Social Security is Not a Ponzi Scheme, Mr. Perry

[OohPooPahDoo]

The idea was "not to spend the money" - in other words the government didn't put the money in interest bearing anythings - but they spent the money. Rather than a Ponzi Scheme, more like the FED Govt embezzled the money - perhaps with the intention of paying it back and perhaps not.

Their "intention of paying it back" is the same as their "intention of paying it back" for all other Treasury obligations. Considering the interest rate on a 30 year Treasury is running between 3% and 4% these days, I'd say the market believes the "intention of paying it back" is pretty damn reliable. Seriously can you name any corporations able to borrow money at such low rates from bond investors?

 

[OohPooPahDoo]

IF the debts we owe to the AMERICAN WORKERS aren't PREFERRED DEBTS?


One wonders why they are not.

Do we care more about those debts we owe to other nation than to our own people?

Apparently we do.

Now seriously....who do our masters really work for?

The American people, or somebody else?

The Constitution does not allow this.

Amendment XIV Section 4
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

Phrased as such to emphasize that war debts would be paid - but applying in general to ANY debt of the U.S. - "not to be questioned" certainly would seem to suggest we can't question the validity of U.S. debt legally owned by ANYONE - including foreigners.

Not to mention the practical ramifications - if we default to foreigners - U.S. citizens who have invested in Treasuries will dump their holdings, causing the price of Treasuries to drop like a rock, forcing the interest rates we have to pay for new debt to skyrocket - resulting eventually in total default or currency devaluation.

 

[flacaltenn]

Raoul::

Can you point out to me exactly where the SS actuaries say that there's nothing of value in the SS trust fund?

OMG Man.. Can you READ??

It's right in my last post BOLDED AND OVERsized.. Direct quote from the SSA Actuarial report for 2009...

Neither the redemption of trust fund bonds, nor
interest paid on those bonds, provides any new net income to the Treasury,
which must finance redemptions and interest payments through
some combination of increased taxation, reductions in other government
spending, or additional borrowing from the public.

I made it a little larger this time so that you'd have a better chance of reading it.. If you can't COMPREHEND that this means EXACTLY that there is NOTHING OF VALUE in the Trust Fund --- I can't help you.. Ask your 4th grade teacher to help you with the big words.

I normally don't pick on folks.. That's not why I'm here. But this is just pitiful...

Putting it in BLOCK CAPS doesn't make it any more truthful and doesn't make you look too smart.

Now, if there's NOTHING OF VALUE in the SS trust fund, like you say, and SS is currently taking in less money than it's paying out, which is actually true, exactly how is SS still paying 100% of benefits?

It's not what I say -- it what it says in the 2009 SSA report. If a Wall Street HappyTimes bond fund spent 10 pages spinning a fiction about how much money they were "making" for their clients and then put in a zinger like.. (and I paraphrase)

Neither the redemption of trust fund bonds, nor
interest paid on those bonds, provides any new net income to the [HappyTimes Bond Fund], which must finance redemptions and interest payments through
some combination of increased [premiums], reductions in other [HappyTimes]
spending, or additional borrowing from [issuing New HappyTimes Bonds on the public market]....

.... the SEC would be on them like stink on bear.. It's blantant fiction.. And Wall Street would be rightfully mocked and punished..

As for why the checks are still going out. Don't know.. Certainly there's a promise to continue to pay. But EVERYONE knows those benefits are NOT yours and NOT guaranteed. So while the FEds are willing to issue NEW debt NOW to cover those obligated, we are already discussing RAISING premiums, lowering benefits, and perhaps even means testing as "solutions" to that problem.

I'm tired of repeating all this for brainwashed automatons who will INSIST that Soc Sec was always sound, never abused and making TONS of money for the American taxpayers. So why don't the 3 or 4 of you remaining stooges go start your own thread about HOW MUCH MONEY the American people have made by "investing" in Soc Sec????

That would be NYCarb with the irritating insistence that Soc Sec is still running a surplus in spite of facts and Obama's theft of premiums. Flopper with his denial that taxpayers are paying TWICE for the same FICA benefit. And YOU Raoul with your inability to read a financial perspectus with the level of sophistication REQUIRED of any "investor".. And of course OOPYDOO who doesn't get the difference between buying EXISTING REAL bonds and holding an IOU to issue FUTURE DEBT..

You folks DO NEED the Fed Govt to tell you how to survive.. You've PROVED how incompetent the general public really is...

 

[OohPooPahDoo]

Raoul::




OMG Man.. Can you READ??

