CDZ Social Security Trust Fund will go broke in 17 years

[flacaltenn]

Each year the trustees for the SSTF are required to publish a report to the President and the Congress on the financial condition of the SSTF. This year it came out last friday afternoon, and it ain't good. Excerpts:

The Social Security report finds that the "trust fund" will run out of money in just 17 years. The news only gets worse from there.

The program's unfunded liability over the next 75 years is now $12.5 trillion, which is up from $11.4 trillion last year and $4.7 trillion a decade ago. In other words, Social Security's long-term unfunded liability has increased by 166% in the span of 10 years.

And on a cash flow basis, Social Security is now losing money every year. Last year it was $54 billion in the red. In a decade the annual shortfall will reach $215 billion – after adjusting for inflation.


What it basically means is that unless the SSA program is changed, the checks that SSTF beneficiaries will get will be reduced significantly. If you add in the Disability Insurance (DI) into the mix you get the total OASDI program: (OAS - Old Age & Survivors)

The Trustees also project that annual cost for the OASDI program will exceed non-interest income throughout the projection period, and will exceed total income beginning in 2022 under the intermediate assumptions. The projected hypothetical combined OASI and DI Trust Fund asset reserves increase through 2021, begin to decline in 2022, and become depleted and unable to pay scheduled benefits in full on a timely basis in 2034. At the time of depletion of these combined reserves, continuing income to the combined trust funds would be sufficient to pay 77 percent of scheduled benefits.


The good news is that this problem can be averted. It's called "the Chilean Model," as 2012 presidential candidate Herman Cain put it, in what was his effort to get the voters to get serious about the issue.

The Chilean Model, the system of private savings accounts for retirement, is practiced in 30 countries. It was developed on a nationwide scale by José Piñera, the former labor minister of Chile during the 1970s, when the country was a socialist rubble and the coffers were bare, and it has worked every time it's been tried.

You really don't understand the basic economics of Social Security, do you?

Yeah, I kinda think I do. Maybe you should cut the crap and specify where I am wrong.

The report is repeating the fictions about SSA "being solvent". It's the Big Lie that hides the criminality of what was done with SSA overpayments for 30 years. Treasury wouldn't be booking debt now and ISSUING NEW DEBT to cover shortfalls -- if there was anything of value in the "trust fund"...

If we have to --- I'm prepared to make the case. But it's actually REAL SIMPLE. The SSA and CBO have been telling you this for YEARS.. Buried in the back pages of EVERY SSA report. Like this current one. Let me cut this short and just have you read and understand the perspectus and admission of guilt...

Federal Debt and Interest Costs

Gross debt, which comprises federal debt held by the public plus Treasury securities held by federal trust funds and other government accounts, is sometimes used to evaluate the government's overall fiscal situation. At the end of 2010, gross federal debt totaled $13.5 trillion--the $9.0 trillion in debt held by the public plus $4.5 trillion in debt held by government accounts. More than half of the latter amount is held by the Social Security trust funds. Because those trust funds and other government accounts are part of the federal government, transactions between them and the Treasury are intragovernmental; that is, the government securities in those funds are an asset to the individual programs but a liability to the rest of the government. The resources needed to redeem the government securities in the trust funds and other accounts in some future year must be generated from taxes, income from other government sources, or borrowing by the government in that year.


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

Social Security’s annual surpluses
of tax income over expenditures are expected to fall sharply this
year and to stay about constant in 2010 because of the economic recession,
and to rise only briefly before declining and turning to cash flow
deficits beginning in 2016 that grow as the baby-boom generation retires.


The combined difference grows each year, so that by 2016, net revenue
flows from the general fund would total $369 billion (1.8 percent of
GDP). The positive amounts that begin in 2016 for OASDI, and started in
2008 for HI, initially represent payments the Treasury must make to the
trust funds when assets are depleted to help pay benefits in years prior to
exhaustion of the funds. 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.

So for all of you believing the "SOLVENT" fairy tale. I ask you -- Which of the 3 choices given in BOLD LARGE above -- is currently being employed to "pay" the CURRENT deficit income of the SSA program?

Of course -- it's #3 -- additional borrowing from the public.. That's the SECOND time you were robbed for the same contribution to SSA...

