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Social security is broke now. There is no account anywhere with the $$ that anyone has put their $$ into.
Social Security has been a pay as you go system since inception.
How does a system work when there are 2 people drawing out of it for every person paying into it?
If there was a system set up similar to social security in the private sector they would arrest the owners of it for fraud.
All social security is and has been is a big Ponzi scheme.
We should never as taxpayers honor past promises our politicians made THAT THERE IS NO WAY WE CAN KEEP.
Right out of the standard Faux News talking points. Some of you really need to get your news from more than one source
Keeping Social Security in a lock box is really stupid. Over half the balance in the trust fund came from government interest payments. To suggest that Social Security is a Ponzi Scheme is even dumber. Social Security loans the balance of the fund to the government and the government spends it. Thats what businesses, individuals, and government do with borrowed funds. The government pays interest to on the bonds. The loan, Special Issue Treasury bonds are payable on demand.
The contention that the trust fund is worthless and Social Security will eventually fail is based on two equally erroneous assumptions.
The assumption that Special Issue treasury bonds are worthless is based on the belief that if they are non-negotiable then they are worthless and the full faith and credit of the US government is worthless. Because debt is non-negotiable does not make it worthless. Loans between nations, loans between banks and the Fed, and loans between state and the federal government are all non-negotiable but that certainly does not make them worthless. The full faith and credit of the United States is considered among the best in world.
The second assumption is that the federal government will not be able to make good its debt to the trust fund. For this to occur the government would have to be incapable of cutting expenses, raising taxes, or borrowing money to pay its debt to the fund. For the government to reach this state, the entire economic system of the country and much of the world would have collapsed which would make the value of the trust fund a moot point.
As far as the safety of Social Security payments, 95% of the social payments come from current payroll contributions. The 5% that is coming from the fund is projected by the CBO to go to zero by 2014. Then after a few years, withdrawals from the fund will begin to supplement payroll contributions. Within about 15 to 20 years the fund would be exhausted. Then what? Assuming Congress never took any action during those years, benefits would drop by about 25%.
In short, it is far more likely that you will die before reaching Social Security retirement age, than benefits not being available.
Keeping Social Security in a lock box is really stupid. Over half the balance in the trust fund came from government interest payments. To suggest that Social Security is a Ponzi Scheme is even dumber. Social Security loans the balance of the fund to the government and the government spends it. Thats what businesses, individuals, and government do with borrowed funds. The government pays interest to on the bonds. The loan, Special Issue Treasury bonds are payable on demand.
The contention that the trust fund is worthless and Social Security will eventually fail is based on two equally erroneous assumptions.
The assumption that Special Issue treasury bonds are worthless is based on the belief that if they are non-negotiable then they are worthless and the full faith and credit of the US government is worthless. Because debt is non-negotiable does not make it worthless. Loans between nations, loans between banks and the Fed, and loans between state and the federal government are all non-negotiable but that certainly does not make them worthless. The full faith and credit of the United States is considered among the best in world.
The second assumption is that the federal government will not be able to make good its debt to the trust fund. For this to occur the government would have to be incapable of cutting expenses, raising taxes, or borrowing money to pay its debt to the fund. For the government to reach this state, the entire economic system of the country and much of the world would have collapsed which would make the value of the trust fund a moot point.
As far as the safety of Social Security payments, 95% of the social payments come from current payroll contributions. The 5% that is coming from the fund is projected by the CBO to go to zero by 2014. Then after a few years, withdrawals from the fund will begin to supplement payroll contributions. Within about 15 to 20 years the fund would be exhausted. Then what? Assuming Congress never took any action during those years, benefits would drop by about 25%.
In short, it is far more likely that you will die before reaching Social Security retirement age, than benefits not being available.
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.
Krautheimer::::
Really? If these trust fund bonds represent anything real, why is it that in calculating national indebtedness they are not even included? We measure national solvency by debt/GDP ratio. As calculated by everyone from the OMB to the CIA, from the Simpson-Bowles to the Domenici-Rivlin commissions, the debt/GDP ratio counts only publicly held debt. This means bonds held by China, Saudi Arabia, you and me. The debt ratio completely ignores the kind of intragovernmental bonds that Mr. Lew insists are the equivalent of publicly held bonds.
Why? Because the intragovernmental bond is nothing more than a bookkeeping device that records how much one part of the U.S. government (Treasury) owes another part of the same government (the Social Security Administration). In judging the creditworthiness of the United States, the world doesn't care what the left hand owes the right. It's all one entity. It cares only what that one entity owes the world.
