01-07-2017, 06:25 PM
(01-06-2017, 09:27 PM)Warren Dew Wrote:(01-04-2017, 04:45 AM)Eric the Green Wrote:(01-04-2017, 01:20 AM)Warren Dew Wrote:(01-03-2017, 04:36 PM)Eric the Green Wrote: Social Security and Medicare are not problems, and are not the cause of the debt. They are paid-for programs. Relatively speaking, Social Security is better paid for than Medicare, but basically it's the same deal.
False. Social Security has unfunded liabilities of $32 trillion, not counting Medicare. That dwarfs the nominal debt of $17 trillion or so.
I don't think so, from all I have heard. Tax payments have been diverted from social security for decades.
I'm afraid you've heard from people who don't understand how the Social Security trust fund works, and probably don't understand finance at all.
The Social Security trust fund is currently at about $2.8 trillion, thanks to Reagan era changes and all the money boomers have pumped into the system. That money is invested in special government bonds that have slightly more favorable terms than the bonds that you and I can buy. Some conspiracy theorists refer to purchase of the bonds as "diversion" of Social Security funds, but that's only true if you think buying GM bonds in your IRA constitutes "diversion" of your money to GM. You get the money back when you sell the bonds or when they mature.
The problem is that us boomers are now retiring. We were sufficiently more numerous than the GIs and Siilents that we paid for to stack up some excess in the trust fund. Unfortunately, the X and Millenial generations are not sufficiently more numerous than us even to keep up with our payments. As a result, the trust fund is likely to be exhausted some time in the next couple of decades. It would need another $32 trillion to avoid eventual exhaustion.
What I heard is that the payments to Social Security were diverted to the general fund.