JimGant

Sigh.

Yes. And the problem we've been having is in definitions. In several writings I've seen this: In others I've seen: national debt less intragovernmental debt equals public debt. And this has been the definition of public debt that I've been going on. And which Cato has also used. But we're not on the same page as Treasury, which uses "debt owed to the public" as the term I've said is "pubic debt." And thus: Intragovernmental debt plus debt owed to the public equals: (take your pick) national debt; or federal debt; or public debt. No wonder no one, including Congress, can have an intelligent conversation when they can't define what's what. So, yeah, the cash flow deficit SS has been having since 2010 has not increased national/federal/public debt, when you use these terms, as they include intragovernmental debt. What Cato and Heritage have been trying to say is that the real problem here is "debt held by the public" -- an entity not blanked out by intragovernmental debt. Thus, only when you incorporate this accounting scheme -- i.e., using only 'debt held by the public,' will you see that the problem we face is TODAY, and not 2033. Maybe if someone in Congress can understand this -- can we correct things sooner rather than later. Here's a quote from Heritage that puts things in layman language:

Certainly it's a problem -- having to borrow $115B from China to fund the SS cash flow deficit in 2023 is definitely a problem, as are the even larger negative cash flows going forward. Anyway, this discussion is getting ridiculous. Let's agree to give it a rest.

I asked you to provide those, but your 'search my early july inputs' didn't do the trick. If your links are really enlightening, and might change my take on matters, please take the time to provide. Thank you.

Where did I ever imply that? Everybody knows, without Cato adding, that come 2033 that SS benefits will decrease, 'cause without any remaining IOUs, the current law doesn't allow SS to borrow what the missing IOUs no longer cover. This law will certainly be changed, if it has to be -- to keep benefits stable. What this whole discussion is about is: SS negative cash flow is contributing to the national debt NOW -- and any sleight-of-hand accounting doesn't alter that problem. So, address this problem now, and maybe come 2033 there will no longer be a problem. This is where Cato and Heritage are coming from. Staving off the 2033 problem will just be serendipity of addressing the deficit problem NOW. It doesn't bother me that you don't realize the problem. But, that members of Congress, like Bernie Sanders can't grasp the significance of the deficit problem is concerning -- 'cause come 2033, Congress will just have to pass a law allowing general revenue funds to cover the benefit shortfall -- and then the deficit angle from SS cash flows will still exist. Tho' this isn't the end of the world, as studies have shown this would only increase national debt by about 4%. However, it would be better, as Cato and Heritage suggest, if we start working the problem soonest. Why you believe Cato and Heritage have some kind of negative agenda against SS -- is beyond my comprehension. I guess, maybe, 'cause you think the problem they've discovered, is not a problem when you factor in intragovernmental debt. Such thinking stands in the way of a solution.

Yes, the pre-2010 days of excess SS cash flow meant the Treasury had to borrow less from the public. But, that was then. Today, and since 2010, SS's negative cash flows have been a serious contributor to public debt. That's what Cato, Heritage, and other forward thinkers are warning about. It's nice to ponder history; but it changes nothing about today and tomorrow.

Ok, the Cato Institute and Heritage Foundation have gotten it wrong, in your and Bernie's estimation, as they concentrate only on the Public Debt increase. This increase due to SS cash flow deficits, occurring since 2010, was $115B in 2023. The Treasury had to obtain $115B from China, and elsewhere in the public domain, to cover this deficit. But as you have pointed out, that $115B is zeroed out, when you factor in intragovernmental debt and the cancellation of $115B in IOUs owned by the SS Trust Fund. Thus, these SS cash flow deficits, in this scenario, are not reflected in the national debt. So, with this rosy picture, nothing to worry about until 2033. Shame on Cato and Heritage for using a debt scenario that accurately points out that the problem is NOW -- and not in 2033, when the IOUs run out. Just can't trust these right wing organizations.

So you believe that if the SS bought gold with their surplus, and not Treasury IOUs -- things would be the same re national debt when they finally ran into cash flow deficit? Maybe this is a progressive mind fart, since Bernie is your buddy in this misrepresentation.

