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To: ksen
SS is a pay as you go system. Currently, it is paying out more in benefits than it is taking in in revenue. The shortfall is being made up by redeeming the non-market, interest bearing T-bills in the SS Trust Fund, which contains $2.6 trillion in what amounts to IOUs. The SSTF is included in the $16 trillion national debt and held under "Intra-governmental Holdings." In reality, the SSTF just represents the good faith and credit of the USG to honor the T-bills. Once the T-bills run out, the SSA can only pay out in benefits what it receives in revenue, which will reduce benefits across the board.

When SS was running a "surplus," more revenue than the amount of benefits paid, the "surplus" was deposited into the General Fund for use elsewhere and Treasury issued non-market T-bills in the amount of the "surplus" and deposited them into the SSTF.

51 posted on 11/15/2012 12:27:23 PM PST by kabar
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To: kabar

I dug deeper and you are right about SS revenues not keeping up with SS expenditures.


52 posted on 11/15/2012 1:14:15 PM PST by ksen
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