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To: oh8eleven
General fund thievery

Another myth. This is the way SS works:

SS is a pay as you go system, i.e.. today's workers pay the benefits for today's retirees. When SS was running a "surplus," i.e., payroll taxes exceeded the benefits paid out, the amount of the "surplus" was deposited into the General Fund and non-market, interest bearing T-bills in the amount of the surplus were issued by Treasury and deposited into the SS Trust Fund. The redemption of those T-bills is guaranteed by the full faith and credit of the USG the same way that the USG guarantees payment to the Chinese who hold over a trillion dollars in US T-bills.

Currently, the SSTF has about $2.4 trillion in these T-bills. The SSTF is included in our $16 national debt under the category of "Intragovernmental Holdings," the same category as other trust funds like HI and federal pension funds. They amount to about $5 trillion of our national debt as distinguished from our publicly held debt.

Since SS has been running a deficit since 2010, it has had to cash in some of its T-bills in the SSTF to make up the shortfall. The General Fund must come up with the money. Unfortunately, 42 cents of every federal dollar spent is borrowed. So we must borrow more money to pay for the redemption of the SS T-bills. So technically, no money was stolen from SS.

37 posted on 12/25/2012 10:52:00 AM PST by kabar
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To: kabar
So technically, no money was stolen from SS.
Oh yeah, I can buy that ... and Santa really does come down the chimney.
54 posted on 12/26/2012 5:40:53 AM PST by oh8eleven (RVN '67-'68)
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