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

[itfitzme]

*And the Government has already defaulted once in it's history.

When? *I did a google on "US default on debt and got nothing.

us government default on debt - Google Search

Not seeing it.

Tried

us treasury doesn't pay on t bills - Google Search

Nothing. *That would be a default, specifically. We talking recent history?

 

[Flopper]

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.

So you don't consider US debt an asset? If that's your position, further discussion is pointless.

 

[AmazonTania]

*And the Government has already defaulted once in it's history.

When? *I did a google on "US default on debt and got nothing.

us government default on debt - Google Search

Not seeing it.

Tried

us treasury doesn't pay on t bills - Google Search

Nothing. *That would be a default, specifically. We talking recent history?

What do you call what happened when Nixon took America off the Gold Standard in 1971?

 

[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.

So you don't consider US debt an asset? If that's your position, further discussion is pointless.

It's no longer good for it's debt. It cannot possibly be an asset.

 

[AmazonTania]

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.

That's your opinion.

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.

Needs are relative. No individual can tell anyone what their needs are. Especially when you put it in such broad terms such as 'common.' I have my needs, and you have yours. Common needs aren't necessarily my needs.

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.

Strawman...

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.

You understand very little, and I don't need to go anywhere I don't want to. You clearly have your own needs and I have mind. Given the circumstances, tend to your own affairs and I will tend to mine. That is, if you're not too busy telling others what to do.

 

[Flopper]

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.

So you don't consider US debt an asset? If that's your position, further discussion is pointless.

It's no longer good for it's debt. It cannot possibly be an asset.

The individuals, major corporations, banks and funds that purchased over 9 trillion dollars in US debt through treasury auctions and the open market would dispute your claim that US debt is not asset.

 

[AmazonTania]

So you don't consider US debt an asset? If that's your position, further discussion is pointless.

It's no longer good for it's debt. It cannot possibly be an asset.

The individuals, major corporations, banks and funds that purchased over 9 trillion dollars in US debt through treasury auctions and the open market would dispute your claim that US debt is not asset.

That's great. And the Chinese actually assumes you'll pay them back one-day. Very few people are loaning the Government 10 years at a rate of 2.13%. Most of those investors have every intention of flipping those bonds before it matures. The question is to whom.

Majority of that demand for public debt which isn't foreign originates from the Federal Reserve. I'm not sure if you've known, but the financial community are not exactly a community which tends to think in foresight. They've adopted an 'in the moment' type of attitude.

 

[Billo_Really]

oh yes it is. I don't buy that article.

And what's that based on?

 

[Flopper]

It's no longer good for it's debt. It cannot possibly be an asset.

The individuals, major corporations, banks and funds that purchased over 9 trillion dollars in US debt through treasury auctions and the open market would dispute your claim that US debt is not asset.

That's great. And the Chinese actually assumes you'll pay them back one-day. Very few people are loaning the Government 10 years at a rate of 2.13%. Most of those investors have every intention of flipping those bonds before it matures. The question is to whom.

Majority of that demand for public debt which isn't foreign originates from the Federal Reserve. I'm not sure if you've known, but the financial community are not exactly a community which tends to think in foresight. They've adopted an 'in the moment' type of attitude.

According to Standard & Poor, Fitch & Moody, US soverign debt is rated as investment grade. The US carries both Fitch's and Moody's highest rating. Standard & Poor rates US debt as AA+ with only 8 nations out of 140 that rate higher. I guess you consider these bond rating services like the financial community lack your foresight.

 

[AmazonTania]

The individuals, major corporations, banks and funds that purchased over 9 trillion dollars in US debt through treasury auctions and the open market would dispute your claim that US debt is not asset.

That's great. And the Chinese actually assumes you'll pay them back one-day. Very few people are loaning the Government 10 years at a rate of 2.13%. Most of those investors have every intention of flipping those bonds before it matures. The question is to whom.

Majority of that demand for public debt which isn't foreign originates from the Federal Reserve. I'm not sure if you've known, but the financial community are not exactly a community which tends to think in foresight. They've adopted an 'in the moment' type of attitude.

According to Standard & Poor, Fitch & Moody, US soverign debt is rated as investment grade. The US carries both Fitch's and Moody's highest rating. Standard & Poor rates US debt as AA+ with only 8 nations out of 140 that rate higher. I guess you consider these bond rating services like the financial community lack your foresight.

The only way these Rating Agencies can be licensed to rate securities is through government licensing. The only way these rating agencies can continue to do so is if they continue to provide good ratings.

That's a complete conflict of interest. Especially since Egan-Jones was one of the first rating agencies to downgrade the United States (twice) and was barred from providing ratings for a couple of months, and S&P was the only major rating agency to downgrade S&P and is being sued by the Justice Department.

 

[lynn63]

As long as we have a percentage of the population that supports social security through employment that covers the elderly population it won't go bankrupt. Any shortages is due to our government dipping into it and not having the means to pay it back.

Recessions do have a major impact on social security if allowed to continue too long. When rumors of social security going bankrupt, does this mean that government officials know something we don't in terms of never recovering from this recession?

