2 hours ago, gamb00ler said:

I've given you the links to the SSA and Treasury web sites that show CATO is wrong

Could you repost those please?

You worry too much.

1 hour ago, JimGant said:

Could you repost those please?

I will.... after you can prove that intragovernmental debt is qualitatively different from the Treasury's borrowing from the public?  Links to CATO opinions are not valid proof.

 

You can locate all of my previous posts by hovering the mouse over my screen name and then click on 'Find Content'.  Our most lengthy discussion about this occurred around the 1st week of July and you will find the links there.

4 hours ago, JimGant said:

The operative phrase is: cash flow deficit equals new public debt.

That has always been my position.... but I never talk about the 'public debt'.  I always talk about the NATIONAL DEBT.  Whether a Treasury debt is considered public or intragovernmental makes absolutely no difference to the Treasury, SSA or the taxpaying, tariff paying US residents.  Those entities saddled with repaying any and ALL Treasury borrowings are unaffected by who receives the interest payments and the final capital repayment.

 

The number with real significance is the NATIONAL DEBT.

3 hours ago, gamb00ler said:

I will.... after you can prove that intragovernmental debt is qualitatively different from the Treasury's borrowing from the public?  Links to CATO opinions are not valid proof.

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:

Quote

There are also varying views on which federal spending actually contributes to deficits. What’s the fiscal effect of Social Security, for example? When it comes to understanding whether Social Security contributes to the national debt, the analysis can get a bit squishy.

https://www.marketplace.org/story/2024/07/04/social-security-national-debt-definition-of-debt

 

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. 

6 minutes ago, gamb00ler said:

but I never talk about the 'public debt'.  I always talk about the NATIONAL DEBT. 

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. 

3 minutes ago, JimGant said:

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. 

The CATO article is their interpretation.   The facts are very basic and you shouldn't need anyone's interpretation.

 

Your post was accurate until you brought in CATO.  They're simply wrong.

 

The definition of the NATIONAL DEBT is very clear.  It includes the 'public debt' and the intragovernmental debt.  There is no room for opinion in that definition.  The SSA still has a balance in the OASI trust fund..... no room for opinion in that.  By law the Treasury holds the OASI trust fund in T-bill equivalents... no room for opinion on that.  When the Treasury makes an SS benefit payment it is also reducing the balance in the OASI trust fund balance...... no room for opinion in that.

 

Why do you need to hear CATO's opinions?  This is extremely simple.  Read the Treasury, SSA and Congressional web sites for the FACTS.

19 minutes ago, JimGant said:

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. 

I never said that the public debt does not rise when the SS benefits are paid.  I ALWAYS state my case in terms of the NATIONAL DEBT.

 

Why are you obsessed with the 'public debt'?  It is useless to everyone except CATO and their co-conspirators.  The US law limits the NATIONAL DEBT..... not the 'public debt'.  What is the purpose to differentiate between 'public debt' and the NATIONAL DEBT?

 

Ask your CATO buddies that question.

 

The 'public debt' ideology is herring that is deeper red than any other I've encountered.

 

You have yet to respond to my request to show any qualitative difference between 'public debt' and intergovernmental debt.  All you say is CATO thinks there's a difference.  Clearly you don't understand what they're saying if you just accept it as gospel.  The actual gospel is spelled out by Treasury, SSA and Congressional web sites.  Read it there.

2 hours ago, gamb00ler said:

What is the purpose to differentiate between 'public debt' and the NATIONAL DEBT?

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. 

 

1 hour ago, JimGant said:

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. 

 

We don't need the extra definition of 'public debt' to know there is a cash flow problem.... it's already obvious. 

CATO is just using the term 'public debt' without bothering to clarify that its meaning is substantially different than NATIONAL DEBT.  CATO's purpose is to create a sense of alarm amongst those who aren't really paying attention to the details.  You fell for it.

If I could have put my Social Security contribs into a real retirement account, Id be driving a Rolls instead of a Benz.

