Thread: Social Security

I'm not the one with my head in the sand:

Speaking to Coalition for American Financial Security last week, O'Neill made the simple statement that, "Today we have no assets [in the Social Security Trust Fund]." That statement prompted howls of outrage from Democrats in Congress. Representative Charles Rangel (D-NY) and Robert Matsui (D-CA) called the statement "the height of irresponsibility."

[Trust Fund] balances are available to finance future benefits…but only in a bookkeeping sense…they do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing, or from the public, or reducing benefits or other expenditures. The existence of large Trust fund balances, therefore, does not, by itself, have any impact on the government's ability to pay benefits.

O'Neill, Democrats Clash Over Trust Fund

Although Social Security will fall into deficit into 2018, some assert that the program’s trust fund will make up the shortfall, and therefore delay any tax increases or benefit cuts, until 2042. That is simply wrong. There is a trust fund, but it has no money in it -- and it never did. No money has ever been saved for future retirees.

One problem: the federal government wasn’t allowed to actually save this money. Since 1939, federal law has required Social Security to “invest” its extra money in Treasury bonds. In other words, the government lends the money to itself. Those funds are then mixed in with all other tax revenue and spent on programs such as education, foreign aid and defense.


So in 2018, when the Social Security program tries to redeem these bonds, the Treasury (having already spent that money over the previous 35 years) won’t be able to repay Social Security from any pre-existing store of cash. Taxpayers will be forced to pay extra taxes in order to fund Social Security’s 40 million retiring baby boomers.

Social Security's Fictitious Trust Fund

The Social Security trust fund really does exist nestled in the bottom drawer of an unremarkable government file cabinet.

It's in a pair of white loose-leaf notebooks holding plastic page covers. Each caresses a piece of paper representing a bond worth a staggering amount of money. Say, $8,577,396,000.00 ($8.577 billion), due on June 30, 2013, with 6.5 percent interest.

ABC News: Social Security Trust Fund Sits in Drawer

Oh, and from your own link (you're as bad as Boon Mee when it comes to providing links which counter your own argument):

They're right that there's no money in the trust fund.

That's because it's all IOUs from one government agency to another.

Originally Posted by surasak

That's because it's all IOUs from one government agency to another.

You must be a bit thick so I will make it easier for you to understand:

All countries in the world borrows money against Treasury bounds and they all eventually have to pay back their loans with interest.
Now, replace Social Security with Japan or whatever - if the money had not been borrowed from the Social Security Trust Fund it would had to be borrowed from somewhere else instead.
Or do you believe that without the loan from Social Security, the money would never been borrowed ?

It's not the same thing.

The Chinese/Japanese are doing it so we have money to buy their products. If we didn't have the ability to borrow money from overseas then the additional taxes would eat up our ability to buy Toyotas, Hondas, and cheap crap from China. It is in their best interest to loan us the money.

On the flip side of the coin every single person who loans money to SS loses money. You will never get back the investment that is being stolen from you, and, you will never get back more than if you invested the same exact money in simple interest bearing CDs or IRAs in the states.

As well, taking 15% of one's wages immediately steals 15% from everyone's bottom line on the promise that 'some day' we might get some of it back. If the U.S. government defaults on SS's IOUs there won't be some foreign army threatening to bomb us as a result. The government simply will raise the income tax or lower benefits to make up for the problem (again, screwing those paying now).

Originally Posted by surasak

The Chinese/Japanese are doing it so we have money to buy their products. If we didn't have the ability to borrow money from overseas then the additional taxes would eat up our ability to buy Toyotas, Hondas, and cheap crap from China. It is in their best interest to loan us the money.

That's not true !
I don't know of any country that doesn't borrow money against treasury bonds to balance the country's budget, it is very common.

Originally Posted by surasak

you will never get back more than if you invested the same exact money in simple interest bearing CDs or IRAs in the states.

