<<The point of the commission is that the Trust Fund is irrelevant>>
Can you name a single non SS trust fund holding Treasury notes that you'd label irrelevant?
It wouldn't make any sense to sit on $1 trillion. It would make sense to invest it in t-bills and earn some interest. Wouldn't it? As the other 5/6 of our debt shows, the government is going to borrow that money from someone.
<<the problem is the pressure put on the general budget to sustain Social Security obligations.>>
That pressure is the same whether it involves honoring federal debt held by SS or the other 5/6 of federal debt held elsewhere.
Remember the SS money is there as long as the US government honors its debts. No tax hikes or benefit cuts are required, just honoring Treasury bills.
<<The underlying problem is the failure to make real investments,>>
How are government bonds not real investments?
<<one that has long been, in effect, a pyramid scheme.>>
Since the first generation to receive SS paid little or nothing into the system, it's always been a pyramid scheme as you put it. It's always been a transfer of wealth from one generation to the one before. And don't forget the system also pays benefits to widows, orphans, and the disabled. It's a social insurance program too.
<<As for your other query, it is my understanding that the big problem is the ever- growing nature of the obligations, not the fictive debt held in the "trust fund", but the actual costs of maintaining the system towards the middle of the century...... >>
That's why SS has been running huge surpluses since the 80's and investing that money. There's only a problem if the government appropriates those bonds, reneges on the full faith and good credit...
You say there's a big problem. I say the funds are being appropriated. We're saying the same thing.
Steve |
