Saturday, November 20, 2010

Yglesias » Social Security Trust Fund

Yglesias » Social Security Trust Fund: "The only issue with the Social Security Trust Fund is that if you assume ROTG will repay its debts, that means ROTG will need to obtain that many through tax hikes or spending cuts. Conversely, if ROTG avoids tax hikes or spending cuts, that will require additional hikes or cuts from Social Security. But it’s hardly as if the overall federal budget deficit is some kind of secret number that people don’t know about because trust fund accounting is confusing them. The point is that ROTG is facing a very large budget deficit over the next 30 years, and that insofar as you try to reduce ROTG’s deficit by rejecting obligations to Social Security then that merely increases Social Security’s actuarial deficit. By the same token, if we reduce federal spending by cutting aid to K-12 schools, then states and municipalities will have a bigger budget gap. The mere fact that the US public sector can be examined at different levels of comprehensiveness doesn’t mean that the distinctions are irrelevant somehow."

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