Social Security Discussion

[Toddsterpatriot]

No...your stock example is a transaction within the private sector. It really doesn't change any of the overall macroaccounting within our sectoral model.

I think I'm done with accounting for today.

No...your stock example is a transaction within the private sector.

Yes, the increase in my stock value increased the financial assets of the private sector, without decreasing the financial assets of any other sector.

I think I'm done with accounting for today.

Then I think I'm done correcting your accounting errors for today.

Your stocks can payout dividends or you can sell them, correct? Bank accounts are settled and cleared when this occurs. If you sell say, 10k worth of Cisco, one account is debited and another is credited, settlements are made in dollars. Those dollars are non-government assets, but are also liabilities of the government sector.

And the increase in my stock assets doesn't increase liabilities of the government sector.

 

[Kimura]

No...your stock example is a transaction within the private sector.

Yes, the increase in my stock value increased the financial assets of the private sector, without decreasing the financial assets of any other sector.

I think I'm done with accounting for today.

Then I think I'm done correcting your accounting errors for today.

Your stocks can payout dividends or you can sell them, correct? Bank accounts are settled and cleared when this occurs. If you sell say, 10k worth of Cisco, one account is debited and another is credited, settlements are made in dollars. Those dollars are non-government assets, but are also liabilities of the government sector.

And the increase in my stock assets doesn't increase liabilities of the government sector.

We're going to try this again.

The net worth of the private sector can indeed increase if private sector financial assets are negative, such as time period between 1997-2008.

Net worth is calculated through valuations, but accounting flows aren't dependent on such valuations. Your example of a certain type of financial asset (stocks) is used when we calculate net worth.

If the market price for a certain stock is $40 and then I purchase one share of the stock from you for $60, all that occurs in this transaction is that I have $60 less then I had and you have $60 more than you had previously. I have one more share of stock, you have less share. Also, the stock's market price went from $40 to $60.

Everyone else who owns a share of this stock thinks they're $20 wealthier per each share. This happens when the stock market goes up across the board.

Hey, wait a minute, what happens when the private sector net financial assets go negative yet net worth increases? Oh yeah, a bubble.

We can even sub-divide the both the government sector and private sector into smaller components in a stock-flow consistent model if we really wanted to.

Either way, even those of us in the private sector who want to take in more $$$$ than we spend in aggregate, will require that some other sector must spend more $$$$ than it receives. In this three sector example, we have the private sector, government sector, and the foreign sector.

Net financial assets of all the aforementioned sectors in the economy must add up to zero. The is a fact as a matter of accounting identity alone.

 

[Toddsterpatriot]

Your stocks can payout dividends or you can sell them, correct? Bank accounts are settled and cleared when this occurs. If you sell say, 10k worth of Cisco, one account is debited and another is credited, settlements are made in dollars. Those dollars are non-government assets, but are also liabilities of the government sector.

And the increase in my stock assets doesn't increase liabilities of the government sector.

We're going to try this again.

The net worth of the private sector can indeed increase if private sector financial assets are negative, such as time period between 1997-2008.

Net worth is calculated through valuations, but accounting flows aren't dependent on such valuations. Your example of a certain type of financial asset (stocks) is used when we calculate net worth.

If the market price for a certain stock is $40 and then I purchase one share of the stock from you for $60, all that occurs in this transaction is that I have $60 less then I had and you have $60 more than you had previously. I have one more share of stock, you have less share. Also, the stock's market price went from $40 to $60.

Everyone else who owns a share of this stock thinks they're $20 wealthier per each share. This happens when the stock market goes up across the board.

Hey, wait a minute, what happens when the private sector net financial assets go negative yet net worth increases? Oh yeah, a bubble.

We can even sub-divide the both the government sector and private sector into smaller components in a stock-flow consistent model if we really wanted to.

Either way, even those of us in the private sector who want to take in more $$$$ than we spend in aggregate, will require that some other sector must spend more $$$$ than it receives. In this three sector example, we have the private sector, government sector, and the foreign sector.

Net financial assets of all the aforementioned sectors in the economy must add up to zero. The is a fact as a matter of accounting identity alone.

The net worth of the private sector can indeed increase if private sector financial assets are negative, such as time period between 1997-2008.

Sure, if private sector tangible assets increase more than private sector financial assets decline.

Either way, even those of us in the private sector who want to take in more $$$$ than we spend in aggregate, will require that some other sector must spend more $$$$ than it receives.

Take in? Can you define that?

Net financial assets of all the aforementioned sectors in the economy must add up to zero. The is a fact as a matter of accounting identity alone.

That was wrong the first time you said it, still wrong now.

 

[RKMBrown]

Your stocks can payout dividends or you can sell them, correct? Bank accounts are settled and cleared when this occurs. If you sell say, 10k worth of Cisco, one account is debited and another is credited, settlements are made in dollars. Those dollars are non-government assets, but are also liabilities of the government sector.

And the increase in my stock assets doesn't increase liabilities of the government sector.

We're going to try this again.

The net worth of the private sector can indeed increase if private sector financial assets are negative, such as time period between 1997-2008.

Net worth is calculated through valuations, but accounting flows aren't dependent on such valuations. Your example of a certain type of financial asset (stocks) is used when we calculate net worth.

If the market price for a certain stock is $40 and then I purchase one share of the stock from you for $60, all that occurs in this transaction is that I have $60 less then I had and you have $60 more than you had previously. I have one more share of stock, you have less share. Also, the stock's market price went from $40 to $60.

Everyone else who owns a share of this stock thinks they're $20 wealthier per each share. This happens when the stock market goes up across the board.

Hey, wait a minute, what happens when the private sector net financial assets go negative yet net worth increases? Oh yeah, a bubble.

We can even sub-divide the both the government sector and private sector into smaller components in a stock-flow consistent model if we really wanted to.

Either way, even those of us in the private sector who want to take in more $$$$ than we spend in aggregate, will require that some other sector must spend more $$$$ than it receives. In this three sector example, we have the private sector, government sector, and the foreign sector.

Net financial assets of all the aforementioned sectors in the economy must add up to zero. The is a fact as a matter of accounting identity alone.

Yawn. Yeah look mom if I limit my vision and discussion only to the numbers in accounts of record I can limit my discussion to only numbers in accounts of record.... I'm smart.

 

[Politico]

This whole thread is completely off it's SS is a Ponzi scheme rails.

 

[Kimura]

Sure, if private sector tangible assets increase more than private sector financial assets decline.


Take in? Can you define that?


That was wrong the first time you said it, still wrong now.

You’re arguing accounting identities which are fact.

For example, let’s say the foreign sector spends less than its income, with a budget surplus of $40 billion. Simultaneously, the domestic government sector also spends less than its income, creating a budget surplus of $20 billion. From accounting identity alone, we know that the domestic private sector must have run a budget deficit of….wait for it…..$60 billion ($40 billion plus $20). During this period, its net financial wealth will have decreased by $60 billion as it issued debt and sold assets. The domestic government sector will have increased its net financial wealth by $20 billion (decreasing debts or increasing claims on other sectors), and the foreign sector will have increased its position by $40 billion though reduced debt load or increasing it claims on other sectors.

This bring us back to the nature of deficits, right? We can arrive at similar conclusions from GDP as well.

The deficit of the federal government simply reflects the savings desire of the private sector. This is how the private sector acquires net financial assets – by running deficits. We can extrapolate this from the following: GDP=C + G + I + (X-M).

For the sake of argument, let’s say (N) equals the net savings of the domestic private sector, in terms of accounting, then N = S – I. (S) equals total savings and (I) equals investment. (S) Savings being income less consumption and taxes, which gives us S = Y – T – C.

We have M –X (our imports – exports), what we call the foreign sector, which is where we have the net saving of dollars (domestic currency). By accounting identity, the net savings of the domestic private sector and the other sectors is offset by the deficit of the government sector. This is G – T (government spending less taxes).

This is all based on textbook national accounting equations of national savings and GDP. Y = C + S +T and GDP = C + G + I + (X-M).

Lastly, in case there was any confusion about claims made on various sectors I’d like to point out we’re talking base money which exists as banks reserves or cash. Net financial assets which are created by the non-government sector are an entirely different animal. They’re not base money, but rather claims on base money which can be converted to base money when they reach maturity. Banks don’t hold base money, they hold claims on it, which is called deposit money. Claims occur whenever we make a withdrawal at the ATM, a store, or even as cash on hand.

 

[Toddsterpatriot]

Sure, if private sector tangible assets increase more than private sector financial assets decline.


Take in? Can you define that?


That was wrong the first time you said it, still wrong now.

You’re arguing accounting identities which are fact.

For example, let’s say the foreign sector spends less than its income, with a budget surplus of $40 billion. Simultaneously, the domestic government sector also spends less than its income, creating a budget surplus of $20 billion. From accounting identity alone, we know that the domestic private sector must have run a budget deficit of….wait for it…..$60 billion ($40 billion plus $20). During this period, its net financial wealth will have decreased by $60 billion as it issued debt and sold assets. The domestic government sector will have increased its net financial wealth by $20 billion (decreasing debts or increasing claims on other sectors), and the foreign sector will have increased its position by $40 billion though reduced debt load or increasing it claims on other sectors.

This bring us back to the nature of deficits, right? We can arrive at similar conclusions from GDP as well.

The deficit of the federal government simply reflects the savings desire of the private sector. This is how the private sector acquires net financial assets – by running deficits. We can extrapolate this from the following: GDP=C + G + I + (X-M).

For the sake of argument, let’s say (N) equals the net savings of the domestic private sector, in terms of accounting, then N = S – I. (S) equals total savings and (I) equals investment. (S) Savings being income less consumption and taxes, which gives us S = Y – T – C.

We have M –X (our imports – exports), what we call the foreign sector, which is where we have the net saving of dollars (domestic currency). By accounting identity, the net savings of the domestic private sector and the other sectors is offset by the deficit of the government sector. This is G – T (government spending less taxes).

This is all based on textbook national accounting equations of national savings and GDP. Y = C + S +T and GDP = C + G + I + (X-M).

Lastly, in case there was any confusion about claims made on various sectors I’d like to point out we’re talking base money which exists as banks reserves or cash. Net financial assets which are created by the non-government sector are an entirely different animal. They’re not base money, but rather claims on base money which can be converted to base money when they reach maturity. Banks don’t hold base money, they hold claims on it, which is called deposit money. Claims occur whenever we make a withdrawal at the ATM, a store, or even as cash on hand.

You’re arguing accounting identities which are fact.

You've misapplied your identities.

Define net financial assets. That was your original mistake.

Lastly, in case there was any confusion about claims made on various sectors I’d like to point out we’re talking base money which exists as banks reserves or cash.

You didn't say base money, in your original error.

 

[Kimura]

This whole thread is completely off it's SS is a Ponzi scheme rails.

Sorry about that.

SS isn’t a Ponzi scheme because it’s not an investment opportunity or investment. SS is a public sector social insurance program which requires payments from certain people as a portion of their income. They then become partipants in SS and are promised a certain level of benefits which is tied to income and age. There is zero economic risk here; there is a level of political risk since politicians may change their position about their commitments to the program.

Secondly, SS isn’t a Ponzi scheme since none of its promoters mislead people who participate in the program. This information is freely available on the SS website.
SS payments aren’t made from new funds paid into the program by people. Operationally, there is zero connection between actual payments and the collection of FICA. Payments are made to the elderly, disabled, etc from the Treasury General Account. FICA payments ultimate destination is the TGA, but they are in no way, shape, or form related to SS payments. The Treasury Department issues bonds to SS in the total dollar amount of FICA collections, and SS can use or redeem these bonds when needed.

