Social Sec will stay solvent for 20 years... *IF* we pay off 1/3 of the National Debt

[rightwinger]

Social Security will be solvent if we raise the retirement age to 70 for those under 40

It might still be solvent if you increase the retirement age and lower benefits, but it will still provide negative returns. But even this idea has trouble working.

Social Security is sustained by nothing more than the Government's ability to tax the hell out of people.

It has worked for 75 years and will work for another 75 with some minor adjustments

 

[AmazonTania]

Social Security will be solvent if we raise the retirement age to 70 for those under 40

It might still be solvent if you increase the retirement age and lower benefits, but it will still provide negative returns. But even this idea has trouble working.

Social Security is sustained by nothing more than the Government's ability to tax the hell out of people.

It has worked for 75 years and will work for another 75 with some minor adjustments

All good things eventually come to an end, for better or for worse. But I'm sure it can work for an extended period of time if the public is willing to allow the Government to rob citizens of their wealth.

 

[boedicca]

Social Security will be solvent if we raise the retirement age to 70 for those under 40

It might still be solvent if you increase the retirement age and lower benefits, but it will still provide negative returns. But even this idea has trouble working.

Social Security is sustained by nothing more than the Government's ability to tax the hell out of people.

It's a Ponzi Scheme in which the relatively better off elderly mug the relatively poorer young.

 

[NYcarbineer]

Social Security did not run a 'deficit'. Social Security in the last 2 years paid its benefits out of payroll tax revenues plus a small amount of earned interest on its securities.

That is not running a deficit.

That would be true, if the only expenditure of Social Security was payouts to the recipients. Do you know how much money has been burrowed from Social Security? Oh yeah, 33.8 trillion dollars!

Social Security invests its revenues like any other retirement fund would. That's how you make your money grow.

 

[NYcarbineer]

So much wrong with this graph, it's basically based on ignorance.

1. Who a business or venture is operated by doesn't make a Ponzi Scheme any less of a Ponzi Scheme.
   
2. Ponzi Schemes and Social Security generally tell their participants where their investments are coming from. Very few people invest their money blindly, even if they are not aware they're investing in a Ponzi Scheme. Most investors want to know what type of investments they are getting into. Investor sentiments can be a crucial factor when it comes to the increase or decrease of certain investments.
   
3. In the eyes of the law, if your business model operates like a ponzi scheme, you can and will be convicted for running a ponzi scheme. This has happened numerous times throughout history where legitimate business models were taken down because of this. Mark Drucker is a good example of how this can happen to anyone who is running a legitimate business.
   
4. All Ponzi Schemes are different in the sense that they are unique relative to it's size.The US Bond Market paid into by investors all over the world. The European Kings Club had almost 100,000 investors. Ron Rewald ran a firm with only 400 investors. The way the US Bond Market/Treasury is currently run, it doesn't make it any less of a ponzi scheme than The European Kings Club. Also The European Kings Club isn't any less of a Ponzi Scheme than Ron Rewald's hedge fund. It doesn't make Social Security any less of a Ponzi Scheme than Bernie Madoff's Derivatives/Options Fund.
5. Who Ponzi Schemes/Pension funds are managed by is irrelevant.
   
6. Ponzi Schemes and Social Security both offers negative returns to their investors.
   
7. Ponzi Schemes do have general investments. Some Ponzi Schemes ran models where the investments were made into US Securities. This part is erroneous just as the rest of the points of this graph.
   
8. Both Ponzi Schemes and Social Security can be tweaked, expanded or cut. It all depends on how the both investment schemes run. Bernie Madoff has been running his Ponzi Scheme since the 1970's. He didn't accomplish this from just mere luck.
   
9. Some Ponzi Schemes have operated for decades. Again, Bernie Madoff is a great example of this. The point is, all Ponzi Schemes generally fail. Social Security has ran deficits 8 years earlier than previously forecast. If my hedge fund had this sort of accounting error, it would be brought up on charges regarding securities fraud.
   
10. They're both Ponzi schemes.
    

Considering that both of you don't really understand the sophistication of how Ponzi Schemes have generally run, Social Security has generally run the exact same way Ponzi Schemes have run. It has a physical effect on the economy, as well as an emotional effect.

They both operates under fails pretenses, they both invest in real capital, it offers negative returns for investors and runs the classic model of what a Ponzi Scheme is. Many have justifiably been accused of running a ponzi scheme and participants of that scheme have testified on behalf of the schemer in vouching for the solvency, as well as credibility of the scheme. The same way politicians, economist and bureaucrats vouch on the solvency and credibility of Social Security. It robs people of much of their wealth, while the politicians and political connected industries profit at the expense of the poor and middle class.