It's right in my last post BOLDED AND OVERsized.. Direct quote from the SSA Actuarial report for 2009...



I made it a little larger this time so that you'd have a better chance of reading it.. If you can't COMPREHEND that this means EXACTLY that there is NOTHING OF VALUE in the Trust Fund --- I can't help you.. Ask your 4th grade teacher to help you with the big words.

I normally don't pick on folks.. That's not why I'm here. But this is just pitiful...

Putting it in BLOCK CAPS doesn't make it any more truthful and doesn't make you look too smart.

Now, if there's NOTHING OF VALUE in the SS trust fund, like you say, and SS is currently taking in less money than it's paying out, which is actually true, exactly how is SS still paying 100% of benefits?

It's not what I say -- it what it says in the 2009 SSA report. If a Wall Street HappyTimes bond fund spent 10 pages spinning a fiction about how much money they were "making" for their clients and then put in a zinger like.. (and I paraphrase)

Neither the redemption of trust fund bonds, nor
interest paid on those bonds, provides any new net income to the [HappyTimes Bond Fund], which must finance redemptions and interest payments through
some combination of increased [premiums], reductions in other [HappyTimes]
spending, or additional borrowing from [issuing New HappyTimes Bonds on the public market]....

.... the SEC would be on them like stink on bear.. It's blantant fiction.. And Wall Street would be rightfully mocked and punished..

As for why the checks are still going out. Don't know.. Certainly there's a promise to continue to pay. But EVERYONE knows those benefits are NOT yours and NOT guaranteed. So while the FEds are willing to issue NEW debt NOW to cover those obligated, we are already discussing RAISING premiums, lowering benefits, and perhaps even means testing as "solutions" to that problem.

I'm tired of repeating all this for brainwashed automatons who will INSIST that Soc Sec was always sound, never abused and making TONS of money for the American taxpayers. So why don't the 3 or 4 of you remaining stooges go start your own thread about HOW MUCH MONEY the American people have made by "investing" in Soc Sec????

That would be NYCarb with the irritating insistence that Soc Sec is still running a surplus in spite of facts and Obama's theft of premiums. Flopper with his denial that taxpayers are paying TWICE for the same FICA benefit. And YOU Raoul with your inability to read a financial perspectus with the level of sophistication REQUIRED of any "investor"..

The social security trust funds represent real obligations of the treasury to the trust fund, resulting in real income. Don't be stupid.

 

[flacaltenn]

OOPYDOO:

The social security trust funds represent real obligations of the treasury to the trust fund, resulting in real income. Don't be stupid.

And MOST of those obligations are because PREMIUM PRINCIPLE was stolen, not invested as the fiction claims. And the SAME taxpayers who were robbed will get to PAY themselves again for those obligations. Do you realize how inefficient that is? Do you realize it results in a benefit dollar costing the taxpayers OVER TWO dollars to finance and add your fictious interest to?

That in no fashion is "real income" as some morons claim it to be..

 

[Raoul_Duke]

The current actuary report says that, unless Congress fixes it, SS will collapse next year, and SS will collapse by 2035. You cited it yourself, if that is your definition sustainable then you have to go back to school.

Still waiting for a link to this report. Where is it?

It has been posted a few times, and it was in a link you quoted once, but I will provide it again simply to rub your nose in it.

Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided.
The financial challenges facing Social Security and Medicare should be addressed soon. If action is taken sooner rather than later, more options and more time will be available to phase in changes so that those affected can adequately prepare.

Trustees Report Summary

You said, and here I cut and paste your exact words, that :

The current actuary report says that, unless Congress fixes it, SS will collapse next year, and SS will collapse by 2035.

Now, to back that claim up you're posting the SS report that says :

Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided.

So your original claim was that SS will collapse next year -- that's your exact words -- and to back that up you're quoting the SS report that says SS will be unsustainable over the long term (75 year period from now) and if not corrected, will cause disruptions for beneficiaries. That is not the same thing, is it? What you've done here is to post an SS report that agrees with me and shows your "collapse" claims to be hysterical nonsense. When you debate somebody on a messageboard you're supposed to provide arguments that counteract the other person's argument, you're not supposed to post stuff that backs up their argument!

Like I already pointed out, SS can be made entirely solvent for the entire long term (75 year) period from now with just small changes to benefits and payroll taxes, to total 0.6% of GDP to be precise. So your hysterical claims that SS will collapse next year are entirely without foundation and the only evidence you could post in support of them actually backs up my argument. Thanks for that!

