negligible91I was confused about what some of these progressives have been saying as well. Where they go wrong is when they start discussing the surplus. The surplus is a myth. Extra income above expenditures for SS is used to buy bonds from the federal government. The government then spends this money and owes it to SS. In other words, these are IOU’s. So while it’s true that SS maintains a ‘surplus’, non-interest income is over time playing a smaller and smaller role in its overall expenditures, while interest income is playing a larger and larger role. And this interest income comes from the federal government, which will have to raise the money from the market. It cannot do this sustainably.
Here’s Robert Wenzel on the subject:
http://www.economicpolicyjournal.com/2012/10/glenn-greenwalds-problem-with-math-and.html