Social Security insolvency is a right wing myth meant to scare you

[Oldstyle]

SS is expected to pay out more than it takes in by 2017, and go bankrupt by 2035.

Something like that but it is currently solvent.

So you're admitting that we have a looming crisis...but you'd like us to pretend it isn't happening because it doesn't jibe with your political view?

 

[RealChange]

Social Security insolvency is a right wing myth meant to scare you.

1) Many morons have called SS a Ponzi scheme. This is a brain dead characterization. The reason Ponzi schemes fail is because they eventually run out of new investors. Unless we stop having children - there will always be new tax revenues into the system.

When social security trustee Charles Blahous was asked if there was a difference between SS and a Ponzi scheme his only answer was that generally with a Ponzi scheme there is an intent to defraud. Regarding the way they are funded he didn't come up with any differences other than with SS we are forced to participate.

He also said that a "great point of confusion" about the current system is that it's "creating some kind of benefit equity from one generation to the next, that's just not how the program works... it's not a savings program it's an income transfer program." He agreed that people who got into the program early got good returns but people under 40 will pay huge taxes and will get relatively little in the way of benefits.

When asked if SS paid out more in benefits than it collected in taxes for 2010 he replied, "that's absolutely true." He said, "it's running in the red and it's only solvent in the sense that the Gov't has a legal obligation to fill up that gap between incoming taxes and outgoing benefits."

There is no SS "trust fund" with money. Originally there was money in the fund but that money was spent long ago on other things. Technically the Gov't owes SS that money plus interest. Since our Gov't is already running a massive deficit the only way to pay back SS is to borrow money from somewhere else.

 

[zonly1]

There were only 1.75 full-time private-sector workers in the United States last year for each person receiving benefits from Social Security, according to data from the Bureau of Labor Statistics and the Social Security board of trustees.

Labor Dept. Data: Only 1.75 Full-Time Private Sector Workers Per Social Security Recipient | CNSnews.com
With more layoffs to come, that number will get worse.

 

[RealChange]

SS is expected to pay out more than it takes in by 2017, and go bankrupt by 2035.

It already pays out more than it brings in. According to social security trustee Charles Blahous SS paid out more in benefits than it collected in taxes for 2010. He also said, "it's running in the red and it's only solvent in the sense that the Gov't has a legal obligation to fill up that gap between incoming taxes and outgoing benefits."

 

[MikeK]

If Social Security insolvency is a myth why did obama use social security checks as a hostage to get the debt ceiling limit raised?

Umm if the people that prinit the checks are liad off no checks will be printed.
Kind of like going to your bank on a holiday, money in there but you can't get it out.

Have you ever heard of direct deposit? I may be wrong but I think thats how it works now.

You're not wrong. It's optional; check or direct deposit.

 

[Contumacious]

Social Security insolvency is a right wing myth meant to scare you.

Social security solvency is a left wing myth meant to lull Americans into a false sense of security .

Many morons have called SS a Ponzi scheme. This is a brain dead characterization.

Correct.

People participate in Ponzi schemes voluntarily.

Americans must participate in Social security under penalty of law.

Is Social Security Constitutional?

by John Attarian

Enraged, Roosevelt decided to subdue the Court. His megalomania inflated by his 1936 landslide, on February 5, 1937 he abruptly asked Congress to enact a bill empowering him to appoint one additional Justice for every one who turned 70 and did not retire, for a maximum of six, thus enlarging the Supreme Court from nine Justices to up to fifteen.

A firestorm ensued. Critics rightly called Roosevelt’s proposal a plan to pack the Court. Even liberals who deplored the Court’s decisions, including many congressional Democrats, opposed it.

Its arm cruelly twisted by Roosevelt’s threat to its independence, the Supreme Court began surrendering in self-preservation. On March 29, the Court upheld a revised Frazier-Lemke Act; the National Firearms Act; the Railway Labor Act, which promoted collective bargaining; and a Washington state law providing for minimum wages for women.

Is Social Security Constitutional? by John Attarian

.

 

[MikeK]

There are several relatively painless ways the program can be modified for indefinite solvency.

1) Increase the eligibility age to occur in proportion with actuarial life expectancy when the program was conceived.

2) Eliminate the contribution cap.

