The Myth Of The Raid On Social Security

[JoeTheEconomist]

I have always doubted the claim - in large part because so many politicians claim that it is true. I pulled out the cashflows, and found not surprisingly that Social Security is a net subsidize rather than a subsidizer of the government. Once you factor out the cost of benefits for seniors and the expense of time, there isn't enough left over to pay for the subsidies that have gone to SS. (mind you these are hard subsidies, not the soft subsidies)

Here is the longer piece with the details. Long story short, when someone tells you that we need to pay back the Trust Fund, the answer is what?

The Myth of the Missing Social Security Trust Fund : FedSmith.com

 

[CrusaderFrank]

I have always doubted the claim - in large part because so many politicians claim that it is true. I pulled out the cashflows, and found not surprisingly that Social Security is a net subsidize rather than a subsidizer of the government. Once you factor out the cost of benefits for seniors and the expense of time, there isn't enough left over to pay for the subsidies that have gone to SS. (mind you these are hard subsidies, not the soft subsidies)

Here is the longer piece with the details. Long story short, when someone tells you that we need to pay back the Trust Fund, the answer is what?

The Myth of the Missing Social Security Trust Fund : FedSmith.com

The "Assets" in the fund are a special type of security that aren't owned by the trustees and can only be sold to one purchaser.

 

[Kosh]

I have always doubted the claim - in large part because so many politicians claim that it is true. I pulled out the cashflows, and found not surprisingly that Social Security is a net subsidize rather than a subsidizer of the government. Once you factor out the cost of benefits for seniors and the expense of time, there isn't enough left over to pay for the subsidies that have gone to SS. (mind you these are hard subsidies, not the soft subsidies)

Here is the longer piece with the details. Long story short, when someone tells you that we need to pay back the Trust Fund, the answer is what?

The Myth of the Missing Social Security Trust Fund : FedSmith.com

Wow! All those IOU's in the trust fund would be a big clue..

 

[JoeTheEconomist]

I have always doubted the claim - in large part because so many politicians claim that it is true. I pulled out the cashflows, and found not surprisingly that Social Security is a net subsidize rather than a subsidizer of the government. Once you factor out the cost of benefits for seniors and the expense of time, there isn't enough left over to pay for the subsidies that have gone to SS. (mind you these are hard subsidies, not the soft subsidies)

Here is the longer piece with the details. Long story short, when someone tells you that we need to pay back the Trust Fund, the answer is what?

The Myth of the Missing Social Security Trust Fund : FedSmith.com

The "Assets" in the fund are a special type of security that aren't owned by the trustees and can only be sold to one purchaser.

The issue here is cashflow. Dollars in and dollars out. "Assets" or assets are how the dollars are stored in between. What you call an "Asset" investment professionals call cash-equivalents. Tomato/Tomawto.

There is no point for an "asset" or asset with a put-option to be negotiable - unless you think that the trustees have access to blackmarket capital. Either the government can repay or it can't. The ability to sell the position to another purchaser is not very relevant.

 

[DGS49]

Joe you need to get another handle. Your ignorance on this simple subject is rather pronounced.

President Roosevelt sold Social Security as a "trust fund," largely because it was (and remains) outrageously unconstitutional and there was some resistance to it. So he said it did not constitute Congress spending money on retirees, but merely being a custodian of a large trust fund.

But the Supreme Court made short work of that silliness (while failing to note that it was unconstitutional), telling us that it was merely a tax and a separate entitlement program, and Congress could end it or modify it as Congress chose to do (the money did not belong to the people who had paid the SS taxes).

When the Citizenry became hysterical about large deficits during the Reagan years, they decided to count SS together with other government revenues and expenditures, because it made government look less spendthriftian. We Boomers made contributions that resulted in revenues far outstripping benefits for many years (all spent on other programs), but we were assured that that money was still "owed" to the Social Security trust fund.

The conflicting and contrasting lies on the subject are enough to make your head spin.

SS was subsidizing the rest of the Federal Government, big time, for many years, but now it is reversed. Democrats tell us that because there remain hundreds of billions of dollars of IOU's FROM THE GOVERNMENT TO THE GOVERNMENT(!), the fictitious Trust Fund won't run dry for many years.

