Zone1 Social Security Scam

[rightwinger]

They could have actually been invested like a pension fund is supposed to do.

If FDR had instituted a savings account, Social Security would not have started paying until the 1960s

FDR was in the middle of a Depression and needed a system where retirees could start receiving benefits quickly

 

[Woodznutz]

They could have actually been invested like a pension fund is supposed to do.

They were "invested" in IOU's from the general fund, and now the general fund has to pay it back using current inputs.

Trillions lost in interest and dividends that could have propped up SS for decades.

There are strict limits on how the Trust Fund is to be 'invested'. It safely earns interest using a mix of government bond yields, which are rising.

 

[martybegan]

If FDR had instituted a savings account, Social Security would not have started paying until the 1960s

FDR was in the middle of a Depression and needed a system where retirees could start receiving benefits quickly

Not if the just the surplus was invested instead of just being transferred to the general fund in the form of IOU's.

 

[martybegan]

There are strict limits on how the Trust Fund is to be 'invested'. It safely earns interest using a mix of government bond yields.

It earns fake interest because in the end the money doesn't come from investment, it comes from the general tax receipts from a few years later.

Those "bonds" are nothing more than IOU's.

 

[Woodznutz]

They could have actually been invested like a pension fund is supposed to do.

They were "invested" in IOU's from the general fund, and now the general fund has to pay it back using current inputs.

Trillions lost in interest and dividends that could have propped up SS for decades.

It would have lost trillions if invested in the markets as well. Better safe than sorry.

 

[martybegan]

It would have lost trillions if invested in the markets as well. Better safe than sorry.

So all pensions and 4o1k's since the inception of the concept have lost trillions?

Even putting the surpluses in a Money Market would have been a better option, and those rarely go under.

 

[Woodznutz]

It earns fake interest because in the end the money doesn't come from investment, it comes from the general tax receipts from a few years later.

Those "bonds" are nothing more than IOU's.

All bonds, notes, bills, whether public or private, are IOU's. My portfolio is filled with such IOU's, payable with interest.

 

[martybegan]

All bonds, notes, bills, whether public or private, are IOU's. My portfolio is filled with such IOU's, payable with interest.

The thing is investment funds earn based on some form of actual work or growth. The ones for SS are basically kick the payment down the road things.

Even municipal bonds are written based on assumed growth or some form of infrastructure improvement.

Plus those are mechanisms for government FUNDING, not funding a national pension plan.

 

[Woodznutz]

So all pensions and 4o1k's since the inception of the concept have lost trillions?

Even putting the surpluses in a Money Market would have been a better option, and those rarely go under.

Pensions and 401's have recently lost billions in value due to the stock market slump. The SS surplus isn't subject to these losses.

 

[dblack]

Seniors vote. Not much else to do. SS keeps them in line.

 

[martybegan]

Pensions and 401's have recently lost billions in value due to the stock market slump. The SS surplus isn't subject to these losses.

And they always come back.

The SS surplus has been lost over the decades to the general fund, and when the surplus goes away not only does the general fund lose a source of income, it now has to start really paying back that interest that has accumulated for close to a century now.

 

[Woodznutz]

The thing is investment funds earn based on some form of actual work or growth. The ones for SS are basically kick the payment down the road things.

Even municipal bonds are written based on assumed growth or some form of infrastructure improvement.

Plus those are mechanisms for government FUNDING, not funding a national pension plan.

. The government borrows the SS surplus and will repay with interest when needed by SS. Nothing to worry about.

 

[martybegan]

. The government borrows the SS surplus and will repay with interest when needed by SS. Nothing to worry about.

Where does the $$ the government pays SS back with interest come from?

 

[Woodznutz]

And they always come back.

The SS surplus has been lost over the decades to the general fund, and when the surplus goes away not only does the general fund lose a source of income, it now has to start really paying back that interest that has accumulated for close to a century now.

Until the markets rebound what are SS recipients to live on?

 

[Woodznutz]

Where does the $$ the government pays SS back with interest come from?

From general revenues, as part of the budget.

 

[martybegan]

Until the markets rebound what are SS recipients to live on?

The same thing they always live on, the payouts based on the immediate cash reserve SS holds onto as well as incoming receipts of SS payments.

 

[martybegan]

From general revenues, as part of the budget.

Which is a nice way to say taxes. For decades the flow was from SS to the general fund. Without a surplus the flow is reversed so not only does the general fund lose income, it now faces vastly increased payments of interest AND principal back into SS.

 

[Woodznutz]

The same thing they always live on, the payouts based on the immediate cash reserve SS holds onto as well as incoming receipts of SS payments.

The certainty of government backed notes is preferable to the vagaries of the market.

 

[Woodznutz]

Which is a nice way to say taxes. For decades the flow was from SS to the general fund. Without a surplus the flow is reversed so not only does the general fund lose income, it now faces vastly increased payments of interest AND principal back into SS.

The government receives revenue from the infusion of the surplus back into the economy. It's a 'sow and reap' thing. The important things is that the money is kept working within the economy.

 

[martybegan]

The certainty of government backed notes is preferable to the vagaries of the market.

Until the government can't pay back what it owes without messing with the general budget or grossly increasing taxes.

THIS is why people call SS a Ponzi scheme, and they have a point, except while it has the functionality of one, it isn't one because it is perfectly legal in it' own case.