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

To: Wharf Rat who wrote (69912)	5/4/2018 4:53:50 PM
From: TimF	Read Replies (1) \| Respond to of 363101

It won't change the amount of borrowing, but if you think you can find American non-governmental lenders to replace the SSTF, good luck with that. Its not about replacement. The government brings in $X from taxes and spends $Y, borrowing the difference $Z. If the trust fund didn't exist it would also spend bring in $X, and spend $Y, borrowing the difference $Z. The government doesn't borrow from the trust fund. It can't, or at least doing so would be meaningless. I'm not making the point again that the SS trust fund is part of the government (so the government can't borrow from it, even if one part of the government can). That's not the point here. (Although it is true.) The point is that the treasury or general fund or "the rest of the government" or whatever you want to call it, doesn't borrow from the trust fund. There is no money there for it to borrow from. There are government bonds. But for the SS trust fund to use those bonds to give the treasury money for current expenses it would have to first get the money from the treasury. If it wanted to borrow $10bil from the trust fund to cover $10bil in current spending, it would have to fist send $10bil to the trust fund so that the trust fund it has the $10bil to send back. The net cash flow for the teasury would be zero, they wouldn't have any additional money to use for current programs or to pay interest or whatever. What the treasury borrows from is not the supposed store of value represented by those bonds but rather from current SS taxes. If there was no trust fund, those taxes would just feed directly to the treasury. Or at least it used to borrow from SS taxes. Now there isn't any extra SS tax revenue after spending so the treasury/general fund can't borrow from SS tax revenue any more. Since it isn't borrowing from that source there is of course nothing to replace.