 

[Raoul_Duke]

Raoul::




OMG Man.. Can you READ??

It's right in my last post BOLDED AND OVERsized.. Direct quote from the SSA Actuarial report for 2009...



I made it a little larger this time so that you'd have a better chance of reading it.. If you can't COMPREHEND that this means EXACTLY that there is NOTHING OF VALUE in the Trust Fund --- I can't help you.. Ask your 4th grade teacher to help you with the big words.

I normally don't pick on folks.. That's not why I'm here. But this is just pitiful...

Putting it in BLOCK CAPS doesn't make it any more truthful and doesn't make you look too smart.

Now, if there's NOTHING OF VALUE in the SS trust fund, like you say, and SS is currently taking in less money than it's paying out, which is actually true, exactly how is SS still paying 100% of benefits?

It's not what I say -- it what it says in the 2009 SSA report. If a Wall Street HappyTimes bond fund spent 10 pages spinning a fiction about how much money they were "making" for their clients and then put in a zinger like.. (and I paraphrase)

Neither the redemption of trust fund bonds, nor
interest paid on those bonds, provides any new net income to the [HappyTimes Bond Fund], which must finance redemptions and interest payments through
some combination of increased [premiums], reductions in other [HappyTimes]
spending, or additional borrowing from [issuing New HappyTimes Bonds on the public market]....

.... the SEC would be on them like stink on bear.. It's blantant fiction.. And Wall Street would be rightfully mocked and punished..

As for why the checks are still going out. Don't know.. Certainly there's a promise to continue to pay. But EVERYONE knows those benefits are NOT yours and NOT guaranteed. So while the FEds are willing to issue NEW debt NOW to cover those obligated, we are already discussing RAISING premiums, lowering benefits, and perhaps even means testing as "solutions" to that problem.

I'm tired of repeating all this for brainwashed automatons who will INSIST that Soc Sec was always sound, never abused and making TONS of money for the American taxpayers. So why don't the 3 or 4 of you remaining stooges go start your own thread about HOW MUCH MONEY the American people have made by "investing" in Soc Sec????

That would be NYCarb with the irritating insistence that Soc Sec is still running a surplus in spite of facts and Obama's theft of premiums. Flopper with his denial that taxpayers are paying TWICE for the same FICA benefit. And YOU Raoul with your inability to read a financial perspectus with the level of sophistication REQUIRED of any "investor".. And of course OOPYDOO who doesn't get the difference between buying EXISTING REAL bonds and holding an IOU to issue FUTURE DEBT..

You folks DO NEED the Fed Govt to tell you how to survive.. You've PROVED how incompetent the general public really is...

I asked you if the SS fund contains, in your own words, NOTHING OF VALUE and SS is currently runniong a deficit, how are 100% of benefits currently being paid. Your answer is, and these are your exact words;

Don't know !

And then you've obviously gone for laughs by accusing other people of ignorance regarding social security matters. I've got to admit, you do a nice line in irony.

Since you don't know how SS is currently paying 100% of benefits I'll explain it to you. They're managing to pay them despite having a roughly $30 billion deficit in the last budget year, because they have about two and a half trillion in the SS trust fund. And despite having to cover the $30 billion shortfall SS's trust fund increased by about $120 billion in interest payments earned on the two plus trillion existing fund. One hundred and twenty billion dollars a year in interest isn't bad going for a worthless fund, is it?

There, i explained how SS managed to pay all scheduled benefits this year. In your own words you didn't know why. Now you do, courtesy of me. Show some class and say thank you to me for educating you..

 

[NYcarbineer]

OOPYDOO:

The social security trust funds represent real obligations of the treasury to the trust fund, resulting in real income. Don't be stupid.

And MOST of those obligations are because PREMIUM PRINCIPLE was stolen, not invested as the fiction claims. And the SAME taxpayers who were robbed will get to PAY themselves again for those obligations. Do you realize how inefficient that is? Do you realize it results in a benefit dollar costing the taxpayers OVER TWO dollars to finance and add your fictious interest to?

That in no fashion is "real income" as some morons claim it to be..

That's nonsense. If you put your personal retirement funds in US treasuries for a safe return of interest income,

are you robbing yourself?

 

[flacaltenn]

OOPYDOO:

The social security trust funds represent real obligations of the treasury to the trust fund, resulting in real income. Don't be stupid.

And MOST of those obligations are because PREMIUM PRINCIPLE was stolen, not invested as the fiction claims. And the SAME taxpayers who were robbed will get to PAY themselves again for those obligations. Do you realize how inefficient that is? Do you realize it results in a benefit dollar costing the taxpayers OVER TWO dollars to finance and add your fictious interest to?

