SS Reform?

[ReformCollege]

Okay. So when millions of people retire with virtually no savings and eventually are forced out on to the street....what is your proposal? Let them die homeless?

One thing age tends to teach is that of unintended consequences. The young (both in age and philosophical views) fail to deal with this problem.

Why on earth would they not save any of their money? My guess is, without social security there will be a much stronger public conscious about the need to save and not spend.

 

[head of joaquin]

So long as the General Fund runs enough of a surplus to cover it, certainly!

Unfortunately, Medicare is screwed, and when it goes, it takes SS with it. And, according to the President, there is no way we will be able to fund it with taxes.

I think you have it backwards. SS often runs a surplus, and sometimes it goes to the general fund.

Yep, Medicare is in trouble -- we need single payer healthcare like the rest of the civilized world. There is no alternative.

 

[Lutherf]

Yeah, those numbers aren't quite up to speed. Last years deficit was roughly 48 billion, in addition to nearly identical shortfalls the previous two years.

http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/spec.pdf (Page 465)

The numbers are actually identical. The $565.8 Billion in receipts from your chart is the combination of Social Security receipts in the amount of $483.7 Billion and Disability Insurance receipts in the amount of $82.1 billion from the link I gave you. I'm not sure what "Outgo: To the Public" is supposed to include but it's pretty doggone close to the $730.8 Billion I cited.

 

[a351]

The numbers are actually identical. The $565.8 Billion in receipts from your chart is the combination of Social Security receipts in the amount of $483.7 Billion and Disability Insurance receipts in the amount of $82.1 billion from the link I gave you. I'm not sure what "Outgo: To the Public" is supposed to include but it's pretty doggone close to the $730.8 Billion I cited.

If you exclude interest from the equation entirely.

 

[Lutherf]

If you exclude interest from the equation entirely.

And what is that interest? It's interest on US Treasuries which is "earned" by current taxpayers and due from future taxpayers. For that reason I don't count it at all because for all practical purposes it isn't an offset.

 

[a351]

And what is that interest? It's interest on US Treasuries which is "earned" by current taxpayers and due from future taxpayers.

For that reason I don't count it at all

because for all practical purposes it isn't an offset.

The yearly excesses in FICA revenue are invested in treasury securities in order to keep pace with inflation and an aging work force in a low risk manner. Direct revenues combined with earned interest are weighed against annual costs. Cut and dry.

The folks who manage the finances of the actual program seem to disagree.

No? Just where are the proceeds socked away?

 

[cpwill]

I think you have it backwards. SS often runs a surplus, and sometimes it goes to the general fund.

SS is running a permanent deficit. Which means it is dependent upon the General Fund. Unfortunately, the General Fund is about to get sunk by Medicare, Medicaid, and Obamacare.

Yep, Medicare is in trouble -- we need single payer healthcare like the rest of the civilized world. There is no alternative.

Without giving it credence, that argument is quite possibly why Obamacare is designed to produce a healthcare crises.

 

[cpwill]

The yearly excesses in FICA revenue are invested in treasury securities in order to keep pace with inflation and an aging work force in a low risk manner. Direct revenues combined with earned interest are weighed against annual costs. Cut and dry.

The folks who manage the finances of the actual program seem to disagree.

No? Just where are the proceeds socked away?

Into IOU's, not treasuries. They are "special promissory notes" which have no inherent value as they cannot be traded or sold. It's a "pretty promise"

 

[Neomalthusian]

SS is running a permanent deficit. Which means it is dependent upon the General Fund. Unfortunately, the General Fund is about to get sunk by Medicare, Medicaid, and Obamacare.

And quite possibly net interest on the national debt.

 

[head of joaquin]

SS is running a permanent deficit. Which means it is dependent upon the General Fund. Unfortunately, the General Fund is about to get sunk by Medicare, Medicaid, and Obamacare.



Without giving it credence, that argument is quite possibly why Obamacare is designed to produce a healthcare crises.

If by "deficit" you mean in 30 years it won't be able to pay out 100% benefits, but rather only 80% for another half century after that, then yeah it's running a deficit.

But of course that only makes sense in bizarroconservative world.

Economic predictions over 10 or 15 years are pretty inaccurate. For all we know, the economy will grow so much in the next decade that SS will be able to pay out for a century. Point is a 30 year window of solvency = forever in economic terms.

