Social Security is Not a Ponzi Scheme, Mr. Perry

[Quantum Windbag]

The only problem today with social security today is the US government. Working people have paid into this program all of their working careers. The government has squandered this money away on everything except for what it was intended for.

That's not even true. The money was spent paying beneficiaries. Social Security is a pay-as-you-go program. When you pay your FICA tax its used to pay current beneficiaries. If there's any left over, they put it in the trust fund, if they're short a little bit, they take some out the trust fund, but on average its pay-as-you-go.

You just defined a Ponzi scheme.

 

[clevergirl]

That's not even true. The money was spent paying beneficiaries. Social Security is a pay-as-you-go program. When you pay your FICA tax its used to pay current beneficiaries. If there's any left over, they put it in the trust fund, if they're short a little bit, they take some out the trust fund, but on average its pay-as-you-go.

SS was a “pay-as-you-go” system, where current tax collections paid for current benefits. The SS trust fund idea gave us the illusion that we were advance funding SS benefits, in a manner similar to the private pension system. In reality, though, SS is still pay-as-you-go, with the difference being that future generations will pay for both the benefits outlay and the repayment of principal and interest on the special government bonds in the trust fund.

Again, there is NO FUND- though it has become normal nomenclature to refer to it as such~ There are T-bills which are used for different kinds of government liabilities, not only SS. T-bills are both a liability and an asset, since they are part of the total federal debt. Basically, one hand of the government owes the other hand, and the investments in the so called “trust fund” are not separate from the entity that sponsors it.

Slight correction -- There are no "T-Bills" in the Trust fund. I've posted the SSA.GOV statement to fact many times.. Lord knows what's actually in there. People have seen the paper -- but it's NOT NEGOTIABLE and it's NOT TRANSFERABLE..

Pardon my shouting -- I'm pissed at others. -- Not you...

Well truth is there is no trust fund..it's an illusion. Are you saying that government does not own t-bills? I think I understand what you are trying to say is that there are no specific t-bills set aside for SS? That is true, because there is no fund. SS is not a fund it is an accounting instrument-it holds a column in the US debt book, for receipts and payments. T-bills are used to move money around in that debt book.

 

[Charles_Main]

Unfortunately you can't invest in hindsight returns.

The accountant said simply putting the money taken out of his check each weak into a Regular Savings account would have given my dad double the Return.

hindsight not needed.

 

[L.K.Eder]

Al Gore on Social Security

 

[saveliberty]

I guess Perry really does not like that pesky older voter group.....good luck with that Perry.

Moron.

...or he is trying to protect them by bring the libotards to reality. If it goes bust, NO MONEY; NO CHECK.

 

[boedicca]

The only problem today with social security today is the US government. Working people have paid into this program all of their working careers. The government has squandered this money away on everything except for what it was intended for.

That's not even true. The money was spent paying beneficiaries. Social Security is a pay-as-you-go program. When you pay your FICA tax its used to pay current beneficiaries. If there's any left over, they put it in the trust fund, if they're short a little bit, they take some out the trust fund, but on average its pay-as-you-go.

You just defined a Ponzi scheme.

Indeed he did. And here's the official definition from SEC.gov:

What is a Ponzi scheme?

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity.

"Ponzi" Schemes


IOUs to be paid by future taxpayers are not Legitimate Investment Activity.

 

[saveliberty]

Poo is beyond reason.

 

[Oddball]

The only problem today with social security today is the US government. Working people have paid into this program all of their working careers. The government has squandered this money away on everything except for what it was intended for.

That's not even true. The money was spent paying beneficiaries. Social Security is a pay-as-you-go program. When you pay your FICA tax its used to pay current beneficiaries. If there's any left over, they put it in the trust fund, if they're short a little bit, they take some out the trust fund, but on average its pay-as-you-go.

Gullibility of astronomical proportions.

 

[flacaltenn]

Well truth is there is no trust fund..it's an illusion. Are you saying that government does not own t-bills? I think I understand what you are trying to say is that there are no specific t-bills set aside for SS? That is true, because there is no fund. SS is not a fund it is an accounting instrument-it holds a column in the US debt book, for receipts and payments. T-bills are used to move money around in that debt book.

How 'bout we kill this farce right now.. I've posted these a zillion times so please excuse my lack of formatting...

