miami_thomas
VIP Member
- Jan 20, 2011
- 1,019
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But this is the fundamental misunderstanding that both parties (and Al Gore in particular) have pressed on the public. The trusts are NOT guaranteed. At all. In any form. They are not defined-benefit pensions, nor are they annuities. They are straightforward transfer payments from current workforce to past workforce. It has been this way since SS was created.No seriously - can someone please explain what mechanism the government would use to "park" this 22T in needed funding for future liabilities related to the trusts? What type of vehicle would they use for that money?
If both SSN and Medicare were guaranteed, the Federal government would be required to keep in an interest baring account the amount needed to fund future liabilities assuming a minimum risk interest rate. To meet that requirement the federal government would have to, as of the articles being referenced, place 22.2 trillion in an interest baring account to cover the future liabilities promised to future SSN recipients.
The special-issue treasuries are simply an accounting mechanism to keep track of the balance. They don't even really pay "interest" in any meaningful sense since the same entity that pays the interest, earns the interest.
Talk of an alleged actuarial liability of 22 Trillion dollars simply perpetuates the myth that the program has a guaranteed defined benefit.
I agree but it is a complete lie to tell people that their Social Security and Medicare will be there for them when they retire. We should be telling people the truth so they can start planning their own retirement without these benefits.