/biz/ - Business & Finance

>>53591583
Social Security covers the difference by selling Treasuries out of its trust. Sometime in the 80s they hiked the social security tax rate and boomers were putting in more than was being paid out, so the government put the excess into US Treasuries. So social security is setup like so:

Obligations paid = Social Security Taxes Collected + Interest from trust + sales of treasuries from trust

So as treasuries get sold off from the trust, it both pushes rates up as a whole and reduces the total interest accrued each period. Thus moving forward we'll see the trust deplete more rapidly as the taxes-obligation gap widens due to reduced interest and requiring larger sell-offs.