Berkeley CSUA MOTD:Entry 35915
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2025/05/24 [General] UID:1000 Activity:popular
5/24    

2005/1/26 [Reference/Tax, Politics/Domestic/SocialSecurity] UID:35915 Activity:moderate
1/26    Question:
        Currently we have a surplus of social security funds every year
        (i.e., more taken in from social security taxes than disbursed).
        I do know that the federal government spends the surplus, and leaves
        an IOU to the social security trust fund.
        The trust fund will start collecting on those IOUs around 2019, when
        social security taxes will not be enough to cover disbursements.
        Does the IOU make any money, and if so, how much?
        \_ The surplus is used to buy government bonds, which pay (not great)
           interest.  When the surplus needs to be spent, the bonds will be
           redeemed (government pays money into the SS system from general
           revenues) or the bonds will be sold on the market.  These have
           basically the same net effect.
           \_ What this is getting at is that at some point the government
              is going to borrow to cover the system. This is a given. I
              don't know why everyone is up-in-arms over the costs of PRAs
              when SS is going to go bankrupt at some point without reform.
              If you object to privatization then what is the solution when
              SS eventually goes bankrupt? Wouldn't it be better to try
              to fix it now? It will cost more now, but save more in the
              long run.
              \_ "at some point" is when?
              \_ Basically, all of Krugman's articles argue that private
                 accounts will be significantly worse than a long-term SS fix.
              \_ I think we SHOULD pay now to fix the system, but that means
                 either raising taxes or not letting people excuse themselves
                 from payroll taxes just because they have a PRA.
                 What's being proposed is just running up the debt now
                 in stead of later.  I think it's an especially bad idea to
                 run up a big debt when we already are running a huge deficit.
              \_ What makes you think we will borrow? Why not just raise taxes?
                 The current surplus is being handed to the wealthy in
                 the form of a tax cut. Eventually, they will have to pay
                 it back. They are doing everything they can to blow smoke
                 in your face and avoid admitting to the responsibility though.
                 up your ass and avoid admitting to the responsibility though.
        \_ Let's have a hard number.  3% annually?
2025/05/24 [General] UID:1000 Activity:popular
5/24    

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