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Politics : Just the Facts, Ma'am: A Compendium of Liberal Fiction -- Ignore unavailable to you. Want to Upgrade?

To: trouthead who wrote (26856)	1/17/2005 4:56:21 PM
From: Oeconomicus	Read Replies (2) \| Respond to of 90947

Current revenue is not set aside to pay future benefits - it is used to pay current benefits and for other programs. Well, it's set aside in that the government issues IOUs to the trust fund, but government accounting pretends that portion of the current deficit doesn't exist - that they aren't really incurring that debt as they spend the SS surplus. They also do not account for future benefit obligations at all. Unlike a private pension fund that must recognize the present value of future benefit obligations as a liability today, the government does not do so. "Are you saying that privatization will not raise the over all debt?" Yes, unless there is an interest differential between the IOUs they issue the trust fund and publicly held treasury securities (a lower rate on the former), but I don't think that's the case.