Liberal Forum

razoo » 23 Mar 2023, 2:24 pm » wrote: ↑

23 Mar 2023, 2:24 pm

Do some homework. As it is you are making **** up ................. 

The trust fund is just a bunch of government IOUs and therefore worthless. Is this true? The trust fund does just contain IOUs, but they’re not worthless. If they are, someone should tell that to the very smart and very rich people, and the central banks of Japan, China, and many other countries that hold a large share of their assets in U.S. government bonds.

When the trust fund was created in 1935, the law stipulated that any excess revenues coming into the Social Security system must be used to purchase federal government bonds. (At the time, the stock market had just lost over 75% of its value and was understood to be unsafe.) Federal bonds are absolutely safe; the government of the United States has never defaulted on any bond obligation. 

What will happen when the assets held in the trust fund are needed to help pay for benefits? The trust will start selling the bonds. Currently it has to sell them back to the Treasury, although the law could easily be changed to allow sales to the same people, institutions, and governments who  buy U.S. bonds. But let’s assume the government has to buy them back. 

If the government were running a surplus, as it did for the last four years of the Clinton administration, it would use that surplus to pay for them. If, on the other hand, the government were running a balanced budget but not a surplus, it would need to issue new Treasury bonds to pay for the bonds it would buy from the trust fund.

In finance, this is called “rolling over” debt, and every major corporation in the world does it every day. At no point would the government need to roll over more than $300 billion in any given year to pay for the trust fund bonds. We already know the federal government can easily sell $475 billion per year in bonds, because it did that in 2005 and interest rates did not even go up—in fact, they remained relatively low

https://www.dollarsandsense.org/archive ... 11orr.html

However, without reform, the Social Security Trust Funds will soon be depleted and unable to pay full benefits. According to CBO's projections: The Old-Age and Survivors Insurance (OASI) Trust Fund, which provides benefits for retired workers and their families as well as deceased workers, will be depleted in 2033.