social security

[Toro]

If by lock-box, you mean cash sitting in an account invested in nothing, then no there has never been a lock-box and for good reason. Most of the 2 trillion dollars in assets in the fund comes from interest earned on investments in treasuries bonds. Typically the fund earns 50 or 60 billion a year.

By law social security payroll taxes go to the treasury where benefits checks are issued. Any remaining funds must be deposited in the trust fund. Most of the funds assets are then invested in US treasury bonds and special issue treasury bonds. Any other use of the funds is illegal.

In most years there is sufficient payroll taxes coming in to pay all benefits, therefore as bonds mature, the proceeds are reinvested in order to maximize interest payments to the fund. Once in the 1980's and in 2010 and 2011, payroll taxes were insufficient to cover benefit payments therefor some benefits were paid from the fund. The amount was about 2% of the fund in 2011, less that the interest being earned.

Anyone that says "S.S. is bankrupt" or "there is nothing in the fund" is showing their ignorance.

S.S. has real problems. Very soon S.S. payroll taxes will not be enough to cover the benefit checks so we will start drawing enough from the trust fund to pay benefits. Sometime in the 2030's, not sure of the year, there will be no assets left in the fund. So what will happens to S.S? Benefits will continue to be paid out the S.S. payroll taxes, however the benefits will be reduced by about 25% possibly a bit more. This is the S.S. problem. It has little or nothing to do with the deficit. S.S is considered off budget, so there is no line item in budget to be cut.

Social Security history Frequently Asked Questions

Social security does not own Treasury bonds. Treasury bonds are marketable bonds that can be bought and sold. Social security owns nonmarketable government liabilities that cannot be bought and sold.

They are also referred to by S.S. as Special Issue Treasury Bonds. They are not marketable because the fund is not allowed to sell them. This does not mean they have no value. They have a face value payable at maturity like any other bond. Private placement bonds used by businesses, large and small are not marketed but that certainly doesn't mean they lack value.

According to S.S, there are only two differences between Special Issue Treasury Bonds and Ordinary Treasury Bonds. Special issues bonds can be redeemed at any time by the fund. Unlike ordinary treasuries, the government can not default on these bonds without an act of Congress. This makes the bonds safer from default than ordinary treasuries.

BTW I think a lot people are unaware that the S.S. trust fund is only 1 of 18 trusts managed by the treasury with a total asset value of 2.5 trillion. To my knowledge all of these funds are invested in US debt. These are just 18 of 230 government trust funds. The other funds are not managed by the treasury and there is little information on the Net about them. I think one of them is an Indian trust fund but I haven't found anything else. I wonder what these funds might be.

I know, I realize all that. I have this argument all the time with people who say there is no trust, or SS is broke, etc. But the bonds don't really exist in the tangible sense. They are accounting entries that are credited and debited to the accounts as if they were real Treasury bonds. The liabilities are real in the sense that they are claims on the US government, but as I understand it, there are no identifiers such as CUSIPs which identify each bond separately. They are conceptual. Of course, most securities no longer exist in the true tangible sense, i.e. bearer bonds, but at least they can be identified and traded.

 

[Flopper]

Social security does not own Treasury bonds. Treasury bonds are marketable bonds that can be bought and sold. Social security owns nonmarketable government liabilities that cannot be bought and sold.

They are also referred to by S.S. as Special Issue Treasury Bonds. They are not marketable because the fund is not allowed to sell them. This does not mean they have no value. They have a face value payable at maturity like any other bond. Private placement bonds used by businesses, large and small are not marketed but that certainly doesn't mean they lack value.

According to S.S, there are only two differences between Special Issue Treasury Bonds and Ordinary Treasury Bonds. Special issues bonds can be redeemed at any time by the fund. Unlike ordinary treasuries, the government can not default on these bonds without an act of Congress. This makes the bonds safer from default than ordinary treasuries.

BTW I think a lot people are unaware that the S.S. trust fund is only 1 of 18 trusts managed by the treasury with a total asset value of 2.5 trillion. To my knowledge all of these funds are invested in US debt. These are just 18 of 230 government trust funds. The other funds are not managed by the treasury and there is little information on the Net about them. I think one of them is an Indian trust fund but I haven't found anything else. I wonder what these funds might be.

I know, I realize all that. I have this argument all the time with people who say there is no trust, or SS is broke, etc. But the bonds don't really exist in the tangible sense. They are accounting entries that are credited and debited to the accounts as if they were real Treasury bonds. The liabilities are real in the sense that they are claims on the US government, but as I understand it, there are no identifiers such as CUSIPs which identify each bond separately. They are conceptual. Of course, most securities no longer exist in the true tangible sense, i.e. bearer bonds, but at least they can be identified and traded.

