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To: Jim Noble

They are both welfare and neither one will run out of money. How is SS running out of money? It has no money to run out of. Todays benefits are paid from todays taxes. The trust fund is an accounting fiction. The idea that SS is some sort of pension is a fiction. It simply takes from one person amd gives it to another.

Do you see any political future were the government stops taking money from person and fiving to another? I do not. You may get paid in worthless dollars or you may noy get paid at all but that wont be from running out of money it will be from a change in the vote buying political calculus.


86 posted on 10/19/2016 7:36:08 PM PDT by FreedomNotSafety
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To: FreedomNotSafety
They are both welfare and neither one will run out of money.

Both welfare and Social Security benefits are entitlements. By definition, an entitlement is something provided by law. The law can be changed, and there's nothing you could do other than vote against the people that changed it. There's no contract with Social Security -- the Supreme Court ruled in 1960 that SS benefits could be revoked at anytime, for any reason.

It has no money to run out of.

Yes, it does. But, when it runs out, Social Security isn't "bankrupt". It must reduce benefits to the level that can be funded by incoming payroll taxes. Currently, that's expected to be about a 20% reduction.

Todays benefits are paid from todays taxes.

Some, but not all. Social Security has been paying more benefits than it has collected in payroll taxes for the past 5 years. So, the shortage has been withdrawn from the Trust Fund. This will continue until it is exhausted -- estimated to be about 2034.

The trust fund is an accounting fiction.

The Trust Fund isn't fiction. It's invested in the equivalent of US Treasury Bonds, as required by law.

But, it's important to explain where that withdrawal is coming from: the general fund. Redemption of the Trust Fund is a line item in the federal budget. So, it's paid from individual and corporate income taxes. However, since we are running a deficit, it's being borrowed from investors.

The net effect is that the special obligation bonds in the Trust Fund are slowly being converted to US Treasury Bonds. The balance in the SS Trust Fund (currently about $2.8 trillion) isn't included in the official debt, but once the conversion occurs, it is included.

97 posted on 10/21/2016 7:20:50 AM PDT by justlurking
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