 

[task0778]

From the SSTF trustees point of view the SSA is solvent accounting-wise in that it has a bunch of IOUs accumulated from past years when payins exceeded payouts. Those IOUs are actually an asset on the SSTF books and therefore the SSTF is not insolvent. But as we know, for some years now the SSA has been taking in less money than they're paying out, so they are cashing in those IOUs to makeup the difference. Each year for the next 17 years they will run through those IOUs until they're all gone, and from that point the SSA will not be solvent any longer. It's an accounting gimmick to be sure, the US Treasury still has to issue new debt to cover those IOUs along with every other deficits the gov't accrues each year. Maybe this is nothing more than semantics, but the SSTF is not issuing new debt, the US Treasury is. Actually, I don't believe the SSTF or the SSA even has the authority to issue new debt, which means that when all those IOUs are gone the SSTF will be forced to pay beneficiaries a lot less money than they're getting now. That's if the Gov't doesn't do something about that, which they apparently do not have the guts to do.

If I'm not mistaken, the SSTF by law could not keep the excess funds that exceeded the payouts, it had to be in effect turned over to the US Treasury to spend on other things, who in turn gave the SSTF an IOU for that money. [BTW, that's how Clinton ended up with a surplus in his last year.] We can point fingers at who is responsible until the cows come home, but the problem is this: for the next 17 years or so the SSTF can and will cash in the IOUs it has accumulated since the inception of the SSTF, and for the next 17 years SSA beneficiaries will get their full amount due. BUT - once those IOUs are gone, the US Gov't cannot by law makeup the difference between how much the SSTF takes in and how much it pays out. Sooner or later Congress will have to take the bull by the horns and finally do something about this or else in 2034 millions of beneficiaries are going to take a big hit in the monthly SSA checks.

 

[jwoodie]

Maybe you should cut the crap and specify where I am wrong.

Sorry, I confused your post with Tax Man's.

 

[jwoodie]

We need millions of currently illegal aliens paying into Social Security to prop it up. Give them legal status in return for 10 years of contributions with no accrued benefits to them or their families.

Also eliminate the income cap on SS and credit 5% of the excess towards benefits (currently scaled at 60-30-15% of income). The additional revenues would be much more than the additional benefits paid out.

And gradually raise the full retirement age to 70.

 

[Dekster]

Each year the trustees for the SSTF are required to publish a report to the President and the Congress on the financial condition of the SSTF. This year it came out last friday afternoon, and it ain't good. Excerpts:

The Social Security report finds that the "trust fund" will run out of money in just 17 years. The news only gets worse from there.

The program's unfunded liability over the next 75 years is now $12.5 trillion, which is up from $11.4 trillion last year and $4.7 trillion a decade ago. In other words, Social Security's long-term unfunded liability has increased by 166% in the span of 10 years.

And on a cash flow basis, Social Security is now losing money every year. Last year it was $54 billion in the red. In a decade the annual shortfall will reach $215 billion – after adjusting for inflation.


What it basically means is that unless the SSA program is changed, the checks that SSTF beneficiaries will get will be reduced significantly. If you add in the Disability Insurance (DI) into the mix you get the total OASDI program: (OAS - Old Age & Survivors)

The Trustees also project that annual cost for the OASDI program will exceed non-interest income throughout the projection period, and will exceed total income beginning in 2022 under the intermediate assumptions. The projected hypothetical combined OASI and DI Trust Fund asset reserves increase through 2021, begin to decline in 2022, and become depleted and unable to pay scheduled benefits in full on a timely basis in 2034. At the time of depletion of these combined reserves, continuing income to the combined trust funds would be sufficient to pay 77 percent of scheduled benefits.


The good news is that this problem can be averted. It's called "the Chilean Model," as 2012 presidential candidate Herman Cain put it, in what was his effort to get the voters to get serious about the issue.

The Chilean Model, the system of private savings accounts for retirement, is practiced in 30 countries. It was developed on a nationwide scale by José Piñera, the former labor minister of Chile during the 1970s, when the country was a socialist rubble and the coffers were bare, and it has worked every time it's been tried.


https://www.ssa.gov/OACT/TR/2017/tr2017.pdf

Raising payroll FICA taxes and doing it before the system was broke would help. I am guessing temporarily cutting the employee side aggravated the issue.

 

[Toro]

Each year the trustees for the SSTF are required to publish a report to the President and the Congress on the financial condition of the SSTF. This year it came out last friday afternoon, and it ain't good. Excerpts:

The Social Security report finds that the "trust fund" will run out of money in just 17 years. The news only gets worse from there.

The program's unfunded liability over the next 75 years is now $12.5 trillion, which is up from $11.4 trillion last year and $4.7 trillion a decade ago. In other words, Social Security's long-term unfunded liability has increased by 166% in the span of 10 years.

