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To: Biggirl

it would be solvent... if the democrats hadn’t looted the fund and pushed it into the general fund.

how about holding accountable those that did it?


49 posted on 04/01/2015 9:16:04 AM PDT by sten (fighting tyranny never goes out of style)
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To: sten
it would be solvent... if the democrats hadn’t looted the fund and pushed it into the general fund.

No, it wouldn't. Please stop repeating this meme, because it's not true.

Every dollar that was borrowed from the Social Security Trust Fund is accounted for, in the form of the equivalent of long-term Treasury Bonds.

In the past couple of years, the benefits paid have exceeded the payroll taxes collected. So, those bonds are starting to be redeemed. Bond redemption is paid out of the general fund, so current-year income tax revenues are being used to do so. Or if you prefer, since we have a deficit, the Social Security Trust Fund bonds are being redeemed by selling US Treasury Bonds on the open market.

According to current projections, the Trust Fund bonds are expected to be exhausted in 2033. After that, they expect there to be only enough taxes to pay 77% of benefits. By law, the benefits must be reduced to match the revenue: Social Security can't borrow money.

The reasons are complex, but it all boils down to demographics: the ratio of taxpayers to beneficiaries are getting lower and lower. Unless people start dying sooner, or couples start having 2.5+ kids apiece (and those kids go on to be productive taxpayers), the problem is just going to get worse.

The real problem was when Congress increased benefits so much back in the 70's that Social Security became actuarially unsound, which is a fancy way of saying they have been paying more than can be sustained ever since.

The government didn't "steal" Social Security. They gave it to your parents and grandparents, to buy their votes.

The payroll tax has been raised repeatedly, but it never solves the real problem: you can't just transfer money from one generation to the previous one. Demographics will always come back to bite you. Every western country has learned that, but few have been willing to switch to an asset-based system.

69 posted on 04/01/2015 5:44:18 PM PDT by justlurking (tagline removed, as demanded by Admin Moderator)
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