That in no fashion is "real income" as some morons claim it to be..

That's nonsense. If you put your personal retirement funds in US treasuries for a safe return of interest income,

are you robbing yourself?

That's NOT nonsense NYC. And the fact that you don't see the diff worries me greatly.

REAL T-bonds are EXISTING DEBT. They go on the market to fund govt overspending in the PAST. If I exchange real money to buy an EXISTING bond, I'm not adding to the future debt of the taxpayers (beyond the already declared obligation). Furthermore, I can SELL that bond at any time and let someone else collect the interest without adding to the burden of the taxpayers at that time.

THAT can't be done with anything in the Trust Fund. Those "bonds" only represent a promise to ISSUE FUTURE DEBT. Thus adding to my (and your tax burden). I know it's harder than following the plot on Project Runway, but try and concentrate on where the VALUE in an investment really is..

If the TF was holding such valuable bonds for ALREADY ISSUED publically traded debt -- I'd be praising the wisdom of that move. Because it would mean that the excess FICA was INVESTED in something that doesn't have to be paid for twice..

 

[NYcarbineer]

OOPYDOO:



And MOST of those obligations are because PREMIUM PRINCIPLE was stolen, not invested as the fiction claims. And the SAME taxpayers who were robbed will get to PAY themselves again for those obligations. Do you realize how inefficient that is? Do you realize it results in a benefit dollar costing the taxpayers OVER TWO dollars to finance and add your fictious interest to?

That in no fashion is "real income" as some morons claim it to be..

That's nonsense. If you put your personal retirement funds in US treasuries for a safe return of interest income,

are you robbing yourself?

That's NOT nonsense NYC. And the fact that you don't see the diff worries me greatly.

REAL T-bonds are EXISTING DEBT. They go on the market to fund govt overspending in the PAST. If I exchange real money to buy an EXISTING bond, I'm not adding to the future debt of the taxpayers (beyond the already declared obligation). Furthermore, I can SELL that bond at any time and let someone else collect the interest without adding to the burden of the taxpayers at that time.

THAT can't be done with anything in the Trust Fund. Those "bonds" only represent a promise to ISSUE FUTURE DEBT. Thus adding to my (and your tax burden). I know it's harder than following the plot on Project Runway, but try and concentrate on where the VALUE in an investment really is..

If the TF was holding such valuable bonds for ALREADY ISSUED publically traded debt -- I'd be praising the wisdom of that move. Because it would mean that the excess FICA was INVESTED in something that doesn't have to be paid for twice..

Are you nuts? A regular T-bill/bond has to be paid back with taxpayer funds, or rolled over and refinanced by selling another bond.

The Fed issues NEW bills/bonds every day/week/month.

You think that if Social Security only bought 'existing' bonds it would somehow be better? Do you realize that then for every bond SS bought, that would be one more bond the federal government would have to sell to someone else.

You're not making any sense.

 

[JakeStarkey]

What is sensible is that SS, one of the best of American works, needs only easy revision to push it forward with great success: means testing and increased retirement age.

 

[OohPooPahDoo]

OOPYDOO:

And MOST of those obligations are because PREMIUM PRINCIPLE was stolen, not invested as the fiction claims.

It was invested in Treasury obligations.

And the SAME taxpayers who were robbed will get to PAY themselves again for those obligations.

No taxpayers were robbed, and the burden of providing for those too old to work always falls on those who can work.

Do you realize how inefficient that is? Do you realize it results in a benefit dollar costing the taxpayers OVER TWO dollars to finance and add your fictious interest to?

You make no sense at all. You have no clue what you're talking about.

That in no fashion is "real income" as some morons claim it to be..

I can assure you the dollars the Treasury pays to satisfy its debt obligations are real. You are a stupid moron.

 

[flacaltenn]

That's nonsense. If you put your personal retirement funds in US treasuries for a safe return of interest income,

are you robbing yourself?

That's NOT nonsense NYC. And the fact that you don't see the diff worries me greatly.

REAL T-bonds are EXISTING DEBT. They go on the market to fund govt overspending in the PAST. If I exchange real money to buy an EXISTING bond, I'm not adding to the future debt of the taxpayers (beyond the already declared obligation). Furthermore, I can SELL that bond at any time and let someone else collect the interest without adding to the burden of the taxpayers at that time.