Well I know they can’t be traded because that would not be legal. Special issue bonds have maturities of less than a year to maximum of 15 years. I’m sure the bonds are laddered with fixed percentages at 15,yr, 10yrs and down to less than a year. Since the trust is constantly buying bonds to reinvest interest, they must own thousands of bonds with different maturities. There must be a number assigned to each bond just to keep up with them.

I think I saw something that said the interest rates on new bonds were taking from weekly treasure bill auctions, which sounds reasonable. What seems rather strange is the option to redeem on demand.

 

[waltky]

He just playin' to the electorate - just like Sarah Palin...

Rick Perry: Smart politics for him to call Social Security a Ponzi scheme?
August 29, 2011 Washington - If Rick Perry wins the GOP presidential nomination, his remarks on Social Security and other issues could haunt him. But right now, his play to the Republican base appears to be spot on.

Texas Gov. Rick Perry is at it again, expressing himself pungently on a hot-button issue. This past weekend, it was Social Security. The front-runner for the GOP presidential nomination called the retirement program for seniors a “monstrous lie” and “a Ponzi scheme for ... young people.” Add that to Governor Perry’s comments on man-made global warming: “a scientific theory that has not been proven.” On evolution: “just a theory” with “gaps.” And on the Federal Reserve’s practice of printing more money to boost the economy: doing so again would be “almost treasonous.” Many conservatives applaud Perry, even as liberals and the mainstream media express alarm.

The long-term politics of these assertions is tricky. If Perry wins the nomination, the remarks – all on tape – could come back to haunt him. In the general election, he would have to appeal to moderates and independents, and these sorts of comments could give such voters pause. Short term, though, his play to the Republican base appears to be spot on. Perry has shot into the lead in the two latest polls of Iowa Republican voters, who will kick off nomination season early next year. “Although he’s drawn ridicule from Democrats and Republican elites [for his comments on global warming and evolution], our polling suggests he’s perfectly in line with the GOP base,” writes Tom Jensen, director of the Democratic firm Public Policy Polling.

According to the PPP poll, 35 percent of Iowa Republicans believe in evolution versus 48 percent who don’t. On global warming, 21 percent of Iowa GOP voters believe in it, and 66 percent do not. Overall, Perry leads the GOP field in Iowa with 21 percent, followed by former Massachusetts Gov. Mitt Romney with 18 percent and Minnesota Rep. Michele Bachmann with 15 percent. Longtime Perry-watcher, Prof. Cal Jillson of Southern Methodist University in Dallas, says the governor is clearing space for himself in the Republican primaries by making eyebrow-raising comments. “All of that is just his late arrival in a race still in flux and him saying, ‘I’m here, pay attention. I’m what you’ve been waiting for,’ ” says Professor Jillson.

Perry’s first goal, Jillson says, is to move Representative Bachmann out of the way so he can go one on one with Mr. Romney. Regarding Perry’s comments on Social Security, Republican strategist Ford O’Connell says he’s raising the right issue – saying, in essence, that the program is going bankrupt and needs to be reformed. “But he could couch it in better terms,” says Mr. O’Connell, chairman of Civic Forum PAC. “Should he win the nomination, it could hurt him in Florida in the general election, given its big senior population.”

MORE

 

[Flopper]

He just playin' to the electorate - just like Sarah Palin...

Rick Perry: Smart politics for him to call Social Security a Ponzi scheme?
August 29, 2011 Washington - If Rick Perry wins the GOP presidential nomination, his remarks on Social Security and other issues could haunt him. But right now, his play to the Republican base appears to be spot on.

Texas Gov. Rick Perry is at it again, expressing himself pungently on a hot-button issue. This past weekend, it was Social Security. The front-runner for the GOP presidential nomination called the retirement program for seniors a “monstrous lie” and “a Ponzi scheme for ... young people.” Add that to Governor Perry’s comments on man-made global warming: “a scientific theory that has not been proven.” On evolution: “just a theory” with “gaps.” And on the Federal Reserve’s practice of printing more money to boost the economy: doing so again would be “almost treasonous.” Many conservatives applaud Perry, even as liberals and the mainstream media express alarm.

The long-term politics of these assertions is tricky. If Perry wins the nomination, the remarks – all on tape – could come back to haunt him. In the general election, he would have to appeal to moderates and independents, and these sorts of comments could give such voters pause. Short term, though, his play to the Republican base appears to be spot on. Perry has shot into the lead in the two latest polls of Iowa Republican voters, who will kick off nomination season early next year. “Although he’s drawn ridicule from Democrats and Republican elites [for his comments on global warming and evolution], our polling suggests he’s perfectly in line with the GOP base,” writes Tom Jensen, director of the Democratic firm Public Policy Polling.

