Social Security is banrupt, so why the extra bump in the rate?

[AmazonTania]

Those of you that earn a check for a living, you may realize that your social security taxes took a hike this last pay period. how convinient Obama. fiscal cliff here we come.

As far I can tell, you're wrong on both counts. Social Security went up 6 months ago, not in the last pay check. In fact, the government didn't really raise the tax, the payroll tax holiday just expired and the rates returned to the same rate, 6.2% that it has been since 1990.

Social Security is of course not bankrupt and never will be.

That is false, unless you are trying to suggest that Ponzi Schemes can last forever.

 

[Flopper]

Those of you that earn a check for a living, you may realize that your social security taxes took a hike this last pay period. how convinient Obama. fiscal cliff here we come.

As far I can tell, you're wrong on both counts. Social Security went up 6 months ago, not in the last pay check. In fact, the government didn't really raise the tax, the payroll tax holiday just expired and the rates returned to the same rate, 6.2% that it has been since 1990.

Social Security is of course not bankrupt and never will be.

That is false, unless you are trying to suggest that Ponzi Schemes can last forever.

I'm simply saying the Social Security System is not bankrupt. Social Security is currently financially sound and political pressure will keep it so. There are a number of ways of keeping Social Security sound for the remainder of the century. It's just a matter of Congress deciding how they want to do it.

 

[AmazonTania]

As far I can tell, you're wrong on both counts. Social Security went up 6 months ago, not in the last pay check. In fact, the government didn't really raise the tax, the payroll tax holiday just expired and the rates returned to the same rate, 6.2% that it has been since 1990.

Social Security is of course not bankrupt and never will be.

That is false, unless you are trying to suggest that Ponzi Schemes can last forever.

I'm simply saying the Social Security System is not bankrupt. Social Security is currently financially sound and political pressure will keep it so. There are a number of ways of keeping Social Security sound for the remainder of the century. It's just a matter of Congress deciding how they want to do it.

The Government owes the Social Security Administration more than $2.8 Trillion dollars. Each year, the Government has to pay the interests as well as the principle on these IOUs. This money has already been spent, so other income from the general budget and paid into Social Security. After beneficiaries have been paid, these surpluses are invested and this happens all over again.

This can only be sustained through the government's ability to overtax you, and even this is not working. As shown through from the amount of benefits which has decreased over the years, as well as the increases in the retirement age. As the interest and obligations increase, the ability to sustain this ponzi scheme decreases. There is no way this can last for a century. Even the Government knows this, but they are perfectly willing to steal from others to keep it solvent for as long as they can.

 

[itfitzme]

Allstate is an insurance company

Its primary income is an insurance premium paid by insurance customers.

According to Allstate's 2012 stockholder's report, the investment portfio included $4.7 billion in US government*securities, $12.1 B in municipal bonds, $2.5 B in foreign gov't bonds, $48 B in corporate bond, $27 million in prefered stock, and other misc. securities.

I am fairly sure that every major corporation will have a similar portfolio.

Of course, the SSI trust fund investment portfolio is comprised entirely off what the financial markets consider to be the least risky investment, US gov't securities.

 

[Flopper]

That is false, unless you are trying to suggest that Ponzi Schemes can last forever.

I'm simply saying the Social Security System is not bankrupt. Social Security is currently financially sound and political pressure will keep it so. There are a number of ways of keeping Social Security sound for the remainder of the century. It's just a matter of Congress deciding how they want to do it.

The Government owes the Social Security Administration more than $2.8 Trillion dollars. Each year, the Government has to pay the interests as well as the principle on these IOUs. This money has already been spent, so other income from the general budget and paid into Social Security. After beneficiaries have been paid, these surpluses are invested and this happens all over again.

This can only be sustained through the government's ability to overtax you, and even this is not working. As shown through from the amount of benefits which has decreased over the years, as well as the increases in the retirement age. As the interest and obligations increase, the ability to sustain this ponzi scheme decreases. There is no way this can last for a century. Even the Government knows this, but they are perfectly willing to steal from others to keep it solvent for as long as they can.

So? The Government owes more than $16 Trillion dollars. Each year, the Government has to pay the interests as well as the principle on these IOUs. There is nothing wrong with Social Security investing the trust fund in government debt like most banks, major corporations, pension funds, central banks, and individuals. If the government fails to meet it's obligations, Social Security would be the least of our problems.

