Social Security and the debt cieling

[Quantum Windbag]

It seems that Obama either lied, or is a complete idiot, about how this works. When you redeem a Treasury Bond you are actually reducing the deficit by that amount, which gives the government more credit to borrow money from someone else.

In his Friday night press conference, for the second time, President Obama raised the specter that Social Security checks might not go out if Congress does not raise the debt ceiling. His words: “Well, when it comes to all the checks, not just Social Security — veterans, people with disabilities — about 70 million checks are sent out each month — if we default then we’re going to have to make adjustments. And I’m already consulting with Secretary Geithner in terms of what the consequences would be.” Earlier he said in an interview on CBS News: “I cannot guarantee that those [Social Security] checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it.”
He must not be consulting with his lawyers, because this attempt to scare Social Security recipients is without legal foundation.
As recently explained in much more detail by legal scholars Mark Scarberry and Nancy Altman, and by the aptly-named Thomas Saving, a former public trustee of the Social Security and Medicare Trust Funds, in an op-ed in the Wall Street Journal, , reaching the debt ceiling will not affect the ability of the Social Security Administration to pay its obligations.
The Social Security trust fund holds about $2.4 trillion in U.S. Treasury bonds, which its trustees are legally entitled to redeem whenever Social Security is running a current account deficit. Thus, if we reach the debt ceiling (which I continue to think is a remote prospect, even if less remote than it seemed a week ago), this is what will happen. The Social Security trust fund will go to Treasury and cash in some of its securities, using the proceeds to send checks to recipients. Each dollar of debt that is redeemed will lower the outstanding public debt by a dollar. That enables the Treasury to borrow another dollar, without violating the debt ceiling. The debt ceiling is not a prohibition on borrowing new money; it is a prohibition on increasing the total level of public indebtedness. If Social Security cashes in some of its bonds, the Treasury can borrow that same amount of money from someone else.

Contrary to the President, Social Security Checks Are Not At Risk | Advancing a Free Society

 

[B. Kidd]

He is vile, unprofessional, and despicable.

 

[Moonglow]

Quote:
But he was needlessly scaring the program's fifty-five million beneficiaries, the vast majority of whom are highly dependent on each month's Social Security check. So was Speaker John Boehner who, in a recent interview, also spoke of the possible interruption of benefits.

Nancy Altman: Disentangling Social Security From the Debt Ceiling

So if Obama used fear tactics, so did Boneher

 

[Moonglow]

u misspelled ceiling in ur header

 

[Trajan]

yes I posted a blurb on the methodology behind providing a bond to the treasuary for redemption from the ss 'trust fund', the sheep do not want to hear it. *shurgs*.

look, he was asked in a townhall way back during the big push for obamacare a question on , well, the health care plan and he totally whiffed, he even employed the totally ridiculous car insurance analogy in his big meeting with the rep.s over obamacare too.

he apparently is barely familiar with and not very well versed in , a great deal, I am trying to think of a topic other than class warfare that he can truly speak to with knowledge and authority.......