]

Except the SS trust fund T-bills are not really T-bills, they are just IOUs the SS dept got from the treasury dept when they transferred FICA taxes to general revenue to spend back when FICA collected more than benefits.

They are real T-bills that earn interest and are backed by the good faith and credit of the USG, the same way that the T-bills are backed that are held by the Chinese. All T-bills are really IOUs.

Far from being "worthless IOUs," the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government.

In contrast T-bills are those bills that the Treasury sells to get the money, they can be bought and sold.

The non-market, interest bearing T-bills held by the SSTF must be redeemed by the USG, which is the only difference. The USG is obligated to redeem them in much the same way as any other T-bill or savings bond.

Actually one congressman on Cavuto today played up the joke like he was serious. He said that SS and medicare benefits can be paid without increasing the debt limit. They can be paid out of the ‘trust fund’. I loved it, I suggested that line in 2011.

They can be paid out of the trust fund, but the GF must come up with the money to redeem them. Since we borrow 42 cents of every federal dollar spent, we will have to borrow the money to pay the benefits. And we can't exceed the debt limit to do that.