Don't know what CD or IRA is, but the principle for investing retirement money is that it should be an extremely safe investment.
Many European countries has that requirement, stock market (which can crash) or private institutes like banks or insurance companies or are not accepted.
Banks, insurance companies and broker firms usually has to deposit some money to get their license, so at worst if they go broke you'll be guaranteed 10 - 20% of your money..

No, as I said before , retirement money is not to gamble with and fortunately governments around the world has the same opinion regardless of the country's political position. Leftwing and rightwing countries share the same opinion - the money should be there when you retire, but not before.
If you need money for own investments, then I suggest that you save from what remains after your tax is paid, that's what I and others have had to do. With that money you can gamble as much as you want.

When more money flows into the U.S. Social Security program than is needed in a fiscal year then the surplus goes to other general expenditures with an IOU issued by the Treasury in place of the money. It's a scam by the politicians to keep taxes lower than what the rate really reflects. Right now, part of the Social Security surplus is being used to finance the war in Iraq (to help keep the deficit down).

Originally Posted by lom

Don't know what CD or IRA is, but the principle for investing retirement money is that it should be an extremely safe investment.

Well, duh, the point I'm bringing up is the ability to divert Social Security taxes into something safe, guaranteed, and, in the hands of the actual investor.

The question here is this: if the same amounts of money were diverted into Social Security or a safe means of investing which method benefits the retiree the most?

CDs (certificates of deposit) and IRAs (individual retirement accounts) return on average 5-6% annually (they are common retirement vehicles here in the states which allow a person to invest money, tax free (to a certain point) and take the money out at retirement). That's more than a person can ever get back through socialized retirement schemes, and, if a person truly has an emergency then one can get the money back (with a penalty of course since taxes are being deferred). I've already lost $60,000 due to the SS scheme.

If the goal is to make people self-sufficient at retirement what is so wrong with letting people divert socialized retirement taxes into an account of their choosing?

If the goal is to allow anyone to retire regardless of how much the person paid or didn't pay into the system then let's cut the bullshit and call it for what it is: welfare.

So what you are saying is that SSA does have money in Bonds, but it is the Treasury that is broke so can not repay what they have borrowed without raising taxes?? so why is it the SSA fault for loaning money to them if it is the law that they must.

It is the feds fault that the SSA has no money and you keep blaming them..

Originally Posted by blackgang

So what you are saying is that SSA does have money in Bonds, but it is the Treasury that is broke so can not repay what they have borrowed without raising taxes?? so why is it the SSA fault for loaning money to them if it is the law that they must.

It is the feds fault that the SSA has no money and you keep blaming them..

Riddle me this:

Is it better to have $1,000,000,000 in cash? Or a piece of paper saying "I owe you $1,000,000,000?"

If the Treasury defaults on repaying the SS bonds who is going to enforce that? The U.S. government?

Originally Posted by surasak

If the goal is to make people self-sufficient at retirement what is so wrong with letting people divert socialized retirement taxes into an account of their choosing?

It's ok, as long as you require from them that they place their money somewhere where there is not the slightest chance of it getting lost.
Because, if they lose their retirement money, the country (social welfare) will have to take care of them. Hence, as I said before, this is also a kind of insurance for the country (= the taxpayers) that they don't have to carry that burden.
It's enough to pay for one owns retirement, you really shouldn't have to pay additionally for fuckers that gamble away their money.

So, about CD's , where is the deposit done ? And IRA's, who handles them ?

And, tell me how it is that private investment companies usually have part of their portfolio in Treasury bonds if they are no good..

Originally Posted by lom

It's ok, as long as you require from them that they place their money somewhere where there is not the slightest chance of it getting lost.

That is a part of the discussion: eliminate SS in favor of individual accounts (instead of pooled money).

Because, if they lose their retirement money, the country (social welfare) will have to take care of them. Hence, as I said before, this is also a kind of insurance for the country (= the taxpayers) that they don't have to carry that burden.

But we are carrying the burden....15% of everyone's wages up to $97,000 pays for this burden. What about everyone else?