Direct from the horse's mouth (or ass)... SSA.GOV says there are negotiable Treasuries in the "trust fund"...

Special-issue securities, Social Security trust funds

The Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund comprise the Social Security trust funds. Both funds are managed by the Department of the Treasury through their Bureau of Public Debt. Since the beginning of the Social Security program, all securities held by the trust funds have been issued by the Federal Government. There are two general types of such securities:

•Special issues—available only to the trust funds
•Public issues—marketable Treasury bonds available to the public.
The trust funds now hold only special issues, but they have held public issues in the past.

From CBO.GOV the organization who analyzes and audits the Fed agencies..

http://www.cbo.gov/ftpdocs/120xx/doc12039/01-26_FY2011Outlook.pdf

When a trust fund receives payroll taxes or other income
that is not needed immediately to pay benefits or cover
other expenses, the Treasury credits the fund and uses the
excess cash to reduce the amount of new federal borrowing
that is needed to finance the governmentwide deficit.
That is, if other tax and spending policies are unchanged,
the government borrows less from the public than it
would in the absence of those excess funds. The reverse is
the case when revenues for a trust fund program fall short
of expenses. The balances of trust funds at a given point
in time are not a measure of resources available to pay
future obligations for the respective programs; those
resources will need to come from federal revenues or
additional borrowing in the years those obligations are
due.

They BORROW the deficit for the "trust fund" with NEW debt issuance. No INTEREST PAID into the trust fund, no money coming out of it.. It's a gigantic accounting fraud.

And finally --- if you're not depressed enough...

The Awful Truth About the Social Security Trust Fund is Beginning to Emerge | Dissident Voice


None of the Social Security surplus revenue has ever been saved and invested in Treasury bonds or anything else. All revenue, not needed to pay current benefits has been put into the general fund and used to pay for wars, tax cuts, and other government programs. Every dollar of the $2.5 trillion that is supposed to be in the trust fund has been “borrowed,” “embezzled,” or “stolen” by the government and spent for other purposes. The trust fund does not hold any real marketable government bonds or any other kind of real assets. It holds only IOUs in the form of ”special issues of the Treasury.” These are a gimmick, created by the government, to make the public think the trust fund holds “bonds” when it holds only IOUs. They are not marketable and could not be sold to anyone even for a penny on the dollar. They are nothing more than accounting devices.

".... to make the public THINK the trust fund hold "bonds" when it only holds IOUs..""

And at least MOST of public is stupid enough to buy it. We need to change that misconception before any INTELLIGIENT fixes are forced on us by the politicians that set-up this farce -- lied to us --- stole the "profit" of SS -- and now want to play us some more... FDR is rolling in his grave...

 

[clevergirl]

Well truth is there is no trust fund..it's an illusion. Are you saying that government does not own t-bills? I think I understand what you are trying to say is that there are no specific t-bills set aside for SS? That is true, because there is no fund. SS is not a fund it is an accounting instrument-it holds a column in the US debt book, for receipts and payments. T-bills are used to move money around in that debt book.

How 'bout we kill this farce right now.. I've posted these a zillion times so please excuse my lack of formatting...

Direct from the horse's mouth (or ass)... SSA.GOV says there are negotiable Treasuries in the "trust fund"...

Special-issue securities, Social Security trust funds

The Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund comprise the Social Security trust funds. Both funds are managed by the Department of the Treasury through their Bureau of Public Debt. Since the beginning of the Social Security program, all securities held by the trust funds have been issued by the Federal Government. There are two general types of such securities:

•Special issues—available only to the trust funds
•Public issues—marketable Treasury bonds available to the public.
The trust funds now hold only special issues, but they have held public issues in the past.

From CBO.GOV the organization who analyzes and audits the Fed agencies..

http://www.cbo.gov/ftpdocs/120xx/doc12039/01-26_FY2011Outlook.pdf

When a trust fund receives payroll taxes or other income
that is not needed immediately to pay benefits or cover
other expenses, the Treasury credits the fund and uses the
excess cash to reduce the amount of new federal borrowing
that is needed to finance the governmentwide deficit.
That is, if other tax and spending policies are unchanged,
the government borrows less from the public than it
would in the absence of those excess funds. The reverse is
the case when revenues for a trust fund program fall short
of expenses. The balances of trust funds at a given point
in time are not a measure of resources available to pay
future obligations for the respective programs; those
resources will need to come from federal revenues or
additional borrowing in the years those obligations are
due.

