Watch Ronald Reagan Explain that: 'Social Security Has Nothing to do with the Deficit.'

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Watch this Video of Ronald Reagan explains that :'Social Security Has Nothing to do with the Deficit.' http://front.moveon.org/ronald-reagan-social-security-has-nothing-to-do-with-the-deficit/

Sacramento Dave's picture
Sacramento Dave
Joined:
Nov. 27, 2010 10:46 am

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Social Security is separate from the general fund. It is not accounted for in the deficit. SS's role in the deficit is that Congress has made it legal to borrow against the SS Trust Fund which is now creating problems for SS to uphold its payout commitments. And Congress rather than talking about surplus creation to pay back outstanding debts is only talking about "deficit reduction" to slow down the acccural of debt and continual borrowing against the fund. Their solution is to undercut the payments to ourselves in SS to subsidize their inability to manage the general fund in an effective way. Brilliant idea....

ah2
Joined:
Dec. 13, 2010 10:00 pm
Quote ah2:

Social Security is separate from the general fund. It is not accounted for in the deficit. SS's role in the deficit is that Congress has made it legal to borrow against the SS Trust Fund which is now creating problems for SS to uphold its payout commitments. And Congress rather than talking about surplus creation to pay back outstanding debts is only talking about "deficit reduction" to slow down the acccural of debt and continual borrowing against the fund. Their solution is to undercut the payments to ourselves in SS to subsidize their inability to manage the general fund in an effective way. Brilliant idea....

Usually if someone "borrows" from a trust fund, they go to jail. Reagan put the practice on steroids as a way to finance upper income tax cuts.

As usual, the poor will be called upon to pay for it. The Obama solution is being put in place. Their benefits will no longer keep up with the cost of living.

Probably as the demand for cat food goes up for Sunday dinners, cat food will see a price increase. Dump your cat and get a goldfish .It will keep the price of cat food down. Granny will appreciate it.

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 4:01 pm

Wow, these old wives tells might never die. The SS funds are paper funds only, not real bank accounts. All the money that SS collects goes directly into the general fund, not some separate SS fund.

What happens to the taxes that go into the trust funds?

Tax income is deposited on a daily basis and is invested in "special-issue" securities. The cash exchanged for the securities goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.

So as we can see... Since all of SS monies are already in the general fund, POTUS does not need to "borrow" any of it. It is already at his disposal.

Now for the other side of the coin. The SS outgoing payments are made by cashing in the special-issue securities on a daily basis. This action takes money back out of the general fund, but with interest. Therefore, any money that SS takes out of the general fund, by virtue of the fact that the general fund is already running at a deficit, must make the deficit larger.

Now take a deep breath. I am not saying SS is the cause of the deficit; it is clearly not their fault yet.

Paleo-con
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Jul. 31, 2007 4:01 pm

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Our kids are counting on us to reverse austerity.

According to UNICEF, even in the world's richest countires, children remain “the most enduring victims” of the recession. In the last six years, 2.6 million more kids have fallen below the poverty line, and more than half of them live right here in the United States.

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