Also, unlike an actual Ponzi scheme, SS doesn’t make wild promises about future payments which ROI doesn’t merit or justify. For and foremost, there is no ROI for SS, because it’s not an investment. SS has a successful track record of seventy years. It’s an entitlement program, social insurance, and its benefits are guaranteed by the federal government.

 

[Kimura]

You’re arguing accounting identities which are fact.

You've misapplied your identities.

Define net financial assets. That was your original mistake.

Lastly, in case there was any confusion about claims made on various sectors I’d like to point out we’re talking base money which exists as banks reserves or cash.

You didn't say base money, in your original error.

I haven't misapplied any accounting identities.

We can define net financial assets as being equal to total financial assets minus total financial liabilities. We're not talking net worth which takes real assets into account.

 

[Kimura]

And the increase in my stock assets doesn't increase liabilities of the government sector.

We're going to try this again.

The net worth of the private sector can indeed increase if private sector financial assets are negative, such as time period between 1997-2008.

Net worth is calculated through valuations, but accounting flows aren't dependent on such valuations. Your example of a certain type of financial asset (stocks) is used when we calculate net worth.

If the market price for a certain stock is $40 and then I purchase one share of the stock from you for $60, all that occurs in this transaction is that I have $60 less then I had and you have $60 more than you had previously. I have one more share of stock, you have less share. Also, the stock's market price went from $40 to $60.

Everyone else who owns a share of this stock thinks they're $20 wealthier per each share. This happens when the stock market goes up across the board.

Hey, wait a minute, what happens when the private sector net financial assets go negative yet net worth increases? Oh yeah, a bubble.

We can even sub-divide the both the government sector and private sector into smaller components in a stock-flow consistent model if we really wanted to.

Either way, even those of us in the private sector who want to take in more $$$$ than we spend in aggregate, will require that some other sector must spend more $$$$ than it receives. In this three sector example, we have the private sector, government sector, and the foreign sector.

Net financial assets of all the aforementioned sectors in the economy must add up to zero. The is a fact as a matter of accounting identity alone.

Yawn. Yeah look mom if I limit my vision and discussion only to the numbers in accounts of record I can limit my discussion to only numbers in accounts of record.... I'm smart.

That's the nature of financial assets. Again, we're not talking real assets.

 

[RKMBrown]

This whole thread is completely off it's SS is a Ponzi scheme rails.

Sorry about that.

SS isn’t a Ponzi scheme because it’s not an investment opportunity or investment. SS is a public sector social insurance program which requires payments from certain people as a portion of their income. They then become partipants in SS and are promised a certain level of benefits which is tied to income and age. There is zero economic risk here; there is a level of political risk since politicians may change their position about their commitments to the program.

Secondly, SS isn’t a Ponzi scheme since none of its promoters mislead people who participate in the program. This information is freely available on the SS website.
SS payments aren’t made from new funds paid into the program by people. Operationally, there is zero connection between actual payments and the collection of FICA. Payments are made to the elderly, disabled, etc from the Treasury General Account. FICA payments ultimate destination is the TGA, but they are in no way, shape, or form related to SS payments. The Treasury Department issues bonds to SS in the total dollar amount of FICA collections, and SS can use or redeem these bonds when needed.

Also, unlike an actual Ponzi scheme, SS doesn’t make wild promises about future payments which ROI doesn’t merit or justify. For and foremost, there is no ROI for SS, because it’s not an investment. SS has a successful track record of seventy years. It’s an entitlement program, social insurance, and its benefits are guaranteed by the federal government.

ROFL a successful track record. OMG that's so funny. Yeah a successful track record of doubling in cost by % of income how many times? From 2% to where is it now? 15%? Where will it land next time 20%? 25%? Successful ROFL. They take your money promise you will get paid back, and you say it's not a ponzi because there's no guarantee you get your money back, thus it's theft. ROFL Yeah ok so I can create a program just like this one and get away with it so long as I don't promise you get your money back? ROFL SS lock box is a lie? ROFL dude you are just to funny. In one post you insist all debits have a credit, now you insist in this case there are only deposits with no expectation of or guarantee of withdraw. But hey don't worry cause we'll be raping your grand kids of their income, so you can live in grand squalor. ROFL

Get off the crack pipe. SS sucks compared to 401k type programs.

 

[RKMBrown]

We're going to try this again.

The net worth of the private sector can indeed increase if private sector financial assets are negative, such as time period between 1997-2008.

Net worth is calculated through valuations, but accounting flows aren't dependent on such valuations. Your example of a certain type of financial asset (stocks) is used when we calculate net worth.

If the market price for a certain stock is $40 and then I purchase one share of the stock from you for $60, all that occurs in this transaction is that I have $60 less then I had and you have $60 more than you had previously. I have one more share of stock, you have less share. Also, the stock's market price went from $40 to $60.

Everyone else who owns a share of this stock thinks they're $20 wealthier per each share. This happens when the stock market goes up across the board.

Hey, wait a minute, what happens when the private sector net financial assets go negative yet net worth increases? Oh yeah, a bubble.

We can even sub-divide the both the government sector and private sector into smaller components in a stock-flow consistent model if we really wanted to.

Either way, even those of us in the private sector who want to take in more $$$$ than we spend in aggregate, will require that some other sector must spend more $$$$ than it receives. In this three sector example, we have the private sector, government sector, and the foreign sector.

Net financial assets of all the aforementioned sectors in the economy must add up to zero. The is a fact as a matter of accounting identity alone.

Yawn. Yeah look mom if I limit my vision and discussion only to the numbers in accounts of record I can limit my discussion to only numbers in accounts of record.... I'm smart.

That's the nature of financial assets. Again, we're not talking real assets.

Why do you think we don't know that?

 

[RKMBrown]

You’re arguing accounting identities which are fact.

You've misapplied your identities.

Define net financial assets. That was your original mistake.

Lastly, in case there was any confusion about claims made on various sectors I’d like to point out we’re talking base money which exists as banks reserves or cash.

You didn't say base money, in your original error.

I haven't misapplied any accounting identities.

We can define net financial assets as being equal to total financial assets minus total financial liabilities. We're not talking net worth which takes real assets into account.

More specifically, YOU were not talking net worth. You decided to scope your view to a particular limited type of asset when discussing how our monetary system works in collaboration with the real world, that is our economy, workforce, and tangible assets. Presumably, you just finished an econ class or you are an accountant not used to talking to people who own companies and have been around for a while.

 

[Toddsterpatriot]

You’re arguing accounting identities which are fact.

You've misapplied your identities.

Define net financial assets. That was your original mistake.

Lastly, in case there was any confusion about claims made on various sectors I’d like to point out we’re talking base money which exists as banks reserves or cash.

You didn't say base money, in your original error.

I haven't misapplied any accounting identities.

We can define net financial assets as being equal to total financial assets minus total financial liabilities. We're not talking net worth which takes real assets into account.

Net private financial wealth equals public debt down to the last penny.

That's your original claim.

Are you claiming now that stocks are not "financial wealth"?

 

[Kimura]

You’re arguing accounting identities which are fact.

You've misapplied your identities.

Define net financial assets. That was your original mistake.

Lastly, in case there was any confusion about claims made on various sectors I’d like to point out we’re talking base money which exists as banks reserves or cash.

You didn't say base money, in your original error.

I haven't misapplied any accounting identities.

We can define net financial assets as being equal to total financial assets minus total financial liabilities. We're not talking net worth which takes real assets into account.

More specifically, YOU were not talking net worth. You decided to scope your view to a particular limited type of asset when discussing how our monetary system works in collaboration with the real world, that is our economy, workforce, and tangible assets. Presumably, you just finished an econ class or you are an accountant not used to talking to people who own companies and have been around for a while.

I thought people understood the difference between net financial assets and net worth (net wealth). Our monetary consists of financial assets in the form of bonds and currency.

I'm not an accountant, nor do I play one on television. I'm a bond trader with a background in economics. Well....I still have an interest in economics apart from job which you could train a monkey to do.