Well, she certainly has agitated some of the naive.... But, she certainly is not anti SS -- only trying to point out the problem is now -- not 2033, when the Trust Fund runs out. Let's do a parable here. Say SS, who had cash flow surpluses up to 2010 -- had bought gold with those surpluses, and not Treasury IOUs. Now, since 2010, when SS cash flow deficits began, they needed cash to cover those deficits -- so they sold gold to China. In 2023, they needed $115B dollars to cover this deficit, so sold gold to China (or whomever in the public) to obtain these dollars. Dollars from China covered the deficit, SS's gold assets reduced by same amount. But NO add on to the US national debt, as this gold-for-dollars was a completely independent transaction by the SS -- no US govt, and any related addition to US govt nation debt, involved. Compare this to what actually happened to those SS surplus cash flows -- they bought Treasury IOUs, and not an outside-the-govt asset, like gold. And the Treasury bought aircraft carriers, and not any redeemable asset attached to the SS Trust Fund. So, come 2010, when negative cash flows began, analyze what happened: SS had no gold to cash in, but only IOUs, which the Treasury traded for cash -- but had to get that cash from China, and thus go into an added national debt of $115B, because of its obligation, per IOU, to Social Security. This is where Cato -- and others -- are trying to wake up those, like Bernie Sanders, who say the numbers (numbers being the IOUs) indicate there is no problem, until the IOUs run out in 2033. Use the gold parable to educate yourself that, IOUs are not an asset, like gold. Thus, what Cato is hammering out, is that: the current SS cash flow deficit is definitely increasing the national debt -- and playing accounting games, like with intragovernmental debt, won't make that fact disappear. This whole discussion is merely to point out, as Cato tries to, that: We don't have until 2033 to address the problem. Why Bernie Sanders, and others, would say otherwise.. is curious, or stupid.

Ah, another Cato gem: Read the article, if you're not entirely bored with this subject. This Cato analysis is from an author that Gambooler says, is out to lunch.

Your hard on against CATO is curious. I hate to keep repeating and repeating -- but CATO is just pointing out that the increase in public debt due to negative cash flows into the SS Trust Fund -- can't be whitewashed by looking at the problem using National Debt, which, using intragovernmental debt, says there is no increase in the US debt due to negative SS cash flows (your and Bernie Sander's position). But, you really think there is no problem indicated here, and CATO is just crying 'fire, fire', when there is none? I think they are just trying to extract some heads that are 'locked up and tight.'

Because one shows the problem of billions of dollars of negative cash flow -- and the other just says "no problem" as long as the IOUs haven't been exhausted. But pointing out a problem, but with no way to address it -- is just pis.... in the wind. So, while this discussion is interesting -- it's worthless. So, come 2033 -- FICA collections will have to increase to cover the negative cash flow. Or the law will have to be changed to allow general revenue collection to cover that negative cash flow. That's probably what will happen, as it's not practical to allow SS recipients to take a 20% hit in benefits. This has already, of course, been studied -- with the conclusion being a modest 4% increase in National Debt. Certainly doable.

Thus, you're unable to understand the problem -- or that's there's even a problem -- since intragovernmental debt neutralizes public debt, in your syllabus. And public debt is at the heart of this cash flow problem.

Actually, from an unemotional standpoint -- they're not different. Thus saying that, a scenario where there's a cash flow deficit of $100B to cover annual SS benefit payments -- and where Treasury has to sell bonds for $100B to the public to cover this deficit (but in doing so, wipes out $100B in Trust Fund IOUs) -- hey, it's a wash, and the rules-that-be say there's absolutely no change in the National Deficit due to Social Security goings on. So, new scenario: SS has a cash flow SURPLUS and is thus able to cover all benefit payments without having to cash in IOUs -- thus Treasury doesn't have to sell bonds for any amount to the public. But this scenario also concludes that there is no change to National Deficit due to Social Security goings on. Samo, samo, right? Cato says 'wrong.' The negative cash flow scenario, and subsequent increase in public debt of $100B -- is a situation needing identifying -- and you can't do that if you apply a deficit definition that says the same thing for all situations. So, maybe we need some scenario-dependent definitions of what constitutes a deficit.... ...... and this has been addressed here: Anyway, looking at our early July discussions on this same subject -- we're just repeating ourselves. And a lot of folks smarter than us are at the same loggerheads.

Could you repost those please?