And on a cash flow basis, Social Security is now losing money every year. Last year it was $54 billion in the red. In a decade the annual shortfall will reach $215 billion – after adjusting for inflation.


What it basically means is that unless the SSA program is changed, the checks that SSTF beneficiaries will get will be reduced significantly. If you add in the Disability Insurance (DI) into the mix you get the total OASDI program: (OAS - Old Age & Survivors)

The Trustees also project that annual cost for the OASDI program will exceed non-interest income throughout the projection period, and will exceed total income beginning in 2022 under the intermediate assumptions. The projected hypothetical combined OASI and DI Trust Fund asset reserves increase through 2021, begin to decline in 2022, and become depleted and unable to pay scheduled benefits in full on a timely basis in 2034. At the time of depletion of these combined reserves, continuing income to the combined trust funds would be sufficient to pay 77 percent of scheduled benefits.


The good news is that this problem can be averted. It's called "the Chilean Model," as 2012 presidential candidate Herman Cain put it, in what was his effort to get the voters to get serious about the issue.

The Chilean Model, the system of private savings accounts for retirement, is practiced in 30 countries. It was developed on a nationwide scale by José Piñera, the former labor minister of Chile during the 1970s, when the country was a socialist rubble and the coffers were bare, and it has worked every time it's been tried.


https://www.ssa.gov/OACT/TR/2017/tr2017.pdf

It doesn't say that in your link. Or at least I couldn't find it. I ran a search for "17 years" through the entire document and nothing came up. Nor did "$215 billion." I found "75 years" but not from the passage you quote.

 

[Toro]

Few people understand how social security works. And I don't blame them, because it is confusing.

I started a thread about it a few years ago that illustrates SS works like a passive Treasury securities mutual fund you would buy at Vanguard. The difference, though, is that rather than the fund buying Treasury securities, the government merely debits and credits individuals accounts in the trust as if they were buying and selling Treasury securities.

Discussion about how SS works is in the link below.

Social Security Discussion

 

[Toro]

The problem with the whole Ponzi scheme (for that's what it is) is people who take out more than they put into it.

Which is why it was setup as a trust so it could make money to pay for future debt.

How much money is in that "trust fund"? Do you know? It's an IOU not a trust fund.

$2.848 trillion.

It's in the link in the OP.

And, yes, it is a trust fund. It is defined in law.

 

[Toro]

Each year the trustees for the SSTF are required to publish a report to the President and the Congress on the financial condition of the SSTF. This year it came out last friday afternoon, and it ain't good. Excerpts:

The Social Security report finds that the "trust fund" will run out of money in just 17 years. The news only gets worse from there.

The program's unfunded liability over the next 75 years is now $12.5 trillion, which is up from $11.4 trillion last year and $4.7 trillion a decade ago. In other words, Social Security's long-term unfunded liability has increased by 166% in the span of 10 years.

And on a cash flow basis, Social Security is now losing money every year. Last year it was $54 billion in the red. In a decade the annual shortfall will reach $215 billion – after adjusting for inflation.


What it basically means is that unless the SSA program is changed, the checks that SSTF beneficiaries will get will be reduced significantly. If you add in the Disability Insurance (DI) into the mix you get the total OASDI program: (OAS - Old Age & Survivors)

The Trustees also project that annual cost for the OASDI program will exceed non-interest income throughout the projection period, and will exceed total income beginning in 2022 under the intermediate assumptions. The projected hypothetical combined OASI and DI Trust Fund asset reserves increase through 2021, begin to decline in 2022, and become depleted and unable to pay scheduled benefits in full on a timely basis in 2034. At the time of depletion of these combined reserves, continuing income to the combined trust funds would be sufficient to pay 77 percent of scheduled benefits.


The good news is that this problem can be averted. It's called "the Chilean Model," as 2012 presidential candidate Herman Cain put it, in what was his effort to get the voters to get serious about the issue.

The Chilean Model, the system of private savings accounts for retirement, is practiced in 30 countries. It was developed on a nationwide scale by José Piñera, the former labor minister of Chile during the 1970s, when the country was a socialist rubble and the coffers were bare, and it has worked every time it's been tried.


https://www.ssa.gov/OACT/TR/2017/tr2017.pdf

This is the twice a year topic that comes up where everyone PRETENDS that there IS a Trust Fund and that it's just piled DEEP with valuable stuff to be hocked if EVER the SSA income goes negative.

And everyone just put their heads in the sand and PRETENDS the SSA income stream hasn't already gone DEAD ASS BROKE since about 2010. 6 to 8 years AHEAD of the projections.

