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Insurance Companies Must hold some of their premiums in Reserve (an account not used for general business) Many companies also use a portion of their premiums to buy reinsurance from other companies.
Reserve is a different issue than one you'd visited earlier, where you pointed at investment as opposed to insurance. Anyway, are you suggesting that there is no reserve for SS to keep the checks going?
Reserve is a different issue than one you'd visited earlier, where you pointed at investment as opposed to insurance. Anyway, are you suggesting that there is no reserve for SS to keep the checks going?
I would prefer SS being an investment program similar to Chili with an insurance option covering worst case scenarios.
There is no reserve other than the tax paying ability of our current and future tax payers.
I would prefer SS being an investment program similar to Chili with an insurance option covering worst case scenarios.
There is no reserve other than the tax paying ability of our current and future tax payers.
Which is something our friend Jetgraphics tells us over and over.
WE are the government's reserve and pool and funding source.
As our incomes shrink (for whatever reason..downsizing, underemployment, retirement) so will the revenue the government gets.
Even without this recession boomers start turning 65 this year and will be retiring in droves. The government knew this and didn't plan. Add the current economy on top and you really have some problems.
Cuts have to be made but no one is willing to do them.
Reserve is a different issue than one you'd visited earlier, where you pointed at investment as opposed to insurance. Anyway, are you suggesting that there is no reserve for SS to keep the checks going?
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What happens to the taxes that go into the trust funds? Tax income is deposited on a daily basis and is invested in "special-issue" securities. The cash exchanged for the securities goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.
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Why do some people describe the "special issue" securities held by the trust funds as worthless IOUs? What is SSA's reaction to this criticism? As stated above, money flowing into the trust funds is invested in U. S. Government securities. Because the government spends this borrowed cash, some people see the trust fund assets as an accumulation of securities that the government will be unable to make good on in the future. Without legislation to restore long-range solvency of the trust funds, redemption of long-term securities prior to maturity would be necessary. Far from being "worthless IOUs," the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government.
The "Trust Fund" is comprised of non-trade-able intergovernmental bonds. There are three ways to redeem those bonds.
1. Excess Social Security Tax can be used to payoff the bond and release the proceeds into the system.
2. If we have a budget surplus the excess tax revenue can be used to pay off the bond and release the funds into the system.
3. If we have a budget deficit we can issue on-budget Treasury Bonds and use the proceeds to payoff the bond and release the proceeds into the system.
In all three cases we rely on the tax paying ability of current and future tax payers. In all but case number two our total debt burden would not change, it would just change from intergovernmental to Us Treasury bonds.
Call me crazy but this picture of the trust fund has never given me a lot of comfort.
The "Trust Fund" is comprised of non-trade-able intergovernmental bonds. There are three ways to redeem those bonds.
1. Excess Social Security Tax can be used to payoff the bond and release the proceeds into the system.
2. If we have a budget surplus the excess tax revenue can be used to pay off the bond and release the funds into the system.
3. If we have a budget deficit we can issue on-budget Treasury Bonds and use the proceeds to payoff the bond and release the proceeds into the system.
In all three cases we rely on the tax paying ability of current and future tax payers. In all but case number two our total debt burden would not change, it would just change from intergovernmental to Us Treasury bonds.
Call me crazy but this picture of the trust fund has never given me a lot of comfort.
Of course it depends on tax paying ability of current and future tax payers, just as any insurance depends on receipts of premiums and outlays on an ongoing basis. Now, the problem I have with your argument is on surplus versus deficit. Since the recession, there has been a deficit, so SSTF is getting drained. Yes? How big is that SSTF pool from which we're able to draw checks?
What exactly is it that makes someone infallible or a saint just because they reach the age of 65? Why is it that when someone reaches this age, they're automatically entitled to free money from the taxpayers? People act like old people are infallible because they're "seniors". What the hell does their "seniority" have to do anything? Sure, in their younger days, some were good people (e.g. military vets who actually deserve the benefits they receive), but a lot were bastards then, they're bastards now, and they're in the situations they're in due to their own poor choices (pissing all of their money away instead of saving for retirement, living unhealthy lifestyles, etc.). So why is it I, the taxpayer have to carry people on my back just because they reach the magical age of sixty-five? I have to subsidize them through social security so they can go down to the casinos in AC, Vegas, Philadelphia Park, etc so they can **** away my money in the slot machines? (I have to pay for their retirement while at the same time saving for my own because by the time I reach retirement age, SS will be insolvent.) I have to subsidize them through medicare because they pissed all their money away, smoked, drank, and ate unhealthily, or better yet when they go to a doctor just because they feel lonely and want someone to talk to? Why the hell, is it my problem? If they can't help themselves let their children help, or private charities. Why do I have to carry them on my back just because they lived to be 65? Discuss.
Of course it depends on tax paying ability of current and future tax payers, just as any insurance depends on receipts of premiums and outlays on an ongoing basis. Now, the problem I have with your argument is on surplus versus deficit. Since the recession, there has been a deficit, so SSTF is getting drained. Yes? How big is that SSTF pool from which we're able to draw checks?
For profitability yes, insurance companies rely on future premiums. For liabilities they have reserves, this is the difference. Many insurance companies could still cover liabilities with reserves, reinsurance and their general fund.
Yes, since the recession there is a SS deficit, 8 years before the median projections made in 2008. The total trust fund is approximately $2.6 trillion. In 2008 the SSA said that the Trust fund would gain another $1 trillion by 2018, now it looks like that won't happen.
In all of the straight line, no fluctuation projections that SS does they assume no negative impact of having to either trade debt or add to taxes in order to redeem the bonds, this is not very good accounting.
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