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Politics : Ask Michael Burke

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To: Skeeter Bug who wrote (84970)	11/8/2000 8:42:37 AM
From: gnuman	Read Replies (1) of 132070

Skeeter Bug. Is SS a Ponzi scheme? Since 1970 the maximum income subject to FICA tax has risen from $8K to$80K. The combined tax rate, (employee and employer), has risen from 9.6% to 15.3%. What's interesting is part of the surplus generated by these increasing tax revenues is included in the General Budget. The collections not required for current SS and Health Insurance disbursements are transferred to the General Budget through "Special Issue" securities purchased by the SS fund. (BTW, the Government does not include the "Special Issue" paper held in SS as part of the National Debt. Currently ~$1 Trillion). Part of the surplus in the General Fund is then used to retire maturing securities held in the SS fund, and to pay interest on the existing paper. So we have increasing FICA taxes, increasing Special Issue securities, increasing debt service on those securities; while at the same time increasing the "surpluses" in the General Fund to be used for non entitlement purposes. What kind of scheme is that? How long can it go on? JMHO's

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