SS DOES NOT ADD ONE NICKEL TO THE DEFICIT. Why is it on the table

[grahamhgreen]

in deficit talks?

Anybody got a real answer?

[ProSense]

1. "Anybody got a real answer?" Yes,

it isn't: http://www.democraticunderground.com/10022099669

[grahamhgreen]

3. Obama, "But David, as you know, one of the proposals we made was something called Chain CPI

which sounds real technical but basically makes an adjustment in terms of how inflation is calculated on Social Security. Highly unpopular among Democrats. Not something supported by AARP. But in pursuit of strengthening Social Security for the long-term I'm willing to make those decisions."

On the table. Sorry, Pro, I hope you're right, but you're not.

Why "Chained CPI"? because the real answer - raising the cap - is easy to understand, and chained CPI is obfuscatory BS. The same kind of BS that got us Obamacare instead of Medicare for All.

[JaneyVee]

2. Because the sooner the GOP can privatize it is the sooner Wall St. can loot it.

[ManiacJoe]

4. Since the SS funds are used to buy bonds,

which dumps the money into the General Fund, SS helps hide the deficit. If fewer SS funds are used to pay the benefits, the better it is a hiding the deficit.

[Old Codger]

5. Probably because

Both parties have a death wish....If there is anything that resembles a cut to social security tied to any of the deals they come up with either on the so called fiscal cliff or later on the debt ceiling deal they will have a hard time getting voters to the polls in 14....useless to vote for either of them if they just screw over the lowest,poorest, least able to fight of the populace.

[Igel]

6. Today it adds to the deficit.

If the FICA tax reduction expires, then it won't.

People keep saying that it doesn't add a cent to the deficit, but it does because the tax reduction is "paid for" out of general revenues. And since most of general revenues is actually from bond sales--this year no money went into the trust fund, instead money flowed out of the trust fund to cover SSA outlays--that means deficit.


More importantly, it'll affect cash flow when we draw down the "trust fund", and would affect either tax rates, discretionary spending, or the deficit once the trust fund's gone.

When I say "cash flow" I mean how much money is required to be converted into debt held by the public instead of intragovernmental debt. Right now there's $2.7 trillion owed by the government to the government. When that is being drawn down, redeeming the intragovernmental debt won't add a penny to the national debt but will most certainly add to the debt that the public will be expected to buy and carry. The thing is, it won't be just the budget deficit that's converted to publicly held debt, but one or two hundred billion in trust fund debt.

The interest to that public debt would be real interest and paid out --right now it's a bookkeeping entry.

[Yo_Mama]

7. It does - to the cash flow deficit

Frankly, the cash flow deficit is the only thing that matters, because it is what forces us to borrow, which is what is producing this, which is not sustainable and is why we are in such trouble now:
http://research.stlouisfed.org/fred2/graph/?s[1][id]=FYGFDPUN


We are borrowing more than a trillion dollars a year, which is increasing our public debt far faster than our GDP is increasing, and sometime in President Obama's next term, the shit is gonna hit the fan.

I am not in favor of cutting SS, but not cutting SS will require raising taxes. This year SS was underfunded for revenue by about 140 billion, which caused us to borrow 140 billion extra.

Restoring the 2% payroll tax cut will remove most of that, and after that the logical thing to do would be to add a 1% income tax for all those exceeding the SS cap each year, said money to be diverted to SS. But even that will only keep it from adding to the deficit for another 10 to 15 years.

This can't continue: