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modrepub

(3,469 posts)
11. The SS Surplus does go into US Bonds
Sun Dec 24, 2017, 09:03 PM
Dec 2017

My point is that that money isn't really being "raised" through traditional means, i.e. a bond sale that pulls in capital from willing people. It's kind of money that's already on the table through excess SS taxes. When the SS surplus (plus interest) is no longer "there" the government will have to pull in more money to finance its debt. If there isn't enough to cover a bond issue then the US government will have to raise interest rates to "attract" more money, which will jack up interest rates on everything else. To date there has never been a shortfall in a US bond call that I know of. When the SS surplus (plus interest) is no longer "there", which is going to happen one day soon, we will see if the capital markets will be willing to make up the difference without any large interest rate changes.

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