February 17, 2014
Putting Social Security on Solid Footing
If you lend yourself money, should you charge interest on the loan? It would depend on how badly you need the interest income, wouldn't it? If you were desperate for cash, you'd pay yourself a hefty interest rate. After all, you need the money, right?
If you fail to see the absurdity in those questions, you might be a member of Congress. But what may be even more absurd than those questions is federal finance. You see, the federal government "lends" itself money and pays interest on those "loans." The prime example of this practice is the surpluses generated by the Social Security portion of the payroll tax that have been "lent" to the general fund. But what does the government pay itself in interest rates on those loans?
In 2013, the federal government paid an average rate of 1.875 percent on the "special issue securities" held by the Social Security Administration (SSA). How does that rate...(Read Full Article)




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