THAT can't be done with anything in the Trust Fund. Those "bonds" only represent a promise to ISSUE FUTURE DEBT. Thus adding to my (and your tax burden). I know it's harder than following the plot on Project Runway, but try and concentrate on where the VALUE in an investment really is..

If the TF was holding such valuable bonds for ALREADY ISSUED publically traded debt -- I'd be praising the wisdom of that move. Because it would mean that the excess FICA was INVESTED in something that doesn't have to be paid for twice..

Are you nuts? A regular T-bill/bond has to be paid back with taxpayer funds, or rolled over and refinanced by selling another bond.

The Fed issues NEW bills/bonds every day/week/month.

You think that if Social Security only bought 'existing' bonds it would somehow be better? Do you realize that then for every bond SS bought, that would be one more bond the federal government would have to sell to someone else.

You're not making any sense.

No you and OOPYDOO are ignoring the statement from the SSA that nothing of value exists in the Trust Fund.. IF existing bonds had been purchased on the OPEN MARKET with FICA excess, it would have actually stimulated the T-Bond market by reducing supply. In addition, the TF could then actually sell back on the market (after pocketing the interest) without actually creating any new debt or taxpayer burden. If they held to maturity, than the taxpayers paid back the principle and interest ONCE. Something of IMMEDIATE VALUE was always in the Trust Fund.. That would be "an investment".

However---

If Congress STEALS the FICA funds, issues an note to "PROMISE" to issue future debt -- you have the cost to taxpayer of the STOLEN FUNDS + Fictional Interest on the IOU + Principle of the NEW BOND + The interest on the NEW BOND. That is the diff. Nothing of IMMEDIATE VALUE was ever in the Trust Fund. The General Fund never transferred ANY further funds in the TF, because Soc Sec was not in deficit until 2010. It was ignored except for an accounting entry.

You've lost the excess FICA, You've paid fictional interest on the IOU, and then you've REFINANCED the whole deal with NEW DEBT and NEW INTEREST when it's time to redeem. You've paid TWICE PLUS for each dollar stolen.. ADD IT UP and weep NYC.

You think that if Social Security only bought 'existing' bonds it would somehow be better? Do you realize that then for every bond SS bought, that would be one more bond the federal government would have to sell to someone else.

YES. It's the difference between investing in EXISTING DEBT that is in the marketplace when the EXCESS FICA was available to buy it, and allowing the govt to promise to issue NEW DEBT in the future. (the future being NOW when SS books are goin negative). Just the act of buying EXISTING DEBT on the market DOES NOT force the govt to issue a replacement or another bond. Now if Congress hadn't EMBEZZLED that money (Harry Reid's words - not mine) -- perhaps they would have had to issue new debt to cover their spending.. But when CLINTON and GINGRICH had their victory laps about balancing the budget back in the mid 90's --- you guys weren't concerned at all that the balancing was only achieved by IGNORING the Trust Fund surpluses that these creeps were stealing were you? You considered it "balanced" didn't you? That's condoning the theft. You are an accessory to the crime..

Not the same life cycle as for every other Treasury debt product.. Only folks who believe that Congress can spend without regard for income, could possibly ever fall for the fairy tale.

I COULD do this at the Sesame Street level with Count Count and Big Bird helping. But if it has to go to that level -- it's hopeless.. You guys just snap your heels 3 times and repeat.

There's no fund like the Trust Fund..
There's no fund like the Trust Fund..
There's no fund like the Trust Fund..

 

[Quantum Windbag]

Yeah that makes a ton of sense.
The federal reserve isn't anything new. Before the Fed - banks did the same ******* thing. They issued notes in exchange for assets - INCLUDING Treasury securities. The only major difference is that instead of thousands of banks issuing notes independntly of one another its more centralized.

Only the Treasury can issue Treasury securities. If a bank issued them it would be fraud or counterfeiting. Do you seriously want to take that position?

I DIDN'T take that position. CAN YOU ******* READ ENGLISH? Under the National Bank system, banks would ISSUE NOTES in EXCHANGE for TREASURY SECURITIES bough on the open market. Please - use a dictionary or ask if you can't comprehend that simply English sentence.

I missed that, sorry.

But you did just hit on why the Federal Reserve system was created, to centralize the monetary supply. Just remember that the Fed does not issue money, so its assets do not back the money.

LOL! OK then, what do its assets back? Its just a coincidence the Fed holds about 2.8 T in Treasuries, SDR's, mortgages, gold, and other marketable assets - AND also has about 2.8 T in liabilities in the form of notes and bank deposits? Is the Fed unlike any other entity - its assets actually do not cancel its liabilities? What are you retarded?

