The American Spectator

p> GO FICA IT OUT br> Re: David Hogberg’s Insecure Arguments : /p> p>Social Security will still be a bad deal. Reform must require that the full 15.3 % be handled like a 401K with plenty of choices of conservative investment options. This would ensure that even lower income taxpayers will have the necessary savings. br> — G.B. Hall br> Marietta, Georgia /p>

I’ve always had a problem with how the federal government handles the excess FICA. Everything I’ve read indicates that the excess is loaned to various branches of the government, and underwritten by T-Bills. For example, let’s say Veterans Affairs needs more money than is budgeted, and subsequently gets the added money from Social Security. The VA, or someone, issues a T-Bill. The only problem I have is: who the hell pays the interest on the T-Bill? If the federal government issues the T-Bill, isn’t the interest paid by the taxpayers, or am I missing something?

p>Maybe you can tell me: is the Federal Government lending out money in which the interest is paid by somebody other than the taxpayers? I’ve always thought that money from the government was actually obtained from banks, and just underwritten by the Federal Government. It would seem to me that if the Federal Government actually was in lending business, the banking and credit union lobbies would have gone ballistic by now, and be in orbit. The American Spectator could do a great service to us ignorant Americans if they could explain how the Federal Government gets a 1-2% return on FICA money.