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To: kabar
"It is more than an artificial distinction. The full faith and credit of the USG is behind the T-bills..."

I wasn't implying a default. The point was that the money is being held in a trust fund, not paid to general revenue. But that is an artificial distinction because the money has just been loaned out and the loan must be paid back with general revenue. Yes there's a fund, but it's a bookkeeping entry. Excess SS collections have all been used to fund the government, and future draws on those funds have to be paid out of general revenue, fund or no fund.

113 posted on 01/08/2015 10:57:16 AM PST by mlo
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To: mlo
Yes, these are interest bearing loans to the USG in the form of T-bills. We borrow about 40% of the money spent by the federal government. SS is just a part of it. We owe money to the tune of $18 trillion. SS is about $2.4 trillion. All interest and redemptions must come out of the General Fund.

An even larger problem is that two thirds of the expenditures of the federal budget come from entitlement programs and debt servicing costs. 40% of Medicare expenses already come from the General Fund by law. These costs are increasing as the population ages. These costs are far more than debt servicing costs. The welfare state chickens are coming home to roost.

120 posted on 01/08/2015 11:21:06 AM PST by kabar
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