Comments about ‘Letter: Borrowed Social Security surplus money should be paid back with interest’

Hello! That's exactly what is happening. When the government borrows money from SS, it pays it back with interest. It's amazing what people don't understand.

Excellent letter Harold. Thanks for stating it so plain and simply.

All of the Social Security surplus is invested in U.S. bonds, which pay interest.

There was an article in the New York Times recently concerning, among other things, the way that potential employers, and the government, treat older people - a prejudice against the aging. There were over 8,000 responses the last time I looked, almost all decrying the "age-ism" of both HR personnel and the government that seems determined to deny the rights of the old to their social security "nest egg" of often only &700 to %800 a month in a time of serious, and worsening, inflation.

The money, as the writer says, that is clearly demarcated for social security is routinely misappropriated. Government then reduces the SS off-takes from paychecks, calls it a "tax cut" and then brazenly talks of how there "isn't enough" to pay recipients and that the program has to be reformed.

The funds now take the form of Treasury bonds. It would be an unprecedented move not to honor government bonds, but congressmen on both sides of the aisle are generally staying mute on the subject.

It may take a third party, with the express goal of solving this problem in an honest and responsible way to save us from Congressional and administrative malfeasance.

Congress does invest the Social Security money. They invest it in Treasury securities so it is available for spending in the general fund. The taxpayer pays the interest,as well as the principle, on these funds. This program was originated during the LBJ administration by a democratically controlled congress. You imply that the funds should be paid back with interest - By Whom?

This letter is wrong. All borrowing must be stopped immediately by eliminating this insidious entitlement program.

Dressing up a pig doesn't make it a princess. Likewise, having the government pretend to pay interest to itself for a failed program doesn't make it any less of a failure.

Social Security is an abomination that has created an entire population of lazy, indolent people who wish to live off the labor of others. Soon, everyone will want to eat, and there will be no one left to bake the bread.

Doug S claims the practice of stealing money from the SS trust fund to pay for items in the general budget was started by LBJ. I have evidence that it was started by Ronald Reagan. But the fact is it doesn't matter who started it. Administrations on both sides of the aisle have used that practice to cover the already overspent federal budget. Today we hear cries that the SS system is broke and that it never should have been implemented. Some hyperbolic comments have included the word "abomination" and have made the ridiculous suggestion that those collecting social security are living off the labor of others. (I wonder who that person thinks paid into the system in the first plkace?)

But the facts are there, and Harold has laid them out perfectly. Social Security was established to ensure that older, retired Americans didn't live in total destitution and it would be a healthy and wealthy system today if our elected officials, from both sides, had kept the trust intended from the beginning. The government has not paid the money they took from SS back into the system and they should do it now.

It is truly amazing that many folks out there don't understand government financing, and specifically, the SS program.

Where does the writer think the government should put excess SS funds? In a desk drawer at Treasury? In the stock market were the risk of loss is substantial if/when markets tank?

No, the excess funds are invested in the most secure investment, as they should be... government bonds. And as indicated by some comments above, interest is accrued on these bonds and will be paid back to the fund, with principal, as needed.

This same treatment is accorded all 'funds' the government holds, such as Medicare, Medicaid, the highway fund, federal employee retirement, etc.

several comments here about the money was put into t-bills.
T-bills are not an asset if you are the one who owes the money.
A bank can not give itself a loan and then pay itself back with interest, and say they made money on the deal.
The government can not borrow money and then pay itself back. all money comes from tax, once spent it is gone.
if the government takes my money and calls it social security it is a tax.
If the government takes my money to pay back t-bills with interest it is a tax.
Seems that younger workers are being asked to pay social security and medicare tax. And also pay tax on t-bills for money that was borrowed, and pay tax to pay off the national debt.
And older workers do not care; they just want to get theirs; regardless who has to pay it.
social security is a bad deal for younger workers, the program already is paying out more then it bring in via tax. They are now selling the t-bills to the communist chinese to pay benefits. communism finally figured out the way to beat us.

To "Harold S. Neslen" as others have pointed out, the money borrowed from SS is paid back with interest. I have seen that the Treasuries pay out 2% to 6% interest.

The problem now is the number of workers for each retiree. When SS started there were arount 7 workers per retiree, by 1960 that had dropped to 5.1 workers per retiree, and now we have 2.9 workers per retiree, and by 2030 it is projected to drop to 2 wokers per retiree.

