Debt ceiling, default and Social Security

With the debt ceiling games being played again – by the people you elected, there is once again concern about Social Security payments.

Social Security is not part of general funding and does not impact debt.

If the government should default it would be catastrophic, but would not permanently affect Social Security benefits.

If there is a general shut down of government SS payments could be delayed.

The Social Security Trust is now redeeming its treasury bonds to pay benefits, if the government defaults – very unlikely – eventually the SS Trust will suffer.

5 comments

  1. “Social Security is not part of general funding and does not impact debt.”

    Every bond that the Social Security Trust cashes in to pay benefits, adds to the debt.
    Just like the $18,000 plus interest, that I have in I-bonds, will also add to the debt, when I cash them, in the future.

    Nothing is ever going to be done about the debt, except maybe raise taxes just to pay the interest. The debt is to large to ever pay back. If the politicians would just stop adding to the debt, the interest payments could be managed and we might be able to pay off some of the debt.

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    1. No, not correct. When Treasury sells a bond it adds to the debt, not when they are cashed. It doesn’t matter who bought the bond, you, me, SS trust or a pension fund or a foreign government.

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  2. The debt ceiling games are being played by today’s Republican members of the House who were crapped on by last year’s Republican members of the Senate when they passed the Omnibus Act. Unless they are hypocrites, the folks holding up the stop sign DID NOT vote for the excessive spending during the last 2 – 3 years. For those who do not agree with the spending, don’t they have a duty to speak up, to “resist”, to negotiate? Isn’t that one of the reasons why their constituents elected them? What would YOU have them do – lie to the voters that they will resist excessive spending, then go to the beltway, join the go along / get along group and stand by meekly – not objecting to spending they never agreed to, and would never agree with?

    And, why didn’t all those who voted to spend, spend, spend raise the debt ceiling at the same time? Let’s poll those folks. Let’s criticize them. Obviously, they wanted to spend, spend, spend, but didn’t want to tax, tax, tax nor take any blame for our annual deficits nor our ever increasing national debt.

    As a taxpayer, for parts of the current and past 6 decades, I am loathe to criticize those who hold up a stop sign. I expect Congress will plow right through the stop sign, but, someone needs to start talking about options to curtail excessive, federal spending.

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