There is NOTHING of VALUE in the Trust Fund. NOTHING to magically redeem to cover the CURRENT OCCURING SHORTFALLS. And every month, the Treasury gets an IOU from the "Trust Fund" and issues BRAND NEW DEBT -- paid for by China and others to cover the MOUNTING deficits.

That NEW debt is the 2nd time some current victims were robbed. They were robbed when Congress spent the money and put an accounting notation into the off-book "Trust Fund" and NEVER BOOKED THE DEBT on the annual budget. Spent it on mohair subsidies and bullets and bureaucratic fantasies.

Then the same working poor that got robbed find TODAY -- that same amount PLUS ficticious interest is RE-FINANCED in their names by issuing ACTUAL Treasuries in order to write the checks. That's the 2nd theft.

This is all a farce. Greatest Show on Earth in terms of the slight of hand.

The trusts have $2.848 trillion of non-marketable government obligations. They are liabilities of the government. Treasury securities are also liabilities of the government.

All government liabilities are spent. It doesn't matter if the liability is a government bond, note, or non-marketable liability.

The government does not issue marketable debt to cover the liabilities of the fund other than the deficits of the trusts. The deficits last year were $53 billion. That is the amount that needs to be issued in Treasury securities. That represents about 6% of the $922 billion spent for SS.

 

[Toro]

From the SSTF trustees point of view the SSA is solvent accounting-wise in that it has a bunch of IOUs accumulated from past years when payins exceeded payouts. Those IOUs are actually an asset on the SSTF books and therefore the SSTF is not insolvent. But as we know, for some years now the SSA has been taking in less money than they're paying out, so they are cashing in those IOUs to makeup the difference. Each year for the next 17 years they will run through those IOUs until they're all gone, and from that point the SSA will not be solvent any longer. It's an accounting gimmick to be sure, the US Treasury still has to issue new debt to cover those IOUs along with every other deficits the gov't accrues each year. Maybe this is nothing more than semantics, but the SSTF is not issuing new debt, the US Treasury is. Actually, I don't believe the SSTF or the SSA even has the authority to issue new debt, which means that when all those IOUs are gone the SSTF will be forced to pay beneficiaries a lot less money than they're getting now. That's if the Gov't doesn't do something about that, which they apparently do not have the guts to do.

If I'm not mistaken, the SSTF by law could not keep the excess funds that exceeded the payouts, it had to be in effect turned over to the US Treasury to spend on other things, who in turn gave the SSTF an IOU for that money. [BTW, that's how Clinton ended up with a surplus in his last year.] We can point fingers at who is responsible until the cows come home, but the problem is this: for the next 17 years or so the SSTF can and will cash in the IOUs it has accumulated since the inception of the SSTF, and for the next 17 years SSA beneficiaries will get their full amount due. BUT - once those IOUs are gone, the US Gov't cannot by law makeup the difference between how much the SSTF takes in and how much it pays out. Sooner or later Congress will have to take the bull by the horns and finally do something about this or else in 2034 millions of beneficiaries are going to take a big hit in the monthly SSA checks.

The author of the post does not understand SS.

• All money collected by the SS trusts are turned over to the government and is spent.
• All assets in the trusts are effectively government IOUs
• The government will not "run through" all the IOUs in 17 years because the IOUs are liabilities of the Treasury. They cannot "run through" them
• The SS trusts will not be bankrupt in 17 years. Instead, what will happen at some point in the future is that in about 17 years or so, there will not be enough IOUs in the trusts to meet the obligations of all Americans in the future. It will be "underfunded" by something like 20%-30%. That will require a change in SS. Either benefits will have to be cut, taxes raised, or the whole system reformed.

 

[Zander]

4 steps to ensure the program is properly funded:

1) Gradually Raise "Full" retirement age to 68 - then index to life expectancy going forward.
2) Raise the cap on taxable earnings to cover 90% of earning (about $275,000 today) - index to wage growth so that it remains at 90%
3) Increase payroll tax by 1% (1/2% employer and 1/2% employee)
4) Use chained CPI for COLA increases.

Viola!! Social Security is fixed for 100 years minimum.

Not sure I want to see 68 yr old roofers forced to work to age 68. This is an asinine requirement for getting your benefits. Especially if you WRECK your health getting to retirement.

Raising caps just destroys this whole UNIVERSAL deal. It makes it another welfare program. If that's done, America will never trust any "UNIVERSAL" program again. MAKE it a welfare program. Don't fuck around the edges.

