- Congress cannot borrow money until it spends what it has collected in taxes.
- Congress therefore was able to use the taxes collected for Social Security that exceeded the current payouts on general spending, this masked a large portion of the deficit.
- The “trust fund” is nothing more than Congress promising that they will “repay” the SS dollars that were diverted in the flush years to meet the SS payouts when the lean years arrive.
We are now in those lean years, the payout burden is greater than the taxes being collected and the shortfall is being “repaid” with borrowed money.
All of this is just political and accounting rhetoric, SS is just a typical welfare program like all the others; the taxpayers of today fund it for the recipients of today and the same will be true until the current taxpayers revolt at the extreme cost.
Trumps kick-ass economy will likely ease the pressure for awhile but the rising interest rates are no longer hiding the cumulative effects of trillion dollar deficits; big changes will be coming soon for our entitlement structures.