It's a Ponzi Scheme.

You don't know what you're talking about.

Social Security did not run a 'deficit'. Social Security in the last 2 years paid its benefits out of payroll tax revenues plus a small amount of earned interest on its securities.

That is not running a deficit.

A wee bit misinformed, aren't we? Social Security has ran a deficit for 3 consecutive years now.

Every year, the Government borrows from the Social Security Trust Fund, by law, and uses the extra funds to fund the general budget where the Government can spend the money how it wants to spend it. The following year, every year, the government takes in a bigger portion in Social Security taxes but it has to pay the interest on these bonds. This money has already spent so the money is taken from the general budget and used to help pay beneficiaries. The more beneficiaries, the more revenue accumulates, the more the Government borrows, the greater the interest.

Eventually, majority of the revenue collected will be consumed in interest payments alone, leaving the rest to pay out some beneficiaries, creating a cash-flow deficit. A cash-flow deficit means that the Treasury can no longer cover interest payments to the Social Security fund by issuing bonds. Instead, Social Security has paid out beneficiaries by using the General Budget.

Social Security is obligated by law to take whatever surpluses remain and invest them. It cannot do this because there are no surpluses, it is currently running a deficit. Just because the Social Security Administration is forced to acquire funds from other parts of the General Budget doesn't make this any less of a deficit. You really don't have a clue how Social Security works, but I can only assume you expect to collect 100% what you paid into it when you have retired. Well, good luck with that.

You're an idiot.

Let me quote directly from the Trustees Report:

"Social Security’s total expenditures have exceeded non-interest income of its combined trust funds since 2010, and the Trustees estimate that Social Security cost will exceed non-interest income throughout the 75-year projection period.

The deficit of non-interest income relative to cost was about $49 billion in 2010, $45 billion in 2011, and $55 billion in 2012. The Trustees project that this cash-flow deficit will average about $75 billion between 2013 and 2018 before rising steeply as income growth slows to the sustainable trend rate after the economic recovery is complete and the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.

Redemption of trust fund asset reserves by the General Fund of the Treasury will provide the resources needed to offset Social Security’s annual aggregate cash-flow deficits.

Since the cash-flow deficit will be less than interest earnings through 2020, reserves of the combined trust funds measured in current dollars will continue to grow...."

Trustees Report Summary

They are talking about a cash-flow deficit, which is not a draw down of principal. The Trust Fund is still growing and will, as it says above, continue to grow until 2020, and that's if nothing is done.

Even if SS was adjusted only to keep the cash flow deficit lower than the annual earned interest, it could run forever.

 

[NYcarbineer]

It might still be solvent if you increase the retirement age and lower benefits, but it will still provide negative returns. But even this idea has trouble working.

Social Security is sustained by nothing more than the Government's ability to tax the hell out of people.

It has worked for 75 years and will work for another 75 with some minor adjustments

All good things eventually come to an end, for better or for worse. But I'm sure it can work for an extended period of time if the public is willing to allow the Government to rob citizens of their wealth.

Social Security was within one year of going broke in 1983, and every conservative's favorite president Ronald Reagan got together with the Democrats and fixed it for about 50 years.

 

[rightwinger]

It might still be solvent if you increase the retirement age and lower benefits, but it will still provide negative returns. But even this idea has trouble working.

Social Security is sustained by nothing more than the Government's ability to tax the hell out of people.

It has worked for 75 years and will work for another 75 with some minor adjustments

All good things eventually come to an end, for better or for worse. But I'm sure it can work for an extended period of time if the public is willing to allow the Government to rob citizens of their wealth.

Nobody has yet lost their wealth to Social Security. Millions of Americans have depended on it to provide a safety net when they were too old to work

For working Americans, the concept of retirement did not exist before Social Security

 

[AmazonTania]

You don't know what you're talking about.

Social Security did not run a 'deficit'. Social Security in the last 2 years paid its benefits out of payroll tax revenues plus a small amount of earned interest on its securities.

That is not running a deficit.

A wee bit misinformed, aren't we? Social Security has ran a deficit for 3 consecutive years now.

Every year, the Government borrows from the Social Security Trust Fund, by law, and uses the extra funds to fund the general budget where the Government can spend the money how it wants to spend it. The following year, every year, the government takes in a bigger portion in Social Security taxes but it has to pay the interest on these bonds. This money has already spent so the money is taken from the general budget and used to help pay beneficiaries. The more beneficiaries, the more revenue accumulates, the more the Government borrows, the greater the interest.

