(MoneyWatch) Since we’re in political sound-bite season, let’s address a misconception that’s often repeated by pundits and political candidates alike: Congress raided the Social Security trust fund and spent it on their own pork-barrel projects.
The truth is that online title loans Alaska in prior years, Social Security taxes collected from workers added up to more than the amount of benefits paid to retirees. This buildup of surplus was intentional — the government wanted to build a reserve that would cover the benefits of the baby boomers. S. government bonds that are legally obligated to pay the stated rate of interest, and then repay the principal when they mature, according to the terms of the bonds.
These special bonds are just part of the funding of the overall federal government, and the assets in the Social Security trust fund represent about 15 percent of the government’s total debt. This process has taken place in full view of anybody who cared to learn about it. There have been no smoke-filled rooms where politicians sat around divvying up the earmarked money in the Social Security trust to finance their pet projects.
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