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Response to eniwetok (Original post)

Mon Mar 28, 2016, 11:23 AM

7. Sorry... untrue

This would be correct if SS were actually a trust fund of invested assets. A higher return would keep the fund solvent longer.

But that isn't the case. The investment portfolio is made up of government obligations. The higher the interest rate paid on those obligations, the more expensive they become to the government. Either way, there's a fiscal dent that's due directly to SS payout obligations.

Essentially, you're arguing to transfer more of current government tax revenue into the SS trust fund... and that would be fine in and of itself. Unfortunately, a higher rate on those bonds means higher interest rates in general... which means that all of the other government debt (FAR more than just what is owed to SS) would also be due higher interest payments. The net effect is a significant negative.

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