 

[head of joaquin]

Into IOU's, not treasuries. They are "special promissory notes" which have no inherent value as they cannot be traded or sold. It's a "pretty promise"

Almost all of the SS trust fund is in t-bonds and cash (about $3T total). The IOU nonsense is typical rightwing noise machine disinformation.

 

[Harry Guerrilla]

Almost all of the SS trust fund is in t-bonds and cash (about $3T total). The IOU nonsense is typical rightwing noise machine disinformation.

It represents debt the government owes itself.
Pretty much everyone here understands, that's completely moronic.

In order to redeem said bonds, they'll have to either, raise general taxes to cover the short fall or issue more marketable debt.
Either way, that's not representative of a trust fund.

Debt swapping and potential tax increases, are not a surplus.

 

[head of joaquin]

It represents debt the government owes itself.
Pretty much everyone here understands, that's completely moronic.

In order to redeem said bonds, they'll have to either, raise general taxes to cover the short fall or issue more marketable debt.
Either way, that's not representative of a trust fund.

Debt swapping and potential tax increases, are not a surplus.

T-bonds represent the safest security on the planet. Would you prefer the SS fund buy pork belly futures?

To call T-bonds an IOU is like saying cash is just paper. If the US can't pay back its debt, you'll have bigger problems than SS defaults. You'll have mutants in the street. Nor will your gold and stock be worth a dime.

Why is it that conservatives seem compelled to bet against America and its future, and act as if that's somehow witty?

 

[blaxshep]

Almost all of the SS trust fund is in t-bonds and cash (about $3T total). The IOU nonsense is typical rightwing noise machine disinformation.

Except that NONE of the IOUs are in T-Bonds, they are all in direct promissory notes;

Promissory notes differ from IOUs in that they contain a specific promise to pay, rather than simply acknowledging that a debt exists. In common speech, other terms, such as "loan," "loan agreement," and "loan contract" may be used interchangeably with "promissory note" but these terms do not have the same legal meaning.

Note that this is just a promise to payback NOT an investment with any interest or exchange value of any kind.

Oh crap now your stupid meme goes right out the window huh?

Unless you just want to deny it, then you are once again, only fooling yourself.

 

[Harry Guerrilla]

T-bonds represent the safest security on the planet. Would you prefer the SS fund buy pork belly futures?

To call T-bonds an IOU is like saying cash is just paper. If the US can't pay back its debt, you'll have bigger problems than SS defaults. You'll have mutants in the street. Nor will your gold and stock be worth a dime.

Why is it that conservative seem compelled to bet against America and its future?

They aren't trade able Tbonds, you're using deceptive terminology.
SS shouldn't play games, there is no trust fund, it has always been a pay go system.

What do you accuse everyone, who doesn't agree with you, as being a conservative?
I mean really, if you look at the world political stage, you're a conservative.

 

[Jessica22]

The trust fund represents a legal obligation to Social Security program recipients and is considered "intra-governmental" debt, a component of the "public" or "national" debt. A debt created by a tax surplus accumulated over the years, huh - now that's real Alice and Wonderland stuff. As of April 2012, the SS intra-governmental debt was $4.8 trillion. Intra-Governmental debt is meaningless as it mean your left hand is owes your left hand. SS therefore is sustainable into infinity unless there is inflation. At that future time it would be time to take money out of the economy via tax increases/spending cuts to cool it off.

 

[Jessica22]

Into IOU's, not treasuries. They are "special promissory notes" which have no inherent value as they cannot be traded or sold. It's a "pretty promise"

Correct, but I think we arrive at very different conclusions based on that fact.

 

[cpwill]

The trust fund represents a legal obligation to Social Security program recipients

The Social Security Website says that that is incorrect. According to the Supreme Court, the United States government has no legal obligations to Social Security recipients. They could cut off every left-handed, balding senior tomorrow and it would be perfectly legal. Social inSecurity.

Intra-Governmental debt is meaningless as it mean your left hand is owes your left hand.

That, however, is spot on

SS therefore is sustainable into infinity unless there is inflation.

and that is not. Since SS is dependent upon the General Fund, it can only be sustained so long as that fund continues to operate. Unfortunately, that fund is scheduled to explode soon, and will take SS with it.

 

[cpwill]

If by "deficit" you mean in 30 years it won't be able to pay out 100% benefits, but rather only 80% for another half century after that, then yeah it's running a deficit.

No, by "Deficit" I mean "it is paying out more than it is taking in today." I know that you lack the ability to process new information on this, but in case you are curious, factcheck.org says I am right and you are wrong.