That's why publicly held bonds are so radically different from intragovernmental bonds. If we default on Chinese-held debt, decades of AAA creditworthiness is destroyed, the world stops lending to us, the dollar collapses, the economy goes into a spiral and we become Argentina. That's why such a default is inconceivable.
On the other hand, what would happen to financial markets if the Treasury stopped honoring the "special issue" bonds in the Social Security trust fund? A lot of angry grumbling at home for sure. But externally? Nothing.
This "default" would simply be the Treasury telling the Social Security Administration that henceforth it would have to fend for itself in covering its annual shortfall. How? By means-testing (cutting the benefits to the rich), changing the inflation formula, raising the retirement age and, if necessary, hiking the cap on income subject to the payroll tax
The only way I can explain it is to refer you OASI actuary tables. See links below. In 2010 there was 712 billion paid in benefits to about 54 million people. That's a benefit of about 13,185/person. 637 billion was collected in payroll taxes. Spread that over 155 million earners and you get a social security tax payment of about 4,100/yr. So the payroll taxes from 3 earners would be about 12,300/yr. When you add in 113 billion in interest it's going pretty close to 13,185.Keeping Social Security in a lock box is really stupid. Over half the balance in the trust fund came from government interest payments. To suggest that Social Security is a Ponzi Scheme is even dumber. Social Security loans the balance of the fund to the government and the government spends it. That’s what businesses, individuals, and government do with borrowed funds. The government pays interest to on the bonds. The loan, Special Issue Treasury bonds are payable on demand.
The contention that the trust fund is worthless and Social Security will eventually fail is based on two equally erroneous assumptions.
The assumption that Special Issue treasury bonds are worthless is based on the belief that if they are non-negotiable then they are worthless and the full faith and credit of the US government is worthless. Because debt is non-negotiable does not make it worthless. Loans between nations, loans between banks and the Fed, and loans between state and the federal government are all non-negotiable but that certainly does not make them worthless. The full faith and credit of the United States is considered among the best in world.
The second assumption is that the federal government will not be able to make good its debt to the trust fund. For this to occur the government would have to be incapable of cutting expenses, raising taxes, or borrowing money to pay its debt to the fund. For the government to reach this state, the entire economic system of the country and much of the world would have collapsed which would make the value of the trust fund a moot point.
As far as the safety of Social Security payments, 95% of the social payments come from current payroll contributions. The 5% that is coming from the fund is projected by the CBO to go to zero by 2014. Then after a few years, withdrawals from the fund will begin to supplement payroll contributions. Within about 15 to 20 years the fund would be exhausted. Then what? Assuming Congress never took any action during those years, benefits would drop by about 25%.
In short, it is far more likely that you will die before reaching Social Security retirement age, than benefits not being available.
Are you claiming government acts the same as business?
When social security started there were 29 people paying into it for every person drawing a benefit.
Now there are 3 paying into it for every person drawing it.
Explain how social security works when there is 1 person paying into it for every person drawing a benefit.
The system is unsustainable. They state so in their own literature they send out!
The only way I can explain it is to refer you OASI actuary tables. See links below. In 2010 there was 712 billion paid in benefits to about 54 million people. That's a benefit of about 13,185/person. 637 billion was collected in payroll taxes. Spread that over 155 million earners and you get a social security tax payment of about 4,100/yr. So the payroll taxes from 3 earners would be about 12,300/yr. When you add in 113 billion in interest it's going pretty close to 13,185.Keeping Social Security in a lock box is really stupid. Over half the balance in the trust fund came from government interest payments. To suggest that Social Security is a Ponzi Scheme is even dumber. Social Security loans the balance of the fund to the government and the government spends it. Thats what businesses, individuals, and government do with borrowed funds. The government pays interest to on the bonds. The loan, Special Issue Treasury bonds are payable on demand.
The contention that the trust fund is worthless and Social Security will eventually fail is based on two equally erroneous assumptions.
The assumption that Special Issue treasury bonds are worthless is based on the belief that if they are non-negotiable then they are worthless and the full faith and credit of the US government is worthless. Because debt is non-negotiable does not make it worthless. Loans between nations, loans between banks and the Fed, and loans between state and the federal government are all non-negotiable but that certainly does not make them worthless. The full faith and credit of the United States is considered among the best in world.
The second assumption is that the federal government will not be able to make good its debt to the trust fund. For this to occur the government would have to be incapable of cutting expenses, raising taxes, or borrowing money to pay its debt to the fund. For the government to reach this state, the entire economic system of the country and much of the world would have collapsed which would make the value of the trust fund a moot point.
