How does SS run a surplus, when it all goes into the general budget, and the general budget is running a deficit?
Don't tell me SS payroll taxes are special for SS, when it all goes into the general gov't slush fund. That's just Enron accounting.
Even only balancing the SS vs its "special" payroll taxes, the program is still in the red.
http://www.washingtontimes.com/news/2010/aug/5/social-security-red-first-time-ever/That was written in
2010. That rosy economic expectations did not pan out, it never went black. So that is current and future debt.
At the end of the day, we've collected tax revenue at about 17-20% of GDP since WW2, plus change in debt yields total cash inflow. The big 5 consumers are Soc Sec, Medicare/aid, DoD, Interest on debt, and everything else.
This is deficit as % of GDP. Integrate (add up) the area under the curve to get total debt. Any % less than inflation rate, causes total debt to gdp to fall.
This plot is useful for showing how much tax revenue is augmented by new debt, year by year. One can easily see WW1, GD, WW2, and the current GD2. Which we have attacked with 2x as much deficit spending compared to GD1. Was it 2x more effective than Hoovers and Roosevelt's GD deficit spending? It certainly feels like we have had a softer landing. But we also came off a higher level of wealth. So it is hard for me to judge. Unfortunately, the constant debt run from 1980 to 1998 piled up a huge amount of debt. [Lower percent over a longer time equal same area under the curve.] So we don't have much head room to sustain any deficit spending before having a public debt crisis like the current private debt crisis.
So bottom line...
It all has to be cut... SS, MediX, DoD, & Everything else. But the big 3 need to be reformed first; they are the most critical to a balanced budget and balance budget cannot be achieved without those 3.
