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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: Mary Cluney who wrote (113083)	5/9/2005 7:55:41 AM
From: kech	Read Replies (1) \| Respond to of 793931

Like anyone else the government borrows money from, the government intends to pay it back. Why is social security different? Yes but who is the government? It is us. Or rather, in this context, it will be the next generation that will be obligated to pay back these IOUs. Additional deficits to pay SS benefits will put a cost on the next generation. The point of the personal accounts is to make a transfer now (through borrowing to make up for their payments going into personal accounts) to the next generation. This gives them a chance to grow an account that the current older generation does not have which will offset the greater tax burden that the next generation will face. Should have done it 10 years ago but doing it now is better than doing nothing.

To: Mary Cluney who wrote (113083)	5/9/2005 9:07:40 AM
From: Lane3	Read Replies (2) \| Respond to of 793931

I understand your philosophy. People should be responsible for their own economic well being. Favoring or disfavoring SS has nothing to do with the mechanics of the trust fund. It may have something to do with his choosing to raise the issue of the mechanics but not with the mechanics themselves. They are what they are. Like anyone else the government borrows money from, the government intends to pay it back. Indeed. Neither he nor I said anything different. In fact, I made that point straight out to you. There is a promise (but not an obligation) to pay back the money and deliver on SS. The money in the SS trust was lent out. In GAAP money that is lent out is counted as money on the balance sheet. It is indeed counted as money on the balance sheet, but it is strictly an internal accounting, a contrivance. Why is social security different? SS is different because in that case the government borrowed money from itself. Let's try a familiar example. Say you manage your cash with envelopes. You have one envelope for food money and another for entertainment. There's a big show in town you want to see so you take money from the food envelope and replace it with an IOU from the entertainment envelope. Your food account is in order. But then what do you do the next day when it's time to buy groceries. There is no money. You can't buy groceries with an IOU from your entertainment envelope and there's no more money in the entertainment envelope available to repay the food envelope. The only way to put things in order would be to work some overtime so you can get extra money to put back in the food envelope. If you thought that you could put an IOU in your food envelope and still buy groceries, you were fooling yourself, thus the hoax. No one is blaming SS for anything, just describing the reality of the scenario. You can't fix a problem that you don't understand and accept. What he's doing is just the opposite of "muddy(ing) the waters." Everything he said is true. He may have some partisan motivations for bringing it up or choosing his language, but what he said is reality. There is no money. There is only a promise to tax and/or borrow to get it.