They BORROW the deficit for the "trust fund" with NEW debt issuance. No INTEREST PAID into the trust fund, no money coming out of it.. It's a gigantic accounting fraud.

And finally --- if you're not depressed enough...

The Awful Truth About the Social Security Trust Fund is Beginning to Emerge | Dissident Voice


None of the Social Security surplus revenue has ever been saved and invested in Treasury bonds or anything else. All revenue, not needed to pay current benefits has been put into the general fund and used to pay for wars, tax cuts, and other government programs. Every dollar of the $2.5 trillion that is supposed to be in the trust fund has been “borrowed,” “embezzled,” or “stolen” by the government and spent for other purposes. The trust fund does not hold any real marketable government bonds or any other kind of real assets. It holds only IOUs in the form of ”special issues of the Treasury.” These are a gimmick, created by the government, to make the public think the trust fund holds “bonds” when it holds only IOUs. They are not marketable and could not be sold to anyone even for a penny on the dollar. They are nothing more than accounting devices.

".... to make the public THINK the trust fund hold "bonds" when it only holds IOUs..""

And at least MOST of public is stupid enough to buy it. We need to change that misconception before any INTELLIGENT fixes are forced on us by the politicians that set-up this farce -- lied to us --- stole the "profit" of SS -- and now want to play us some more... FDR is rolling in his grave...

I understand that "special issuance bonds" are NOT the same as public issuance bonds...but they are backed with the same guarantee.

I found this site and will research more later. It is certainly a worthwhile discussion!

from the link:

The rate of interest on special issues is determined by a formula enacted in 1960. The rate is determined at the end of each month and applies to new investments in the following month.

The numeric average of the 12 monthly interest rates for 2010 was 2.760 percent. The annual effective interest rate (the average rate of return on all investments over a one-year period) for the OASI and DI Trust Funds, combined, was 4.642 percent in 2010. This higher effective rate resulted because the funds hold special-issue bonds acquired in past years when interest rates were higher.

 

[flacaltenn]

I understand that "special issuance bonds" are NOT the same as public issuance bonds...but they are backed with the same guarantee.

No -- NOT the same guarantee. You think that the market for US Treasuries would be doing as well as it is if the $5Trill SS liability was EQUALLY backed with what they are buying? Most economists will tell you that if push comes -- the T-Bill will be paid first and the Treasury will go to Congress and tell SSA to either increase FICA or reduce the benefits immediately...

You've got to understand that about 40% of the $14TRIL debt is owed to the govt itself.. That include SS liabilities. You think REAL bond holders (the other 60%) are going to let the govt pay itself FIRST???

Think again.. Ask China or Japan...

 

[Toro]

If SS is a Ponzi Scheme, then so is all government debt.

As is all consumer debt for that matter.

 

[Toro]

I understand that "special issuance bonds" are NOT the same as public issuance bonds...but they are backed with the same guarantee.

No -- NOT the same guarantee. You think that the market for US Treasuries would be doing as well as it is if the $5Trill SS liability was EQUALLY backed with what they are buying? Most economists will tell you that if push comes -- the T-Bill will be paid first and the Treasury will go to Congress and tell SSA to either increase FICA or reduce the benefits immediately...

You've got to understand that about 40% of the $14TRIL debt is owed to the govt itself.. That include SS liabilities. You think REAL bond holders (the other 60%) are going to let the govt pay itself FIRST???

Think again.. Ask China or Japan...

What do you mean "let?"

What is China going to do, invade?

 

[NYcarbineer]

I understand that "special issuance bonds" are NOT the same as public issuance bonds...but they are backed with the same guarantee.

No -- NOT the same guarantee. You think that the market for US Treasuries would be doing as well as it is if the $5Trill SS liability was EQUALLY backed with what they are buying? Most economists will tell you that if push comes -- the T-Bill will be paid first and the Treasury will go to Congress and tell SSA to either increase FICA or reduce the benefits immediately...

You've got to understand that about 40% of the $14TRIL debt is owed to the govt itself.. That include SS liabilities. You think REAL bond holders (the other 60%) are going to let the govt pay itself FIRST???

