Two issues. First off, the Government makes up their own rules. Secondly, SS is not like a 401(k) or IRA. The money you contributed does not have your name on it. SS is a pay as you go program. When you work, you pay for those getting SS benefits. When you retire, your SS benefits are paid by those working.
The Government cannot invest the excess SS taxes that were collected in the same way that you or a private company can. By law, the money can only be "invested" in Treasury Bills. The actual excess money that was collected was indeed spent since we have always, with just a few exceptions, had deficit budgets. SS has earned a fair amount of interest on those Treasury Bills (on paper). What most people fail to realize is the cashing in of those "investments" when SS taxes can't cover benefits that are due (this is where we are now), requires taking on additional real debt on the global markets to get real money to pay those benefits since we continue to run deficit budgets. Before that point, it is a zero sum game as one Government Department wrote an IOU to another Government Department.
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Originally Posted by Guest
Call it whatever is correct in the parlance of government accounting or practice. However, my reference is to those funds contributed by individuals that will be expecting to get that (their) money back at an appropriate time.
As opposed to the genral fund with is not designated toward individual tax payers and thus available to squander.
No different than contributing to a retirement fund in a corporation. That money is not to be used by the corporation and replaced with an IOU.
I am aware of companies that do siphon off what they have decided are excess funds and used for other than the individuals retirement. Excess is/was the amount of $$ over and above the amount needed to satisfy all retirement payouts. Much different than an IOU as the basic contribution plus earnings is still intact. Making use of the excess....a legal accounting tactic.
I did not say right...just legal tactic.
The government could just as well have had an excess if they monies taken from SS were invested and not squandered......replaced with an IOU!!!
Borrowing money to fund IOU's. How long would that be tolerated in corporate America? Banking America?
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