Going to 14% of income for self-employed is a non-starter. It was originally PROMISED never to exceed 1 or 2% of income. So much for the analytics and projections of ANY Govt program.. Chimps could be more prescient.

Current "full" retirement age is 67 for folks born after 1960 so, adding 1 year is not an "asinine" requirement.

The tax for Social security is currently 6.2% for the employee and 6.2% for the employer. Going to 6.7% each is not going to bankrupt anyone. If it does, you're a financial moron. At any rate, TANSTAAFL!!

Do I love the program? Hell no! I'd like to see workers be able to permanently opt out and invest the money into their own retirement accounts. But that ain't gonna happen in my lifetime. Our society views "government" as their daddy......and the sheeple are too stupid to handle their own finances.

PS- Most Roofers don't continue roofing after a certain age, they become Superintendents, Estimators, or Salesmen.

 

[flacaltenn]

If I'm not mistaken, the SSTF by law could not keep the excess funds that exceeded the payouts, it had to be in effect turned over to the US Treasury to spend on other things, who in turn gave the SSTF an IOU for that money. [BTW, that's how Clinton ended up with a surplus in his last year.]

Now there's the crux of the matter. Stupid limited thinking on the part of Congress and Trustless Trustees.

Instead of stealing and squandering the Surplus there's any number of creative ways that the excess could have used to REDUCE future liabilities.

One is -- they could have BOUGHT BACK EXISTING Treasuries already sold and out in the marketplace. REAL Debt instruments that when they bought them, would have REDUCED the debt and make future payouts easier. And -- they could hold them and SELL THEM if necessary..

Two is -- they could have USED the surplus to allow volunteers to forgo a SMALL FRACTION of their FICA contributions in return for FUTURE reduced benefits. A REAL value to the future of the fund.

Three is -- They could have created a lockbox for inter-govermental "loans" subject to market interest payments. That would allow for emergency expenditures from any number of "underfunded" agencies to be paid back like any note. NOT subject to zero-based budgeting like you suggested. Because this is an Insurance Underwriting process long recognized as ESSENTIAL to the financial stability of ANY insurance agency..

Instead they stole and squandered it. Kicking the can down the road. And Congress/Leadership NEVER RESPONDED to a looming crisis that we KNEW WAS COMING for 30 years.

 

[flacaltenn]

Few people understand how social security works. And I don't blame them, because it is confusing.

I started a thread about it a few years ago that illustrates SS works like a passive Treasury securities mutual fund you would buy at Vanguard. The difference, though, is that rather than the fund buying Treasury securities, the government merely debits and credits individuals accounts in the trust as if they were buying and selling Treasury securities.

Discussion about how SS works is in the link below.

Social Security Discussion

Except that it's not INDIVIDUALS that are being debited and credited. Those "debits" were never booked as DEBT when they were incurred. Not in a way that matters to the taxpayers. Taxpayers were overcharged for donations and fleeced. And NOW the Treasury issues NEW DEBT to honor the IOUs as tho NOTHING was ever "booked".. So it's the TAXPAYERS paying the phony "interest" on SSA "holdings". And when they're robbed the 2nd time to cough up the cash for the IOUs, the criminals pile on the additional CURRENT bond interests to the some of same victims -- just as a final kick in the groin...

 

[Toddsterpatriot]

If I'm not mistaken, the SSTF by law could not keep the excess funds that exceeded the payouts, it had to be in effect turned over to the US Treasury to spend on other things, who in turn gave the SSTF an IOU for that money. [BTW, that's how Clinton ended up with a surplus in his last year.]

Now there's the crux of the matter. Stupid limited thinking on the part of Congress and Trustless Trustees.

Instead of stealing and squandering the Surplus there's any number of creative ways that the excess could have used to REDUCE future liabilities.

One is -- they could have BOUGHT BACK EXISTING Treasuries already sold and out in the marketplace. REAL Debt instruments that when they bought them, would have REDUCED the debt and make future payouts easier. And -- they could hold them and SELL THEM if necessary..

Two is -- they could have USED the surplus to allow volunteers to forgo a SMALL FRACTION of their FICA contributions in return for FUTURE reduced benefits. A REAL value to the future of the fund.

Three is -- They could have created a lockbox for inter-govermental "loans" subject to market interest payments. That would allow for emergency expenditures from any number of "underfunded" agencies to be paid back like any note. NOT subject to zero-based budgeting like you suggested. Because this is an Insurance Underwriting process long recognized as ESSENTIAL to the financial stability of ANY insurance agency..