The fed does not back the dollar, the government does. How does that make me an idiot?

Exactly. Now can you explain how assets that secure the a loan can be used to back the actual money that is being loaned?

If the money isn't paid back, the Fed confiscates the assets. Duh Its just like a home mortgage loan genius

Do you know what technically means?

The treasury never takes back the loan, nor does it charge any interest on said loan. There are no terms other than the legal requirement that each federal reserve bank have enough assets on hand to cover the amount of money it requests from the central bank.

By the way, they have never been audited, are not required to meet any but internal accounting standards, and are generally exempt from all the regulations that apply to other banks. that is why Ron Paul, among others, has been calling for them to be audited for years, no one knows exactly what assets they hold, or how good they are.

Do you know how banking works at all?

We are not talking about banking, we are talking about fed.

A brief overview of how the Fed creates the monetary base - two basic means to do it

1) Open market operations - In Open Market Operations - the Federal Reserve purchases assets off the market in exchange for newly created money. This money can be in the form of currency - or in the form of a deposit with the Fed. The asset it is exchanged for can in theory - be anything - though it is most useful for the Fed to buy liquid assets, such as Treasury securities, SDR's, gold, and now - mortgage backed securities. When the Fed buys assets, the money supply increases, when they sell assets (or as those assets expire into cash, like treasuries), it decreases.

2) Discount window - through the discount window, the Fed can make loans directly to banks. The bank must have sufficient collateral to pledge for these loans. This collateral could be any of the things mentioned above as well as loans the bank has made. The Fed makes the loan by creating new money - the bank receives notes or an increase in its reserve balance. When the loan is paid back, the money is "destroyed".

In both cases, the Federal Reserve Notes or reserve deposits that the Federal Reserve pays out in exchange for assets shows up as a liability on their balance sheet, while the things they buy with that money show up as assets. So for example, if I sell a $1000 T-Bill to the Federal Reserve, they will give me $1000 in Federal Reserve Notes, and I give them they T-Bill. The T-Bill is their asset, but the notes they issued to me are their liability - so the sum balance is zero.


Now - what happens when the Fed's assets are greater than their liabilities? This can happen when the assets they buy appreciate in value. If the Fed buys a 1 year T-Bill for $999 that pays $1000, they will give the seller $999 in Federal Reserve Notes. At the end of the year, the T-Bill will be a $1000 asset, while the FRN will still be a $999 liability - so the Fed has made $1. They may need $0.02 or so out of that $1 to pay for expenses, and in the end, they have 98 cents in profit. The Fed is not allowed to post a profit, however, so this gets sent to the general fund, I believe on an annual basis - restoring the Fed's balance sheet to zero. In effect then, the Fed essentially is paid no interest on the Treasury securities it has.

Good try, but that is not actually what happens. Read this and then come back. I would post an excerpt, but no excerpt actually covers it well enough to refute your post. To make it so simple it is actually insulting, from the POV of the investor (taxpayer) the government (Treasury) is pays interest to itself (the Fed). The Fed takes out expenses, which are growing because of the interest the Fed is paying on the excess reserves (profit.) The remainder goes back to the Treasury. This makes the expense of the government buying an asset a revenue for the government. Try this in the real world any you will end up in jail.

Cumberland Advisors - Market Commentary

 

[Quantum Windbag]

IF the debts we owe to the AMERICAN WORKERS aren't PREFERRED DEBTS?


One wonders why they are not.

Do we care more about those debts we owe to other nation than to our own people?

Apparently we do.

Now seriously....who do our masters really work for?

The American people, or somebody else?

The Constitution does not allow this.

Amendment XIV Section 4
The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

Phrased as such to emphasize that war debts would be paid - but applying in general to ANY debt of the U.S. - "not to be questioned" certainly would seem to suggest we can't question the validity of U.S. debt legally owned by ANYONE - including foreigners.

Not to mention the practical ramifications - if we default to foreigners - U.S. citizens who have invested in Treasuries will dump their holdings, causing the price of Treasuries to drop like a rock, forcing the interest rates we have to pay for new debt to skyrocket - resulting eventually in total default or currency devaluation.

Funny thing, the Constitution also would have prevented us devaluing the dollar and dropping the gold standard. SCOTUS basically ruled that Congress can define money any way it likes, which allowed them to pay back the holders of gold backed certificates with dollars that were worth a fraction of what the previous dollars were. this set a precedent that would allow Congress to suddenly declare the Peso as our currency and pay all previous debts in Pesos at a 1 to 1 exchange rate, even though Pesos are worth the cents.

