Replies

While it's true that the government consolidates and nets out debt owed between the branches of the federal government following rules similar to most legal business entities, there are obviously big differences between the federal government and other legal entities.

The legal claim held by SSA is much stronger and can only be restructured by a vote of congress, not the executive as in most business entities.

Because the claim is stronger than a normal subsidiary, I think the SSA Trust Funds should be treated as a separate entity. And that the treasury should report the debt. And SSA should report the unfunded liabilities as well as the trust fund growth projections.

That would put pressure on SSA to do better reporting on the status of their trust fund vs projected liabilities than they do today. And it would put pressure on Congress to bring down the total debt.

Perry is not wrong, it does resemble a ponzi scheme because the trust fund is not large enough to cover the liability that was incurred. And they are using way too much of current SSI taxes just to pay the liabilities incurred yesteryear.

The Treasury debt to SSA is reported as footnotes to the financial statements. And of course SSA's separate entity report shows it in full.

You can see a report on the SSA trust fund here.
SSA Trust Fund Data
SSA Trust Fund
SSA Trust Fund Outlook

The fund is sitting on $2.4 Trillion in Debt owed to it by the U.S. Treasury. SSA currently pays out $585 Billion a year in benefits, so the trust fund is sufficient to cover 4 years, if they stopped the program today. In My opinion it needs to be at least 15 x current benefits, just for those already retired.

I think they should actually split the OASI trust fund into three parts. Survivors Insurance should be it's own fund. And then the SSA fund needs to be split into an endowment for those retired. And an endowment for those still working. When someone retires, they should shift an appropriate amount of funds from the working fund to the retirement fund.

It makes no sense to report the way SSA does now that the trust fund is 400% of current outlays.

The legal claim held by SSA is much stronger and can only be restructured by a vote of congress, not the executive as in most business entities.

So President Obama's threat during the debt-ceiling flap was no more than hot air? He did say that Social Security payments would be threatened if the debt ceiling - the Teasury debt ceiling - wasn't raised.

If what you said was true, then a debt-ceiling freeze would not affect SSI assets until its holdings shrunk to zero.