I can say 'not spending the money' is not like what you describe.... it means that you should not have a unified budget... one where we have this big surplus on SS and the even bigger deficit on everything else and say 'See, it is not as bad as you think. We are only running a $250 billion dollar deficit'.... when in reality... on the 'normal' budget we were running a much higher deficit....
Yes, this does address one of the issues(the ability to use the excess SS money to claim we don't have a big deficit). But, it doesn't address the bigger problem. As I understand it, the big complaint of those who say "don't spend the money" is that they don't want to use the surplus to buy government bonds, since taxpayers have to pay all the interest and principal on these bonds. It feels like it's just an accounting trick--"I paid excess SS contributions (taxes), and later I have to pay extra taxes again to pay off the debt I then owe the SS system because of the USG bonds they bought--with my money." And, it IS a shell game, to a large extent. Having a non-unified budget doesn't fix that.
Since there's no way for the government to "save up" money without adverse consequences, the best answer is to stop overtaxing SS participants. It's a moot point now, since what is flowing in is just about at parity with what is flowing out. If, 30 years ago, folks had been allowed to put the "excess" in carefully limited and diversified investments under their own control, there would be a lot more folks in a lot better shape for retirement, and we taxpayers
wouldn't be on the hook for a penny more than we are today. This "partial privatization" could have been done for free. What we got instead is the worst of both worlds, thanks to the fearmongers and all those who pushed for keeping the SS taxes high so government could keep the spending faucets open wide. (And the villains came from both parties).
For a brand new version of the exact same government shell game, see the "CLASS ACT" which passed as part of Health Care "reform."
More info. Proponents of the bill used the excess receipts from long term care insurance premiums in the early years to artificially make the health care "reform" deficit numbers less egregious, but what they bought us all is a huge tax bill in coming decades. It's an outrage.
In part:
. . . One smidgen of truth in the message is that persons must pay premiums for at least five years before they qualify for benefits. As a result, the government will be bringing in extra revenue for years before it must start making any payments. According to
CBO’s most recent estimate (Table 5, page 32) the program would act to reduce the deficit by a total of $70.2 billion during the nine years ending in 2019 — including savings to the Medicaid program brought about by fewer persons entering nursing homes.
CBO said earlier, in its
estimate given last year, that the program probably would reduce the deficit during the decade starting in 2020 as well, though not by as much as during the first nine years. After that, CBO said, "the sum of benefit payments and administrative costs would probably exceed premium income and savings to the Medicaid program. Therefore, the programs would add to budget deficits in the third decade—and in succeeding decades—by amounts on the order of tens of billions of dollars for each 10-year period."
And if the government is estimating "tens of billions of dollars" of costs to the taxpayer in coming decades, we can only guess what the
actual cost will be. Note that the money from the early years isn't going into a hole in the ground (or wink-wink "lock box") to be later dug up and used to pay for nursing home care--it's the same sleight-of-hand "pay us now AND pay us later" mechanism we complain about with SS.