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They're holding "Notes" that can only be sold to the entity that is over $1Trillion in annual deficit
And? I hold $500 in U.S. Savings Bonds that can only be sold back to the Treasury, you're telling me they are worthless? Because I'm pretty sure I can just go to my bank and deposit them, with them settling the transaction with the Treasury on my behalf, just like the last set of savings bonds I deposited. Has the Treasury decided to stop paying on its non-marketable obligations - or are you just a fearmonger?
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."
Umm the govt holding over 2 trillion in promissory notes for the surplus they spent has nothing to do with this?
I guess the entire fininacial community is insolvent because without the promissory notes they hold they are insolvent?
It appears to me that many/most right wingers are crying this insolvent cry because they do not want the govt to repay it's promissory notes to the SS ssytem. aka the American people.
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.
LOL! A PERSON still has to initiate the process.
Umm the govt holding over 2 trillion in promissory notes for the surplus they spent has nothing to do with this?
I guess the entire fininacial community is insolvent because without the promissory notes they hold they are insolvent?
It appears to me that many/most right wingers are crying this insolvent cry because they do not want the govt to repay it's promissory notes to the SS ssytem. aka the American people.
They're holding "Notes" that can only be sold to the entity that is over $1Trillion in annual deficit
WAKE THE FUCK UP!
Clearly you are one of those who think the USA should not repay it's debts.
1. It is a ponzi scheme because the population is declining, and the unemployment rate is increasing, which means not enough money to meet obligations (in 2037)
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..
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?
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..
What taxpayers are paying for is that fact that the government borrowed the money from the trust fund over the past near thirty years to cover its spending elsewhere. That has no bearing whatsoever on Social Security's sustainability or success as a programme to provide retirement income for America's seniors.
1. It is a ponzi scheme because the population is declining, and the unemployment rate is increasing, which means not enough money to meet obligations (in 2037)
The population is growing, not declining.
And SS is not a Ponzi Scheme.
But it needs to be fixed.
They're holding "Notes" that can only be sold to the entity that is over $1Trillion in annual deficit
And? I hold $500 in U.S. Savings Bonds that can only be sold back to the Treasury, you're telling me they are worthless? Because I'm pretty sure I can just go to my bank and deposit them, with them settling the transaction with the Treasury on my behalf, just like the last set of savings bonds I deposited. Has the Treasury decided to stop paying on its non-marketable obligations - or are you just a fearmonger?
"I cannot guarantee that those checks go out on August 3rd if we haven't resolved this issue. Because there may simply not be the money in the coffers to do it" Barack "Social Security Really is Bankrupt" Obama, the Downgraded President
Have you ever heard of direct deposit? I may be wrong but I think thats how it works now.
LOL! A PERSON still has to initiate the process.
It's automated stupid.
LOL! A PERSON still has to initiate the process.
It's automated stupid.
LOL! You're a moron.
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
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?
That's false. You're either lying, or you are ignorant of the facts.
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."
Umm the govt holding over 2 trillion in promissory notes for the surplus they spent has nothing to do with this?
I guess the entire fininacial community is insolvent because without the promissory notes they hold they are insolvent?
It appears to me that many/most right wingers are crying this insolvent cry because they do not want the govt to repay it's promissory notes to the SS ssytem. aka the American people.
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."
That statement is ludicrous.
Someone argue that it's not. I want to hear that one.
The annual report of the Social Security Trustees, published in August 2010, forecast that the primary Social Security program, the Old Age and Survivors Insurance Trust Fund (OASI), would not exceed its tax receipts until 2018. Unfortunately, it happened in fiscal 2010, which ended in October. That year's outlays for the OASI fund were about $580 billion, while receipts came to only $540 billion -- a whopping $40 billion shortfall.
Social Security expenditures exceeded the programs non-interest income in 2010 for the first time since 1983. The $49 billion deficit last year (excluding interest income) and $46 billion projected deficit in 2011 are in large part due to the weakened economy and to downward income adjustments that correct for excess payroll tax revenue credited to the trust funds in earlier years.
Because Social Securitys Trust Fund continues to grow even as the program runs a current deficit, some people are confused into believing that the program is now running a surplus. But what is actually happening is that other government accounts are being tapped to pay interest to its Trust Fund based on surpluses that Social Security has run in the past. These interest payments between government accounts do not reduce the federal deficit; the net effect of Social Security on the federal budget this year will thus be roughly $40 billion in the negative
Under scenarios that reflect exceptional fiscal restraint, the economy will head toward a sizable net asset position during social security surplus years. After the program begins to accumulate deficits, however, debt ratios rise rapidly, moving the economy toward extraordinarily large and possibly unstable debt ratios.
The financial status of social security is crucial to an analysis of future debt policy. Social security income (primarily payroll and benefit taxes) and outgo (benefit payments) flow through separate trust fund accounts that are part of overall Federal revenues and outlays. Thus, social security surpluses improve the Federal budget balance and deficits invoke the usual methods of government finance.
It's automated stupid.
LOL! You're a moron.
Did the truth hurt you? poor baby
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).
MoonGlow: There is the fairy tale accounting for these IOUs and then there is a reality about WHERE the source of the "interest" and note repayments ACTUALLY comes from..
Writing a debt obligation isn't STEALING anything shit for brains, its a LOAN people do it all the time.Say in 1997, SS ran a $58Bill surplus.. That money was STOLEN by Congress and spent on anything they like. An IOU was placed in the Trust Fund and accounted for AS THO it was an actual investment.
Wrong. The Trust Fund pays for the IOU by sending its excess funds to the Treasury. You really have no idea what you're talking about, though I can tell you're well read on right wing fear mania blogs.But in 1997, the government never PAID for that IOU. Never issue a debit against the "investment".
.So they left it up to FUTURE Taxpayers to cover any Shortfalls in the SS reciepts
I have no expectation of SS being around when (and more importantly, if) I retire.