What a load of horse manure!

 

[JoeTheEconomist]

I have always doubted the claim - in large part because so many politicians claim that it is true. I pulled out the cashflows, and found not surprisingly that Social Security is a net subsidize rather than a subsidizer of the government. Once you factor out the cost of benefits for seniors and the expense of time, there isn't enough left over to pay for the subsidies that have gone to SS. (mind you these are hard subsidies, not the soft subsidies)

Here is the longer piece with the details. Long story short, when someone tells you that we need to pay back the Trust Fund, the answer is what?

The Myth of the Missing Social Security Trust Fund : FedSmith.com

Wow! All those IOU's in the trust fund would be a big clue..

The issue here is cashflow. Dollars in and dollars out. "IOUs" or government securities are how the dollars are stored in between. What you call an "IOU" is the same thing that investment professionals call cash-equivalents. Tomato/Tomawto.

 

[JoeTheEconomist]

Joe you need to get another handle. Your ignorance on this simple subject is rather pronounced.

President Roosevelt sold Social Security as a "trust fund," largely because it was (and remains) outrageously unconstitutional and there was some resistance to it. So he said it did not constitute Congress spending money on retirees, but merely being a custodian of a large trust fund.

But the Supreme Court made short work of that silliness (while failing to note that it was unconstitutional), telling us that it was merely a tax and a separate entitlement program, and Congress could end it or modify it as Congress chose to do (the money did not belong to the people who had paid the SS taxes).

When the Citizenry became hysterical about large deficits during the Reagan years, they decided to count SS together with other government revenues and expenditures, because it made government look less spendthriftian. We Boomers made contributions that resulted in revenues far outstripping benefits for many years (all spent on other programs), but we were assured that that money was still "owed" to the Social Security trust fund.

The conflicting and contrasting lies on the subject are enough to make your head spin.

SS was subsidizing the rest of the Federal Government, big time, for many years, but now it is reversed. Democrats tell us that because there remain hundreds of billions of dollars of IOU's FROM THE GOVERNMENT TO THE GOVERNMENT(!), the fictitious Trust Fund won't run dry for many years.

What a load of horse manure!

It isn't my ignorance. It is the ignorance of the SSA which provided the data. I notice that your opinion doesn't have any reference material. I think you need to re-read heverling v Davis. You are right about it saying the payroll taxes are constitutional - it said nothing about "trust funds". The Trust Fund concept has never questioned that.

Your facts about Reagan are wrong. The system was moved on budget in 1969 (by Nixon and the recommendation of LBJ) in large part because the system was a pay-as-you-go system. The 1983 reform actually moved the system off budget in 1990. The period in between generated a very modest amount of cash. Reagan's net benefit over 8 years was 75 billion.

"SS was subsidizing the rest of the Federal Government, big time, for many years, but now it is reversed." This isn't exactly the opposite of what I said. The vast majority of SS's resources today are interest. That is the purchase of time. It doesn't buy a bolt for a tank, or a bus-ticket for an undocumented worker.

FYI, the largest borrower from SS is GWB. He borrowed more from SS than all other Presidents combined.

"The conflicting and contrasting lies on the subject are enough to make your head spin. "

Sorry, the SSA is more credible than the sources you have provided.

 

[jwoodie]

What is the point of this discussion?

 

[JoeTheEconomist]

What is the point of this discussion?

I write on the issue, and use the feedback in articles.

The other point is that Social Security is the largest expense of the Federal Budget. The discussion of the system is largely conducted at the level of Grimm childhood fairytales. It makes no difference of whether it is LBJ, Reagan, Bush, Clinton, or name another person. There has been no raid on Social Security, absent a conspiracy of 80 years.

In the current campaign cycle, you have at least 4 people making the claim. This wouldn't be problematic if they were campaigning for the county dog catcher. Unfortunately, they are vying for the presidency, and they are pretty clearly out of touch with the mechanics and financial problems of the system. It should be worrisome to you the voter, because all of these people have a array of handlers, advisers and focus groups to vet non-sense.

If Social Security doesn't have a point, what is the point of a discussion of Planned Parenthood or military spending.