If Social Security is in danger from gov.borrowing why don't they stop borrowing from it? Tax increase soon?

Question

The government has a long history of borrowing money from Social Security.
That's our retirement money and this was supposedly created to secure citizens in their retirement!
They are still borrowing from it:
http://oversight.house.gov/story.asp?ID=847

Will we have to raise taxes regardless of whether it's a Republican or Democrat President to repay these borrowed monies?

Answer 1

We'll have to do one or more of these:
1. Stop borrowing
2. Raise the retirement age
3. Privatize some or all of it
4. Reduce benefits
5. Continue to raise taxes
6. Eliminate it

It can't last the way it is.

Answer 2

When the social security was first invented life expectancy didn't go too far past 60. So they were giving social security out to people just few(couple of) years before they died. Today, people are living much much longer and now we have baby boomers entering their retirement age soon. Social security was never designed to meet this kind of big demand. That's biggest problem. It's old system that was never updated properly. We do need some over haul or just collect more money(tax) for it.

The problem may be manageable with disciplined spending, better managing finances of this country. Just common sense approach.

Spending 2 trillion dollars chasing after WMD in Iraq just to ease someone's hunch sure isn't helping this situation. There's big problem with accountability. It's hard when you see gov lose few billion dollars here and there like its chump change.

Answer 3

It doesn't really matter if they stop borrowing from it anymore. The BIG surpluses are all in the past and there's 70 years worth of missing interest rates that could have doubled that money several times.

We needed it too, because our population has stopped growing and the ratios of today demand a tax burden from the working class that is seven times higher even though the benefits aren't as good in real dollar terms!

Not only that, but we're on the wrong side of the interest rate now. Instead of drawing hundreds of billions from what could have been investment income, we're shelling out hundreds of billions just to satisfy interest on our debt (Like an interest-only mortgage).

I don't think there's going to be a good solution because social security is going to soon consume about 1/4 of the nation's economy, roughly the size of our current federal government. Add in universal healthcare and today's federal expenditures and within 10 years D.C. is going to need about 65-70% of the nation's wealth every year to pay its promises.

That's not going to be good for employment, wages, investment, or any one who is currently working and hopes to someday retire.

Answer 4

Actually what we do is refinance. That is the debt is in the form of Treasury Bill. When these come due, the government sells new Treasury Bills and so has the money to pay off the original. Its much like refinancing you mortgage. Theoretically that could go on forever, as long as people buy US Treasury Bills.

I didn't say I like or agree with deficit financing. Just that this is how its done.

Answer 5

Social Security can't go broke for the same reason that the Dept. of Defense can't go broke....all the money comes out of the same pocket. It just depends what this country wants to spend it on. Real social and physical security or a bloated military that can't get out of it's own way? We're not going to refight WW2..we don't need thousands of 70 ton tanks..tanks that modern technology can blow into trash no matter how much armor it has. Someone needs to say it...and I just did! Good for me!

Answer 6

Both Clinton and Gore had plans to stop the government from borrowing from it. But no one really listened to their plans on social security. People would rather just make fun of the term "lockbox" then realize what it meant.

Answer 7

The problem is government cannot be trusted to do much of anything. They should not be in the retirement business.

Yes we have big problems coming with this.

Answer 8

If government workers (elected or appointed) were in the same “program” as us, none of us would have to worry about Social Security ever being insolvent - ever again.

Answer 9

Sure, as soon as we get a Democrat President, we will have plenty of Tax Increases.
Many Democrat Voters want a Tax Increase. They think they will get bigger Welfare checks out of it.

Answer 10

Everyone knows that tax increases, reduce revenue!!! Lowering taxes, increases revenue!! We shouldn't have Social Security anyway.