It's enough to pay for one owns retirement, you really shouldn't have to pay additionally for fuckers that gamble away their money.

And because we have a social insurance policy it keeps people from being responsible. You can literally gamble everything away because the government will take care of you.

So, about CD's , where is the deposit done ? And IRA's, who handles them ?

Banks. The deposits are also insured in case the bank fails, so, there's no risk at all. You turn over some money for a set period of time and you are guaranteed a return. It's not as sexy as stocks and futures but it's guaranteed.

And, tell me how it is that private investment companies usually have part of their portfolio in Treasury bonds if they are no good..

It's not the Treasury bonds that are at issue. It's the special bonds that Treasury only owes to the SS fund.

If the government defaults who will get their money last? A foreign country with a large army? A large brokerage house? Or an agency of the same government?

Really, where is the risk to the politicians if SS goes bankrupt and the Treasury fails to pay back money to the SS account as long as the Treasury still pays its bills to everyone else?

But we are carrying the burden....15% of everyone's wages up to $97,000 pays for this burden. What about everyone else?

You are just spouting again, they take 7.65% from you and 7.65% from your employer up to $97,000 gross income that you make, so it is not 15% from the employee.

Banks. The deposits are also insured in case the bank fails, so, there's no risk at all. You turn over some money for a set period of time and you are guaranteed a return. It's not as sexy as stocks and futures but it's guaranteed.

It is the same treasury that will pay the banks as will pay to SSA, if they are broke they can pay no one.
Banks have no cash either, just like SSA. everyone does business on paper.
If the treasury ever admits it is broke and the people find out there will be runs on banks so they will never let it be known, how many times have thewy been close? no one will tell but every time they do all they do is print up some mopre worthless $100 bill and let them out on the market, and then the value goesd down, it has gone from a $1 to 15 cents since 1960 just by the practise I am talking about.

Originally Posted by blackgang

But we are carrying the burden....15% of everyone's wages up to $97,000 pays for this burden. What about everyone else?

You are just spouting again, they take 7.65% from you and 7.65% from your employer up to $97,000 gross income that you make, so it is not 15% from the employee.

It's still 15% of your wages because of the tax laws.

Banks. The deposits are also insured in case the bank fails, so, there's no risk at all. You turn over some money for a set period of time and you are guaranteed a return. It's not as sexy as stocks and futures but it's guaranteed.

It is the same treasury that will pay the banks as will pay to SSA, if they are broke they can pay no one.[/quote]

I'll post this for the last time because it gets old repeating myself: the SS surplus is a paper loan.

If you are in financial dire straits who gets paid first? Mortgage, right? Then comes car payments, furniture, etc (all secured). Utilities, food. Credit cards come last.

In a similar fashion, when the notes come due, do you really think the money will be there? Or will most Americans, like yourself, still have their heads in the sand?

Banks have no cash either, just like SSA. everyone does business on paper.

I can walk to my bank right now and demand all my money back.

So, why shouldn't I be able to do the same with my retirement?

I can walk to my bank right now and demand all my money back.

Damn rights you should, they are bound to have less than $100 in cash.

And anytime that SSA needs the money in their checking account, the FED will give em the amount they need in the account and subtract so much paper and it is comes to it that the T aint got any paper to swap, then the will print up some more money to cover it,,
They can do that since this day[20] in March 1968, thats the date that the US went off gold standard and started using worthless paper.

There is no way that the US govt is gonna go broke,,jesus christ I thought you were smarter than that, altho from what you post most of the time even I wonder about that.

Maybe you should read "The Crash of 79" it is easy to understand so you shouldn't have to much trouble, maybe your wife can help you..

Originally Posted by stroller

Now, if you are self-employed, you're assumed to have shown some monetary management capabilities and you have a choice.

Self-employed also must pay the 15% into SS.

