How Borrowing Funds from Social Security Impacts U.S. in the Future

The U.S. federal government may borrow funds from the Social Security to subsidize governmental operations. Consequently, the government is obligated to return the borrowed funds along with interest.

The U.S. federal government is authorized to borrow funds from the Social Security, given that it will return the borrowed funds along with interest. The funds borrowed by the government are intended to subsidize governmental operations. This move is apparently similar to how banks utilize deposits to support the expenses of consumers and businesses.

According to Nesbit, the allegations that borrowing from the Social Security is considered “stealing” is misinformation. This is because the Social Security Administration (SSA) states that the government is obligated to return the borrowed funds and to date, has never failed to do so.

Reports say the interest that comes along with the borrowed funds is additional income for the Social Security. In 2022, the interests helped provide funding for the agency by increasing the assets to $66.4 billion.

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Social Security Benefits

According to Loe, the funds of the Social Security mostly come from the payroll taxes deducted from employees’ paychecks. Thereafter, the income is deposited into two trust funds— the Old-Age Survivors Insurance (OASI) and the Disability Insurance (DI).

Furthermore, the Social Security funds are used to provide beneficiaries with payments and cover the expenses to administer the program. This means that the investments in special Treasury bonds that are guaranteed by the government and that earn interest are IOUs to the SSA.

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