3) Impose a means test. In my own example, if my monthly benefit were reduced by up to $200 I really wouldn't feel it. And there are many for whom the monthly benefit would be redundantly trivial and wholly unnecessary.*

(*Social Security is an insurance program, not an investment. Qualification for payment could be determined by level of existing personal assets without negatively affecting anyone.)


PS: In case anyone is wondering: I am a Socialist.

 

[Charles_Main]

Social Security insolvency is a right wing myth meant to scare you.


Seriously. A few points:

1) Many morons have called SS a Ponzi scheme. This is a brain dead characterization. The reason Ponzi schemes fail is because they eventually run out of new investors. Unless we stop having children - there will always be new tax revenues into the system.

2) If nothing is done, Social Security can continue to pay benefits under current law for at least a couple of decades. After that, it can only pay benefits at about 80% - but for as far as can be seen into the future, it can continue to pay at that level - thus, even if the politicians do absolutely nothing - 80% of the program is solvent for as far as can be forecast.

3) Ultimately, the ability of a society to support its retirees and disabled - that is, the ability of those who produce to produce enough for those who cannot produce (either because they are too old to work, or disabled) - doesn't really depend on the particular investment vehicle that those who do not produce use. If the worker to retiree ratio is 2:1 as opposed to 10:1, the workers in the 2:1 situation will have to produce more for the retirees than those in the 10:1 situation. The only exceptions are things that you can actually save for retirement - like a house. Other than your house - everything you need in retirement will have to be made by somebody during (or right before) your retirement.



4) Social Security taxes do not get wasted - most of them go to pay current benefits. If their is extra, the trust fund buys bonds. If their is not enough, they sell some of their bonds. This does push the burden around in time - this is no secret and no one ever tried to cover it up - but over many decades, the SS Trust Fund will spend the same as it takes in (plus interest paid on its Trust Fund balance).

If Social Security insolvency is a myth why did obama use social security checks as a hostage to get the debt ceiling limit raised?

Because the OP of this thread is a fucking idiot, and SS is insolvent. Not Because it's running out of money on it's own, but because the Fucking Retards in DC raped it's Fund to pay for the General Budget, and now there really is no money in the Coffers.

 

[RealChange]

Social Security trustee Charles Blahous said that Social Security already paid out more in benefits than it collected in taxes for 2010. He also said, "it's running in the red and it's only solvent in the sense that the Gov't has a legal obligation to fill up that gap between incoming taxes and outgoing benefits."

How can you argue with that? It's insolvent!

 

[flacaltenn]

Here we go again.. The whack-o-moles flee one thread and start a new one because they couldn't debate the facts.

1) Social Security is not the problem. The PROGRAM is just a promise and tax with no GUARANTEES on benefits, contributions and completely subject to the whims of the Clown College. The PROBLEM is the phoney fiction of Trust Fund -- which never held any true assets and is NOT paying for the shortfalls in Soc Sec annual reciepts/payments that we ALREADY seeing in 2010.

2) What I just said is CLEARLY stated by both the SSA Actuaries and the Cong. Budget Office.

http://www.cbo.gov/ftpdocs/120xx/doc12039/01-26_FY2011Outlook.pdf

When a trust fund receives payroll taxes or other income
that is not needed immediately to pay benefits or cover
other expenses, the Treasury credits the fund and uses the
excess cash to reduce the amount of new federal borrowing
that is needed to finance the governmentwide deficit.
That is, if other tax and spending policies are unchanged,
the government borrows less from the public than it
would in the absence of those excess funds. The reverse is
the case when revenues for a trust fund program fall short
of expenses. The balances of trust funds at a given point
in time are not a measure of resources available to pay
future obligations for the respective programs; those
resources will need to come from federal revenues or
additional borrowing in the years those obligations are
due.

Meaning QUITE CLEARLY that the $40Bill in phoney "interest" that SSA needed to balance it's books in 2010 came out of NEW taxpayer debt, NOT the Trust Fund. Here's the same statement from the 2009 Actuary Report..

http://www.socialsecurity.gov/history/pdf/tr09summary.pdf

Neither the redemption of trust fund bonds, nor
interest paid on those bonds, provides any new net income to the Treasury,
which must finance redemptions and interest payments through
some combination of increased taxation, reductions in other government
spending, or additional borrowing from the public.

3) The fact that any shortfall in SS reciepts needs to be covered by NEW debt and taxpayer obligations makes the entire Trust Fund an evil fiction promulgated to cover the THEFT of all the FICA overcharges for the past 30 years..

