Quote from Ed Breen:
If you understand the difference between the 'Special Government Securities', which are simply IOU accounting entries showing the Treasury has promised to borrow money to pay SS obligations when SS begins to run a deficit, and real 'Treaury Securities', which are tradable legal contracts to pay third parties interest and principal for a loan over a fixed term; then you can see how the Treasury would have no problem paying SS benefits even if the debt ceiling was not increased.
The reason for this is that for each new Treasury Security the Treasury sold to borrow money to fund SS benefits, the Treasury would write down the equal amount of 'Special Government Securities' notated in the account of the SS Trust Fund. Since the 'Special Government Securities' notated in the SS Trust Fund and the amount of real Treasury Securitities outstanding are both included in the Debt Ceiling....the creation of new Treasury Securities that extinguish an equal amount of 'Special Government Securities' would have no net change on the national debt...the change would only be creating real securities to retire IOU promises. The Debt Ceiling has no bearing on the Treasury's ability to do this...so, there is no reason that SS checks would not go out...unless of course someone just wants to scare you.