According to the PPP poll, 35 percent of Iowa Republicans believe in evolution versus 48 percent who don’t. On global warming, 21 percent of Iowa GOP voters believe in it, and 66 percent do not. Overall, Perry leads the GOP field in Iowa with 21 percent, followed by former Massachusetts Gov. Mitt Romney with 18 percent and Minnesota Rep. Michele Bachmann with 15 percent. Longtime Perry-watcher, Prof. Cal Jillson of Southern Methodist University in Dallas, says the governor is clearing space for himself in the Republican primaries by making eyebrow-raising comments. “All of that is just his late arrival in a race still in flux and him saying, ‘I’m here, pay attention. I’m what you’ve been waiting for,’ ” says Professor Jillson.

Perry’s first goal, Jillson says, is to move Representative Bachmann out of the way so he can go one on one with Mr. Romney. Regarding Perry’s comments on Social Security, Republican strategist Ford O’Connell says he’s raising the right issue – saying, in essence, that the program is going bankrupt and needs to be reformed. “But he could couch it in better terms,” says Mr. O’Connell, chairman of Civic Forum PAC. “Should he win the nomination, it could hurt him in Florida in the general election, given its big senior population.”

MORE

It will be interesting to see how he plays Florida with all the seniors. I guess he will try to downplay his statements about social security and medicare.

 

[Gadawg73]

hey congress quit tampering with social security, ill dare you guys, robb from the working taxpayers to fund illegals or slackers with the working folks money that they earned and put in for retirement, most people would go to jail for these actions.
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.

So by taxing away workers money, spending it, and then paying those workers retirement with other people's money that could have been invested, Congress is helping the working people? It seems to me like social security is the robbery.

Phase out social security, and abolish it. Allow people to create their own private retirement accounts. They would generate more money. Invest in mutual funds if you worry you do not have the know how to make the decisions yourself. The market provides all you need. The government takes away your hard earned money and pretends like it is doing you a favor when it returns the stolen property.

There never was a system to invest the $$. From the start this has been a giant Ponzi pay as you go system.
The system NEVER was intended to be a retirement system as the average age of an American when started was LESS than 62 yoa. Social security was set up as insurance IN CASE you lived past 62.
And when started 29 folks paid into it for every beneficiary. This is the part that most Americans DO NOT GET. Now it is less than 3 to 1.
UNSUSTAINABLE.

 

[Gadawg73]

People need to get in their thick skulls:
SOCIAL SECURITY IS NOT A RETIREMENT SYSTEM.
The taxpayers should not have to pay citizens a retirement.
SS was set up as insurance and as a supplement.

 

[Full-Auto]

People need to get in their thick skulls:
SOCIAL SECURITY IS NOT A RETIREMENT SYSTEM.
The taxpayers should not have to pay citizens a retirement.
SS was set up as insurance and as a supplement.

Thats the word now!!!

But during the debate leading up to it.

It will come to you as a right.

Your premiums will never go up.

You can pass it on to your heirs.

ITS PROTECTED BY A TRUST FUND...........................

 

[flacaltenn]

It is only broke if you consider the two trillion dollars it holds in US treasury bills as worthless.

Those are IOUs only.

Yes, that's exactly what a treasury bill is, no collateral just backed by the full faith and credit of the United States.

HOW in the ff'in world can you pop up every Soc Sec thread and contend again that there are negotiable Treasury Bonds in the Trust Fund? I've given you ample proof that it's a farce. MORE THAN ONCE!

Those papers in the trust fund are NOT general issue transferable bonds. They are worthless paper IOUs. Backed ONLY by the integrity and ethical content of Congress. Wanna trust them???

 

[editec]

hey congress quit tampering with social security, ill dare you guys, robb from the working taxpayers to fund illegals or slackers with the working folks money that they earned and put in for retirement, most people would go to jail for these actions.
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.

Social secuurity isn't broke if you look at its balance sheet.

But the fact that its one and only DEBTOR is broke is a problem, without doubt.

FIXING the FEDERAL GOVERNMENT is a problem that is NOT on the agenda.

 

[flacaltenn]

hey congress quit tampering with social security, ill dare you guys, robb from the working taxpayers to fund illegals or slackers with the working folks money that they earned and put in for retirement, most people would go to jail for these actions.
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.

Social secuurity isn't broke if you look at its balance sheet.

But the fact that its one and only DEBTOR is broke is a problem, without doubt.

FIXING the FEDERAL GOVERNMENT is a problem that is NOT on the agenda.