Unless those 2 workers have really high paying jobs or else the SS benefits are cut significantly, the system is unsustainable.

@VIDAR:

"several comments here about the money was put into t-bills."

The money is not put in t-bills. The money is transferred to the general fund and a special government bond, not available to the public, is issued to the SS fund. The bonds pay interest, meaning the fund balance on the SS books grow a bit. The interest is nominal.

"T-bills are not an asset if you are the one who owes the money."

No one is calling them an asset. The government has no net cash assets. Haven't you heard? The government is in debt to the tune of almost $16 trillion. It's broke!

"A bank can not give itself a loan and then pay itself back with interest, and say they made money on the deal."

The government is not a bank. The transaction regarding the handling of the SS fund is merely an accounting transaction... moving funds from the SS fund ledger to the general fund ledger.

"The government can not borrow money and then pay itself back."

It's not a matter of borrowing money. It's a matter of accounting transactions.

Continued...

continued...

"all money comes from tax, once spent it is gone."

That's what taxes are for... to pay bills. Some payouts cover the cost of operating the government. Others are to pay SS beneficiaries... etc.

"if the government takes my money and calls it social security it is a tax."

All money the government takes in can be called a 'tax.'

"Seems that younger workers are being asked to pay social security and medicare tax."

All workers pay into the fund... and when they reach the eligibility age, they start withdrawing. Doesn't matter who put the money in or when, since money is fungible (look the word up).

"...the program already is paying out more then it bring in via tax."

That can, and will be fixed once the Congress gets up enough courage to do what they were elected them to do... tweak the account to maintain viability.

"They are now selling the t-bills to the communist Chinese to pay benefits. Communism finally figured out the way to beat us."

You got that right. Not only do they buy our bonds, they have figured out how to suck up most of our manufacturing jobs.

Mr. Bean

same kind of accounting that forced us to have to bailout wall street and banks, and forced financial companies to go belly up.
to me is sounds like a shell game con, only I do not want to play three card monte; the government however is forcing me to.
How about this: lets pay down the national debt, then if there is money left over we fund social security.
I do not see that the younger workers owe retired persons anything; being that they passed onto us trillions of dollars of debt.

@VIDAR:

"same kind of accounting that forced us to have to bailout wall street and banks, and forced financial companies to go belly up."

'Accounting' did not cause the bailouts and belly-ups. That was the result of inept government officials loosening real estate loan requirements and greedy bankers taking advantage.

"to me is sounds like a shell game con, only I do not want to play three card monte; the government however is forcing me to."

The government is doing no such thing. It's not complicated... Just pay your SS taxes and when you get old enough, sign up for the benefits. And, in the mean time, talk to your Congressional representatives to get them to tweak the SS program as we go along. Careful attention by Congress on a regular basis will keep the fund solvent with small adjustments.

"How about this: lets pay down the national debt..."

That would take several lifetimes and would suck our economy dry.

"...then if there is money left over we fund social security."

Money left over? Are you kidding? The government has no money. In fact, it's in debt by $16 trillion. Have you not heard?

@JohnCharity,

You need to be very careful about who you label as an "entire population" who are lazy and indolent.

I, like many others, are retired and do receive and use Social Security benefits as part of our retirement income. I worked continuously for 40 years after receiving my college degree before retirement and also invested in 401(k) programs, which funds I also now use as retirement income. That is properly called financial planning for your retirement years.

As a fairly conservative retired life-long Republican, who worked hard and planned for my retirement income, I strongly resent your claim that I am "lazy and indolent."

Maybe, to make @JohnCharity happy, I should change my comment tag to "Lazy&Indolent."

overly generous government socialist programs, and overly generous retirement pension programs, are literally driving our country, and other countries economic systems into the ground.
Countries and companies are going bankrupt because they do not have the assets to pay out what they over promised.
We simply can not continue to burden the youth of the world with these obligations.
a growing percentage of them do not even have jobs because of the havoc it has caused.
over 1/2 of what the federal government spends goes to fund socialist programs for the elderly.
something has to change, we can not continue to pay out money at this rate.
We need to stop sending social security to elder that do not need the money and could do without.

Conservatives are gunning for Social Security. They want us to think that gutting it is the only option. If you agree vote for a tea party candidate.

I too am very offended by the comments of John Charity Spring. He should leave the office for a week and go work with a laborer somewhere to get a taste of a real America.