Reform! Reform! Reform Healthcare or Bust!
We pay into Social Security. Social Security buys Treasury bonds. Congress takes the money from the T-Bills and spends it on.. anything it wants to (the money from the T-bills is counted in revenue like money from any purchaser of T-bills). When bills come due, congress pays off the holders of the bills.
Since the Social Security office is collecting more money than it’s spending, more money is flowing into Congress from the program (through Treasury bills) than is flowing out of Congress to the program (by paying off those Treasury bills). Over the long-term, the payments in and payments out should ballance. Historically, in any given year Social Security has always paid more money into treasury bills than it’s collected by buying treasury bills. The SS projections that have proven the most consistently correct predict that this will continue to be the case for the foreseeable future.
The big problem here is that Medicare is part of the SS program. Medicare is cheaper than any private healthcare program in America, and it’s growth curve is smaller– but that expenditure growth curve is still +10%. So Social Security could well be eaten by Medicare– if we don’t reform the whole American Healthcare system.
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