Think again.. Ask China or Japan...

lol, what Congress is going to pay China and **** American seniors?

 

[mudwhistle]

First of all Social Security is solvent and can sustain the baby boomer retirement. Second of all, long term sustainability can be easily fixed by raising the cap on income eligibility.

Bernie Sanders Introduces Bill To Lift The Payroll Tax Cap, Ensuring Full Social Security Funding For Nearly 75 Years

Maybe you might believe the father of Reganomics...

Wall Street Targets the Elderly
Looting Social Security
by PAUL CRAIG ROBERTS

Hank Paulson, the Gold Sacks bankster/US Treasury Secretary, who deregulated the financial system, caused a world crisis that wrecked the prospects of foreign banks and governments, caused millions of Americans to lose retirement savings, homes, and jobs, and left taxpayers burdened with multi-trillions of dollars of new US debt, is still not in jail. He is writing in the New York Times urging that the mess he caused be fixed by taking away from working Americans the Social Security and Medicare for which they have paid in earmarked taxes all their working lives.

Wall Street’s approach to the poor has always been to drive them deeper into the ground.

As there is no money to be made from the poor, Wall Street fleeces them by yanking away their entitlements. It has always been thus. During the Reagan administration, Wall Street decided to boost the values of its bond and stock portfolios by using Social Security revenues to lower budget deficits. Wall Street figured that lower deficits would mean lower interest rates and higher bond and stock prices.

Two Wall Street henchmen, Alan Greenspan and David Stockman, set up the Social Security raid in this way: The Carter administration had put Social Security in the black for the foreseeable future by establishing a schedule for future Social Security payroll tax increases. Greenspan and Stockman conspired to phase in the payroll tax increases earlier than was needed in order to gain surplus Social Security revenues that could be used to finance other government spending, thus reducing the budget deficit. They sold it to President Reagan as “putting Social Security on a sound basis.”

Along the way Americans were told that the surplus revenues were going into a special Social Security trust fund at the U.S. Treasury. But what is in the fund is Treasury IOUs for the spent revenues. When the “trust funds” are needed to pay Social Security benefits, the Treasury will have to sell more debt in order to redeem the IOUs.

Currently these systems are not in deficit. The problem is that government is using earmarked revenues for other purposes. Indeed, since the 1980s Social Security revenues have been used to fund general government. Today Social Security revenues are being used to fund trillion dollar bailouts for Wall Street and to fund the Bush/Obama wars of aggression against Muslims.

Republicans have extraordinary animosity toward the poor. In an effort to talk retirees out of their support systems, Republicans frequently describe Social Security as a Ponzi scheme and “unsustainable.” They ought to know. The phony trust fund, which they set up to hide the fact that Wall Street and the Pentagon are running off with Social Security revenues, is a Ponzi scheme. Social Security itself has been with us since the 1930s and has yet to wreck our lives and budget. But it only took Hank Paulson’s derivative Ponzi scheme and its bailout a few years to inflict irreparable damage on our lives and budget.

Had Social Security been privatized, I doubt that Wall Street would have been permitted to deregulate the financial system. Too much would have been at stake.

After the latest crisis brought on by Wall Street’s dishonesty and greed, trusting Wall Street to manage anyone’s old age pension requires a leap of faith that no intelligent person can make.

Wall Street has got away with its raid on the public treasury. Now, pockets full, it wants to pay for the heist by curtailing Social Security and Medicare. Having deprived the working population of homes, jobs, and health care, Wall Street is now after the elderly’s old age security.

Social Security, formerly an untouchable “third rail of politics,” is now “unsustainable,” while the real unsustainables–a pre-1929 unregulated financial system and open-ended multi-trillion dollar Global War Against Terror–are the new untouchables. This transformation signals the complete capture of American democracy by an oligarchy of special interests.

More

The great enemy of truth is very often not the lie – deliberate, contrived and dishonest – but the myth – persistent, persuasive, and unrealistic. Too often we enjoy the comfort of opinion without the discomfort of thought.
President John F. Kennedy

You actually trust the government????

That's a good one.

Okay.....a bit of reality.

Governments make laws an impose regulations that the private sector has to follow.

Who makes government follow their own rules and regulations???

