Flopper:
Had the government not been “overcharging”, Social Security would not have had sufficient funds to cover benefits paid in the years 1959,1961,1963,1965,1975,1976,1977,1978,1980, and 1981. Also, there would be no assets in the fund to pay benefits to baby boomers today.
YouÂ’re correct in 2010 and also 2011 tax receipts were not enough to pay benefits so funds from the trust were used to pay benefits as has been done 10 times in the last 60 years. However in 2010 and 2011, the fund still grew because interests earned exceed payouts. The fund grew by 68 million in 2010 in spite of the 40 billion withdrawal.
Benefits will decrease 25% only if Congress does not take action. The fund will reach a zero balance, then all benefits will be paid from current payroll tax collection.
The Social Security Trust Fund is a fairy tale if its assets are worthless; that is the special issue treasury bonds are worthless. Unlike regular treasury bonds, the administration cannot refuse to pay principal or interest on special interest bonds without the approval of congress, making special interest bonds safer than regular treasury bonds.
You've been ROBBED, you've been LIED TO, and you refuse to acknowledge that the "trust fund" IS a fiction. There is NOTHING of value in the trust fund with which to pay current or future liabilities. Those can ONLY be covered by new DEBT issuance (payable by current and future taxpayers). If this was NOT the case -- Obama and Congress couldn't threaten that the SS checks "might not go out" because the tax-cheat Treas Sec could just open the trust fund lockbox and pull out all that valuable stuff and write checks.
I have NO IDEA why you're talking about 1961. The SS Fund last went negative in the 80's. They RAISED the payroll tax withholding so high to keep it solvent back then -- that they were able to plunder over $2Trill from the pockets of the working poor over the next 30 years. That money is GONE... Nothing of value remains except IOUs.
And this is an ABSOLUTE gem...
Why ON EARTH would interest payments EXCEED the current year liabilities for payout? You think any of the EXCESS is in the LOCKBOX for next year? It's an accounting fiction that they are using to hide some of NEW "on-book" debt that they are generating by the dumpster full. That way they can CLAIM that the excess went to Soc Sec instead of to 3 or 4 wars and ethanol subsidies. It's the NEW theft that being perpetrated on the public by having SS convieniently "off budget"..
Until we smash this myth that SS "is financially secure" -- we can't even BEGIN to prioritize the process of fixing this economic mess. And here is the ONLY CBO statement required so that you can STOP fantasizing and get with reality..
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.
If the trust fund is worthless, then so are the savings bonds tucked away in safe deposit boxes and for that matter all US debt. All US debt is an IOU, no collateral, just a promise from the government. As long as the government pays the interest and principal through revenue or debt the fund is solid.
You donÂ’t seem to understand that the governmentÂ’s financial problems have nothing to do with S.S. If S.S. never existed, the 2 trillion plus dollars the government borrowed from the trust fund would have been borrowed from investors in treasury bonds. In fact, debt would have been a lot higher because without S.S, millions of seniors would have been on welfare, driving the debt even higher.
The reason both Obama and Congress are saying Social Security payments are in endanger is to put pressure on the oppositions. The administration cannot fail to pay the trust interest and principal without Congressional approval, which is not going to happen. 94% of the retirement benefit payments in 2011 will come from payroll tax revenues. They only need to raise 45 billion for the year or 3.75 billion for August. I think they said on Aug 2, they would have 70 billion in cash. You can bet 3.75 billion will be pulled out to pay seniors.
Interest does not exceed liabilities. It exceeds the $45 billion shortage. For 2010, interest was 117 billion. ThatÂ’s a yield of about 4.5%.
There is no lockbox for S.S. I donÂ’t think there has been one in the past, nor should there be one. Since 1958, the trust has earned in excess of 1.4 trillion dollars, which is most of the funds assets. Putting the money in non-interest bearing federal reserve account makes no sense.
If Social Security is not secure, then neither is all other US debt. In that case the only thing that will have valued will be a gold and hard assets.