There are many ways to solve the Social Security problem. The payroll tax rate has been 6.2% and has not been raised in 23 years. The Social Security normal retirement age is 67 despite the fact most Americans are living well beyond that age. Early Social Security retirement at 62 and has an insufficient penalty. These and other changes can keep Social Security sound for the remainder of the century. By 2050, the baby boomer effect will be gone and benefits growth will be decreasing.

Social Security is not the problem. Medicare is.

 

[OohPooPahDoo]

Social Security is banrupt

That really sucks. My grandmother really needs her check. Now that they aren't paying social security anymore, this is a big problem.

You'd think it'd be bigger news that they stopped sending out social security checks. I can't find where the media is reporting it. Do you have a link?

Those of you that earn a check for a living, you may realize that your social security taxes took a hike this last pay period. how convinient Obama. fiscal cliff here we come.

Last pay period? I'm looking at my pay check and the May FICA taxes are the same as April.

 

[OohPooPahDoo]

That is false, unless you are trying to suggest that Ponzi Schemes can last forever.

I'm simply saying the Social Security System is not bankrupt. Social Security is currently financially sound and political pressure will keep it so. There are a number of ways of keeping Social Security sound for the remainder of the century. It's just a matter of Congress deciding how they want to do it.

The Government owes the Social Security Administration more than $2.8 Trillion dollars. Each year, the Government has to pay the interests as well as the principle on these IOUs.

The government never ever has to pay principle. It may have to pay principal, though.

This money has already been spent, so other income from the general budget and paid into Social Security. After beneficiaries have been paid, these surpluses are invested and this happens all over again.

This can only be sustained through the government's ability to overtax you, and even this is not working. As shown through from the amount of benefits which has decreased over the years, as well as the increases in the retirement age. As the interest and obligations increase, the ability to sustain this ponzi scheme decreases. There is no way this can last for a century.

It will last as long as those of working age can produce enough to support themselves and those too old to work.

Even the Government knows this, but they are perfectly willing to steal from others to keep it solvent for as long as they can.

No one is stealing from anyone. Stealing is by definition an illegal act. Taxation is legal. So it can't - by definition - be stealing.

 

[OohPooPahDoo]

Those of you that earn a check for a living, you may realize that your social security taxes took a hike this last pay period. how convinient Obama. fiscal cliff here we come.

As far I can tell, you're wrong on both counts. Social Security went up 6 months ago, not in the last pay check. In fact, the government didn't really raise the tax, the payroll tax holiday just expired and the rates returned to the same rate, 6.2% that it has been since 1990.

Social Security is of course not bankrupt and never will be.

That is false, unless you are trying to suggest that Ponzi Schemes can last forever.

If Social Security is a "Ponzi Scheme" then so is every other investment you can think of.

 

[AmazonTania]

As far I can tell, you're wrong on both counts. Social Security went up 6 months ago, not in the last pay check. In fact, the government didn't really raise the tax, the payroll tax holiday just expired and the rates returned to the same rate, 6.2% that it has been since 1990.

Social Security is of course not bankrupt and never will be.

That is false, unless you are trying to suggest that Ponzi Schemes can last forever.

If Social Security is a "Ponzi Scheme" then so is every other investment you can think of.

Social Security can only be sustained if the money coming into the treasury outpaces the money being paid to beneficiaries. That's a ponzi scheme. There is no other investment which works like this... Although, this probably won't stop you for ignorantly and incorrectly mentioning a few.

 

[AmazonTania]

I'm simply saying the Social Security System is not bankrupt. Social Security is currently financially sound and political pressure will keep it so. There are a number of ways of keeping Social Security sound for the remainder of the century. It's just a matter of Congress deciding how they want to do it.

The Government owes the Social Security Administration more than $2.8 Trillion dollars. Each year, the Government has to pay the interests as well as the principle on these IOUs.

This money has already been spent, so other income from the general budget and paid into Social Security. After beneficiaries have been paid, these surpluses are invested and this happens all over again.

This can only be sustained through the government's ability to overtax you, and even this is not working. As shown through from the amount of benefits which has decreased over the years, as well as the increases in the retirement age. As the interest and obligations increase, the ability to sustain this ponzi scheme decreases. There is no way this can last for a century. Even the Government knows this, but they are perfectly willing to steal from others to keep it solvent for as long as they can.

So? The Government owes more than $16 Trillion dollars. Each year, the Government has to pay the interests as well as the principle on these IOUs.

You don't seem to understand the difference, as there are many.

