2009-09-27

There is no Social Security surplus

In the article, Social Security strained by early retirements, there's a repetition of an old canard, the SS trust fund.
The deficits - $10 billion in 2010 and $9 billion in 2011 - won't affect payments to retirees because Social Security has accumulated surpluses from previous years totaling $2.5 trillion. But they will add to the overall federal deficit.
The "surplus" came from the Federal government borrowing money from Social Security. It is the same as if you took money out of your personal retirement account and put an IOU in its place. The deficits won't affect payments to retirees because no politician will vote to cut Social Security. The cuts will have to come from other parts of the budget...if there was a sane budget. Instead, the government will borrow more.

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