22 hours ago, JimGant said:

Right now we're borrowing billions in cash to make up the SS cash deficit in receipts vs outgo. Come 2033

Wrong, we are taking the money from the trust fund (please read SS Trustee's report) to cover the shortfall in SS payments. The treasury has borrowed money from the trust fund and the Government has to borrow more to replenish the trust fund. But once, the trust fund is gone, government cannot borrow to replenish the trust fund by law. That is when the payments will be cut 25%. The SS is able to pay 75% of the current payment till 2100 under existing law without the trust fund. Please read SS Trustee's report; not any CATO (a libertarian thinktank)'s report who are advocating SS as a Ponzi scheme and are advocating for complete elimination of FICA taxes and push everybody to mandated 401(K) and IRAs. In my opinion SS should invest in the market (low cost index funds, bond funds, and the US treasuries) instead of solely investing in US treasuries. Of course, it has to be done slowly instead of injecting trillion dollars into the market to skew the market. 

 In his 1999 State of the Union address, President Bill Clinton proposed transferring $2.7 trillion in budget surpluses to the Social Security trust funds. He further suggested investing 20 percent of those funds in the stock market, likely in index funds, aiming for about 14.5% of the total trust fund assets to be in index funds. Everybody ridiculed his ideas, including Democrats. I believe we would have been better off if we did that. 

19 hours ago, gamb00ler said:

CATO is just using the term 'public debt' without bothering to clarify that its meaning is substantially different than NATIONAL DEBT.  CATO's purpose is to create a sense of alarm amongst those who aren't really paying attention to the details. 

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.'

 

Quote

Both gross debt [National Debt] and debt held by the public are important measures, but for different reasons. Most economists regard debt held by the public – particularly as a share of GDP – to be the most economically meaningful measure of debt. Debt held by the public measures the amount of U.S. debt held by entities other than the federal government and traded publicly. It is thus relevant for understanding the extent to which debt is providing fiscal stimulus, crowding out private investment, influencing interest rates, and consuming fiscal space.

https://www.crfb.org/papers/qa-gross-debt-versus-debt-held-public

 

Ah, another Cato gem:

 

Quote

https://www.cato.org/blog/social-securitys-41-trillion-hidden-government-deficit

....it is imperative that we are clear-eyed about how Social Security’s spending impacts American workers and the federal deficit. Every year Social Security runs a cash-flow deficit, it exacerbates our nation’s fiscal challenges, threatening Americans with higher future taxes or an unsustainable debt. Social Security’s cumulative $4.1 trillion deficit over the next 10 years underscores the urgent need for reform, not in 2033 when the ‘trust fund’ will be depleted, but ASAP.

 

Quote

Politicians have perpetuated this myth for decades, including Senator Bernie Sanders who claimed, “Social Security has a $2.8 trillion surplus in its trust fund and can pay out every benefit owed to every eligible American for the next 19 years.” [Gambooler said this too]  However, this is not how the system actually works.

 

 

Quote

When Social Security needs to redeem these bonds to cover benefit payments, the Treasury must find the money somewhere other than from the trust fund—either by collecting more in taxes, redirecting other spending, or increasing the national debt.

The implication is that Social Security’s cash-flow deficits directly contribute to the federal deficit. Each dollar redeemed from the Trust Fund is a dollar the Treasury must come up with, exacerbating our fiscal imbalance.

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. 

1 hour ago, JimGant said:

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

CATO's arguments are red herrings.  There is a real crisis fast approaching in the funding of SS benefits.  But.... the shift from intragovernmental loans to public debt is definitely not cause for alarm.  Fixing the current actuarial weakness in SS financing is way, way more important.  But, it seems that shouting about the debt shift makes them feel better.  Unfortunately their articles have distracted people from the actual problem and caused much confusion about SS's impact on the national debt.

 

The ONLY solution to stop the shift from intragovernmental to public debt is to fix the actuarial math..... so that is what CATO should be paying attention to.

 

The impact from the shifting of debt will be very minimal.... besides... until Congress improves SS's financials, the Treasury's hands are tied.

38 minutes ago, JimGant said:

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. 

95% emotion.... very little factual basis for their opinions.  I never claimed what you stated.  I have always agreed with the projections that OASI will be depleted by 2032/3.  Stop lying about what I claimed.

