Why the Social Security checks might be held off after Oct 17 with continuing fake "shut down"??
I thought that SS has a trust fund, which holds all the contributions made by the workers during the past few decades, and I thought that there is still a $2+ trillion surplus in the SS trust fund, enough to pay the benefit for many years to come. How come the SS payment should be adversely affected by the fake "debt ceiling"?
The "shut down" might affect the SS payment only because the $2+ trillion surplus fund in the SS trust fund has already been spent completely, so that US government has to create more debt to pay for the Social Security.
Should the SS trust fund be segregated from the general spending accounts??
In case of a default, which is possible eventually given the perpetual fiscal deficit, the retirees' claim on the SS payment would probably have lower priority over the Interest payments to US sovereign debtholders, such as Japan or China, at least legally.
Whether to raise the debt ceiling is a fake argument because it has to be raised for now.
However, if there is no long-term solution for the malaise of perpetual fiscal deficit and ballooning debt, then the ultimate default is a mathematical certainty.
There is no contradiction. Your $39 trillion is the unfunded future liabilities given the infinite time horizon, due to demographic shift and other factors.
The $2 trillion plus is the money already paid into the SS Trust Fund. Every time you receive a pay check, about 6% of the fund was deducted and then deposited into the SS Trust Fund. For a given year, if receipt from employed workers more than cover the payment to the retired workers, then a surplus is recorded. Over many decades, there is about $2 trillion plus surplus accumulated in the Trust Fund.
The point is that there is currently no money in the SS Trust fund, only $2+ trillion IOU written by the US Treasury.