It's not just ME that calls it theft. Harry Reid has called it embezzlement, Fritz Hollings has called the Trust Fund "worse than Confederate money"..

4) That theft of the original FICA Surpluses is GONE -- SPENT -- SAYONARA. We are on our own to face future deficits in the fund due to demographics because the Congress Critters couldn't keep their hands off it and simply kicked the can down the road with IOUs and promises to cover future liabilities with future debt.

5) It is up to us to be OUTRAGED that we will PAY more than TWICE for the fiction of the SS Trust Fund. I don't expect folks who believe that the Govt is just a giant piggy bank with immense amounts of "REAL CASH" sitting around to understand this. So it's no wonder that the Whack-A-Moles are so upset with the truth that they've been lied to and mugged - BECAUSE largely and curiously they are our LEFTIST buds on the board.

6) One of awful effects of that theft is that it disproportionally affected the poorest of workers who were essentially forced to PAY INCOME TAX when they thought they paying for SSA "premiums". Because the excess FICA was spent in the years collected on programs in the General Budget. Essentially Lefties -- you accomplished what the Republicans can only dream of -- and that is to hamstring the Progressive nature of the tax tables for all the past 30 years. Congrats!!! Clinton balanced his budget with EXCESS FICA taxes. How sweet was that for the working poor?

You know that old saying about Conservatives and Lefties.. Well here's where the mugging part starts your political conversation. As soon as you get over the grief of finding out there is no Santa Claus and that your purse is actually missing-- things will start to improve for you.

I guess they just need to holler and stamp their feet and start a zillion new threads hoping that the facts will change. They won't..

 

[flacaltenn]

There are several relatively painless ways the program can be modified for indefinite solvency.

1) Increase the eligibility age to occur in proportion with actuarial life expectancy when the program was conceived.

2) Eliminate the contribution cap.

3) Impose a means test. In my own example, if my monthly benefit were reduced by up to $200 I really wouldn't feel it. And there are many for whom the monthly benefit would be redundantly trivial and wholly unnecessary.*

(*Social Security is an insurance program, not an investment. Qualification for payment could be determined by level of existing personal assets without negatively affecting anyone.)


PS: In case anyone is wondering: I am a Socialist.

And FDR would be so proud of the way that you've just dismembered and roasted his dream of UNIVERSAL coverage for ALL workers...

 

[flacaltenn]

OOpydOO::

Social Security insolvency is a right wing myth meant to scare you

Have I scared you now? Gee. I sure hope so.. Now can we ditch the tantrum and the tears and get on with fixing it?

 

[Raoul_Duke]

Here we go again.. The whack-o-moles flee one thread and start a new one because they couldn't debate the facts.

1) Social Security is not the problem. The PROGRAM is just a promise and tax with no GUARANTEES on benefits, contributions and completely subject to the whims of the Clown College. The PROBLEM is the phoney fiction of Trust Fund -- which never held any true assets and is NOT paying for the shortfalls in Soc Sec annual reciepts/payments that we ALREADY seeing in 2010.

2) What I just said is CLEARLY stated by both the SSA Actuaries and the Cong. Budget Office.

You keep making these claims and then running away from debating them. Here's a link to the old thread where I explained to you why you're wrong. Perhaps you can reply in this thread :

http://www.usmessageboard.com/polit...t-a-ponzi-scheme-mr-perry-60.html#post4150061

 

[flacaltenn]

Here we go again.. The whack-o-moles flee one thread and start a new one because they couldn't debate the facts.

1) Social Security is not the problem. The PROGRAM is just a promise and tax with no GUARANTEES on benefits, contributions and completely subject to the whims of the Clown College. The PROBLEM is the phoney fiction of Trust Fund -- which never held any true assets and is NOT paying for the shortfalls in Soc Sec annual reciepts/payments that we ALREADY seeing in 2010.

2) What I just said is CLEARLY stated by both the SSA Actuaries and the Cong. Budget Office.

You keep making these claims and then running away from debating them. Here's a link to the old thread where I explained to you why you're wrong. Perhaps you can reply in this thread :

http://www.usmessageboard.com/polit...t-a-ponzi-scheme-mr-perry-60.html#post4150061

Sorry man -- My response is above.. Never ran away from anything. There is nothing of value in the Trust Fund. See above.. Ad Infinitum...

