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

[OohPooPahDoo]

All taxes are wasted. Please don't pretend otherwise.

Really? How do you leave your house? What does it take for you to get to the grocery store, what do you use a helicopter?

 

[flacaltenn]

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..

It comes from the Treasury

From ANOTHER REAL Debt instrument issued to China or me in 2010. There are now 2 debt instruments to cover the original theft. The excess FICA was never paid for until today. There was nothing of value in the Trust Fund from which to recover that original theft. (See admission from SSA and CBO in my original post).

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.

Writing a debt obligation isn't STEALING anything shit for brains, its a LOAN people do it all the time.

If those excess FICA payments that were taken for 30 years had any value -- why does the Treasury need to finance SS deficits with NEW debt payable by TODAY'S taxpayers? The original FICA is STOLEN -- GONE because we're paying any SS deficits out of TODAY'S general fund. You call that a loan? Or an investment? When you pay TWICE for the same value? Plus Interest?

But in 1997, the government never PAID for that IOU. Never issue a debit against the "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.

The IOU merely accounts for the magnitude of theft plus fictional interest. Yes it added to the budget in the years where there WAS a surplus. Clinton/Gingrich counted the Excess FICA towards their "balanced budget". How could the budget be actually balanced in those years if a valuable note was created and placed in the Trust Fund? Clue -- the note had no actually value. As far as the REAL on-budget balancing, they declared it as an ASSET to the treasury. In the years where there is a deficit -- it becomes a liability to the Treasury. So in 1997 -- taxpayers lose $58Bill. In 2010, they LOSE again when NEW debt is issued on the public market to cover a shortfall. It's a lose-lose proposition.

So they left it up to FUTURE Taxpayers to cover any Shortfalls in the SS reciepts

.

Who the fuck else would cover it? God? The Money Tree?

If the Trust Fund never existed -- it would make no difference in how the 2010 SS deficit was financed. True statement there. The treasury would cough up the $40Bill to continue to write checks. The only purpose of the fictional Trust FUnd is to keep track of how much debt WILL be issued in the future to cover the past theft. Issuing FUTURE DEBT is of no value to the taxpayers who have already OVERPAID into the Trust Fund for 30+ yrs.

You getting this yet? Need to up the "shit for brains" ante here? Maybe I should stop working so hard and just concentrate on the personal attacks like you and others are resorting to..

 

[OohPooPahDoo]

If those excess FICA payments that were taken for 30 years had any value -- why does the Treasury need to finance SS deficits with NEW debt payable by TODAY'S taxpayers?

How would that stop them from having value?

 

[flacaltenn]

If those excess FICA payments that were taken for 30 years had any value -- why does the Treasury need to finance SS deficits with NEW debt payable by TODAY'S taxpayers?

How would that stop them from having value?

Go back and read the SSA and CBO quotes in my first post. When SS runs a deficit it goes on the General Fund ledger as a debt. NEW debt is issued (say to me or Japan) to pay for this years shortfall. Why does NEW debt have to be issued -- if there is value in "notes" in the Trust Fund? Why are taxpayers PAYING AGAIN to finance value that THEY put into the fund 30 years ago?

Answer -- No actual value in the fund to cover the Loan that was made. It was all put on FUTURE taxpayers to cover any deficits that might occur in Soc Sec..

 

[bigrebnc1775]

LOL! You're a moron.

Did the truth hurt you? poor baby

Not all SS payments are even sent electronically.

no fucking shit thanks for playing.

 

[OohPooPahDoo]

Answer -- No actual value in the fund to cover the Loan that was made.

No actual "value" - yet a transfer of real money from the Treasury to the Trust Fund must have occurred, or else benefit payments wouldn't have been made, right? How can the Trust Fund not have "value" if indeed the Treasury is redeeming it for real money?

It was all put on FUTURE taxpayers to cover any deficits that might occur in Soc Sec..

So in other words, the Trust fund sold its IOU's to the market, with the Treasury acting as an intermediary, buying the Trust Fund Debt and selling new debt to investors to cover it. And they don't have value because the Trust Fund has been able to use them to generate real cash flow?