As far as the safety of Social Security payments, 95% of the social payments come from current payroll contributions. The 5% that is coming from the fund is projected by the CBO to go to zero by 2014. Then after a few years, withdrawals from the fund will begin to supplement payroll contributions. Within about 15 to 20 years the fund would be exhausted. Then what? Assuming Congress never took any action during those years, benefits would drop by about 25%.
In short, it is far more likely that you will die before reaching Social Security retirement age, than benefits not being available.
Are you claiming government acts the same as business?
When social security started there were 29 people paying into it for every person drawing a benefit.
Now there are 3 paying into it for every person drawing it.
Explain how social security works when there is 1 person paying into it for every person drawing a benefit.
The system is unsustainable. They state so in their own literature they send out!
Social Security Trust Funds
Monthly Statistical Snapshot, July 2011
Sure they will, if it every comes to that. The administration can not refuse to pay Special Issue treasury bond interest or principal without congressional approval, fat chance of that ever happening. There is no requirement for the administration to seek approval of congress before defaulting on regular treasury bills.Keeping Social Security in a lock box is really stupid. Over half the balance in the trust fund came from government interest payments. To suggest that Social Security is a Ponzi Scheme is even dumber. Social Security loans the balance of the fund to the government and the government spends it. Thats what businesses, individuals, and government do with borrowed funds. The government pays interest to on the bonds. The loan, Special Issue Treasury bonds are payable on demand.
The contention that the trust fund is worthless and Social Security will eventually fail is based on two equally erroneous assumptions.
The assumption that Special Issue treasury bonds are worthless is based on the belief that if they are non-negotiable then they are worthless and the full faith and credit of the US government is worthless. Because debt is non-negotiable does not make it worthless. Loans between nations, loans between banks and the Fed, and loans between state and the federal government are all non-negotiable but that certainly does not make them worthless. The full faith and credit of the United States is considered among the best in world.
The second assumption is that the federal government will not be able to make good its debt to the trust fund. For this to occur the government would have to be incapable of cutting expenses, raising taxes, or borrowing money to pay its debt to the fund. For the government to reach this state, the entire economic system of the country and much of the world would have collapsed which would make the value of the trust fund a moot point.
As far as the safety of Social Security payments, 95% of the social payments come from current payroll contributions. The 5% that is coming from the fund is projected by the CBO to go to zero by 2014. Then after a few years, withdrawals from the fund will begin to supplement payroll contributions. Within about 15 to 20 years the fund would be exhausted. Then what? Assuming Congress never took any action during those years, benefits would drop by about 25%.
In short, it is far more likely that you will die before reaching Social Security retirement age, than benefits not being available.
This is like playing Whack-A-Mole.. Same shit every thread on Soc Sec.. NOTHING comes out of "the Trust fund".. Any deficit (like we are seeing today) is funded by issuing NEW DEBT..
From the Congressional Budget Office -- for cryin' out loud...
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.
Furthermore -- this insistence that the Govt "is good for it" and will put SS obligations above payments of REAL T-BILL holders is ludicrous..
Charles Krauthammer: 'Special issue' bonds don't change the fact that the lockbox is empty
Krautheimer::::
Really? If these trust fund bonds represent anything real, why is it that in calculating national indebtedness they are not even included? We measure national solvency by debt/GDP ratio. As calculated by everyone from the OMB to the CIA, from the Simpson-Bowles to the Domenici-Rivlin commissions, the debt/GDP ratio counts only publicly held debt. This means bonds held by China, Saudi Arabia, you and me. The debt ratio completely ignores the kind of intragovernmental bonds that Mr. Lew insists are the equivalent of publicly held bonds.
Why? Because the intragovernmental bond is nothing more than a bookkeeping device that records how much one part of the U.S. government (Treasury) owes another part of the same government (the Social Security Administration). In judging the creditworthiness of the United States, the world doesn't care what the left hand owes the right. It's all one entity. It cares only what that one entity owes the world.
That's why publicly held bonds are so radically different from intragovernmental bonds. If we default on Chinese-held debt, decades of AAA creditworthiness is destroyed, the world stops lending to us, the dollar collapses, the economy goes into a spiral and we become Argentina. That's why such a default is inconceivable.
On the other hand, what would happen to financial markets if the Treasury stopped honoring the "special issue" bonds in the Social Security trust fund? A lot of angry grumbling at home for sure. But externally? Nothing.
