Subject: RE: James' defense of spending SS surpluses
from James:
>>> But this is a SS forum not a budget balance forum. And we can't change history. If you are implying that if we did not have the SS excess, they would not have
borrowed, then indeed you must be smoking those 'funny' cigarettes. Even after borrowing and spending the SS excess, in some years they borrowed and spent
another $300 billion. And they didn't even bat an eye. Supertankers full of red ink!
I believe the financial status of a creditor, which the general fund is to SS, is important. You may be correct that nothing could have stopped such spending. But even a marginal influence has significance.
I wrote: I believe there's evidence of the effect of the public's recent awareness of the practice which supports that conclusion.
To which you replied: >>>And they almost all ran for re-election and didn't blush a bit. And almost all were re-elected. The 'people' knew what was going on. They were getting 'services' without having to pay for them with taxes.
I suspect if you ran a lexis search you would find a dramatic increase in the references to the practice of spending trust fund money. Although its human nature to want things without paying for them, human beings are not without some capacity to make ethical judgements about such things. A change in the public awareness can make a difference which brings me to the essential question that has to do not with the past but the present: How do you feel about the accounting proposal? Should debt that is incurred to the trust fund be continued to be represented as an asset in the annual budget figures?
>>> But if you don't want to invest in US gov't debt instruments, where would you invest the excess?
This is certainly part of the ongoing discussion. But as you point out, there is somewhat of zero-sum game. Bonds not held by the trust fund are then held by the public. All other things being equal, there would be no net national savings.