 

[RKMBrown]

You’re arguing accounting identities which are fact.

You've misapplied your identities.

Define net financial assets. That was your original mistake.

Lastly, in case there was any confusion about claims made on various sectors I’d like to point out we’re talking base money which exists as banks reserves or cash.

You didn't say base money, in your original error.

I haven't misapplied any accounting identities.

We can define net financial assets as being equal to total financial assets minus total financial liabilities. We're not talking net worth which takes real assets into account.

Net private financial wealth equals public debt down to the last penny.

That's your original claim.

Are you claiming now that stocks are not "financial wealth"?

No, he's just separating the net worth of the stock from the equation. His accounting argument is that the net worth is made irrelevant by his proposal that in order for the net worth to be realized it has to be bought and sold for a price. Thus, at the sale us dollars must be used.

 

[RKMBrown]

I haven't misapplied any accounting identities.

We can define net financial assets as being equal to total financial assets minus total financial liabilities. We're not talking net worth which takes real assets into account.

More specifically, YOU were not talking net worth. You decided to scope your view to a particular limited type of asset when discussing how our monetary system works in collaboration with the real world, that is our economy, workforce, and tangible assets. Presumably, you just finished an econ class or you are an accountant not used to talking to people who own companies and have been around for a while.

I thought people understood the difference between net financial assets and net worth (net wealth). Our monetary consists of financial assets in the form of bonds and currency.

I'm not an accountant, nor do I play one on television. I'm a bond trader with a background in economics. Well....I still have an interest in economics apart from job which you could train a monkey to do.

Most people do understand the difference. (Take that back.) Some people do understand the difference. However, it's easy for statements to get lost in translation.

Bonds? I'd think you would prefer 401ks that use somewhat safe investments over SS then.

 

[Kimura]

That's your original claim.

We're talking net financial wealth, not net worth which includes real assets.
That's correct, it's basic macroaccounting. Again, if you're going to argue over basic accounting identities....

Are you claiming now that stocks are not "financial wealth"?

They are, but they're dependent on valuations, and these transactions occur within the private sector. I'm working on an example where we can sub-divide the private sector to illustrate my point.

 

[Kimura]

More specifically, YOU were not talking net worth. You decided to scope your view to a particular limited type of asset when discussing how our monetary system works in collaboration with the real world, that is our economy, workforce, and tangible assets. Presumably, you just finished an econ class or you are an accountant not used to talking to people who own companies and have been around for a while.

I thought people understood the difference between net financial assets and net worth (net wealth). Our monetary consists of financial assets in the form of bonds and currency.

I'm not an accountant, nor do I play one on television. I'm a bond trader with a background in economics. Well....I still have an interest in economics apart from job which you could train a monkey to do.

Most people do understand the difference. (Take that back.) Some people do understand the difference. However, it's easy for statements to get lost in translation.

Bonds? I'd think you would prefer 401ks that use somewhat safe investments over SS then.

I'm a bond trader for an Italian bank, that's my profession.

Personally, I have a financial planner, but I have a traditional IRA, some mutual funds (REITS, bond funds, index funds) and we dabble in ETFs. I also like real estate in terms of investment. I tend to lean conservative in my investment strategies even though I'm still young.

 

[RKMBrown]

That's your original claim.

We're talking net financial wealth, not net worth which includes real assets.
That's correct, it's basic macroaccounting. Again, if you're going to argue over basic accounting identities....

Are you claiming now that stocks are not "financial wealth"?

They are, but they're dependent on valuations, and these transactions occur within the private sector. I'm working on an example where we can sub-divide the private sector to illustrate my point.

So on one end of the total system we have people that have and create real assets and sometimes convert said assets to cash in accounts. On the other end of the total system we have the fed that loans out money to the banking cartel for near zero interest, wherein that money is backed by fairy dust. The banks are supposed to then loan that money out to corporations and individuals to buy and make more tangible assets. The result of this is that a very small number of the banks control the vast majority of all tangible assets. What a nice scheme for the banks. All the money they want at the best rate to buy all the assets they want.