Eventually, majority of the revenue collected will be consumed in interest payments alone, leaving the rest to pay out some beneficiaries, creating a cash-flow deficit. A cash-flow deficit means that the Treasury can no longer cover interest payments to the Social Security fund by issuing bonds. Instead, Social Security has paid out beneficiaries by using the General Budget.

Social Security is obligated by law to take whatever surpluses remain and invest them. It cannot do this because there are no surpluses, it is currently running a deficit. Just because the Social Security Administration is forced to acquire funds from other parts of the General Budget doesn't make this any less of a deficit. You really don't have a clue how Social Security works, but I can only assume you expect to collect 100% what you paid into it when you have retired. Well, good luck with that.

You're an idiot.

Let me quote directly from the Trustees Report:

"Social Security’s total expenditures have exceeded non-interest income of its combined trust funds since 2010, and the Trustees estimate that Social Security cost will exceed non-interest income throughout the 75-year projection period.

The deficit of non-interest income relative to cost was about $49 billion in 2010, $45 billion in 2011, and $55 billion in 2012. The Trustees project that this cash-flow deficit will average about $75 billion between 2013 and 2018 before rising steeply as income growth slows to the sustainable trend rate after the economic recovery is complete and the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.

Redemption of trust fund asset reserves by the General Fund of the Treasury will provide the resources needed to offset Social Security’s annual aggregate cash-flow deficits.

Since the cash-flow deficit will be less than interest earnings through 2020, reserves of the combined trust funds measured in current dollars will continue to grow...."

Trustees Report Summary

They are talking about a cash-flow deficit, which is not a draw down of principal. The Trust Fund is still growing and will, as it says above, continue to grow until 2020, and that's if nothing is done.

You don't even realise that just brought an article which supports what I have already said... Thanks, I guess. The only reason the trust fund is still growing is because projected interest earnings still exceeds the non-interest income deficit. This isn't going to last for very long. Nonetheless, a deficit is a deficit. You have said that there was no deficit, and that is not correct.

Even if SS was adjusted only to keep the cash flow deficit lower than the annual earned interest, it could run forever.

If by forever, you mean by 2033, sure. These are merely projected numbers. Then again, the CBO was 8 years off it's deficit mark. But who is counting.

 

[AmazonTania]

It has worked for 75 years and will work for another 75 with some minor adjustments

All good things eventually come to an end, for better or for worse. But I'm sure it can work for an extended period of time if the public is willing to allow the Government to rob citizens of their wealth.

Nobody has yet lost their wealth to Social Security. Millions of Americans have depended on it to provide a safety net when they were too old to work

Considering that you have to live to be 105 to collect 100% of what you paid into Social Security, that's not true. The average couple pays $598,000 into social security and can expect to collect at least $556,000 if they both live to be 85.

http://www.urban.org/UploadedPDF/41...dicare-Taxes-and-Benefits-Over-a-Lifetime.pdf

No other investment strategy provides negative returns continually for participants, except Social Security. Any other business model would have been brought up on charges of fraud.

For working Americans, the concept of retirement did not exist before Social Security

People saved for their retirement or invested before Social Security. Social Security was created because it was assumed people were too stupid to do it on their own.

 

[rightwinger]

All good things eventually come to an end, for better or for worse. But I'm sure it can work for an extended period of time if the public is willing to allow the Government to rob citizens of their wealth.

Nobody has yet lost their wealth to Social Security. Millions of Americans have depended on it to provide a safety net when they were too old to work

Considering that you have to live to be 105 to collect 100% of what you paid into Social Security, that's not true. The average couple pays $598,000 into social security and can expect to collect at least $556,000 if they both live to be 85.

http://www.urban.org/UploadedPDF/41...dicare-Taxes-and-Benefits-Over-a-Lifetime.pdf

For working Americans, the concept of retirement did not exist before Social Security

People saved for their retirement or invested before Social Security. Social Security was created because it was assumed people were too stupid to do it on their own.

Those who were well off did

For most working Americans your retirement plan consisted of having lots of kids and praying one of them would take care of you in your old age.

 

[AmazonTania]

It has worked for 75 years and will work for another 75 with some minor adjustments

All good things eventually come to an end, for better or for worse. But I'm sure it can work for an extended period of time if the public is willing to allow the Government to rob citizens of their wealth.

Social Security was within one year of going broke in 1983, and every conservative's favorite president Ronald Reagan got together with the Democrats and fixed it for about 50 years.

All they've done was kick the can down the road. The problem is rearing it's ugly head again in almost three decades. That's hardly enough time for one generation gap.