Majority of the money borrowed by the US Government is in short term. The Majority of the debt to the Social Security Administration is borrowed in long term. Bonds for the Social Security Administration are maturing every 1 - 3 years. Bonds for the public debt are maturing every couple of weeks. The government actually uses the funds from the general budget to help pay Social Security. There is no funds left over from the general budget to help pay down the nation debt, or bonds that are maturing. What the Government effectively does is it pays of it's obligations to current maturing debt holders by selling new bonds. Either this, or rolling over their debt.

Effectively, the United States Treasury is running a ponzi scheme, much larger than Social Security. At the rate things are going, it won't be long until majority of the surpluses from Social Security will be directed straight towards the interest. Just like the national debt.

There is nothing wrong with Social Security investing the trust fund in government debt like most banks, major corporations, pension funds, central banks, and individuals. If the government fails to meet it's obligations, Social Security would be the least of our problems.

These banks, corporations, pension funds, and central banks are good for their obligations. The US Government is not. It continually needs to roll over it's debt. At the pace individuals are retiring (mostly due to the economy), there is no way Social Security can be sustained.

There are many ways to solve the Social Security problem. The payroll tax rate has been 6.2% and has not been raised in 23 years. The Social Security normal retirement age is 67 despite the fact most Americans are living well beyond that age. Early Social Security retirement at 62 and has an insufficient penalty. These and other changes can keep Social Security sound for the remainder of the century. By 2050, the baby boomer effect will be gone and benefits growth will be decreasing.

Social Security is not the problem. Medicare is.

They're both the problem. At the rate both of these programs are going, they most likely won't be around by the year 2050.

 

[AmazonTania]

I'm simply saying the Social Security System is not bankrupt. Social Security is currently financially sound and political pressure will keep it so. There are a number of ways of keeping Social Security sound for the remainder of the century. It's just a matter of Congress deciding how they want to do it.

The Government owes the Social Security Administration more than $2.8 Trillion dollars. Each year, the Government has to pay the interests as well as the principle on these IOUs.

The government never ever has to pay principle. It may have to pay principal, though.

It's never paid either as far as I can remember.

It will last as long as those of working age can produce enough to support themselves and those too old to work.

We already have welfare in this country.

No one is stealing from anyone. Stealing is by definition an illegal act. Taxation is legal. So it can't - by definition - be stealing.

Stealing is not an illegal act. The government does it from me every day. The use of force to obtain property which does not belong to you is stealing. Something that is wrong isn't un-wrong simply because it's legal. Stealing directly is wrong. Using someone else to steal is wrong. Using the Government to steal is wrong.

Distinction without a difference.

 

[OohPooPahDoo]

The Government owes the Social Security Administration more than $2.8 Trillion dollars. Each year, the Government has to pay the interests as well as the principle on these IOUs.

The government never ever has to pay principle. It may have to pay principal, though.

It's never paid either as far as I can remember.

The U.S. Government has never failed to pay principal amounts on its debt obligations as they come due

It will last as long as those of working age can produce enough to support themselves and those too old to work.

We already have welfare in this country.

No one is stealing from anyone. Stealing is by definition an illegal act. Taxation is legal. So it can't - by definition - be stealing.

Stealing is not an illegal act. The government does it from me every day. The use of force to obtain property which does not belong to you is stealing. Something that is wrong isn't un-wrong simply because it's legal. Stealing directly is wrong. Using someone else to steal is wrong. Using the Government to steal is wrong.

Distinction without a difference.

Taxation is not stealing. You're just a whiny little baby. Grow up.

 

[Flopper]

The Government owes the Social Security Administration more than $2.8 Trillion dollars. Each year, the Government has to pay the interests as well as the principle on these IOUs.

This money has already been spent, so other income from the general budget and paid into Social Security. After beneficiaries have been paid, these surpluses are invested and this happens all over again.

This can only be sustained through the government's ability to overtax you, and even this is not working. As shown through from the amount of benefits which has decreased over the years, as well as the increases in the retirement age. As the interest and obligations increase, the ability to sustain this ponzi scheme decreases. There is no way this can last for a century. Even the Government knows this, but they are perfectly willing to steal from others to keep it solvent for as long as they can.

So? The Government owes more than $16 Trillion dollars. Each year, the Government has to pay the interests as well as the principle on these IOUs.

You don't seem to understand the difference, as there are many.

Majority of the money borrowed by the US Government is in short term. The Majority of the debt to the Social Security Administration is borrowed in long term. Bonds for the Social Security Administration are maturing every 1 - 3 years. Bonds for the public debt are maturing every couple of weeks. The government actually uses the funds from the general budget to help pay Social Security. There is no funds left over from the general budget to help pay down the nation debt, or bonds that are maturing. What the Government effectively does is it pays of it's obligations to current maturing debt holders by selling new bonds. Either this, or rolling over their debt.