 

[Quantum Windbag]

Putting it in BLOCK CAPS doesn't make it any more truthful and doesn't make you look too smart.

Now, if there's NOTHING OF VALUE in the SS trust fund, like you say, and SS is currently taking in less money than it's paying out, which is actually true, exactly how is SS still paying 100% of benefits?

It's not what I say -- it what it says in the 2009 SSA report. If a Wall Street HappyTimes bond fund spent 10 pages spinning a fiction about how much money they were "making" for their clients and then put in a zinger like.. (and I paraphrase)

Neither the redemption of trust fund bonds, nor
interest paid on those bonds, provides any new net income to the [HappyTimes Bond Fund], which must finance redemptions and interest payments through
some combination of increased [premiums], reductions in other [HappyTimes]
spending, or additional borrowing from [issuing New HappyTimes Bonds on the public market]....

.... the SEC would be on them like stink on bear.. It's blantant fiction.. And Wall Street would be rightfully mocked and punished..

As for why the checks are still going out. Don't know.. Certainly there's a promise to continue to pay. But EVERYONE knows those benefits are NOT yours and NOT guaranteed. So while the FEds are willing to issue NEW debt NOW to cover those obligated, we are already discussing RAISING premiums, lowering benefits, and perhaps even means testing as "solutions" to that problem.

I'm tired of repeating all this for brainwashed automatons who will INSIST that Soc Sec was always sound, never abused and making TONS of money for the American taxpayers. So why don't the 3 or 4 of you remaining stooges go start your own thread about HOW MUCH MONEY the American people have made by "investing" in Soc Sec????

That would be NYCarb with the irritating insistence that Soc Sec is still running a surplus in spite of facts and Obama's theft of premiums. Flopper with his denial that taxpayers are paying TWICE for the same FICA benefit. And YOU Raoul with your inability to read a financial perspectus with the level of sophistication REQUIRED of any "investor"..

The social security trust funds represent real obligations of the treasury to the trust fund, resulting in real income. Don't be stupid.

In Flemming v Nestor the Supreme Court ruled that SS is a tax, and that it imposes no contractual obligation on the government to pay benefits. I guess that makes you wrong, again.

Social Security Online History Pages

 

[flacaltenn]

What is sensible is that SS, one of the best of American works, needs only easy revision to push it forward with great success: means testing and increased retirement age.

Just because we are living longer doesn't mean that the govt should be forcing us to work longer. They are not our keepers or bosses. THat's not their choice to make. Actually, I also worry that raising the retirement age will be seen as racist and class-ist - since poor and some minorities are at a known disadvantage in life expectancies.

As far as means testing -- you are aware that just 70 yrs ago this program was sold as UNIVERSAL coverage for ALL workers?

What do you think your chances are of selling UNIVERSAL Healthcare will be if you axe SOC SEC back to a simpler welfare transfer?? Never be trusted with UNIVERSAL anything ever again..

 

[Quantum Windbag]

Still waiting for a link to this report. Where is it?

It has been posted a few times, and it was in a link you quoted once, but I will provide it again simply to rub your nose in it.

Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided.
The financial challenges facing Social Security and Medicare should be addressed soon. If action is taken sooner rather than later, more options and more time will be available to phase in changes so that those affected can adequately prepare.

Trustees Report Summary

You said, and here I cut and paste your exact words, that :

The current actuary report says that, unless Congress fixes it, SS will collapse next year, and SS will collapse by 2035.

Now, to back that claim up you're posting the SS report that says :

Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided.

So your original claim was that SS will collapse next year -- that's your exact words -- and to back that up you're quoting the SS report that says SS will be unsustainable over the long term (75 year period from now) and if not corrected, will cause disruptions for beneficiaries. That is not the same thing, is it? What you've done here is to post an SS report that agrees with me and shows your "collapse" claims to be hysterical nonsense. When you debate somebody on a messageboard you're supposed to provide arguments that counteract the other person's argument, you're not supposed to post stuff that backs up their argument!

Like I already pointed out, SS can be made entirely solvent for the entire long term (75 year) period from now with just small changes to benefits and payroll taxes, to total 0.6% of GDP to be precise. So your hysterical claims that SS will collapse next year are entirely without foundation and the only evidence you could post in support of them actually backs up my argument. Thanks for that!

Typo.

