Friday, July 15

So What Does Obama Plan To Use Gov't Revenue On If the Dept Limit Is Not Raised?

President Obama and his team have been making a number of threats during the discussion on how or whether to raise the US debt limit. These threats included defaulting on debt payments as well as not paying out Social Security benefits.

Now given that Government Revenue (taxes and fees that the Government is receiving each month) exceeds the amount needed to pay for Social Security, Medicaid, Defense and debt obligations, just what does he plan to use that money for if he is not going to use it to pay these items?

Also, it is nice to see questions regarding the $2+ trillion Social Security Trust Fund. As I pointed out last year:

So on the one hand, Social Security has a surplus of over $2 Trillion to meet it's needs. On the other hand, all of that money was traded for Government bonds. The bonds are a promise from the Government to repay Social Security.

The Government took the money and spent it. The Government now either needs to pay that money back to Social Security, and with running a deficit, would need to borrow that money to repay the bonds. That could be a serious problem given that the Government already needs to borrow to cover the current year's spending deficits. And that is a problem with the idea of selling the bonds held by Social Security. Doing so increases the amount that needs to be sold into the market, and the Government is already having trouble selling the bonds it needs to need to cover current-year deficit spending.

Of course they could just print more money. I am not sure exactly how that would work out.

So remember, no matter how the politicians try to claim that Social Security has no problem, keep in mind that these same politicians turned the Social Security Trust Fund of $2 Trillion and turned it into added Government debt. - Link
Once the debt issue is over, the Conservatives in Congress should go back and tackle Social Security reform. The defense that there is no problem was just busted by the Democrats.

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