 

[cpwill]

And quite possibly net interest on the national debt.

True. A return to even historically standard interest rates pretty much ends the party.

 

[Neomalthusian]

True. A return to even historically standard interest rates pretty much ends the party.

So we are in fact in a ZIRP trap... yeah?

 

[Jessica22]

The Social Security Website says that that is incorrect. According to the Supreme Court, the United States government has no legal obligations to Social Security recipients. They could cut off every left-handed, balding senior tomorrow and it would be perfectly legal. Social inSecurity.

You are referring to limited Supreme Court case law - Flemming v. Nestor, 363 U.S. 603 (1960).

"In this 1960 Supreme Court decision Nestor's denial of benefits was upheld even though he had contributed to the program for 19 years and was already receiving benefits. Under a 1954 law, Social Security benefits were denied to persons deported for, among other things, having been a member of the Communist party. Accordingly, Mr. Nestor's benefits were terminated."

Mr. Nestor's denial of benefits was based on an act of legislature. The Social Security cannot unilaterally deny benefits. It takes an act of legislature.

http://http://www.ssa.gov/history/nestor.html

Since SS is dependent upon the General Fund, it can only be sustained so long as that fund continues to operate. Unfortunately, that fund is scheduled to explode soon, and will take SS with it.

The pay roll taxes created a surplus over the years and somehow that is counted as part of the national debt (Alice in Wonderland stuff). The Government can continue to make payments when there is a deficit in taxes as a surplus caused the same thing. The Government does need taxes to fund itself, as it issues the currency, but there are other reasons for them. The Federal Government is not a giant household. Households are users of the currency. If the Federal Reserve can create trillions of balance sheet dollars for the banks to "re-open the Wall Street gambling casino" why not for things that benefit old people?

 

[cpwill]

So we are in fact in a ZIRP trap... yeah?

You have a farm and can grow your own food, right?

 

[cpwill]

You are referring to limited Supreme Court case law - Flemming v. Nestor, 363 U.S. 603 (1960).

"In this 1960 Supreme Court decision Nestor's denial of benefits was upheld even though he had contributed to the program for 19 years and was already receiving benefits. Under a 1954 law, Social Security benefits were denied to persons deported for, among other things, having been a member of the Communist party. Accordingly, Mr. Nestor's benefits were terminated."

Mr. Nestor's denial of benefits was based on an act of legislature. The Social Security cannot unilaterally deny benefits. It takes an act of legislature.

http://http://www.ssa.gov/history/nestor.html

That is correct. The US Government does not legally owe a single penny to a single recipient. We can alter the payout in any way that we like at any time.

The pay roll taxes created a surplus over the years and somehow that is counted as part of the national debt (Alice in Wonderland stuff). The Government can continue to make payments when there is a deficit in taxes as a surplus caused the same thing. The Government does need taxes to fund itself, as it issues the currency, but there are other reasons for them. The Federal Government is not a giant household. Households are users of the currency. If the Federal Reserve can create trillions of balance sheet dollars for the banks to "re-open the Wall Street gambling casino" why not for things that benefit old people?

Because doing so every year for year over year in anything close to the amounts necessary to cover our entitlements would result in serious devaluation of the currency, which would result in an effective default on both our national debt and our old people. Good luck with Social Security when the average benefit is still $1200 a month, and your grocery bill alone is $1500. In the meantime, old people live off of their savings, savings that we would have destroyed through inflation. Oh, grandma, you did the right thing and saved your entire life? Well your $450K is now worth $50K. I hope you don't plan on living longer than the next twelve months, because SS isn't going to be able to cover you, either.


Printing money doesn't create wealth. It just shifts wealth from the current holders of dollars to the person with the printing press. It's effectively a tax on having a dollar.



Everyone who has looked at this problem set - from the IMF to the CBO to President Obama to Simpson-Bowles to Paul Ryan has come up with the same basic fact: the United States cannot avoid a massive fiscal crises unless it reduces expenditures in its' entitlements.

 

[Lutherf]

The yearly excesses in FICA revenue are invested in treasury securities in order to keep pace with inflation and an aging work force in a low risk manner. Direct revenues combined with earned interest are weighed against annual costs. Cut and dry.

The folks who manage the finances of the actual program seem to disagree.

No? Just where are the proceeds socked away?

There is no excess FICA revenue. Everything that comes in is converted to treasuries and spent as general funds.