 

This quote (you didn't specify the source) is particularly erroneous:

When Social Security needs to redeem these bonds to cover benefit payments, the Treasury must find the money somewhere other than from the trust fund—either by collecting more in taxes, redirecting other spending, or increasing the national debt.

The implication is that Social Security’s cash-flow deficits directly contribute to the federal deficit. Each dollar redeemed from the Trust Fund is a dollar the Treasury must come up with, exacerbating our fiscal imbalance.

 

CATO is 100% wrong claiming that SS's shortfall is "increasing the national debt".  I've proved it many times but CATO must be paying you enough to ignore all else but their drivel.  The redeeming of the OASI bonds is merely shifting financing from intragovernmental loan to public debt.  Both those amounts are part of the NATIONAL DEBT... so obviously no increase in the NATIONAL DEBT.  Face it, you've swallowed an untruth that is eating away at your brain.

 

CATO is yelling fire... before any fire actually starts... but if Congress doesn't act... there will be a fire.

 

The term NATIONAL DEBT is very well defined, but CATO misuses it.  They should use the term 'public debt'

@JimGant look at the drivel CATO produces.... this article is so full or errors and misuse of terminology.  It clearly shows that they are not really up to speed on the subjects that are the basis of their articles.

By Romin Boccia (a Peter Thiel acolyte):

https://www.cato.org/blog/social-security-spending-adds-national-debt

 

She writes articles that are extremely misleading.  She comes as close to lying as possible in her articles about SS and the 'US debt'.  Her goal is not to educate but to agitate the naive and bring them into the SS hater's camp.  There 'oughta be a law! 

They'll just print money and you'll take your $8,200 to $24,000 haircut in inflation.  

 "See?  Painless!" 
 

On 7/26/2025 at 8:31 AM, Knight Rider said:

The committee for a responsible budget predicts SS cut to the tune of $18,000 in seven years. What are American expats planning to do in the future? 

https://www.crfb.org/blogs/retirees-face-18100-benefit-cut-7-years

This projection is based on when the SS "trust fund" is depleted.   Congess will deal with this issue at the 11th hour.   

On 8/2/2025 at 8:13 AM, gamb00ler said:

Here's a new look at your misconception.  You claim that the government is just borrowing from itself which makes the OASI nothing but an accounting 'trick'.  But, that is 100% false. 

  I've been down this road with you. You are 100% wrong on this point.   The SS trust fund consists of special T-bills, and the surplus was allocated to the general fund.   

2 hours ago, gamb00ler said:

@JimGant look at the drivel CATO produces.... this article is so full or errors and misuse of terminology.  It clearly shows that they are not really up to speed on the subjects that are the basis of their articles.

By Romin Boccia (a Peter Thiel acolyte):

https://www.cato.org/blog/social-security-spending-adds-national-debt

 

She writes articles that are extremely misleading.  She comes as close to lying as possible in her articles about SS and the 'US debt'.  Her goal is not to educate but to agitate the naive and bring them into the SS hater's camp.  There 'oughta be a law! 

SS spending does add to the debt. 

On 8/4/2025 at 7:41 PM, gamb00ler said:

She writes articles that are extremely misleading.  She comes as close to lying as possible in her articles about SS and the 'US debt'.  Her goal is not to educate but to agitate the naive and bring them into the SS hater's camp.  There 'oughta be a law!

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. 

 

2 hours ago, JimGant said:

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. 

You must have the same brain worm as RFK had.   You parable is way off.  In your story, there was no obligation created by the Treasury.  In real life there was.   Each and every special T-bill held by OASI is truly a Treasury obligation.  That is the why your little story is worthless.

 

You keep forgetting that when ANY T-bill holder redeems it.... the US NATIONAL DEBT is reduced.   Absolutely an indisputable FACT.  So when SS redeems one of their special T-bills, the NATIONAL DEBT is reduced.  But I do agree with you that the Treasury must simultaneously sell a new T-bill to the public to raise the cash required to redeem said SS T-bill.  Reduction of NATIONAL DEBT through T-bill redemption is offset by a new T-bill sold to the public which does increase the 'public debt'.  NATIONAL DEBT includes both intragovernmental and public debt.  Therefor the NATIONAL DEBT does not change.