Medicare is the portion that is in danger of collapsing, not SS. Not sure why I typed SS twice, but I admit I did, and that made me look stupid. Medicare is in imminent danger of collapsing under its own weight, and the current report makes it clear. I was also guilty of confusing something else I read with what I remembered of the report. The danger is in the next 5 years or so, and unless Congress acts this year or next it will be all but impossible to stop.

Congress, as we can see, is not going to act, which is only going to make things worse.

Anyway, I was wrong, thanks for calling me on it.

 

[saveliberty]

I can assure you the dollars the Treasury pays to satisfy its debt obligations are real. You are a stupid moron.

Where does the Treasury get those dollars? There are only two sources. Taxpayers or printing more money. Both hurt the working public.

 

[NYcarbineer]

That's NOT nonsense NYC. And the fact that you don't see the diff worries me greatly.

REAL T-bonds are EXISTING DEBT. They go on the market to fund govt overspending in the PAST. If I exchange real money to buy an EXISTING bond, I'm not adding to the future debt of the taxpayers (beyond the already declared obligation). Furthermore, I can SELL that bond at any time and let someone else collect the interest without adding to the burden of the taxpayers at that time.

THAT can't be done with anything in the Trust Fund. Those "bonds" only represent a promise to ISSUE FUTURE DEBT. Thus adding to my (and your tax burden). I know it's harder than following the plot on Project Runway, but try and concentrate on where the VALUE in an investment really is..

If the TF was holding such valuable bonds for ALREADY ISSUED publically traded debt -- I'd be praising the wisdom of that move. Because it would mean that the excess FICA was INVESTED in something that doesn't have to be paid for twice..

Are you nuts? A regular T-bill/bond has to be paid back with taxpayer funds, or rolled over and refinanced by selling another bond.

The Fed issues NEW bills/bonds every day/week/month.

You think that if Social Security only bought 'existing' bonds it would somehow be better? Do you realize that then for every bond SS bought, that would be one more bond the federal government would have to sell to someone else.

You're not making any sense.

No you and OOPYDOO are ignoring the statement from the SSA that nothing of value exists in the Trust Fund.. IF existing bonds had been purchased on the OPEN MARKET with FICA excess, it would have actually stimulated the T-Bond market by reducing supply. In addition, the TF could then actually sell back on the market (after pocketing the interest) without actually creating any new debt or taxpayer burden. If they held to maturity, than the taxpayers paid back the principle and interest ONCE. Something of IMMEDIATE VALUE was always in the Trust Fund.. That would be "an investment".

However---

If Congress STEALS the FICA funds, issues an note to "PROMISE" to issue future debt -- you have the cost to taxpayer of the STOLEN FUNDS + Fictional Interest on the IOU + Principle of the NEW BOND + The interest on the NEW BOND. That is the diff. Nothing of IMMEDIATE VALUE was ever in the Trust Fund. The General Fund never transferred ANY further funds in the TF, because Soc Sec was not in deficit until 2010. It was ignored except for an accounting entry.

You've lost the excess FICA, You've paid fictional interest on the IOU, and then you've REFINANCED the whole deal with NEW DEBT and NEW INTEREST when it's time to redeem. You've paid TWICE PLUS for each dollar stolen.. ADD IT UP and weep NYC.

You think that if Social Security only bought 'existing' bonds it would somehow be better? Do you realize that then for every bond SS bought, that would be one more bond the federal government would have to sell to someone else.

YES. It's the difference between investing in EXISTING DEBT that is in the marketplace when the EXCESS FICA was available to buy it, and allowing the govt to promise to issue NEW DEBT in the future. (the future being NOW when SS books are goin negative). Just the act of buying EXISTING DEBT on the market DOES NOT force the govt to issue a replacement or another bond. Now if Congress hadn't EMBEZZLED that money (Harry Reid's words - not mine) -- perhaps they would have had to issue new debt to cover their spending.. But when CLINTON and GINGRICH had their victory laps about balancing the budget back in the mid 90's --- you guys weren't concerned at all that the balancing was only achieved by IGNORING the Trust Fund surpluses that these creeps were stealing were you? You considered it "balanced" didn't you? That's condoning the theft. You are an accessory to the crime..

Not the same life cycle as for every other Treasury debt product.. Only folks who believe that Congress can spend without regard for income, could possibly ever fall for the fairy tale.

I COULD do this at the Sesame Street level with Count Count and Big Bird helping. But if it has to go to that level -- it's hopeless.. You guys just snap your heels 3 times and repeat.

There's no fund like the Trust Fund..
There's no fund like the Trust Fund..
There's no fund like the Trust Fund..

Your ignorance is beginning to frustrate me.