The Social Security Scam - Mark Brandly - Mises Institute

The Social Security Scam - Mark Brandly - Mises Institute: "The federal government is in debt to itself. Compare this to debt in the private sector. No business declares that it's deep in debt because it loaned itself money. It's the same with families. Parents don't lay awake at night trying to figure out how to repay the money they loaned themselves. The government, however, thinks that it makes perfect sense to collect $100 of tax revenue, spend the $100, and then declare that it now owes itself $100. This scheme is not limited to Social Security. Currently, federal intragovernmental debt for all programs totals $4.3 trillion.


How should we think about this intragovernmental debt? The Treasury department collects $100 in Social Security taxes, the SSA spends $70 on Social Security benefits, and the other $30 goes to, let's say, military spending. Since $30 was collected for Social Security, but spent on the military, the Trust Fund now has $30 of bonds. The bonds are simply promises of future taxes. The feds collected the money for Social Security and now they are going to collect taxes again for Social Security spending. The $2.4 trillion of bonds in the Trust fund represent Social Security revenues that need to be collected a second time, since the tax revenues did not go towards Social Security spending when they were initially collected. In fact, all of the intragovernmental debt represents future higher taxes."