Nobody.

Try suing the government and see how far you get.

Again, an icon of conservatism has you pegged....

No passion so effectually robs the mind of all its powers of acting and reasoning as fear.
Edmund Burke

One that confounds good and evil is an enemy to good.
Edmund Burke

So....why are you such and enemy to good????

From what I can see Democrats are all talk and no action. They rip everyone off over here and give a bit of it to the folks over there....keeping billions of it for themselves and their union thugs in the process.

What is good about a party that calls it's opposition terrorists, hostage-takers, barbarians, evil profit-takers, sons of bitches, and says they want to kill granny and babies when they never have????

What's good about a party that uses taxpayer's funds for procedures that have killed over 40 million babies?

What's good about a party who's ideas are so great that they have to split us apart and breed hatred between the races, between the economic classes, and pits American against American just to take the spotlight off of their utter failures????

They walk up to us and kick us and when we defend ourselves they say WE are the aggressors.

They can't run on their records so they have to cause conflict. Turmoil is their ally. What's good about that???

 

[NYcarbineer]

the Hard Right arguements here make no sense at all.

They do in the context of the rightwing mindset that nothing the government does can work,

unless it's war.

 

[Trajan]

It is to Republicans. Even many on Social Security. Only they don't know it's Social Security. They think it's from "fans".

Social Security is a bigger and better ponzi scheme than Bernie Maddof ever thought of.

For all your working life--you and your employer pay 12..4% of your gross wages into this fund. If you're lucky enough to make it to 67 years old they will give you back diddly sqaut on your investment--and should you meet your demise early and are single they simply confiscate your contribution. The Federal Government uses this fund to pay for wars--foreign aid--disaster relief--and about anything and everything other than what it was intended for--the well being of the elderly in this country.

That's why Rick Perry is right--he won't win election on his stance--because so many are dependent on social security today.

If you are old, $1,800.00 a month is nothing to sneeze at.

uh huh.

let me share this with you booboo, SSI will not be there for me or anyone like me in its present form when I retire.

I am in my 50's, I am taking care now to be sure I am comfortable no matter what, hence, I will be means tested down in SSI to the point where in I am lucky if I see 750.00 a month despite my cut being calculated at the max, which is what 2200.00(?) I believe.

whats wrong with that picture? its a mandated ripoff thats what. they will keep the difference and give it to folks who took earned income credits there by receiving net money back via fed returns to the point where in their fica has in effect been refunded.......took about a wealth transfer, all at the point of the gov pen ( gun).

 

[OohPooPahDoo]

Unfortunately you can't invest in hindsight returns.

The accountant said simply putting the money taken out of his check each weak into a Regular Savings account would have given my dad double the Return.

hindsight not needed.

Do you know what the word "hindsight" means?

Your accountant's note that your father WOULD HAVE had X returns HAD he invested in something in the PAST is called HINDSIGHT.

 

[OohPooPahDoo]

The only problem today with social security today is the US government. Working people have paid into this program all of their working careers. The government has squandered this money away on everything except for what it was intended for.

That's not even true. The money was spent paying beneficiaries. Social Security is a pay-as-you-go program. When you pay your FICA tax its used to pay current beneficiaries. If there's any left over, they put it in the trust fund, if they're short a little bit, they take some out the trust fund, but on average its pay-as-you-go.

You just defined a Ponzi scheme.

Ponzi schemes aren't transparent. If you want to know how Social Security operates you can go to their website and find out. Ponzi schemes are also designed to transfer all the wealth to one or a small group of individuals. Social security merely transfers wealth from one generation to the one before it.

 

[NYcarbineer]

The may plan on it....but it rarely materializes.

Just remember....intentions are more valuable then results.

Social Security has not added one dime to the national debt and has a trillion plus dollar surplus and is solvent to 2037.

Depends on your math and your understanding of SS. Right now, SS can pay only 73 cents on the dollar. Current workers are making up the shortfall. In order to balance out the shortfall either a tax increase to workers and employers must happen, a cut in benefits, or a raise in the retirement age (which is also technically a cut in benefits).

In other words it IS going broke unless something is done.

Phasing out the program is also an option-

It was in much worse shape in 1983, but oh my god,

28 years later it's still here!

Ponzi scheme my ass. You people need to grow up.