We should all adopt BG's morals and just cheat our way through life. It would be very easy to simply tell the government I don't make a dime from tips and I would save myself thousands of dollars in the process. Hell, while I'm at it I'll take my gun and blow away my neighbor's head next time the stereo is too loud. But then that would lower me to the level of the gutter in which certain other forum members seem to live.

"Don't like the system; cheat."

The only real underachiever on this forum is the one on welfare, cough, I mean Social Security right now. Pretty funny, actually, when you think about it.

Originally Posted by surasak

Self-employed also must pay the 15% into SS.

One of my friends started his own business.

Worked 14+ hours per day.


Got killed because he had to pay his full 15%.


His own business. Only him.


Eventually he said "f*ck it" for this and B & O tax reasons in WA state and worked for someone else.


Socialist.... Insecurity.

I bet that he didn't know that half of that was deductible against Federal income taxes. Of course if you pay no Federal tax then you're screwed. I took it up the ass as well when I was self-employed. It's such a warm and fuzzy feeling knowing that 15% of your working hours are spent so someone else can live in retirement.

The whole system is a mess. Get rid of all of it and have a simple tax that funds everything. And while we're at it let me make my retirement choices.

I think it's ironic that the left wants to allow a woman to make a choice whether or not to keep an unborn child but won't let the child when born make a choice whether or not to participate in mandatory retirement schemes.

Originally Posted by surasak

such a warm and fuzzy feeling knowing that 15% of your working hours are spent so someone else can live in retirement.

And I'm going to enjoy every minute of mine knowing I have earned it.
We all make choices in life - you want to opt out of Federal tax (earned income) and SS? Get a job working overseas...simple.

Originally Posted by surasak

Self-employed also must pay the 15% into SS.

Ah, ok, this is US specific.

Originally Posted by Milkman

Socialist.... Insecurity.

I don't see the connection there... What does your friend's business uncompetitiveness in a capitalist society have to do with socialism and insecurity?

Simple.

Socialist....meaning not something you should find in a capitalist society. We eliminated welfare in 1996 and it didn't cause people to live in the streets. Can we please eliminate Social Security by 2016?

Insecurity....because it's a scam and it won't be there when neither he nor I retire...or at least on the terms we are being told now. Meaning that when we retire either 'benefits' will be cut, retirement age will be raised, or the SS taxes will go up (again). Meaning unlike the older ones here we're going to be screwed because the system as they know it won't provide us the same level playing field. It's a flawed system since the ratio of workers to retirees is always decreasing. This means that before long there will be one worker supporting one retirees (involuntary slavery). When the system was created about 16 workers paid in while one 'collected.' Now it's broken and the politicians won't fix it.

The whole system is a mess. Get rid of all of it and have a simple tax that funds everything. And while we're at it let me make my retirement choices.

You can,, no one says you have to work, pay taxes or live in a country that you hate as much as you hate the USA.
If you do not like what they do with the money that you are taxed, then do not give it to them, simple really so even as simple as you are you should understand that.
Milkman doesn't like it either, so he has left the security of govt protection that you so crave and went out into the world to make his own way,
He seems to be doing a fine job of it and has no bitch, but you do not have the guts or anything else that it takes to cut the gut and go off and make it on your own, so all you can do is bitch and snivel about how bad you are taking it in the ass.

We eliminated welfare in 1996 and it didn't cause people to live in the streets. Can we please eliminate Social Security by 2016?

There is as much welfare being paid today as ever and there are more homeless people than ever before in the history of the country.

Jesus Christ, but you are a simple minded pathetic bastard, why don't you go in the bathroom and drink a can of Drano.

Originally Posted by stroller

Originally Posted by Milkman

Socialist.... Insecurity.

I don't see the connection there... What does your friend's business uncompetitiveness in a capitalist society have to do with socialism and insecurity?

SS was just one of the hits he was taking. B & O hit him, too.

I'm just saying that the small business man is punished, and part of this punished is because of the full payment (not shared) into SS.

Originally Posted by Boon Mee

A congenital complainer...

A true conservative , a big egoist.