You make no sense!

If I sell a debt obligation I own and get paid for it - obviously, it had value!

 

[flacaltenn]

Answer -- No actual value in the fund to cover the Loan that was made.

No actual "value" - yet a transfer of real money from the Treasury to the Trust Fund must have occurred, or else benefit payments wouldn't have been made, right? How can the Trust Fund not have "value" if indeed the Treasury is redeeming it for real money?

You need to keep track of the cost basis on the "investment". When Treasury covers the shortfall in 2010 by issuing even MORE debt, they are putting taxpayers on the hook for more debt. Yes the IOUs promise that the money will be paid back. But it doesn't provide any liquidity to do so. Issuing NEW debt whenever SS comes up short is increasing the cost to the taxpayer of each "deficit SS dollar" considerably. Like I said, makes no diff if the Trust Fund ever EXISTED financially speaking. It's just an accounting fiction, not an investment.

It was all put on FUTURE taxpayers to cover any deficits that might occur in Soc Sec..

So in other words, the Trust fund sold its IOU's to the market, with the Treasury acting as an intermediary, buying the Trust Fund Debt and selling new debt to investors to cover it. And they don't have value because the Trust Fund has been able to use them to generate real cash flow?

You make no sense!

If I sell a debt obligation I own and get paid for it - obviously, it had value!

The Trust Fund IOUs CAN'T be sold "to the market" or anywhere else. Says so in the terms of "special issues". Treasury doesn't use the worthless IOUs to cover the shortfall, they have to put the SS deficit request in line with everyone else in the General Fund and issue NEW REAL T-Bonds to cover the deficit.. You are paying THIS YEAR for that new debt. And you ALREADY PAID excess FICA for 30 years. Where is the "value"?

 

[flacaltenn]

Hey OOpydOO:

I feel somewhat guilty because evidentually -- when you get it -- you're gonna be outraged. And it's gonna rock your little lefty world. Yes -- I AM trying to scare you actually.

I'm not doing this because I hate Soc Sec. In fact, I want to preserve the original intent of it's being a UNIVERSAL program.. But some of us who DON'T worship big govt. know how crooked these guys are. And if you lose your blind faith in their ability to manage your affairs -- you know you just might become a little more skeptical about their infaliablity.

Your last statement in previous post brings us to what SHOULD HAVE HAPPENED>>>

When a yearly surplus was encountered, the trust fund should have bought EXISTING honest to God T-Bonds on the open market. Which COULD be sold anytime or redeemed at maturity. That way, the Congress was deprived of their "slush fund" and taxpayers would have no ADDITIONAL financing costs or increased debt on the General Budget.. That's just ONE solution.. But it illustrates the big diff between billing taxpayers twice and a REAL investment..

 

[OohPooPahDoo]

The Trust Fund IOUs CAN'T be sold "to the market" or anywhere else.

Neither can a U.S. Savings Bond. Are you saying those don't have "value" either?

You are paying THIS YEAR for that new debt. And you ALREADY PAID excess FICA for 30 years.

The excess FICA reduced the burden on the general fund. You seem to have a habit of counting only negative balances, not a very good accounting practice.

 

[flacaltenn]

The Trust Fund IOUs CAN'T be sold "to the market" or anywhere else.

Neither can a U.S. Savings Bond. Are you saying those don't have "value" either?

A savings Bond of any type always has cash value. But more importantly, the year the Treasury ISSUED that bond they took a debit to the General Fund. In other words they acknowledged that borrowing. They never acknowledged the IOUs that went "off-the-books" to the Trust Fund. That would have canceled out the advantage of using the FICA surplus to "balance the General budget" under Clinton for instance. So the acknowledgement of the DEBT part only occurs when SS needs money to balance. Hence the NEW DEBT getting issued to cover the "promise".

Bottom line. You buy a bond to turn actual cash into actual cash plus interest. What we got for our actual cash was a promise to issue future DEBT to cover the cash plus interest.