Effectively, the United States Treasury is running a ponzi scheme, much larger than Social Security. At the rate things are going, it won't be long until majority of the surpluses from Social Security will be directed straight towards the interest. Just like the national debt.

There is nothing wrong with Social Security investing the trust fund in government debt like most banks, major corporations, pension funds, central banks, and individuals. If the government fails to meet it's obligations, Social Security would be the least of our problems.

These banks, corporations, pension funds, and central banks are good for their obligations. The US Government is not. It continually needs to roll over it's debt. At the pace individuals are retiring (mostly due to the economy), there is no way Social Security can be sustained.

There are many ways to solve the Social Security problem. The payroll tax rate has been 6.2% and has not been raised in 23 years. The Social Security normal retirement age is 67 despite the fact most Americans are living well beyond that age. Early Social Security retirement at 62 and has an insufficient penalty. These and other changes can keep Social Security sound for the remainder of the century. By 2050, the baby boomer effect will be gone and benefits growth will be decreasing.

Social Security is not the problem. Medicare is.

They're both the problem. At the rate both of these programs are going, they most likely won't be around by the year 2050.

The average maturity of US debt is about 4.6 years. Trust Fund Policy requires that funds be invested with a maturity evenly distributed from 1 to 15 years. In 2012, the average maturity of the fund was just over 6.3 years. These average maturities will vary by a year or so depending on economic conditions but there is no reason to believe that the small difference in maturities will cause any problem.

Furthermore the trust fund is still growing. The value of the assets have increased every year since 1981. In 2012, total receipts were 840,190 billion. Total benefits paid were 785,781 billion. The fund increased by 54,409 billion. It's current value for 2012 stands at 2,732,334 billion.

The potential problem is that congress will not act to increase revenues or decrease benefits paid and the fund will begin to shrink. If Congress were to do absolutely nothing, the fund will begin shrinking in value in a few years and would be exhausted in about 25 or 30 years. At that time, benefits would have to be reduced by 20% to 30% to equal Social Security Tax collections. Because of the number of people that depend on Social Security, that obviously will not happen. Either taxes will go up, benefits will go down or some combination of two.

There is not need to reduce the national debt. We have been refinancing and increasing debt for over 50 years and we will continue to do so. The problem is the rate of increase. It is exceeding GDP growth. That has to change.

Trust Fund Data
http://www.ssa.gov/policy/docs/ssb/v45n1/v45n1p3.pdf

 

[OohPooPahDoo]

That is false, unless you are trying to suggest that Ponzi Schemes can last forever.

If Social Security is a "Ponzi Scheme" then so is every other investment you can think of.

Social Security can only be sustained if the money coming into the treasury outpaces the money being paid to beneficiaries. That's a ponzi scheme. There is no other investment which works like this... Although, this probably won't stop you for ignorantly and incorrectly mentioning a few.

Any investment will fail if its source of revenue dries up. But hey, someone with a nice blog probably told you SS is a "Ponzi scheme", so it has to be true.

You should have taken summer school classes.

 

[AmazonTania]

If Social Security is a "Ponzi Scheme" then so is every other investment you can think of.

Social Security can only be sustained if the money coming into the treasury outpaces the money being paid to beneficiaries. That's a ponzi scheme. There is no other investment which works like this... Although, this probably won't stop you for ignorantly and incorrectly mentioning a few.

Any investment will fail if its source of revenue dries up.

That's not anywhere similar to what a Ponzi Scheme is. A Ponzi Scheme is an investment operation in which you pay previous investors with the funds you obtain from newer investors, rather than the funds coming from the profits earned from an organization or individual.

I also don't know how you think investments work, but the idea is to put of present consumption in the hopes of possible future consumption. There are some returns which are doubled. There some which allows the investor to break even and there some which accumulate losses. But all of which actually includes an investment of some magnitude. The point is, you are using your own money to possible achieve a return from an actually organization. Your returns are not originating from another person's investments.

There is a very obvious and distinct difference, but I'm not surprised that you do not see the difference.

But hey, someone with a nice blog probably told you SS is a "Ponzi scheme", so it has to be true.

You should have taken summer school classes.

You mean at the same place you learned economics or about investing? No thanks. My time is much better spent getting paid to give financial advice. Sort of similar to what I already do.

 

[AmazonTania]

The government never ever has to pay principle. It may have to pay principal, though.

It's never paid either as far as I can remember.

The U.S. Government has never failed to pay principal amounts on its debt obligations as they come due.