You did not "prove" ANYTHING in that thread. All you did was to pick out a flippantly sarcastic "I don't know" quote from me.. You NEVER refuted the statements above and you're in complete denial.. You're also not gonna wear me down. So go ahead and show everyone how smart you are and what an ass I am and refute ANYTHING that I've said in this thread so far...

 

[Raoul_Duke]

Here we go again.. The whack-o-moles flee one thread and start a new one because they couldn't debate the facts.

1) Social Security is not the problem. The PROGRAM is just a promise and tax with no GUARANTEES on benefits, contributions and completely subject to the whims of the Clown College. The PROBLEM is the phoney fiction of Trust Fund -- which never held any true assets and is NOT paying for the shortfalls in Soc Sec annual reciepts/payments that we ALREADY seeing in 2010.

2) What I just said is CLEARLY stated by both the SSA Actuaries and the Cong. Budget Office.

You keep making these claims and then running away from debating them. Here's a link to the old thread where I explained to you why you're wrong. Perhaps you can reply in this thread :

http://www.usmessageboard.com/polit...t-a-ponzi-scheme-mr-perry-60.html#post4150061

Sorry man -- My response is above.. Never ran away from anything. There is nothing of value in the Trust Fund. See above.. Ad Infinitum...

You did not "prove" ANYTHING in that thread. All you did was to pick out a flippantly sarcastic "I don't know" quote from me.. You NEVER refuted the statements above and you're in complete denial.. You're also not gonna wear me down. So go ahead and show everyone how smart you are and what an ass I am and refute ANYTHING that I've said in this thread so far...

You didn't reply to the post I linked. Now, if there's nothing of value in the SS trust fund how come it earned a hundred and ten billion dollars in annual interest payments in the last budget year? That's a pretty impressive annual return for a worthless fund, no?

 

[flacaltenn]

You keep making these claims and then running away from debating them. Here's a link to the old thread where I explained to you why you're wrong. Perhaps you can reply in this thread :

http://www.usmessageboard.com/polit...t-a-ponzi-scheme-mr-perry-60.html#post4150061

Sorry man -- My response is above.. Never ran away from anything. There is nothing of value in the Trust Fund. See above.. Ad Infinitum...

You did not "prove" ANYTHING in that thread. All you did was to pick out a flippantly sarcastic "I don't know" quote from me.. You NEVER refuted the statements above and you're in complete denial.. You're also not gonna wear me down. So go ahead and show everyone how smart you are and what an ass I am and refute ANYTHING that I've said in this thread so far...

You didn't reply to the post I linked. Now, if there's nothing of value in the SS trust fund how come it earned a hundred and ten billion dollars in annual interest payments in the last budget year? That's a pretty impressive annual return for a worthless fund, no?

You're not comprehending the stuff I've already posted here. No wonder you're having a problem.. Go read my first post in this thread again. Especially the part where the SSA AND the CBO declare quite clearly -- that all money your quoting came NOT from the trust fund, but from NEW SPENDING AND DEBT created in that fiscal year. DIDN'T COME FROM THE TRUST FUND!!! It came from a promise on an IOU in the Trust Fund that TODAY'S TAXPAYERS would be paying for any shortfalls in tax revenues..

Yesterday's taxpayers are just screwed... THus the FICTION of the Trust Fund..

The taxpayers are paying AGAIN for the surpluses that went into the fund (on worthless paper IOUs not T-Bond investments) years ago..

 

[RealChange]

You keep making these claims and then running away from debating them. Here's a link to the old thread where I explained to you why you're wrong. Perhaps you can reply in this thread :

http://www.usmessageboard.com/polit...t-a-ponzi-scheme-mr-perry-60.html#post4150061

You do realize that in 2010 social security paid out more than it brought in?

 

[RealChange]

You're not comprehending the stuff I've already posted here. No wonder you're having a problem.. Go read my first post in this thread again. Especially the part where the SSA AND the CBO declare quite clearly -- that all money your quoting came NOT from the trust fund, but from NEW SPENDING AND DEBT created in that fiscal year. DIDN'T COME FROM THE TRUST FUND!!! It came from a promise on an IOU in the Trust Fund that TODAY'S TAXPAYERS would be paying for any shortfalls in tax revenues..

Yesterday's taxpayers are just screwed... THus the FICTION of the Trust Fund..