Is there any hope for America to come up with new innovations in job creation that can restore our economy? The only problem I see with social security having difficulty in meeting its obligations is the last generation baby boomers. The population that will support them when they reach 65 is smaller and will present a challenge for them to support until they die off.

 

[Flopper]

That's great. And the Chinese actually assumes you'll pay them back one-day. Very few people are loaning the Government 10 years at a rate of 2.13%. Most of those investors have every intention of flipping those bonds before it matures. The question is to whom.

Majority of that demand for public debt which isn't foreign originates from the Federal Reserve. I'm not sure if you've known, but the financial community are not exactly a community which tends to think in foresight. They've adopted an 'in the moment' type of attitude.

According to Standard & Poor, Fitch & Moody, US soverign debt is rated as investment grade. The US carries both Fitch's and Moody's highest rating. Standard & Poor rates US debt as AA+ with only 8 nations out of 140 that rate higher. I guess you consider these bond rating services like the financial community lack your foresight.

The only way these Rating Agencies can be licensed to rate securities is through government licensing. The only way these rating agencies can continue to do so is if they continue to provide good ratings.

That's a complete conflict of interest. Especially since Egan-Jones was one of the first rating agencies to downgrade the United States (twice) and was barred from providing ratings for a couple of months, and S&P was the only major rating agency to downgrade S&P and is being sued by the Justice Department.

There is no government license required to rate bonds.

 

[AmazonTania]

According to Standard & Poor, Fitch & Moody, US soverign debt is rated as investment grade. The US carries both Fitch's and Moody's highest rating. Standard & Poor rates US debt as AA+ with only 8 nations out of 140 that rate higher. I guess you consider these bond rating services like the financial community lack your foresight.

The only way these Rating Agencies can be licensed to rate securities is through government licensing. The only way these rating agencies can continue to do so is if they continue to provide good ratings.

That's a complete conflict of interest. Especially since Egan-Jones was one of the first rating agencies to downgrade the United States (twice) and was barred from providing ratings for a couple of months, and S&P was the only major rating agency to downgrade S&P and is being sued by the Justice Department.

There is no government license required to rate bonds.

Anyone can rate bonds if they choose to. To be a credit rating agency in America requires SEC approval. Becoming an NRSRO also requires approval from the SEC.

 

[C_Clayton_Jones]

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

Likely because it isn’t ‘bankrupt.’

 

[tjvh]

I don't hear any bitching about a 510 billion dollar defense budget.

The defense budget IS the one thing the government is Constitutionally required to provide, Social Security... Not so much.

 

[AmazonTania]

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

Likely because it isn’t ‘bankrupt.’

That doesn't make sense.

 

[OohPooPahDoo]

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

Which is exactly how the stock market works.

, rather than the funds coming from the profits earned from an organization or individual.

When you sell a share of stock the money comes from new investors, not company profit.

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.

An actually organization? What the **** is that? Originating from another person's investments? LOL! A share of stock doesn't "originate 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.

You get paid to give financial advice? LOL! To who, 9 year olds? With folks like you giving financial advice, its no surprise at all the economy tanked a few years ago.

Are you aware that if there are no new investors available to buy the stock that old investors purchased, the value of that stock becomes zero? Are you aware that whether or not we, as a society, are capable of producing enough goods and services to take care of those too old to work has absolutely nothing to do with whether or not we have social security and almost everything to do with age demographics?

 

[midcan5]

In their effort to demonize government the right wing puppets mouth the most ridiculous nonsense over and over again. What's with these dummies? They can't all be home schooled in the Koch Brothers book for raising attentive puppets, can they?

"Exposing the Social Security solvency hype'

Exposing the Social Security solvency hype - MarketWatch

One man's retirement math: Social Security wins - CSMonitor.com

Pew Research Center reports that only 6 percent of scientists identified as Republican and only 9 percent identified as conservatives. Ever wonder why.

No nation was ever founded by conservatives, for in order to do so, you'd need to stop whining and do something - or by clueless libertarians who think all things started at their birth. http://www.usmessageboard.com/educa...history-of-the-united-states-post6429110.html

 

[OohPooPahDoo]

It's no longer good for it's debt. It cannot possibly be an asset.

The individuals, major corporations, banks and funds that purchased over 9 trillion dollars in US debt through treasury auctions and the open market would dispute your claim that US debt is not asset.

That's great. And the Chinese actually assumes you'll pay them back one-day. Very few people are loaning the Government 10 years at a rate of 2.13%. Most of those investors have every intention of flipping those bonds before it matures. The question is to whom.

Majority of that demand for public debt which isn't foreign originates from the Federal Reserve. I'm not sure if you've known, but the financial community are not exactly a community which tends to think in foresight. They've adopted an 'in the moment' type of attitude.

Mom-and-pop investors, and not the Federal Reserve, have been the ones most responsible for driving the mad dash to government debt, according to newly released data.

Guess Who's Buying All the Bonds? (It's Not the Fed)

 

[Pop23]

If someone puts a gun to your head and takes your money, that is known as a thief

If someone puts a gun to your head, takes your money and says he will pay you back in time with interest, but does not its known as the Government.

And we trust these guys with our personal and health information

BRILLIANT