 

From Wikipedia  https://en.wikipedia.org/wiki/National_debt_of_the_United_States

 

The national debt can also be classified into marketable or non-marketable securities. Most of the marketable securities are Treasury notes, bills, and bonds held by investors and governments globally. The non-marketable securities are mainly the "government account series" owed to certain government trust funds such as the Social Security Trust Fund, which represented $2.82 trillion (~$3.45 trillion in 2023) in 2017.

On 8/4/2025 at 10:19 PM, TedG said:

  I've been down this road with you. You are 100% wrong on this point.   The SS trust fund consists of special T-bills, and the surplus was allocated to the general fund.   

Yes... and you're headed in the wrong direction. 

I have provided plenty of evidence to support my explanation.... and you have provided what?

 

The OASI did provide cash to the Treasury, but obtained essentially T-bills in return.  Now OASI is redeeming those T-bills for cash.  Completely normal transactions that happen between any T-bill purchaser and the Treasury.  Absolutely no qualitative difference from public T-bill useage.  You're out to lunch.... but I'll read any link that you provide as long as it comes from Wikipedia, congress, Treasury or SSA.  No opinion pieces will be accepted or read.

2 hours ago, JimGant said:

Why Bernie Sanders, and others, would say otherwise.. is curious, or stupid. 

You're egregiously misstating Mr. Sanders position on SS.  He has long been aware of the fast approaching depletion of OASI.  But... he does agree with my opinion that the current shortfall in SSA cash flow is NOT increasing the NATIONAL DEBT.

43 minutes ago, gamb00ler said:

Yes... and you're headed in the wrong direction. 

I have provided plenty of evidence to support my explanation.... and you have provided what?

 

The OASI did provide cash to the Treasury, but obtained essentially T-bills in return.  Now OASI is redeeming those T-bills for cash.  Completely normal transactions that happen between any T-bill purchaser and the Treasury.  Absolutely no qualitative difference from public T-bill useage.  You're out to lunch.... but I'll read any link that you provide as long as it comes from Wikipedia, congress, Treasury or SSA.  No opinion pieces will be accepted or read.

Here we go again.  The money to redeem the TBills comes from taxes or deficit spending. 

5 minutes ago, gamb00ler said:

You're egregiously misstating Mr. Sanders position on SS.  He has long been aware of the fast approaching depletion of OASI.  But... he does agree with my opinion that the current shortfall in SSA cash flow is NOT increasing the NATIONAL DEBT.

The shortfall does increase the national debt. 

On 8/4/2025 at 10:20 PM, TedG said:

SS spending does add to the debt. 

You keep forgetting that when ANY T-bill holder redeems it.... the US NATIONAL DEBT is reduced.   Absolutely an indisputable FACT.  So when SS redeems one of their special T-bills, the NATIONAL DEBT is reduced.  But I do agree with you that the Treasury must simultaneously sell a new T-bill to the public to raise the cash required to redeem said SS T-bill.  Reduction of NATIONAL DEBT through T-bill redemption is offset by a new T-bill sold to the public which does increase the 'public debt'.  NATIONAL DEBT includes both intragovernmental and public debt.  Therefor the NATIONAL DEBT does not change.

 

The only thing that does change is who receives the interest and principal repayment from the Treasury.  The Treasury owes the same interest and principal after as it did before.

 

From Wikipedia  https://en.wikipedia.org/wiki/National_debt_of_the_United_States

 

The national debt can also be classified into marketable or non-marketable securities. Most of the marketable securities are Treasury notes, bills, and bonds held by investors and governments globally. The non-marketable securities are mainly the "government account series" owed to certain government trust funds such as the Social Security Trust Fund, which represented $2.82 trillion (~$3.45 trillion in 2023) in 2017.

1 hour ago, gamb00ler said:

You must have the same brain worm as RFK had.   You parable is way off.  In your story, there was no obligation created by the Treasury.  In real life there was.   Each and every special T-bill held by OASI is truly a Treasury obligation.  That is the why your little story is worthless.

Where does the money come from to pay these obligations? 

1 minute ago, gamb00ler said:

You keep forgetting that when ANY T-bill holder redeems it.... the US NATIONAL DEBT is reduced

When a T-bill is redeemed, where does the money come from to pay it?