|
willbeurdaddy -> RE: Social Security in the red for first time ever (8/6/2010 8:34:11 AM)
|
quote:
ORIGINAL: mnottertail
quote:
ORIGINAL: willbeurdaddy
Very misleading article. The "red" is only the difference between tax receipts and benefit payments + expenses. Interest on the trust fund securities more than exceeds that deficit.
Hey, I've always wondered on that, since much of the SocSec is in the intragovernmental transfers and the securities are mostly Ts (I could be wrong about that) aren't we still in effect, 1. paying the interest to ourselves, thru taxation and borrowing, and; 2. since it is becoming increasingly unclear whether we can or cannot pay them back at full value, is it even realistic to talk red and black.
In any case, this points out the difference in deficit and debt. A concept that has unclear meaning to many, and are often bandied about interchangeably, by folks who know better, with myself being one of the maximally culpable.
All, not just most, of the trust fund is invested in special issue Treasuries, so yes, so interest payments are a transfer from the left pocket to the right. (Much like you borrowing from your 401(k) account).
As far as paying it back, US Treasuries are still considered the safest investment in the world. If we default on our debts we'll be in a lot worse trouble then SS actually having negative cash flow. That is why it is so critical to rein in spending and grow the economy.
|
|
|
|