This "default" would simply be the Treasury telling the Social Security Administration that henceforth it would have to fend for itself in covering its annual shortfall. How? By means-testing (cutting the benefits to the rich), changing the inflation formula, raising the retirement age and, if necessary, hiking the cap on income subject to the payroll tax
40% of the TOTAL $14TRILL debt is owed by the govt TO the govt. You think China, Japan, are goin sit by while the govt pays itself FIRST Flopper?
And how's about not bailing this time and actually discussing the issue???
No, Social Security will be drawing from the trust fund unless Congress makes some changes, which they probably will.The only way I can explain it is to refer you OASI actuary tables. See links below. In 2010 there was 712 billion paid in benefits to about 54 million people. That's a benefit of about 13,185/person. 637 billion was collected in payroll taxes. Spread that over 155 million earners and you get a social security tax payment of about 4,100/yr. So the payroll taxes from 3 earners would be about 12,300/yr. When you add in 113 billion in interest it's going pretty close to 13,185.Are you claiming government acts the same as business?
When social security started there were 29 people paying into it for every person drawing a benefit.
Now there are 3 paying into it for every person drawing it.
Explain how social security works when there is 1 person paying into it for every person drawing a benefit.
The system is unsustainable. They state so in their own literature they send out!
Social Security Trust Funds
Monthly Statistical Snapshot, July 2011
Using your figures when it hits 2 to 1 in 14 years social security will immediately be cut 33% by the government.
YEAH RIGHT.
Most people DO NOT KNOW just how much $$$ he has wasted this year alone!!!!infman4x said:obama has wasted enough money to foreign countries and bailouts plus money/ assistance for welfare and slackers to have corrected social security, dont continue to rob the working people who made this country, working folks have to be responsible with their money,how about government getting their act together and living within their means, and oh by the way fix social security, because you guys screwed it up, theres enough of you guys sittin on your bottoms drawing big pay,lets do something.
You got it. If you don't believe the Actuarial Reports you're helpless. Click on receipts just above the table. It's all there. Social Security Trust FundsYou're hopelessly brainwashed..
Where did that $117Bill interest payment come from Flopper? Where did TREASURY get the money? Did they SELL something? Did they redeem some other IOUS they had laying around? OMB says they issued NEW debt instruments or "borrowed" it. There are NO ASSETS generating REAL INCOME in the trust..
And more importantly ---- the fund deficit for that year was $75Bill.. So Why did they transfer $117B to a fund that retains no cash at year end? That's $42 BILL MORE than was neccessary to balance the fund. WHERE DID THAT GO? I'm sure you're gonna tell me it was INVESTED into more Special Treasury Notes...
Think about the ramifications of that carefully before you answer..
No, Social Security will be drawing from the trust fund unless Congress makes some changes, which they probably will.The only way I can explain it is to refer you OASI actuary tables. See links below. In 2010 there was 712 billion paid in benefits to about 54 million people. That's a benefit of about 13,185/person. 637 billion was collected in payroll taxes. Spread that over 155 million earners and you get a social security tax payment of about 4,100/yr. So the payroll taxes from 3 earners would be about 12,300/yr. When you add in 113 billion in interest it's going pretty close to 13,185.
Social Security Trust Funds
Monthly Statistical Snapshot, July 2011
Using your figures when it hits 2 to 1 in 14 years social security will immediately be cut 33% by the government.
YEAH RIGHT.
First you say there is no trust fund. Then you say the trust fund is stuffed with IOUs. That makes no sense. The trust funds, OASI and DI are treasury accounts held by the federal reserve.No, Social Security will be drawing from the trust fund unless Congress makes some changes, which they probably will.Using your figures when it hits 2 to 1 in 14 years social security will immediately be cut 33% by the government.
YEAH RIGHT.
No offense Flopper but there is NO trust fund bud.
All there is in the "trust fund" is a bunch of IOUs.
Where is this trust fund you claim has $$$ in it?
Flopper, even the politicians admit there is not one cent in any trust fund.
First you say there is no trust fund. Then you say the trust fund is stuffed with IOUs. That makes no sense. The trust funds, OASI and DI are treasury accounts held by the federal reserve.No, Social Security will be drawing from the trust fund unless Congress makes some changes, which they probably will.
No offense Flopper but there is NO trust fund bud.
All there is in the "trust fund" is a bunch of IOUs.
Where is this trust fund you claim has $$$ in it?
Flopper, even the politicians admit there is not one cent in any trust fund.
What do you think a treasury bond is or a US government savings bond? It's an IOU. That's what all government debt is. There is no collateral. It's backed only by the full faith and credit of the United States. You either have faith in your country or you don't. If you don't then there's no point in discussing this any further.
First you say there is no trust fund. Then you say the trust fund is stuffed with IOUs. That makes no sense. The trust funds, OASI and DI are treasury accounts held by the federal reserve.No, Social Security will be drawing from the trust fund unless Congress makes some changes, which they probably will.
No offense Flopper but there is NO trust fund bud.
All there is in the "trust fund" is a bunch of IOUs.
Where is this trust fund you claim has $$$ in it?
Flopper, even the politicians admit there is not one cent in any trust fund.
What do you think a treasury bond is or a US government savings bond? It's an IOU. That's what all government debt is. There is no collateral. It's backed only by the full faith and credit of the United States. You either have faith in your country or you don't. If you don't then there's no point in discussing this any further.
First you say there is no trust fund. Then you say the trust fund is stuffed with IOUs. That makes no sense. The trust funds, OASI and DI are treasury accounts held by the federal reserve.No offense Flopper but there is NO trust fund bud.
All there is in the "trust fund" is a bunch of IOUs.
Where is this trust fund you claim has $$$ in it?
Flopper, even the politicians admit there is not one cent in any trust fund.
What do you think a treasury bond is or a US government savings bond? It's an IOU. That's what all government debt is. There is no collateral. It's backed only by the full faith and credit of the United States. You either have faith in your country or you don't. If you don't then there's no point in discussing this any further.
This is where your pig-headedness is causing you to fail... The notes in the fund ARE NOT US government savings bonds and you fail to comprehend the gi-normous diff!
If Congress had made it clear 30 years ago that Soc Sec Trust Fund could ONLY HOLD public issue Treasury Bonds -- then TODAY -- we would be selling those valuable assets on the open market. It would be a bonanza because of the interest rates on some of those notes coming in at 6 or even 8%..
They didn't do their fidiciary duty. They put in NON-TRANSFERABLE, NON-MARKETABLE IOUs with no intrinsic value OTHER than a wink and a nod..
If those IOUs WERE genuine marketable instruments -- I'd be lauding the fund for doing their job.. And I'd be buying them as quickly as the SSA could sell them.. And so would the Chinese and Japanese and Warren Buffett. The only folks who can redeem "the trust fund" is the Treasury with OUR money -- so we end up paying exactly TWICE for the same FICA contributions AND WE PAY the interest on that...
I assume your gonna vote Dem. The reason your party is staring at extinction is because this willful denial of Soc Sec problems is only ANGERING the American people.. Keep it up.. It adds to the consensus that leftists are functionally economically illiterate and incapable of comprehending what tool set is available to Govt to tune the economy...
First you say there is no trust fund. Then you say the trust fund is stuffed with IOUs. That makes no sense. The trust funds, OASI and DI are treasury accounts held by the federal reserve.No offense Flopper but there is NO trust fund bud.
All there is in the "trust fund" is a bunch of IOUs.
Where is this trust fund you claim has $$$ in it?
Flopper, even the politicians admit there is not one cent in any trust fund.
What do you think a treasury bond is or a US government savings bond? It's an IOU. That's what all government debt is. There is no collateral. It's backed only by the full faith and credit of the United States. You either have faith in your country or you don't. If you don't then there's no point in discussing this any further.
This is where your pig-headedness is causing you to fail... The notes in the fund ARE NOT US government savings bonds and you fail to comprehend the gi-normous diff!
If Congress had made it clear 30 years ago that Soc Sec Trust Fund could ONLY HOLD public issue Treasury Bonds -- then TODAY -- we would be selling those valuable assets on the open market. It would be a bonanza because of the interest rates on some of those notes coming in at 6 or even 8%..
They didn't do their fidiciary duty. They put in NON-TRANSFERABLE, NON-MARKETABLE IOUs with no intrinsic value OTHER than a wink and a nod..
If those IOUs WERE genuine marketable instruments -- I'd be lauding the fund for doing their job.. And I'd be buying them as quickly as the SSA could sell them.. And so would the Chinese and Japanese and Warren Buffett. The only folks who can redeem "the trust fund" is the Treasury with OUR money -- so we end up paying exactly TWICE for the same FICA contributions AND WE PAY the interest on that...
I assume your gonna vote Dem. The reason your party is staring at extinction is because this willful denial of Soc Sec problems is only ANGERING the American people.. Keep it up.. It adds to the consensus that leftists are functionally economically illiterate and incapable of comprehending what tool set is available to Govt to tune the economy...