Yes, they have. Hence, the need to roll over debt. The United States has never paid a single bill since the 1920's. And the Government has already defaulted once in it's history.

But of course, if I pay my visa with my mastercard, I guess I did pay my bills.

Taxation is not stealing. You're just a whiny little baby. Grow up.

That's your opinion. Exactly what is the difference between me -- a private citizen -- using force to take your property, and a government entity using force to take your money?

Of course, if the Government does it, then it's not illegal, right Nixon?

 

[AmazonTania]

The average maturity of US debt is about 4.6 years. Trust Fund Policy requires that funds be invested with a maturity evenly distributed from 1 to 15 years. In 2012, the average maturity of the fund was just over 6.3 years. These average maturities will vary by a year or so depending on economic conditions but there is no reason to believe that the small difference in maturities will cause any problem.

Furthermore the trust fund is still growing. The value of the assets have increased every year since 1981. In 2012, total receipts were 840,190 billion. Total benefits paid were 785,781 billion. The fund increased by 54,409 billion. It's current value for 2012 stands at 2,732,334 billion.

The potential problem is that congress will not act to increase revenues or decrease benefits paid and the fund will begin to shrink. If Congress were to do absolutely nothing, the fund will begin shrinking in value in a few years and would be exhausted in about 25 or 30 years. At that time, benefits would have to be reduced by 20% to 30% to equal Social Security Tax collections. Because of the number of people that depend on Social Security, that obviously will not happen. Either taxes will go up, benefits will go down or some combination of two.

There is not need to reduce the national debt. We have been refinancing and increasing debt for over 50 years and we will continue to do so. The problem is the rate of increase. It is exceeding GDP growth. That has to change.

Trust Fund Data
http://www.ssa.gov/policy/docs/ssb/v45n1/v45n1p3.pdf

The trust fund isn't growing. Just the IOU's that the Treasury owes the Social Security Administration. The Treasury has no money. And it's not a potential problem. It is a problem. Social Security already started running deficits for three straight consecutive years. But you're right, if nothing is done, benefits will be cut by 2033, providing that inflation doesn't eat it up first. The national debt was not a huge problem 25 - 50 years ago. Now it is. There is no way the Government will be able to keep rates low for very long. Even if the Government could, it's not good for it's obligations. Any mention of decreasing the deficit, starts the mantra of a possible default.

 

[itfitzme]

Taxation is not stealing. You're just a whiny little baby. Grow up.

That's your opinion. Exactly what is the difference between me -- a private citizen -- using force to take your property, and a government entity using force to take your money?

You seem to be under the mistaken impression that those dollar bills belong to you. *The money is a social tool that serves as a ticket to indicate that you did some work and therefor have a right to some goods. *The goods that you buy after taxes belong to you. *The money belongs to the social group. *It has no purpose except in being exchanged between people.

Taxes reciepts are based on a percentage of the total. *This is effective because it provides an indicator of the amount of resources available to put towards common needs. *When GDP goes up, reciepts go up. *This indicates that more can be put into things like roadways, bridges, etc.

You like the "household" analogy. *Its like when you live in a house with people. Everyone has to pitch in and clean. You don't get to shit in the toilet and not contribute to keeping it clean.

But we don't have people all putting in their 8 hour shift, once a month, fixing sewer pipes or driving around in a squad car. *Everyone contributes to taxes and we pay someone that specialized in waste treatment or law enforcement. It is called "specialization" and it is much more efficient.

I understand that, if it really bothers you, you can go to alaska and homestead. *Somempeoplemdo manage to live off the land, eat rabbit, etc.

 

[itfitzme]

Taxation is not stealing. You're just a whiny little baby. Grow up.

That's your opinion. Exactly what is the difference between me -- a private citizen -- using force to take your property, and a government entity using force to take your money?

Of course, if the Government does it, then it's not illegal, right Nixon?

Well, I think it's also the opinion of the framersmof the constitution and the US Supreme Court.

The difference is one is illegal and the other is not. *If a private party steals your car, it's illegal.

And if Nixon stole your car, that would be illegal. *If it is legal for the President to do, then when he does it, it's legal. *If he's restricted by law from doing it, it's illegal.

If the legal speed limit is 25 mph and you drive faster, it is illegal. If you drive 25 mph, then it's legal.

 

[PoliticalChic]

Why Social Security Cannot Go Bankrupt - Forbes

Social Security is not bankrupt.

Do you know that the author is a Keynesian, i.e., invested in Liberal economics?

Let that temper your views.