Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : The Trump Presidency -- Ignore unavailable to you. Want to Upgrade?

To: neolib who wrote (69513)	5/2/2018 6:47:15 PM
From: TimF	Read Replies (1) \| Respond to of 355750

SS Fund invests elsewhere getting a certain return, and the General Fund borrows elsewhere paying a certain rate. If that happened, and the rates didn't change for any of it, not much difference. Yes by borrowing from its their own fund the Feds pay less interest outside of that fund. But by spending less or by raising more income tax revenue they would also pay less. The SS tax is just a tax. If they didn't have it and we just paid higher income tax rates to cover the same SS payments it wouldn't be that SS was owed to anyone and it isn't owed now. You look at the whole and the feds aren't any better off by moving money between the funds. You want to focus on the balance between the funds and you can see an asset and a liability, but they cancel each other out exactly anyway and always will. If the legal requirement (which Congress could change just as they could change any other law, not that I'm asking them to do so here) that SS cut payments when the trust fund runs out if it can't meet them with SS taxes was repealed, then the trust fund would mean little. Congress could arbitrarily set it to zero without default, and without changing it overall income, overall spending, or SS spending, and it could arbitrarily set it to 100 times as high. There are reasons to have different accounts, but in the end its the overall balance that really matters. There is no real store of value in the trust fund, the feds have to pay out future SS spending from taxes with a trust fund or without it. 100 % of that spending comes from taxes or from external borrowing outside the government. Its all just taxes and spending.