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Reply #8: Here it is in a nutshell.
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snippy
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Mon Feb-07-05 08:27 AM
Response to Original message |
8. Here it is in a nutshell. |
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Democrats advocated "saving Social Security" by using the annual surpluses the government was then running to pay down the publicly held portion of the federal debt. This was done each year there was a surplus. Paying down the publicly held debt would make it easier and cheaper for the government to monetize the Social Security trust fund by borrowing money in the bond market to use to pay benefits once Social Security itself was no longer running a surplus.
Democrats and a few republicans wanted to continue to run annual surpluses and continue to pay down the publicly held debt. Many people expected the annual surpluses to continue and anticipated that it was possible that all of the publicly held debt could be paid off in the not too distant future. If that occurred before Social Security stopped running a surplus, the government would be left with excess cash at the end of each fiscal year. Clinton proposed that if the government did have excess cash, it should be invested by the Social Security trust fund in the stock and bond markets. Republicans howled and screamed at this suggestion so it never gained any traction.
All of the democratic positions on Social Security in the late 1990's were based on the assumption that government surpluses would continue except during periods of recession. No one anticipated that a fiscal maniac would become president and rape the federal treasury and future generations of Americans. All democratic proposals to invest Social security assets in the stock market were based on continued annual surpluses eventually eliminating the publicly held portion of the national debt, not on risking Social Security assets in the hope of getting a higher return on those assets while reducing the completely safe and guaranteed benefits to be received by retirees.
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