 

[AmazonTania]

Nobody has yet lost their wealth to Social Security. Millions of Americans have depended on it to provide a safety net when they were too old to work

Considering that you have to live to be 105 to collect 100% of what you paid into Social Security, that's not true. The average couple pays $598,000 into social security and can expect to collect at least $556,000 if they both live to be 85.

http://www.urban.org/UploadedPDF/41...dicare-Taxes-and-Benefits-Over-a-Lifetime.pdf

For working Americans, the concept of retirement did not exist before Social Security

People saved for their retirement or invested before Social Security. Social Security was created because it was assumed people were too stupid to do it on their own.

Those who were well off did

For most working Americans your retirement plan consisted of having lots of kids and praying one of them would take care of you in your old age.

This hasn't changed, as 75% of Americans near the retirement age had less than $30,000 saved for retirement in 2010. That's just the retiring age, which tended to be more fiscally responsible. Exactly what are the younger generation -- which barely saves anything -- going to do? We're just keeping Social Security solvent for the current retirees, while leaving nothing for the next generation.

 

[tyroneweaver]

if we return to the clinton/gingrich budget we'll wipe 2/3 of the debt

 

[Little-Acorn]

Exactly what are the younger generation -- which barely saves anything -- going to do?

Are you directing this question at "The younger generation"? I doubt they're reading this forum just now... most of them.

Any members of "The younger generation" want to tell AT what you're going to do for retirement?

We're just keeping Social Security solvent for the current retirees, while leaving nothing for the next generation.

Umm... who's "We"?

 

[NYcarbineer]

A wee bit misinformed, aren't we? Social Security has ran a deficit for 3 consecutive years now.

Every year, the Government borrows from the Social Security Trust Fund, by law, and uses the extra funds to fund the general budget where the Government can spend the money how it wants to spend it. The following year, every year, the government takes in a bigger portion in Social Security taxes but it has to pay the interest on these bonds. This money has already spent so the money is taken from the general budget and used to help pay beneficiaries. The more beneficiaries, the more revenue accumulates, the more the Government borrows, the greater the interest.

Eventually, majority of the revenue collected will be consumed in interest payments alone, leaving the rest to pay out some beneficiaries, creating a cash-flow deficit. A cash-flow deficit means that the Treasury can no longer cover interest payments to the Social Security fund by issuing bonds. Instead, Social Security has paid out beneficiaries by using the General Budget.

Social Security is obligated by law to take whatever surpluses remain and invest them. It cannot do this because there are no surpluses, it is currently running a deficit. Just because the Social Security Administration is forced to acquire funds from other parts of the General Budget doesn't make this any less of a deficit. You really don't have a clue how Social Security works, but I can only assume you expect to collect 100% what you paid into it when you have retired. Well, good luck with that.

You're an idiot.

Let me quote directly from the Trustees Report:

"Social Security’s total expenditures have exceeded non-interest income of its combined trust funds since 2010, and the Trustees estimate that Social Security cost will exceed non-interest income throughout the 75-year projection period.

The deficit of non-interest income relative to cost was about $49 billion in 2010, $45 billion in 2011, and $55 billion in 2012. The Trustees project that this cash-flow deficit will average about $75 billion between 2013 and 2018 before rising steeply as income growth slows to the sustainable trend rate after the economic recovery is complete and the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.

Redemption of trust fund asset reserves by the General Fund of the Treasury will provide the resources needed to offset Social Security’s annual aggregate cash-flow deficits.

Since the cash-flow deficit will be less than interest earnings through 2020, reserves of the combined trust funds measured in current dollars will continue to grow...."

Trustees Report Summary

They are talking about a cash-flow deficit, which is not a draw down of principal. The Trust Fund is still growing and will, as it says above, continue to grow until 2020, and that's if nothing is done.

You don't even realise that just brought an article which supports what I have already said... Thanks, I guess. The only reason the trust fund is still growing is because projected interest earnings still exceeds the non-interest income deficit. This isn't going to last for very long. Nonetheless, a deficit is a deficit. You have said that there was no deficit, and that is not correct.

Even if SS was adjusted only to keep the cash flow deficit lower than the annual earned interest, it could run forever.

If by forever, you mean by 2033, sure. These are merely projected numbers. Then again, the CBO was 8 years off it's deficit mark. But who is counting.

Your use of deficit was to support your idiotic claim that SS is a Ponzi scheme.

Forever means forever. If I put a million dollars in bonds and generate 50,000 a year in interest, and spend no more than 50,000 a year, that million will last forever, assuming the bond investment remains available.

 

[NYcarbineer]

It has worked for 75 years and will work for another 75 with some minor adjustments

All good things eventually come to an end, for better or for worse. But I'm sure it can work for an extended period of time if the public is willing to allow the Government to rob citizens of their wealth.