Social Security went NEGATIVE in 2010.. Largely because of the economy and the theft of payroll taxes that was in the "stimulus" act. MAYBE it's got a couple positive years IF the economy recovers -- but the doom and gloom is HERE -- NOW...

But you're right -- I don't see it getting fixed without scuttling every aspect of it's original UNIVERSAL intent...

 

[flacaltenn]

In fact -- look at why the deficit under Obama is exploding.. Under Bush -- SS was running 100BIll surplus which was stolen by congress. In 2010 it ran a 50Bill deficit.

That's a SWING of 150Bill/yr or because the SS deficit will INCREASE dramatically in the next 10 years, that amount alone probably ADDS $3TRILL to poor unfortunate Obama's bar tab..

The guy is a sucker for taking the office given what's been set in motion. A BIGGER idiot will get elected to be swept away by the coming monsoon of debt payments..

 

[MiddleClass]

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

 

[flacaltenn]

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

Just curious -0- As misinformed as YOU are -- what news sources can we attribute THAT ignorance to? Everything GaDawg said has merit. (But actually it's more like 4 retirees for every worker and getting worse). I've got quotes and links for you -- but 1st we need to impeach whatever crap news has made you so sure of yourself..

And BTW: Welcome to USMB.. I believe there's an entire FORUM for folks who think Fox News is useless and evil...

 

[signelect]

A democratic congress voted to steel my SS money from the trust so they could give it to their buddies. Leave my money along, you should all be in jail.

 

[lehr]

hey congress quit tampering with social security, ill dare you guys, robb from the working taxpayers to fund illegals or slackers with the working folks money that they earned and put in for retirement, most people would go to jail for these actions.
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.

dont worry ! there will always be money for us - IT WILL COME FROM OBAMAS STASH !

 

[lehr]

A democratic congress voted to steel my SS money from the trust so they could give it to their buddies. Leave my money along, you should all be in jail.

COMMUNIST DEMOKRATS TOOK S.S. FROM A PRIVATE FUND AND PUT IT IN THE GENERAL FUND SO CONGRESS WAS ABLE TO SPEND IT !

COMMUNIST DEMOKRATS PUT A TAX ON S.S. !

COMMUNIST DEMOKRATS INCREASED TAX ON S.S. - KOMRADE GORE CAST THE DECIDING VOTE !

COMMUNIST DEMOKRATS GAVE S.S. TO (ALEGAL) IMMIGRANTS WHO COME TO AMERIKA AT AGE 65

communist demokrats never have enuff money !

 

[Flopper]

A democratic congress voted to steel my SS money from the trust so they could give it to their buddies. Leave my money along, you should all be in jail.

COMMUNIST DEMOKRATS TOOK S.S. FROM A PRIVATE FUND AND PUT IT IN THE GENERAL FUND SO CONGRESS WAS ABLE TO SPEND IT !

COMMUNIST DEMOKRATS PUT A TAX ON S.S. !

COMMUNIST DEMOKRATS INCREASED TAX ON S.S. - KOMRADE GORE CAST THE DECIDING VOTE !

COMMUNIST DEMOKRATS GAVE S.S. TO (ALEGAL) IMMIGRANTS WHO COME TO AMERIKA AT AGE 65

communist demokrats never have enuff money !

And when was there a private fund?

 

[Old Rocks]

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.

It is only broke if you consider the two trillion dollars it holds in US treasury bills as worthless.

Those are IOUs only.

Tell that to China. Were we to pay out to others, and not our citizens who worked their whole lives, then the government just as well pack it up. No way would I find it acceptable that the government would pay out money to anybody before paying out to the citizens that contributed the whole of their working lives.

 

[Old Rocks]

hey congress quit tampering with social security, ill dare you guys, robb from the working taxpayers to fund illegals or slackers with the working folks money that they earned and put in for retirement, most people would go to jail for these actions.
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.

Social secuurity isn't broke if you look at its balance sheet.

But the fact that its one and only DEBTOR is broke is a problem, without doubt.

FIXING the FEDERAL GOVERNMENT is a problem that is NOT on the agenda.

Social Security went NEGATIVE in 2010.. Largely because of the economy and the theft of payroll taxes that was in the "stimulus" act. MAYBE it's got a couple positive years IF the economy recovers -- but the doom and gloom is HERE -- NOW...

But you're right -- I don't see it getting fixed without scuttling every aspect of it's original UNIVERSAL intent...

The single largest voting block in the US are us older people. AARP is a force you will deal with. And the attempt to take what we have earned so that the very wealthy can have even more won't sit well here.

You just try scuttling SS.

 

[Gadawg73]

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

I do not watch Fox News Moe.
Try just a little harder next time.
Facts are a real bitch for some folks so they make it up as they go.