You are paying THIS YEAR for that new debt. And you ALREADY PAID excess FICA for 30 years.

The excess FICA reduced the burden on the general fund. You seem to have a habit of counting only negative balances, not a very good accounting practice.

Made no difference however to the "solvency" of Soc Sec tho. A pay as you go system doesn't NEED a Trust Fund. The Trust Fund was supposed to buffer future known liabilities. Instead they turned it into an accounting gimmick by not placing value into it for the stolen funds. It might as well not exist at all in it's current embodiment. We all know how much they stole. That's how much they SHOULD pay back.. But the Trust Fund and the IOUs don't help to do that financially.

 

[Flopper]

If those excess FICA payments that were taken for 30 years had any value -- why does the Treasury need to finance SS deficits with NEW debt payable by TODAY'S taxpayers?

How would that stop them from having value?

Go back and read the SSA and CBO quotes in my first post. When SS runs a deficit it goes on the General Fund ledger as a debt. NEW debt is issued (say to me or Japan) to pay for this years shortfall. Why does NEW debt have to be issued -- if there is value in "notes" in the Trust Fund? Why are taxpayers PAYING AGAIN to finance value that THEY put into the fund 30 years ago?

Answer -- No actual value in the fund to cover the Loan that was made. It was all put on FUTURE taxpayers to cover any deficits that might occur in Soc Sec..

We should all be worried about the S.S. deficit? In 2010, it's .0018% of the fund balance. We should be worried about the large number of baby boomers that are going to empty the fund in the 2030's. When S.S. runs a deficit, the trust fund will redeem enough Special Issue bonds to cover the deficit. The government will have to issue enough new debit, ordinary treasuries to cover the deficit. Debt held by the public will rise and intergovernmental debt will fall. There is no effect on the national debt but a huge effect on S.S. beneficiaries once that fund runs dry.

 

[OohPooPahDoo]

A savings Bond of any type always has cash value.

Why? Its not marketable. The only entity that can buy them back is the Treasury or their agents, and you can't even cash them in the first year after you buy them!

Bottom line. You buy a bond to turn actual cash into actual cash plus interest. What we got for our actual cash was a promise to issue future DEBT to cover the cash plus interest. [/COLOR]

I'm sorry, but I missed the part where payments made to Social Security beneficiaries have no "value". They have been made, on time, and in full, ever since the inception of the program - and last year, Social Security ran into the red and their trust fund balance decreased. The trust fund balance decreased, cash flow from the Treasury into the SSA went positive - and yet those trust funds have no "value" ?


Your definition of "value" must be way different than mine. I would consider anything I can trade for cash to have economic "value" to me - yet your definition of "value" seems to rest mostly in how cash is obtained to pay debts. In fact - by your definition of value, NONE of the U.S. Debt is valid, since its just replaced with new debt every year.

That's how much they SHOULD pay back.. But the Trust Fund and the IOUs don't help to do that financially.

If the Treasury doesn't pay the Trust Fund as interest and principal comes due, the U.S. Government is in default.

 

[Soggy in NOLA]

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?

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.

Priceless.. absolutely priceless....

 

[healthmyths]

Geez.. Maybe you should tell the Trustees for Social Security!
Timothy F. Geithner, Secretary of the Treasury, and Managing Trustee
Hilda L. Solis, Secretary of Labor, and Trustee
Kathleen Sebelius, Secretary of Health and Human Services,and Trustee
Michael J. Astrue,Commissioner ofSocial Security,

From their report page
page 31...

In 2023, revenues plus interest income to the trust funds will be less than total
expenditures for that year.
Reserves will start to be drawn down to pay benefits.

In 2036, trust fund reserves are projected to be depleted.
Income is projected to cover 77% of benefits due then.

By 2085, assuming no change in taxes, benefits or assumptions, revenue would cover
about 74% of benefits due then.

nasi.org/research/2011/social-security-benefits-finances-policy-options-primer]Social Security Benefits, Finances, and Policy Options: A Primer | National Academy of Social Insurance

 

[flacaltenn]

How would that stop them from having value?