Instead they stole and squandered it. Kicking the can down the road. And Congress/Leadership NEVER RESPONDED to a looming crisis that we KNEW WAS COMING for 30 years.

One is -- they could have BOUGHT BACK EXISTING Treasuries already sold and out in the marketplace. REAL Debt instruments that when they bought them, would have REDUCED the debt and make future payouts easier.

Say the government has a $50 billion surplus in SocSec and a $100 billion deficit in the rest of the government.
SocSec gets $50 billion in non-marketable securities (IOUs) and the government sells $50 billion in new Treasuries to the rest of the world.

Under your scenario, Soc Sec buys $50 billion in existing Treasuries, while the government sells $100 billion in new Treasuries.

There is zero difference in the debt between those two scenarios.

 

[deanrd]

Social Security Trust Fund will go broke in 17 years

Maybe that's why Republicans want millions of Americans to die.

 

[Toddsterpatriot]

Social Security Trust Fund will go broke in 17 years

Maybe that's why Republicans want millions of Americans to die.

If they wanted that, they'd support the complete government takeover of healthcare.

 

[Mikeoxenormous]

Each year the trustees for the SSTF are required to publish a report to the President and the Congress on the financial condition of the SSTF. This year it came out last friday afternoon, and it ain't good. Excerpts:

The Social Security report finds that the "trust fund" will run out of money in just 17 years. The news only gets worse from there.

The program's unfunded liability over the next 75 years is now $12.5 trillion, which is up from $11.4 trillion last year and $4.7 trillion a decade ago. In other words, Social Security's long-term unfunded liability has increased by 166% in the span of 10 years.

And on a cash flow basis, Social Security is now losing money every year. Last year it was $54 billion in the red. In a decade the annual shortfall will reach $215 billion – after adjusting for inflation.


What it basically means is that unless the SSA program is changed, the checks that SSTF beneficiaries will get will be reduced significantly. If you add in the Disability Insurance (DI) into the mix you get the total OASDI program: (OAS - Old Age & Survivors)

The Trustees also project that annual cost for the OASDI program will exceed non-interest income throughout the projection period, and will exceed total income beginning in 2022 under the intermediate assumptions. The projected hypothetical combined OASI and DI Trust Fund asset reserves increase through 2021, begin to decline in 2022, and become depleted and unable to pay scheduled benefits in full on a timely basis in 2034. At the time of depletion of these combined reserves, continuing income to the combined trust funds would be sufficient to pay 77 percent of scheduled benefits.


The good news is that this problem can be averted. It's called "the Chilean Model," as 2012 presidential candidate Herman Cain put it, in what was his effort to get the voters to get serious about the issue.

The Chilean Model, the system of private savings accounts for retirement, is practiced in 30 countries. It was developed on a nationwide scale by José Piñera, the former labor minister of Chile during the 1970s, when the country was a socialist rubble and the coffers were bare, and it has worked every time it's been tried.

You really don't understand the basic economics of Social Security, do you?

Yeah, I kinda think I do. Maybe you should cut the crap and specify where I am wrong.

The report is repeating the fictions about SSA "being solvent". It's the Big Lie that hides the criminality of what was done with SSA overpayments for 30 years. Treasury wouldn't be booking debt now and ISSUING NEW DEBT to cover shortfalls -- if there was anything of value in the "trust fund"...

If we have to --- I'm prepared to make the case. But it's actually REAL SIMPLE. The SSA and CBO have been telling you this for YEARS.. Buried in the back pages of EVERY SSA report. Like this current one. Let me cut this short and just have you read and understand the perspectus and admission of guilt...

Federal Debt and Interest Costs

Gross debt, which comprises federal debt held by the public plus Treasury securities held by federal trust funds and other government accounts, is sometimes used to evaluate the government's overall fiscal situation. At the end of 2010, gross federal debt totaled $13.5 trillion--the $9.0 trillion in debt held by the public plus $4.5 trillion in debt held by government accounts. More than half of the latter amount is held by the Social Security trust funds. Because those trust funds and other government accounts are part of the federal government, transactions between them and the Treasury are intragovernmental; that is, the government securities in those funds are an asset to the individual programs but a liability to the rest of the government. The resources needed to redeem the government securities in the trust funds and other accounts in some future year must be generated from taxes, income from other government sources, or borrowing by the government in that year.


