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Politics : Mainstream Politics and Economics -- Ignore unavailable to you. Want to Upgrade?

To: Steve Lokness who wrote (13262)	3/21/2012 2:30:04 PM
From: TimF	Respond to of 85487

So because they were in their top spending years and because the government under Reagan was still functioning as a government should, the government increased SS - increased taxes. They increased the taxes to prepare for the baby boomers as you say. Except there wasn't any real preparation. The money was spent. Which doesn't imply that SS will be cut, only that to pay out the money they have to get it elsewhere. Exactly the same as they would have had to do if SS tax never brought in much more than SS spent. If the nominal trust fund has $0. And SS spending is higher than SS taxes by $X. And your going to continue SS spending as projected by the formula. Then other taxes have to bring in $X. If the nominal trust fund has the many billions it has now. And SS spending is higher than SS taxes by $X. And your going to continue SS spending as projected by the formula. Then other taxes have to bring in $X. If the nominal trust fund has $10^100^100^100. And SS spending is higher than SS taxes by $X. And your going to continue SS spending as projected by the formula. Then other taxes have to bring in $X. The amount accounted for in the trust fund makes no difference to the future reality. There is no store of wealth for the government there since the liability of the debt exactly cancels the value of the asset. If the money had been used to pay down the federal debt. Then while there wouldn't be a store of money, the other debt would be reduced, and so our future potential for borrowing would have been increased. Paying down debt is in many ways equivalent to saving. But we didn't do that either. The country kept spending more and going in to more debt.