Nobody has yet lost their wealth to Social Security. Millions of Americans have depended on it to provide a safety net when they were too old to work

For working Americans, the concept of retirement did not exist before Social Security

Conservatives have to continually predict gloom and doom for Social Security because

1. they hate the idea that a government program with such an important purpose works so well, because that in one stroke demolishes the conservative myth that government is bad.

2. they would love to end Social Security as we know it and replace it with some sort of privatized deal,

so their pals on Wall Street could their hands on all the money and milk it for every nickel they could.

 

[AmazonTania]

You're an idiot.

Let me quote directly from the Trustees Report:

"Social Security’s total expenditures have exceeded non-interest income of its combined trust funds since 2010, and the Trustees estimate that Social Security cost will exceed non-interest income throughout the 75-year projection period.

The deficit of non-interest income relative to cost was about $49 billion in 2010, $45 billion in 2011, and $55 billion in 2012. The Trustees project that this cash-flow deficit will average about $75 billion between 2013 and 2018 before rising steeply as income growth slows to the sustainable trend rate after the economic recovery is complete and the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.

Redemption of trust fund asset reserves by the General Fund of the Treasury will provide the resources needed to offset Social Security’s annual aggregate cash-flow deficits.

Since the cash-flow deficit will be less than interest earnings through 2020, reserves of the combined trust funds measured in current dollars will continue to grow...."

Trustees Report Summary

They are talking about a cash-flow deficit, which is not a draw down of principal. The Trust Fund is still growing and will, as it says above, continue to grow until 2020, and that's if nothing is done.

You don't even realise that just brought an article which supports what I have already said... Thanks, I guess. The only reason the trust fund is still growing is because projected interest earnings still exceeds the non-interest income deficit. This isn't going to last for very long. Nonetheless, a deficit is a deficit. You have said that there was no deficit, and that is not correct.

Even if SS was adjusted only to keep the cash flow deficit lower than the annual earned interest, it could run forever.

If by forever, you mean by 2033, sure. These are merely projected numbers. Then again, the CBO was 8 years off it's deficit mark. But who is counting.

Your use of deficit was to support your idiotic claim that SS is a Ponzi scheme.

So because it runs a deficit means that it's not a Ponzi Scheme? There are Ponzi Schemes which have run at a loss, though their operations didn't last very long. Resources were just pooled in form other ventures to run operating expenses and to support what little investors they could. This is no different from how Social Security is operating.

And why exactly would Social Security operate like a Ponzi Scheme, if it isn't a Ponzi Scheme...

Forever means forever. If I put a million dollars in bonds and generate 50,000 a year in interest, and spend no more than 50,000 a year, that million will last forever, assuming the bond investment remains available.

Your anecdotal scenario doesn't make it any more solvent. Eventually, interest earnings this investment will run dry and this will happen sooner rather than later. Forever means forever, but you should already know that nothing last forever.

 

[Lakhota]

Social Security is the largest holder of U.S. debt ($2.67 trillion) - followed by U.S. Federal Reserve ($1.659 trillion), China ($1.169 trillion), savings bonds & other investors ($1.102 trillion), Japan ($1.083 trillion), pension funds ($903.4 billion), mutual funds ($797.9 billion), state and local governments ($444.6 billion), depository institutions, insurance companies, Brazil, Caribbean banking centers, Taiwan...

The Biggest Holders of US Government Debt

 

[JakeStarkey]

Nonsense, wingers.

SS is fine now, and it will remain fine with minor fixes.

No, kids, the sky is not falling.

 

[AmazonTania]

Conservatives have to continually predict gloom and doom for Social Security because

1. they hate the idea that a government program with such an important purpose works so well, because that in one stroke demolishes the conservative myth that government is bad.

If it works so well, then we aren't having these conversations about Social Security running cash-flow deficits and becoming insolvent in a decade-and-a-half. Also we wouldn't be decreasing increasing the retirement age to 70, plus lowering benefits.

2. they would love to end Social Security as we know it and replace it with some sort of privatized deal,

I don't really see where this downside is. Galveston County, Texas used a tax loophole to opt out of the Social Security scam, and to this day it runs it's own pension plan and offers much better results. Why are you so afraid of people choosing where they would like their own pension fund to be? Is it because they wouldn't be able to provide revenue to the Government so they can spend it the way they want? Then again, they aren't able to do this now.

so their pals on Wall Street could their hands on all the money and milk it for every nickel they could.

Stocks continue to make new highs and offer greater yields than Social Security. If I would recommend investing in the stock market over investing in social security, as a broker, I'd recommend people invest their money into stocks.