Go back and read the SSA and CBO quotes in my first post. When SS runs a deficit it goes on the General Fund ledger as a debt. NEW debt is issued (say to me or Japan) to pay for this years shortfall. Why does NEW debt have to be issued -- if there is value in "notes" in the Trust Fund? Why are taxpayers PAYING AGAIN to finance value that THEY put into the fund 30 years ago?

Answer -- No actual value in the fund to cover the Loan that was made. It was all put on FUTURE taxpayers to cover any deficits that might occur in Soc Sec..

We should all be worried about the S.S. deficit? In 2010, it's .0018% of the fund balance. We should be worried about the large number of baby boomers that are going to empty the fund in the 2030's. When S.S. runs a deficit, the trust fund will redeem enough Special Issue bonds to cover the deficit. The government will have to issue enough new debit, ordinary treasuries to cover the deficit. Debt held by the public will rise and intergovernmental debt will fall. There is no effect on the national debt but a huge effect on S.S. beneficiaries once that fund runs dry.

WOW Flopper.. I'm impressed.. That last post shows remarkable progress in understanding the financing aspect of the "The Trust Fund". Now the only problem is that you need to stipulate that the "redemption" of TF IOUs does NOTHING to actually finance the debt to be issued. If the Trust Fund was buried deep in Yucca Mtn and piled under a ton of radioactive waste -- the RE-financing aspect of those stolen FICA funds would proceed the exact same way. There was no "investment".

The problem with your last line is that it's the ON-BOOK General Fund that drives the yearly budgeting. Not the off-book Trust Funds. And SS deficits will add to the issuance of NEW debt that has to be created every year that SS is in deficit. THAT is what the external world and credit markets really care about. The AMOUNT of ISSUED US debt on the general market.

You have to reach the conclusion that for 30 years, Taxpayers were told that excess FICA was FINANCING future liabilities. That was a lie and the Trust Fund did NOTHING to ameliorate the payment of SS deficits. Only to account for the total owed.

 

[MiddleClass]

Any politician dumb enough to lie about our Social Security Retirement Fund is Dead in the Water, and Perry will never be able to live his BIG LIE down with the biggest voting block in America - Senior Citizens.

LATER PERRY!

 

[Flopper]

You have to reach the conclusion that for 30 years, Taxpayers were told that excess FICA was FINANCING future liabilities. That was a lie and the Trust Fund did NOTHING to ameliorate the payment of SS deficits. Only to account for the total owed.

Don't you even look at the S.S. Actuarial Reports. 57 of last 70 years FICA tax collections have paid all S.S. benefits with the surplus added to the fund. This is the way S.S. works now and has worked for 70 years. FICA pays benefits with excess going to the fund. Most of the years that FICA did not cover benefits were recessionary years in which tax collections were low.

20 years of high birth rates from the 50's produced the baby boom which is now beginning to hit social security. Congress has refused for over 20 years to increase FICA contributions so the funds will begin running deficits each year until it is exhausted. Intragovernment debt will be exchanged for debt held by the public. The national debt remains the same. Social Security benefits become equal to FICA tax revenue.

If nothing changes in about 30 years, the number of beneficiaries will start falling because of the fall in birth rates from a high of 25.3 in 1957 to the current rate of 13.8. In other words we have almost half the number of beneficiaries. FICA will once again be able to pay all benefits and provide a surplus as has been the case in past.

 

[flacaltenn]

You have to reach the conclusion that for 30 years, Taxpayers were told that excess FICA was FINANCING future liabilities. That was a lie and the Trust Fund did NOTHING to ameliorate the payment of SS deficits. Only to account for the total owed.

Don't you even look at the S.S. Actuarial Reports. 57 of last 70 years FICA tax collections have paid all S.S. benefits with the surplus added to the fund. This is the way S.S. works now and has worked for 70 years. FICA pays benefits with excess going to the fund. Most of the years that FICA did not cover benefits were recessionary years in which tax collections were low.

