tag:blogger.com,1999:blog-3862216000300765627.post7780960505479493275..comments2024-01-16T03:42:46.705-05:00Comments on The Downward Spiral: Federal Budget Deficit Rises With Payroll Tax CutBill Hickshttp://www.blogger.com/profile/17551954408189665078noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-3862216000300765627.post-5440589178215238922012-03-17T01:03:48.796-04:002012-03-17T01:03:48.796-04:00The reason it is adding to the current deficit is ...The reason it is adding to the current deficit is that the money lost to the Social Security Trust Fund due to the payroll tax cut is being made up out of current accounts. See the text of the statute in the notes to 26 U.S.C. 1401.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3862216000300765627.post-74262095316212711522012-03-16T23:09:57.945-04:002012-03-16T23:09:57.945-04:00Thanks for the music - it's new to me...Thanks for the music - it's new to me...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3862216000300765627.post-766960602869809462012-03-16T23:02:48.667-04:002012-03-16T23:02:48.667-04:00But the serious people in Washington have two cate...But the serious people in Washington have two categories of USG debt: those that cannot be defaulted on, and those which we just "owe to ourselves" (the SS trust fund) which are therefore just accounting entries and can be ignored with impunity. Refusing to fund promised benefits without a "fix" is, in effect, acknowledging default on that debt, but the financial markets will not treat it as such. I would just like to force government poohbahs to own up to this treachery and deceit.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-3862216000300765627.post-19756199994331870592012-03-16T22:20:40.990-04:002012-03-16T22:20:40.990-04:00The problem is that if the USG defaults on ANY bon...The problem is that if the USG defaults on ANY bond, doesn't matter whether it is held by China, Japan, the Federal Reserve or grandma, its ability to continue to borrow will instantly implode. That will slash federal spending by at least 40% overnight (as that is approximately how much we are borrowing these days). The financial markets, which are being greatly propped up by the deficit spending, would also crash hard and a financial panic would likely ensue.<br /><br />In short, we would then have MUCH bigger problems than whether the SS program is still solvent.Bill Hickshttps://www.blogger.com/profile/17551954408189665078noreply@blogger.comtag:blogger.com,1999:blog-3862216000300765627.post-5568558520658570862012-03-16T22:02:14.827-04:002012-03-16T22:02:14.827-04:00The Social Security Administration used the decade...The Social Security Administration used the decades of surplus money to buy U.S. Treasury Bonds. They are backed by the full faith and credit of the U.S government. We must raise revenue, i.e. taxes, to repay the bondholders (the trust fund). If we say (like Senator Simpson advocates) that they are just worthless IOU's, then you have to explain why we are choosing to honor the debts to China and Japan but repudiating the debts to our own people. I want to hear someone make this argument.Anonymousnoreply@blogger.com