Which of the following is true?
A) All of the current revenues flowing into the Social Security system are needed for benefit payments to current retirees.
B) If the Social Security surplus was used to pay down the privately held federal debt, this would reduce future taxes and, thereby, make it easier to deal with the retirement of the baby boomers.
C) During the 1980s and 1990s, most of the social security surplus was used to reduce the national debt.
D) When the Social Security surplus is used to cover the current operating expenses of the federal government, it will make it easier for future taxpayers to provide promised Social Security benefits to baby boomers.

Question

Quizplus · Accepted Answer

If the Social Security surplus was used to pay down the privately held federal debt, this would reduce future taxes and, thereby, make it easier to deal with the retirement of the baby boomers. This is because the reduction in federal debt would lead to lower interest payments on the debt, freeing up resources that could be used to support Social Security benefits. Option A is incorrect because the current revenues flowing into the Social Security system are not sufficient to cover all benefit payments, and the Social Security trust fund is expected to be depleted by 2035. Option C is incorrect because most of the surplus was used to purchase US Treasury bonds, which added to the national debt. Option D is incorrect because diverting the Social Security surplus to cover current operating expenses does not address the underlying financial challenges facing the program and could jeopardize the long-term solvency of the system.

Which of the Following Is True