20 years of high birth rates from the 50's produced the baby boom which is now beginning to hit social security. Congress has refused for over 20 years to increase FICA contributions so the funds will begin running deficits each year until it is exhausted. Intragovernment debt will be exchanged for debt held by the public. The national debt remains the same. Social Security benefits become equal to FICA tax revenue.

If nothing changes in about 30 years, the number of beneficiaries will start falling because of the fall in birth rates from a high of 25.3 in 1957 to the current rate of 13.8. In other words we have almost half the number of beneficiaries. FICA will once again be able to pay all benefits and provide a surplus as has been the case in past.

Now see -- you've lost the reason and the clear vision again.. Good thing I fought the urge to rep you..

NOTHING gets paid out of the Trust Fund. SSA says so. CBO admits this. Treasury has studies to ponder this. Deficits get paid from the General Fund. By issuing new debt. You said that in the previous thread. So anything "fictiously going into the Trust Fund" doesn't amount to jackshit in terms of actually paying deficits.

Tell me why you can't drop the fiction that all that excess FICA is STILL in the fund? If it was the taxpayers wouldn't be financing NEW DEBT to pay for the deficits would they Flopper?

If a deficit occurs -- it gets paid as tho the Trust Fund doesn't even exist. No value to it. The Excess FICA was "embezzled" (Harry Reid). End of story..

OR Flopper. Explain to me why we can't draw on the 1997 Excess FICA contributions to cover the 2010 shortfall? and do that WITHOUT ISSUING ADDITIONAL NEW DEBT.

 

[OohPooPahDoo]

Geez.. Maybe you should tell the Trustees for Social Security!
Timothy F. Geithner, Secretary of the Treasury, and Managing Trustee
Hilda L. Solis, Secretary of Labor, and Trustee
Kathleen Sebelius, Secretary of Health and Human Services,and Trustee
Michael J. Astrue,Commissioner ofSocial Security,

From their report page
page 31...

In 2023, revenues plus interest income to the trust funds will be less than total
expenditures for that year.
Reserves will start to be drawn down to pay benefits.

In 2036, trust fund reserves are projected to be depleted.
Income is projected to cover 77% of benefits due then.

By 2085, assuming no change in taxes, benefits or assumptions, revenue would cover
about 74% of benefits due then.

nasi.org/research/2011/social-security-benefits-finances-policy-options-primer]Social Security Benefits, Finances, and Policy Options: A Primer | National Academy of Social Insurance

Wow. So social security is solvent at least at the 74% benefit level for the next 74 years - essentially, the next lifetime. So if the politicians are completely stupid and do NOTHING to fix it - its still 3/4 paid for the next 74 years - that's the WORSE case scenario. Can you name anything else as solvent?

 

[flacaltenn]

Geez.. Maybe you should tell the Trustees for Social Security!
Timothy F. Geithner, Secretary of the Treasury, and Managing Trustee
Hilda L. Solis, Secretary of Labor, and Trustee
Kathleen Sebelius, Secretary of Health and Human Services,and Trustee
Michael J. Astrue,Commissioner ofSocial Security,

From their report page
page 31...

In 2023, revenues plus interest income to the trust funds will be less than total
expenditures for that year.
Reserves will start to be drawn down to pay benefits.

In 2036, trust fund reserves are projected to be depleted.
Income is projected to cover 77% of benefits due then.

By 2085, assuming no change in taxes, benefits or assumptions, revenue would cover
about 74% of benefits due then.

nasi.org/research/2011/social-security-benefits-finances-policy-options-primer]Social Security Benefits, Finances, and Policy Options: A Primer | National Academy of Social Insurance

Wow. So social security is solvent at least at the 74% benefit level for the next 74 years - essentially, the next lifetime. So if the politicians are completely stupid and do NOTHING to fix it - its still 3/4 paid for the next 74 years - that's the WORSE case scenario. Can you name anything else as solvent?

Yeah -- methyl alcohol.....