Social Security--still the best retirement deal around

[exboyfil]

40. How do laws get changed?

By a majority in the two Houses of Congress and the President's signature. Pieces of S.S. have changed all the time (some changes limiting benefits such as moving the retirement age, taxing a portion of S.S., and eliminating S.S. payments for college students).

General revenues are needed to retire the bonds held by S.S. As I said before many view a default on S.S. securities as a less severe signal than defaulting on general debt obligations. It all comes down to the political will to ensure that this default does not happen. S.S. is not in a vacuum - $2.6T are held by S.S. of the $16T. If you decide to stiff the public holders of debt, then lots of bad things happen - far worse (as perceived by the powerful) than a S.S. default (especially one disguished by legislative tricks) against S.S.

Obama has not helped this situation when he reduced withholdings and made up the difference with general revenues. That was an awful precedent to set.

I feel every dime should be paid back to S.S. (ie every Treasury submitted for payment to pay benefits should be honored, but stay tuned). I don't have the stomach for a repeat performance in the future.

$16T debt is a truly staggering number. It does not exist because of S.S., but it impacts the ability of general revenues to satisfy S.S. bonds.