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Comment by caturopath | Hacker News Reader

> Social Security lends the government a trillion dollars.

This is a nonsense step. There is no meaning to the social security lending the government any money, as social security is the government

> Bob lends the government a trillion dollars. Bob sells this loan on the public market. Social Security happens to be the organization that buys that loan from Bob.

This scenario is just "The government buys back some of its debt, reducing its outstanding debt." The "Social Security" part is just a random detail that doesn't add anything.

(BTW, Social Security doesn't actually do this. They hold special bonds that are not the same ones available to the public.)

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Social Security is not funded by the government, it's funded by payroll taxes. Saying that Social Security loaning money to the government is meaningless is like saying that you loaning money to your brother-in-law is meaningless because you both have accounts at the same bank.

Debt is debt.

> Social Security is not funded by the government, it's funded by payroll taxes

This fictional accounting is a silly marketting gimmick, not a meaningful distinction. It's a government program just like all other forms of welfare.

Do you think that there were decades when lots of folks were contributing and no one was collecting?

Uh, if accounting is a fiction, well, I'm not going to say there isn't a kernel of truth to that, but it doesn't help us answer the question of who has debt responsibilities to whom; the entire enterprise is predicated axiomatically on "accounting fictions".

Social Security is a government program like any other. The delineation of tax types is just branding to make people like it more, it isn't economically meaningful. When the payroll tax is higher than the SS spend, the government just spends the money. (These bonds are IOUs for all the times they do that.)

It's like saying that it's meaningless for you to loan yourself money, because it is (except when there is some other, external reason that it carries meaning, not by rules you made yourself.) We constantly ignore these internal self-debts for people and for companies.

https://www.cbpp.org/research/recommendation-that-presidents... notes

> Most economists agree that the debt held by the public is what really affects the economy. As the Congressional Budget Office stated in its June 2009 report on the long-term budget outlook, “Long-term projections of federal debt held by the public, measured relative to the size of the economy, provide useful yardsticks for assessing the sustainability of fiscal policies.” In contrast, “gross debt . . . is not useful for assessing how the Treasury’s operations affect the economy.”

> Social Security is not funded by the government, it's funded by payroll taxes.

If it is funded by taxes, it is funded by government.

You could argue that the social security trust funds are loaning money to the general fund, but that’s like saying your savings account and money market account are loaning money to your checking account.

I fail to see how this debt is "meaningless" given interest is being paid and the solvency of the program is not legally guaranteed.

Congress may step in and directly fund certain SS programs through some other means once the ss trust fund fails to cover these expenses, but that outcome is far from guaranteed, so the ability of this fund to generate revenue through lending to other parts of the federal government remains material.

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