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

Social Security’s annual surpluses
of tax income over expenditures are expected to fall sharply this
year and to stay about constant in 2010 because of the economic recession,
and to rise only briefly before declining and turning to cash flow
deficits beginning in 2016 that grow as the baby-boom generation retires.


The combined difference grows each year, so that by 2016, net revenue
flows from the general fund would total $369 billion (1.8 percent of
GDP). The positive amounts that begin in 2016 for OASDI, and started in
2008 for HI, initially represent payments the Treasury must make to the
trust funds when assets are depleted to help pay benefits in years prior to
exhaustion of the funds. 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.

So for all of you believing the "SOLVENT" fairy tale. I ask you -- Which of the 3 choices given in BOLD LARGE above -- is currently being employed to "pay" the CURRENT deficit income of the SSA program?

Of course -- it's #3 -- additional borrowing from the public.. That's the SECOND time you were robbed for the same contribution to SSA...

So why is it that Social Security is always going bankrupt and Welfare isn't? Could it be that the whole US government is going Bankrupt but doesn't want to tell you, because of the feckless spending of Obama adding 10 trillion more dollars of debt? Hmmm?

 

[Mikeoxenormous]

Social Security Trust Fund will go broke in 17 years

Maybe that's why Republicans want millions of Americans to die.

Not really, it is you liberals who want Americans to die, we(Conservatives) just want you liberals to show the rest of US the way to extinction as was put in another post.

 

[flacaltenn]

Each year the trustees for the SSTF are required to publish a report to the President and the Congress on the financial condition of the SSTF. This year it came out last friday afternoon, and it ain't good. Excerpts:

The Social Security report finds that the "trust fund" will run out of money in just 17 years. The news only gets worse from there.

The program's unfunded liability over the next 75 years is now $12.5 trillion, which is up from $11.4 trillion last year and $4.7 trillion a decade ago. In other words, Social Security's long-term unfunded liability has increased by 166% in the span of 10 years.

And on a cash flow basis, Social Security is now losing money every year. Last year it was $54 billion in the red. In a decade the annual shortfall will reach $215 billion – after adjusting for inflation.


What it basically means is that unless the SSA program is changed, the checks that SSTF beneficiaries will get will be reduced significantly. If you add in the Disability Insurance (DI) into the mix you get the total OASDI program: (OAS - Old Age & Survivors)

The Trustees also project that annual cost for the OASDI program will exceed non-interest income throughout the projection period, and will exceed total income beginning in 2022 under the intermediate assumptions. The projected hypothetical combined OASI and DI Trust Fund asset reserves increase through 2021, begin to decline in 2022, and become depleted and unable to pay scheduled benefits in full on a timely basis in 2034. At the time of depletion of these combined reserves, continuing income to the combined trust funds would be sufficient to pay 77 percent of scheduled benefits.


The good news is that this problem can be averted. It's called "the Chilean Model," as 2012 presidential candidate Herman Cain put it, in what was his effort to get the voters to get serious about the issue.

The Chilean Model, the system of private savings accounts for retirement, is practiced in 30 countries. It was developed on a nationwide scale by José Piñera, the former labor minister of Chile during the 1970s, when the country was a socialist rubble and the coffers were bare, and it has worked every time it's been tried.

You really don't understand the basic economics of Social Security, do you?

Yeah, I kinda think I do. Maybe you should cut the crap and specify where I am wrong.

The report is repeating the fictions about SSA "being solvent". It's the Big Lie that hides the criminality of what was done with SSA overpayments for 30 years. Treasury wouldn't be booking debt now and ISSUING NEW DEBT to cover shortfalls -- if there was anything of value in the "trust fund"...

If we have to --- I'm prepared to make the case. But it's actually REAL SIMPLE. The SSA and CBO have been telling you this for YEARS.. Buried in the back pages of EVERY SSA report. Like this current one. Let me cut this short and just have you read and understand the perspectus and admission of guilt...

Federal Debt and Interest Costs

Gross debt, which comprises federal debt held by the public plus Treasury securities held by federal trust funds and other government accounts, is sometimes used to evaluate the government's overall fiscal situation. At the end of 2010, gross federal debt totaled $13.5 trillion--the $9.0 trillion in debt held by the public plus $4.5 trillion in debt held by government accounts. More than half of the latter amount is held by the Social Security trust funds. Because those trust funds and other government accounts are part of the federal government, transactions between them and the Treasury are intragovernmental; that is, the government securities in those funds are an asset to the individual programs but a liability to the rest of the government. The resources needed to redeem the government securities in the trust funds and other accounts in some future year must be generated from taxes, income from other government sources, or borrowing by the government in that year.


