13 thoughts on “Forbes post, “Yes, Social Security Does Indeed Add To The Federal Deficit”

  1. no need to “re-think” Social Security…simply eliminate the income cap on which SS taxes are paid (now!)…of course, that (or other measures) should have been done a couple of decades ago…

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  2. Your argument was hard to read and follow and frankly made no sense. You just took the information that was written by Teresa Ghilarducci and put another spin on it. Frankly, if I were a woman who bets, my bet would be on Teresa. Who has 25 years as a professor of economics at the University of Notre Dame.

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  3. Gee Jane you didn’t mention the hundreds of millions owed to SS by our government (meaning us). I assume this is because paying it back would mean tax increases for, well, everyone. So, to save SS both eliminating the salary cap and stopping using SS to close budget gaps will be necessary. If you don’t know that you’re either a liar or incredibly stupid, or both. Next time, how about telling the whole story.

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    1. You must have missed this section of the article: “each dollar of Trust Fund bond redeemed, is another dollar which the requires the issuing of more bonds.”

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  4. I read your argument. I am not convinced in the least. SS can not borrow money. So there is no way it can add to the deficit. If nothing is done, then benefits will have to be cut.

    The “duck” government spends more than it earns. It has no savings. It borrows to make up the difference. It refuses to stop borrowing, getting deeper and deeper in debt.

    The “duck” SS spends less than it earns (at least from 1983 to now). It has a nice savings account invested in treasury bonds. When the day comes when it has no savings and needs money, it will tighten its belt and live on what it earns.

    Sorry. Those are polar opposites.

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    1. Right now, Social Security is collecting in FICA taxes just 92% of what it pays out. In 2034, when the last treasury bond is redeemed, it’ll collect 77% of benefits in FICA taxes. No one imagines that Congress will simply let across-the-board 23% benefit cuts take place.

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  5. To me, and I’m no accountant, your omission of the actual reason for the largest deficit increase ever (the 2017 tax cut for the rich), makes your points seem more like smoke. You can argue your points about the program(s) need for reform, but the real issue is that our deficit is on track for an increase of $1.5 Trillion and how many people are going to be hurt by literally robbing from these programs. Unfunded wars and tax cuts for the rich few are the enemy of the People.

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  6. I’m a conservative and wide open to your premise, and I have an MBA from the University of Chicago. But I simply cannot follow your argument as stated here.

    And to the previous commenter: as I understand it, since the 2017 tax cut, fed revenues have actually increased, so we can’t really blame the cut for the deficit increase. So what does explain it? That would be the even larger increase in spending.

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  7. The general fund owes SS 2.4 trillion in money it borrowed, that should never have been borrowed, which would easily cover and “deficit” in out going money if it was given back.

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    1. Please explain exactly HOW redeeming the 2.4T Treasury Bonds that the SS trust holds will help SS? It doesn’t help. In fact, it would make it much worse for the SS trust. Those bonds are paying interest that the SS trust is counting on to pay future benefits. If the money was returned, then what? The SS is just supposed to sit on it and let inflation devalue it?

      The accounting projections for SS already predict the return of principal and interest on the bonds, and they still come up short. So there is no way that redeeming the bonds comes close to solving the problem.

      Please do some basic fact research before parroting lies told to you by some uninformed source.

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  8. Social Security taxes flow into Social Security’s bank account. That money is used to pay current benefits, and the excess beyond benefits paid is invested in US government bonds. Those bonds are specific issue bonds, for Social Security investment only, by decree of Congress. The income from those bonds goes into the Social Security Trust to be used for future payment changes. When the trust funds should become exhausted (more SS recipient payouts than SS payer taxation), benefits may have to be cut so income balances with payouts.

    SS accrued benefits only can be considered “part of the deficit” because the government borrowed the funds from SS monies for its regular operations. The government owes that money to SS the same as if it had borrowed money from any other source.

    The real reason the government wants to cut SS, is because politicians do not want to “raise taxes” on higher income earners to provide benefits to other future recipients. With a growing income disparity in the US, and companies not keeping average wages up to a reasonable level, the only source of additional SS income is to tax higher wage earners, those making above the the current wage tax ceiling. Clearly, particularly for Republicans, this is not something many politicians want to do. Also, because those making the higher incomes may not need SS to retire, they have no desire to contribute more than they might receive back.

    Medicare is essentially the same type of self-supported program, with the same issues…but there is no current income ceiling for Medicare taxation. The wealthier folks want income caps or benefit cuts for that program to save themselves money. Most can afford the best health insurance one can buy, for less than the growing cost of their Medicare taxation.

    If the average wage earner made more money, part of projected shortfalls could be addressed with taxes on their higher incomes. Otherwise, there is no other place to get the money but from high income earners, and the rich do not want to pay.

    That is about as simple as it all gets.

    Medicaid, however, is a government and state supported partnership program.

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