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Author: 0x6a74 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Re: Could you retire without Social Security? Date: 12/19/2010 1:41 AM
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. Would someone please tell me what the correlation between Federal income taxes, etc. and SS and Medicare. SS and Medicare are paid separately as Employment taxes and supposedly are to be placed in a trust fund, not in the General fund.


if i understand the question ..

the connection is that when there's a surplus for SS, the trust-fund is raided by the General Fund and given T-Bonds (IOUs)

those Bonds will have to be re-paid from General Revenue (incl Income Tax)

if there isn't sufficient Revenue (due to ,inter alia, lower taxes), one way to deal with that is default the SS Bonds. (apparently the preferred way by the WSJ)
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