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Subject:  Re: Could you retire without Social Security? Date:  12/19/2010  1:41 AM
Author:  0x6a74 Number:  67868 of 101513

. 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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