OT: How to Save Social Security

Stewart Schooley · 2005-02-19T02:48:13+00:00

I'm starting an OT discussion because I want to follow up on some things that were mentioned here.To understand SS problems you have to understand the national debt. It is listed as 7 trillion dollars, but that is not the whole truth. Only 60% of it is "debt owed to the public". This is money owed to buyers of regular government bonds [individuals, retirement plans, corporations, foreign nations] and this debt must be paid or we are a bankkrupt country.40% is "intra governmental holdings" and it is comprised of money 'borrowed' from SS, the railroad retirement fund, government workers pension fund and the military pension fund. Each year Congress 'borrows' the surplus from these funds and gives them special government bonds that were created for this purpose. The debt owed to SS alone is now just about 1.5 trillion dollars. These bonds pay an average rate of 2.2% and they are not available to the public. Every year Congress has to pay interest on the bonds, but no money is exchanged. Congress authorizes more bonds in the amount of the interest due, the money stays in the treasury and Congress spends it.There is no law that says Congress must pay their debt to SS or any of the other pension funds. Congress created this situation and Congress can simply wipe the books clean if they wish. You can only depend on the honesty and personal integrity of members of Congress to pay back the money they owe to SS....................Here's what I think should be done - Congress should issue more regular government bonds to fund the transition to privatization for younger workers. The money generated will automatically be deducted from the debt owed to SS and the "intra governmenta holdings" will now be reduced by that amount.Let's say one trillion dollars has to be raised. Our total national debt will remain the same because one trillion dollars will be subtracted from "intra governmental holdings" and added to the "debt owed to the public" which means it will then be...

Feb 19, 2005 141 Replies

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Larry Blanchard 21 years ago

Yep. I was surprised when I heard it too. But I did some research and that's the way it goes. Again, if we'd had no children she couldn't collect from mine. If I divorced my current wife (Ouch! Put down that rolling pin!) she'd be ineligible to collect based on my income.

Since she only worked long enough to get the bare minimum, she has an incentive to keep me happy :-).

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