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Is Social Security Welfare?

NWRatCon said:
Treasuries tied to the inflation index.
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Fyi, there are ibonds that do this you can buy (at a limit).

But treasuries are debt for the general tax payer. So it'd essentially be subsidized retirement right? That interest payment to the fund has to come from somewhere else if not the payroll tax. It would have to come out of income taxes or deficit spending.

At that point we might as well just print some $ and put it in the fund if needed.
 
ScrambledEggs said:
Fyi, there are ibonds that do this you can buy (at a limit).

But treasuries are debt for the general tax payer. So it'd essentially be subsidized retirement right? That interest payment to the fund has to come from somewhere else if not the payroll tax. It would have to come out of income taxes or deficit spending.

At that point we might as well just print some $ and put it in the fund if needed.
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That is essentially the calculation that always exists when the government is lending to itself. It's literally the "robbing Peter to pay Paul" dilemma.
 
aociswundumho said:
Social Security does not promote the general welfare, it benefits a specific special interest group. This particular group has one of the most powerful lobbying organizations in the country:

www.aarp.org

AARP® Official Site - Join & Explore the Benefits

AARP is the nation's largest nonprofit, nonpartisan organization dedicated to empowering Americans 50 and older to choose how they live as they age.
www.aarp.org www.aarp.org
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If it keeps my mother in law from having to move in with us in her elderly years, then it promotes my general welfare too.
 
ScrambledEggs said:
If all of the gains in the fund come from selling and buying bonds from the federal government, regardless of interest rate, and outside of payroll tax funding, you are essentially having the government give you money.

The true free market non-welfare approach would be for the SS fund to invest in private fixed income and equities.

Otherwise you are literally asking for other taxpayers to fund your retirement.
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and when the stock market crashes or take a big hit and that money is gone? then what do they do?
it has been set up so the ONLY entity that can buy these bonds is the US government because it is the safest entity to trust , ( they can print money to cover the debt if needed ) for that reason and it is a way the US government gets to borrow money cheap, I just think they are getting to use this money and not paying any where near what they should
Have a nice day
 
Tbird19482 said:
and when the stock market crashes or take a big hit and that money is gone? then what do they do?
it has been set up so the ONLY entity that can buy these bonds is the US government because it is the safest entity to trust , ( they can print money to cover the debt if needed ) for that reason and it is a way the US government gets to borrow money cheap, I just think they are getting to use this money and not paying any where near what they should
Have a nice day
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You can't have your cake and eat it too.

Don't want welfare? Don't rely on government debt outside of the payroll tax to fund your retirement.

Want higher returns? Don't rely on super safe government debt.
 
Tbird19482 said:
and when the stock market crashes or take a big hit and that money is gone? then what do they do?
it has been set up so the ONLY entity that can buy these bonds is the US government because it is the safest entity to trust , ( they can print money to cover the debt if needed ) for that reason and it is a way the US government gets to borrow money cheap, I just think they are getting to use this money and not paying any where near what they should
Have a nice day
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Why "should" anyone buy SS trust fund bonds at higher interest than what they can get from a treasury?

What happened to free markets?
 
Don't forget. US Government == US tax payers
 
ScrambledEggs said:
Why "should" anyone buy SS trust fund bonds at higher interest than what they can get from a treasury?
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WOW do you even know how the system and their bonds work?
it has been set up so that ONLY the US government can borrow this money and pay a super low interest rate, I am sure if it was on the open market and some how has the security that the government gives it the ROI would be at least double what the Government pays, but there is no way to make sure it is as secure as it is now.
I just would like to see them get a higher ROI
as I said IF the Gov. had to pay at LEAST half of what the market is at the SS trust would be getting a better ROI then they are getting now and the Government would still NOT be paying anything NEAR market a win win for both
Have a nice day
 
Tbird19482 said:
WOW do you even know how the system and their bonds work?
it has been set up so that ONLY the US government can borrow this money and pay a super low interest rate, I am sure if it was on the open market and some how has the security that the government gives it the ROI would be at least double what the Government pays, but there is no way to make sure it is as secure as it is now.
I just would like to see them get a higher ROI
as I said IF the Gov. had to pay at LEAST half of what the market is at the SS trust would be getting a better ROI then they are getting now and the Government would still NOT be paying anything NEAR market a win win for both
Have a nice day
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What is the current interest rate which the US government borrows from the fund?

Again, why should anyone, including the government, borrow money from the fund if they can borrow the same from the open market? Why do you prefer that tax payers subsidize your retirement instead?

On one hand, you complain that the government uses these funds. On the other hand you complain it doesn't use the funds enough at a high enough interest rate.
 
ScrambledEggs said:
Why "should" anyone buy SS trust fund bonds at higher interest than what they can get from a treasury?

What happened to free markets?
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Here's an idea. What about issuing public bonds that are earmarked for Social Security? I'd buy those.
 

Special-issue securities bear a nominal rate of interest determined by a formula specified by law in section 201(d) of the Social Security Act. The current formula was established by the 1960 amendments to the Social Security Act. The formula sets the rate applicable in a given month to the average market yield on marketable interest-bearing securities of the Federal government which are not due or callable until after 4 years from the last business day of the prior month (the day when the rate is determined). The average yield must then be rounded to the nearest eighth of 1 percent. This formula became effective with the October 1960 rate.
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Special issues interest rates are set to be a market average

@Tbird19482
 
ScrambledEggs said:
I like that idea
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Me too. I bought EEE bonds for each of my kids when they were born, to give them when they became adults. If I could have bought the same bonds specifically tied to funding SS, I would have bought those. A Win-Win.
 
NWRatCon said:
Me too. I bought EEE bonds for each of my kids when they were born, to give them when they became adults. If I could have bought the same bonds specifically tied to funding SS, I would have bought those. A Win-Win.
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Its an interesting idea. Carries some risk though, as does everything in the financial world. It could certainly be used as supplemental. But we are still back to the government issuing debt to pay for retirement. Which doesn't bother me. But we should call a spade a spade.
 
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