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

Social Security’s annual surpluses
of tax income over expenditures are expected to fall sharply this
year and to stay about constant in 2010 because of the economic recession,
and to rise only briefly before declining and turning to cash flow
deficits beginning in 2016 that grow as the baby-boom generation retires.


The combined difference grows each year, so that by 2016, net revenue
flows from the general fund would total $369 billion (1.8 percent of
GDP). The positive amounts that begin in 2016 for OASDI, and started in
2008 for HI, initially represent payments the Treasury must make to the
trust funds when assets are depleted to help pay benefits in years prior to
exhaustion of the funds. 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.

So for all of you believing the "SOLVENT" fairy tale. I ask you -- Which of the 3 choices given in BOLD LARGE above -- is currently being employed to "pay" the CURRENT deficit income of the SSA program?

Of course -- it's #3 -- additional borrowing from the public.. That's the SECOND time you were robbed for the same contribution to SSA...

So why is it that Social Security is always going bankrupt and Welfare isn't? Could it be that the whole US government is going Bankrupt but doesn't want to tell you, because of the feckless spending of Obama adding 10 trillion more dollars of debt? Hmmm?

Oh -- that's an easy question. SocSec was configured and sold as a Universal Insurance Plan. BY DEFINITION -- Universal is not "welfare". It has trustees. It has "premiums". It's suppose to serve EVERYONE that contributes to it.

If you WANT to make Soc Soc into a welfare program -- that's an option. But dont ever try to fool Americans again with Universal Anything. Because if the govt can't administer a simple retirement insurance program without robbing it and mismanaging it -- we're not gonna trust them with more "Universal" shit like turning over 1/6 of the economy in healthcare to them....

Make Soc Sec ONLY for the "needy" and it becomes welfare. Make the CAPS skyrocket and premium increase and it BECOMES welfare..

 

[flacaltenn]

If I'm not mistaken, the SSTF by law could not keep the excess funds that exceeded the payouts, it had to be in effect turned over to the US Treasury to spend on other things, who in turn gave the SSTF an IOU for that money. [BTW, that's how Clinton ended up with a surplus in his last year.]

Now there's the crux of the matter. Stupid limited thinking on the part of Congress and Trustless Trustees.

Instead of stealing and squandering the Surplus there's any number of creative ways that the excess could have used to REDUCE future liabilities.

One is -- they could have BOUGHT BACK EXISTING Treasuries already sold and out in the marketplace. REAL Debt instruments that when they bought them, would have REDUCED the debt and make future payouts easier. And -- they could hold them and SELL THEM if necessary..

Two is -- they could have USED the surplus to allow volunteers to forgo a SMALL FRACTION of their FICA contributions in return for FUTURE reduced benefits. A REAL value to the future of the fund.

Three is -- They could have created a lockbox for inter-govermental "loans" subject to market interest payments. That would allow for emergency expenditures from any number of "underfunded" agencies to be paid back like any note. NOT subject to zero-based budgeting like you suggested. Because this is an Insurance Underwriting process long recognized as ESSENTIAL to the financial stability of ANY insurance agency..

Instead they stole and squandered it. Kicking the can down the road. And Congress/Leadership NEVER RESPONDED to a looming crisis that we KNEW WAS COMING for 30 years.

One is -- they could have BOUGHT BACK EXISTING Treasuries already sold and out in the marketplace. REAL Debt instruments that when they bought them, would have REDUCED the debt and make future payouts easier.

Say the government has a $50 billion surplus in SocSec and a $100 billion deficit in the rest of the government.
SocSec gets $50 billion in non-marketable securities (IOUs) and the government sells $50 billion in new Treasuries to the rest of the world.

Under your scenario, Soc Sec buys $50 billion in existing Treasuries, while the government sells $100 billion in new Treasuries.

There is zero difference in the debt between those two scenarios.

Actually, there are several important differences. There would MARKETABLE paper already backing up the SSA deficits when they needed to be funded. The interest would have PRODUCED and paid during the years those bonds sat in a vault..

But more importantly --- debt would have BOOKED as debt. There would have been no magic claims of "balancing the budget" during the Clinton Admin. Congress couldn't be heroes for pulling off that magic trick.

And finally AMERICANS would actually have title to REAL faith and credit from the govt and not have to listen to how the program needed the Caps vaulted skyward and FICA taxes raised in order to fix the KNOWN shortfalls that were gonna occur. Americans... Not foreign govts or institutions receiving all those $Bills of interest..