Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: Wally_Kalbacken

Please tell me you are kidding...

Look at the SSA FAQ page...http://www.ssa.gov/OACT/ProgData/fundFAQ.html#n5

As stated in the answer to “What happens to the taxes that go into the trust funds?”, most of the money flowing into the trust funds is invested in U. S. Government securities. Because the government spends this borrowed cash, some people see the current increase in the trust fund assets as an accumulation of securities that the government will be unable to make good on in the future. Without legislation to restore long-range solvency of the trust funds, redemption of long-term securities prior to maturity would be necessary.

Far from being “worthless IOUs,” the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government.

Many options are being considered to restore long-range trust fund solvency. These options are being considered now, over 30 years in advance of the year the funds are likely to be exhausted. It is thus likely that legislation will be enacted to restore long-term solvency, making it unlikely that the trust funds’ securities will need to be redeemed on a large scale prior to maturity.


61 posted on 01/17/2008 8:01:38 PM PST by BamaBlue
[ Post Reply | Private Reply | To 54 | View Replies ]


To: BamaBlue
They could hold it as pennies or in gold bars I suppose, but unless you want to argue that US Government securities are worthless (which, if it were true would unhinge the world economy) the value is still in the trust fund. To say it is spent (as in consumed for armaments or concrete for bridges and highways) is simply not true. At the end of the accounting year the value of the securities and any cash balances are added to form the current year surplus (or in the future, ceteris paribus, a deficit).
69 posted on 01/17/2008 8:46:57 PM PST by Wally_Kalbacken (Seldom right but never in doubt)
[ Post Reply | Private Reply | To 61 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson