social security

Flopper,

The problem here is that those 'investments' really represent debt that will be owed by the general fund and yet that debt is not reported as such. That 2 trillion that the SS can claim as held assets need to be reflected as 2 trillion in owed debt by the general fund. Once we get a view on that debt then we can see why there is turmoil about paying those off. It represents a MASSIVE amount of cash that we simply do not have. As already pointed out, it is almost a guarantee that the government will default on them as well. The default will be called something else of course like changing the retirement age and the benefit but it amounts to the same thing. As I pay into the system with a promised benefit of X, I know that promised benefit will NOT be met and instead I'll get something else. Hence, the inherent mistrust in the government's ability to manage said monies.


What they are doing is not investing. You are not investing when you loan yourself money with the intent to pay yourself back with interest.
 
Flopper,

The problem here is that those 'investments' really represent debt that will be owed by the general fund and yet that debt is not reported as such. That 2 trillion that the SS can claim as held assets need to be reflected as 2 trillion in owed debt by the general fund. Once we get a view on that debt then we can see why there is turmoil about paying those off. It represents a MASSIVE amount of cash that we simply do not have. As already pointed out, it is almost a guarantee that the government will default on them as well. The default will be called something else of course like changing the retirement age and the benefit but it amounts to the same thing. As I pay into the system with a promised benefit of X, I know that promised benefit will NOT be met and instead I'll get something else. Hence, the inherent mistrust in the government's ability to manage said monies.


What they are doing is not investing. You are not investing when you loan yourself money with the intent to pay yourself back with interest.

The only purpose of the trust is pay for benefits in years that receipts are less benefits paid. Congress could modify the law wiping out the trust and thus lower the national debt by 2.5 trillion dollars. 40 of the last 53 years, FICA tax receipts have exceeded benefit payments so in the years that the taxes didn't cover benefits, the difference could be paid out of operating expenses. Congress would have to make a firm commitment in law to do this and it would have to be a nondiscretionary item. The problem is that trust fund is a stronger commitment because the invested assets are financial obligations of the government. This is probably why the trust was created.
 
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Flopper,

The problem here is that those 'investments' really represent debt that will be owed by the general fund and yet that debt is not reported as such. That 2 trillion that the SS can claim as held assets need to be reflected as 2 trillion in owed debt by the general fund. Once we get a view on that debt then we can see why there is turmoil about paying those off. It represents a MASSIVE amount of cash that we simply do not have. As already pointed out, it is almost a guarantee that the government will default on them as well. The default will be called something else of course like changing the retirement age and the benefit but it amounts to the same thing. As I pay into the system with a promised benefit of X, I know that promised benefit will NOT be met and instead I'll get something else. Hence, the inherent mistrust in the government's ability to manage said monies.


What they are doing is not investing. You are not investing when you loan yourself money with the intent to pay yourself back with interest.

The only purpose of the trust is pay for benefits in years that receipts are less benefits paid. Congress could modify the law wiping out the trust and thus lower the national debt by 2.5 trillion dollars. 40 of the last 53 years, FICA tax receipts have exceeded benefit payments so in the years that the taxes didn't cover benefits, the difference could be paid out of operating expenses. Congress would have to make a firm commitment in law to do this and it would have to be a nondiscretionary item. The problem is that trust fund is a stronger commitment because the invested assets are financial obligations of the government. This is probably why the trust was created.

?
Did you not understand what I said? There is already a debt. That debt is kept 100 percent off the books and is NOT reported. Wiping out the "trust" fund would actually make that debt reappear as it should be. There is no 'stronger' commitment. Congress can change that commitment on a fucking whim and they will do so to make the program solvent though it will make it far less useful. The fact is that it will not be called a default because the SS fund won't be defaulted on, the American people will. The government does not need to call it a default when it slashes your payments and raises your retirement age. That IS a default but not on the held bonds. Even though the government can't pay them back, they can lie about it and simply not turn them in and instead pay you less.


That cash is going to come out of the general fund, PERIOD. I don't see where the big confusion is for you. Those bonds represent exactly that, debt that is owed through the general fund and that is the only place the future SS payments can be made. The problem is, there is not enough cash to make those payments. We are running a trillion dollar + debt every year. How much do you think the SS fund is going to add to that as the largest workforce this nation has EVER seen retires only to be replaced by on half the damn size. Where is the problem here. It does not matter that those funds are 'invested' in government bonds because those bonds DO NOT REPRESENT REAL ASSETS. THEY REPRESENT FUTURE DEMAND ON GENERAL FUNDS. If you are solely concerned with the actual payments then, sure they will be made. All the way up until the country burns to the fucking ground with debt.


The program must be made solvent. Period. The only solutions that the dems have put fourth are to make the program borderline worthless by returning it to what it was - a program that waited to pay you until you were supposed to die. I prefer one that gives you actual control of your assets and prepares you with actual wealth instead of promised 'just above' poverty. That is unacceptable.
 
Flopper,

The problem here is that those 'investments' really represent debt that will be owed by the general fund and yet that debt is not reported as such. That 2 trillion that the SS can claim as held assets need to be reflected as 2 trillion in owed debt by the general fund. Once we get a view on that debt then we can see why there is turmoil about paying those off. It represents a MASSIVE amount of cash that we simply do not have. As already pointed out, it is almost a guarantee that the government will default on them as well. The default will be called something else of course like changing the retirement age and the benefit but it amounts to the same thing. As I pay into the system with a promised benefit of X, I know that promised benefit will NOT be met and instead I'll get something else. Hence, the inherent mistrust in the government's ability to manage said monies.


What they are doing is not investing. You are not investing when you loan yourself money with the intent to pay yourself back with interest.

The only purpose of the trust is pay for benefits in years that receipts are less benefits paid. Congress could modify the law wiping out the trust and thus lower the national debt by 2.5 trillion dollars. 40 of the last 53 years, FICA tax receipts have exceeded benefit payments so in the years that the taxes didn't cover benefits, the difference could be paid out of operating expenses. Congress would have to make a firm commitment in law to do this and it would have to be a nondiscretionary item. The problem is that trust fund is a stronger commitment because the invested assets are financial obligations of the government. This is probably why the trust was created.

?
Did you not understand what I said? There is already a debt. That debt is kept 100 percent off the books and is NOT reported. Wiping out the "trust" fund would actually make that debt reappear as it should be. There is no 'stronger' commitment. Congress can change that commitment on a fucking whim and they will do so to make the program solvent though it will make it far less useful. The fact is that it will not be called a default because the SS fund won't be defaulted on, the American people will. The government does not need to call it a default when it slashes your payments and raises your retirement age. That IS a default but not on the held bonds. Even though the government can't pay them back, they can lie about it and simply not turn them in and instead pay you less.


That cash is going to come out of the general fund, PERIOD. I don't see where the big confusion is for you. Those bonds represent exactly that, debt that is owed through the general fund and that is the only place the future SS payments can be made. The problem is, there is not enough cash to make those payments. We are running a trillion dollar + debt every year. How much do you think the SS fund is going to add to that as the largest workforce this nation has EVER seen retires only to be replaced by on half the damn size. Where is the problem here. It does not matter that those funds are 'invested' in government bonds because those bonds DO NOT REPRESENT REAL ASSETS. THEY REPRESENT FUTURE DEMAND ON GENERAL FUNDS. If you are solely concerned with the actual payments then, sure they will be made. All the way up until the country burns to the fucking ground with debt.


The program must be made solvent. Period. The only solutions that the dems have put fourth are to make the program borderline worthless by returning it to what it was - a program that waited to pay you until you were supposed to die. I prefer one that gives you actual control of your assets and prepares you with actual wealth instead of promised 'just above' poverty. That is unacceptable.
I'm not sure what you mean by 100% off the books. Are you referring to the budget which is basically a cash budget and does not include entitlements?

The national debt is about 15 trillion which includes:

Securities held by investors outside the federal government, including that held by investors, the Federal Reserve System and foreign, state and local governments and intragovernment debt comprises Treasury securities held in accounts administered by the federal government, such as the Social Security Trust Fund.

Congress will fix S.S. It's a problem not near as complex as fixing the deficit spending. There are many options. Also, the increase in payout for baby boomer will not last forever. Birthrates peaked at 25.3 in 1957 and started falling in 70's. In 2009 the birthrate was 13.8, almost half what we saw in 1957. So the baby boomer peak in retirement should occur in 2020's and slowly fall off over the next 30 years. Once Congress fixes Social Security, then the trust fund has no use, at least not until increased life spans cause benefits to exceed revenue. Hopefully congress will adjust rates to keep up with increased life spans to avoid future problems.
 
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.

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...

SS is popular with the American public. Defending it is popular. It's good that we are beginning a discussion of much needed reform, but calling it a Ponzi Scheme is not a winning strategy.

I'll agree that "ponzi scheme" is inflammatory.. But pointing out the fraud and misrepresentation is VITAL to fixing it. The number of folks here BELIEVING that every penny has been carefully managed and invested is testimony to the work that needs to be done to get the patient's consent to operate.. Some of the same "deniers" want to schedule a surgery without an accurate diagnosis.
 
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.

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...

The goal of the fund is safety of principal. Public treasuries sold before maturity can incur losses. Special issue treasuries, surrendered before maturity can not suffer any lose. They are always bought and sold at face value to eliminate the risk of market fluctuations. If the goal of the fund included taking some trading risk, then public treasuries would be more appropriate.Investing in public treasuries puts the fund at greater risk due to market fluctuations. What would be the advantage for the fund since it seeks to minimize risks? There is no sound reason for the fund to hold transferable and marketable securities. However, the option to invest in public treasuries does exist. If there were sufficient political pressure, the fund could switch to public treasuries. However, the fund would require more management because sale of securities could generate losses.

You're missing the important diff here Flopper. REAL public treasuries in the TF would represent PAST DEBT. Meaning that FICA excess (real money) was traded for EXISTING DEBT that was available for sale on the market. NO NEW DEBT to be issued.

IOUs promising issuance of future debt --- means the excess FICA was stolen and needs to be replaced IN THE FUTURE with NEW debt issuance.

Forget the minimal marketing risks Flopper. It's a matter of whether you pay that PRINCIPLE ONCE or TWICE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

They SPENT THE PRINCIPLE FLOPPER.. THat's the diff.. They deferred reporting that debt until today when it's issued to cover "interest" and current shortfalls. Should have lived within their means and kept their grubby hands off the FICA funds..
 
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...

SS is popular with the American public. Defending it is popular. It's good that we are beginning a discussion of much needed reform, but calling it a Ponzi Scheme is not a winning strategy.

I'll agree that "ponzi scheme" is inflammatory.. But pointing out the fraud and misrepresentation is VITAL to fixing it. The number of folks here BELIEVING that every penny has been carefully managed and invested is testimony to the work that needs to be done to get the patient's consent to operate.. Some of the same "deniers" want to schedule a surgery without an accurate diagnosis.
When S.S. was first passed there was no trust fund. Benefits were to be paid out of tax collections with any excesses or shortage coming out of the general fund. Congress saw this as a problem and the trust fund was created by amendment, I think in 1937. It has operated pretty much the same since day one. Payroll taxes collected by the Treasury are used to pay benefits. The remainder is put in the trust fund. By law, the trust fund must be invested in government securities. Revenue has exceed benefit paid in all but 13 years since 1937. The fund has operated in accordance with the law and is carefully managed.
 
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...

The goal of the fund is safety of principal. Public treasuries sold before maturity can incur losses. Special issue treasuries, surrendered before maturity can not suffer any lose. They are always bought and sold at face value to eliminate the risk of market fluctuations. If the goal of the fund included taking some trading risk, then public treasuries would be more appropriate.Investing in public treasuries puts the fund at greater risk due to market fluctuations. What would be the advantage for the fund since it seeks to minimize risks? There is no sound reason for the fund to hold transferable and marketable securities. However, the option to invest in public treasuries does exist. If there were sufficient political pressure, the fund could switch to public treasuries. However, the fund would require more management because sale of securities could generate losses.

You're missing the important diff here Flopper. REAL public treasuries in the TF would represent PAST DEBT. Meaning that FICA excess (real money) was traded for EXISTING DEBT that was available for sale on the market. NO NEW DEBT to be issued.

IOUs promising issuance of future debt --- means the excess FICA was stolen and needs to be replaced IN THE FUTURE with NEW debt issuance.

Forget the minimal marketing risks Flopper. It's a matter of whether you pay that PRINCIPLE ONCE or TWICE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

They SPENT THE PRINCIPLE FLOPPER.. THat's the diff.. They deferred reporting that debt until today when it's issued to cover "interest" and current shortfalls. Should have lived within their means and kept their grubby hands off the FICA funds..
If the trustee had invested the funds in ordinary treasury bonds, instead of the special issue treasuries, the national debt would still be 15 trillion dollars. We would have 2.5 trillion less intragovernment loans and 2.5 trillion more debt held by the public. The 2.5 trillion the government did not receive from the trust fund would be made up by issuing 2.5 trillion new treasuries to the public.
 

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