The taxpayers are paying AGAIN for the surpluses that went into the fund (on worthless paper IOUs not T-Bond investments) years ago..

Exactly. The so called "trust fund" has IOU's in it. The Gov't essentially borrowed money from itself via the ss fund. There is no money in it which means if it ever pays back that money it will come from future tax payers.

 

[Moonglow]

A Board of Trustees oversees the financial operations of the trust funds. The Board reports annually to the Congress on the financial status of the trust funds.


How are the trust funds invested? By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are "special issues" of the United States Treasury. Such securities are available only to the trust funds.
In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. Marketable securities are subject to the forces of the open market and may suffer a loss, or enjoy a gain, if sold before maturity. Investment in special issues gives the trust funds the same flexibility as holding cash.

Data on trust fund investments provide a breakdown by interest rate and trust fund for any month after 1989.


What interest rate do the trust funds' assets earn? The rate of interest on special issues is determined by a formula enacted in 1960. The rate is determined at the end of each month and applies to new investments in the following month.
The numeric average of the 12 monthly interest rates for 2010 was 2.760 percent. The annual effective interest rate (the average rate of return on all investments over a one-year period) for the OASI and DI Trust Funds, combined, was 4.642 percent in 2010. This higher effective rate resulted because the funds hold special-issue bonds acquired in past years when interest rates were higher.


What happens to the taxes that go into the trust funds? Tax income is deposited on a daily basis and is invested in "special-issue" securities. The cash exchanged for the securities goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.


If all the income is invested, how do benefits get paid each month? Money to cover expenditures (mainly benefit payments) from the trust funds comes from the redemption or sale of securities held by the trust funds. When "special-issue" securities are redeemed, interest is paid. In fact, the principal amount of special issues redeemed, plus the corresponding interest, is just enough to cover an expenditure.


What were the amounts of securities bought and sold during recent years? The amount bought in 2010 was $1,020 billion, while the amount sold was $929 billion. See investment transactions for more detail and earlier years.

Why do some people describe the "special issue" securities held by the trust funds as worthless IOUs? What is SSA's reaction to this criticism? As stated above, money flowing into the trust funds is invested in U. S. Government securities. Because the government spends this borrowed cash, some people see the trust fund assets as an accumulation of securities that the government will be unable to make good on in the future. Without legislation to restore long-range solvency of the trust funds, redemption of long-term securities prior to maturity would be necessary.
Far from being "worthless IOUs," the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government.

Many options are being considered to restore long-range trust fund solvency. These options are being considered now, over 20 years in advance of the year the funds are likely to be exhausted. It is thus likely that legislation will be enacted to restore long-term solvency, making it unlikely that the trust funds' securities will need to be redeemed on a large scale prior to maturity.


Can the Social Security Trust Funds remain solvent without making changes to the program? In the annual Trustees Report, projections are made under three alternative sets of economic and demographic assumptions. Under one of these sets (labeled "Low Cost") the trust funds remain solvent for the next 75 years. Under the other two sets (the "Intermediate" and "High Cost"), the trust funds become depleted within the next 25 years. The intermediate assumptions reflect the Trustees' best estimate of future experience.
Some benefits could be paid even if the trust funds are depleted. For example, under the intermediate assumptions, annual income to the trust funds is projected to equal about three-quarters of program cost once the trust funds become depleted. If no legislation has been enacted to restore long-term solvency by that time, about three-quarters of scheduled benefits could be paid in each year.

The Trustees believe that extensive public discussion and analysis of the long-range financing problems of the Social Security program are essential in developing broad support for changes to restore the long-range balance of the program.


Were the assets of the Social Security Trust Funds depleted in the past? The assets of the larger trust fund (OASI), from which retirement benefits are paid, were nearly depleted in 1982. No beneficiary was shortchanged because the Congress enacted temporary emergency legislation that permitted borrowing from other Federal trust funds and then later enacted legislation to strengthen OASI Trust Fund financing. The borrowed amounts were repaid with interest within 4 years.

Trust Fund FAQs

 

[Moonglow]

WASHINGTON (AP) — Most of the top Republicans running for president are embracing plans to partially privatize Social Security, reviving a contentious issue that fizzled under President George W. Bush after Democrats relentlessly attacked it

GOP candidates revive private Social Security idea - Yahoo! News