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

To: neolib who wrote (69548)	5/3/2018 10:39:28 AM
From: TimF	Read Replies (3) \| Respond to of 353904

No it is a new question. Its a question you think more important, its a question you want to talk about but its irrelevant to the point I made that you challenged. You continue to leave out the salient point that the Gov must borrow for its other spending. That's an important point but not a highly relevant one in this context. The government takes in a lot, and in spends even more. That creates a deficit and it borrows to cover the deficit. SS taxes are like other taxes in that they increase government income and reduce the deficit. SS spending is like other spending in that it increases the total the government spends and increases the deficit. From the perspective of the government as a whole the trust fund neither increases nor reduces the deficit. Remove the fund, and just throw all past present and future SS tax income in to the treasury the same way that personal income tax is, and you wouldn't change the debt or deficit at all* You want to tell the Chinese their Treasury holdings don't mean anything, because the US Gov must collect Taxes to redeem them? They mean something to the Chinese because the US government must collect taxes to redeem them. They are a net asset to the Chinese because someone else is paying for them. Why is the SS Trust Fund any different than any other holder of US Debt? Because it is the US government. From the perspective of the SS program its not that different (there are certain technical differences but they aren't very important). From the perspective of the whole US government its very different because the asset is canceled by an exactly equal liability. * with the exception that current law calls for cutting SS payments when the value in the intragovernmental trust fund runs out, but if that requirement didn't exist than canceling the trust fund and treating SS just as any other program would leave the debt, and deficit the same.