The SSA just goes into the General Fund--if that is what the government calls it. An accounting entry is made for the surplus and some type of bonds are added to the SSA account. Its an electronic entry somewhere. Everything is spent if it is needed.
Agreed with one minor change...delete: "if it is needed." at the end of the last sentence. But that means there's no real traceability of funding. It all goes into the GF and gets disbursed. I'm not suggesting that it should be traceable, but where the money goes amounts to how we prefer to view it.
I think we both realize that decades ago the government changed it's accounting practices with the sole purpose of hiding the deficit. The current definition of balanced budget is what's left after revenue collected - funds spent. If it's a positive number, than we have a balanced budget. That is the definition. We may not like it, but until the government adopts another accounting practice, that's the definition.
I think the Postal Service law requires it to operate at break-even. The Treasury subsidizes it when it runs a deficit and, I assume, swipes its surplus when it is profitable. That sounds fair.
That's absolutely accurate. However, the Postal Service doesn't have the authority to raise postal rates. That's reserved for our fine members of Congress and the President. While there is a specific law for the Postal Service, in practical application its operation isn't all that different. There was something similar for the DOT, they were supposed to run their budget off of revenues collected related to transportation. Federal gas tax, airline fees etc., they weren't supposed to tap into other government revenue streams but I haven't followed their budget to be able to tell what happened.
Re: Treasury subsidizes.... Another case of how we like to perceive things. They sell treasuries, the people>>>>foreign governments that purchase those treasuries are the ones that are subsidizing. The Treasury is just a money laundering organization.
I can only assume that the SSA surplus was used to cancel some electronic bonds or notes somewhere.
I think the reality is that the Treasury sells treasuries. If there is a "surplus", they sell less treasuries then the amount of treasuries that are paid out, thus retiring some debt. I use the word "reality" somewhat loosely when talking about Federal budgets.
It is true, Mr. Clinton had 2 years of surpluses. If you exclude the SSA surplus, it was about $86 billion--of little consequence to the government but a good start. Some confuse deficits and surpluses with national debt. During these two years of surplus, the national debt grew at a slower pace. However, it still grew.
Shhh...that's why we point to public debt and not national debt. <s>
There's also another game that I don't fully "appreciate". Interest on the debt and how it appears in the Federal Budget. I think they only show the interest on the public debt, but not the interest on the intragovernmental debt. It shows up in the national debt numbers, I think, but seems disappear in the Federal budget when they talk about interest on the debt. To put it simply, there seems to be interest on the debt that is missing and I can't find it. [See your last par.]...I still don't know where it is, but it's somewhere lurking and it's going to be big when the interest rates return to historical averages.
You are a fairly young fellow so you may not remember this. Back in the 1970s, there were congressional hearings about the stewardship of U. S. Trust funds, including SSA. The focus of the hearings was the "accounting" interest on the "accounting entry" bonds allocated to the trust funds. The going rate for bonds was about 7 percent--I seem to remember.
That was the point where I began to realize that there were funny games being played with the budget and I didn't understand what they were.
Did you see that the Japanese are interested in dumping Treasuries as soon as the US dollar can take it?
jttmab |
