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IMO, Claiming the SS trust fund has 3 trillion dollars in it is deceiving. Non-marketable funds are worthless ious. It is an accounting trick that mimics Enron and Madoff.
Enron was formed in 1985 by Kenneth Lay after merging Houston Natural Gas and InterNorth. Several years later, when Jeffrey Skilling was hired, he developed a staff of executives that – by the use of accounting loopholes, special purpose entities, and poor financial reporting – were able to hide billions of dollars in debt from failed deals and projects
You statements are completely ridiculous and your posts should be in the Political Controversy forum as opposed to Economics.
Trust fund surplus have been statutorily required to be invested in treasuries for decades. These notes have been redeemed and paid just like every other bill, note and bond issued by the United States to this date.
The idea that the government raided the trust fund is horse **** perpetuated by low information people.
IMO, Claiming the SS trust fund has 3 trillion dollars in it is deceiving. Non-marketable funds are worthless ious. It is an accounting trick that mimics Enron and Madoff.
They aren't worthless, they are (and always have been) paid back with interest. I've never heard of Enron or Madoff being charged with the crime of with investing in USA govt bonds.
You keep chanting Enron and Madoff because it sounds like good scary financial crimes but I've already explained to you why it's different, they committed fraud via deception. It's hilarious you're saying to look at the annual reports from SSA that go into great detail on their assets/liabilities then turn around and say they are doing the same thing as Enron/Madoff which was hiding information, not publishing it.
Quote:
Originally Posted by maat55
Enron was formed in 1985 by Kenneth Lay after merging Houston Natural Gas and InterNorth. Several years later, when Jeffrey Skilling was hired, he developed a staff of executives that – by the use of accounting loopholes, special purpose entities, and poor financial reporting – were able to hide billions of dollars in debt from failed deals and projects
SSA is not hiding billions of dollars in debt.
Quote:
Originally Posted by maat55
Reimbursements from General Fund of the Treasury . . 87.8 14.9 102.7
A reimbursement for costs SSA isn't responsible for is not a mingling of the general fund and the SS trust fund and it certainly isn't the US treasury (or congress) raiding the trust fund. If I pay to have my shared hedges trimmed and my neighbor reimburses me with cash I put in my savings account it does not mean I've intermingled by savings account with his. The reimbursements happen occasionally with policy changes as explained here:
General Revenue & the Social Security Trust Funds | Committee for a Responsible Federal Budget Direct transfers from the General Fund: The general fund has occasionally reimbursed the Social Security Trust Funds in specific cases to compensate it for policy changes that would otherwise lower its balance. Most recently, Congress passed a payroll tax cut for 2011 and 2012, lowering the payroll tax rate by 2 percentage points to stimulate the economy but authorizing a general fund transfer so the Social Security Trust Funds would be no worse off. The holiday was responsible for $225 billion of transfers. Congress has also used general fund transfers to pay for extra benefit credits to active-duty military between 1957 and 2001, special age-72 benefits for people not covered by the program by 1968, a payroll tax credit in 1984, and other reasons. Overall, nearly $260 billion has been transferred from the General Fund since 1965, or $300 billion in today's dollars.
You statements are completely ridiculous and your posts should be in the Political Controversy forum as opposed to Economics.
Trust fund surplus have been statutorily required to be invested in treasuries for decades. These notes have been redeemed and paid just like every other bill, note and bond issued by the United States to this date.
The idea that the government raided the trust fund is horse **** perpetuated by low information people.
"These notes" are nothing but iuo's. Where did the money go that purchased them? Where does the money come from to redeem them?
You bring home your paycheck. Your wife takes 500 out for* ? and replaces it with a piece of paper with iuo on it. You sit down at the end of the month to pay the bills. You have your deposit less 500. Where is the money? How do you replace it?
*or, you give your wife 1000. She deposits 500 in your general account. Puts a 500 iou in the house payment account. Where is the money? How do you replace it?
"These notes" are nothing but iuo's. Where did the money go that purchased them? Where does the money come from to redeem them?
You bring home your paycheck. Your wife takes 500 out for* ? and replaces it with a piece of paper with iuo on it. You sit down at the end of the month to pay the bills. You have your deposit less 500. Where is the money? How do you replace it?
*or, you give your wife 1000. She deposits 500 in your general account. Puts a 500 iou in the house payment account. Where is the money? How do you replace it?
You are very confused, are using a false equivalence and obviously do not understand basic financial instruments and how they work.
Social security and the notes they own is no different than mutual funds, pension funds, other governments, corporations etc that invest in the exact same bills, notes and bonds. Besides credit worthiness, these investments are no different than investing in other fixed income instruments. They work exactly the same way.
The money could be invested in Chinese bonds, stocks, vanguard index funds etc if the laws were changed. The money is real, gets paid every single day and if the laws were changed could be invested elsewhere.
You bring home your paycheck. Your wife takes 500 out for* ? and replaces it with a piece of paper with iuo on it. You sit down at the end of the month to pay the bills. You have your deposit less 500. Where is the money? How do you replace it?
Okay, to work with your analogy you're saying Social Security was unable to pay benefits because the US Treasury defaulted on it's bonds? When did that happen?
They aren't worthless, they are (and always have been) paid back with interest. I've never heard of Enron or Madoff being charged with the crime of with investing in USA govt bonds.
You keep chanting Enron and Madoff because it sounds like good scary financial crimes but I've already explained to you why it's different, they committed fraud via deception. It's hilarious you're saying to look at the annual reports from SSA that go into great detail on their assets/liabilities then turn around and say they are doing the same thing as Enron/Madoff which was hiding information, not publishing it.
Enron and Madoff are examples of financial deception. Enron hid debt. The government deceives by claiming 3 trillion in reserves with bonds, yet these bonds can only be redeemed with new debt or general fund monies. I understand that it might be difficult for the government to store 3 trillion in hard assets, but non-marketable bonds are not even close.
Quote:
A reimbursement for costs SSA isn't responsible for is not a mingling of the general fund and the SS trust fund and it certainly isn't the US treasury (or congress) raiding the trust fund. If I pay to have my shared hedges trimmed and my neighbor reimburses me with cash I put in my savings account it does not mean I've intermingled by savings account with his. The reimbursements happen occasionally with policy changes as explained here:
General Revenue & the Social Security Trust Funds | Committee for a Responsible Federal Budget Direct transfers from the General Fund: The general fund has occasionally reimbursed the Social Security Trust Funds in specific cases to compensate it for policy changes that would otherwise lower its balance. Most recently, Congress passed a payroll tax cut for 2011 and 2012, lowering the payroll tax rate by 2 percentage points to stimulate the economy but authorizing a general fund transfer so the Social Security Trust Funds would be no worse off. The holiday was responsible for $225 billion of transfers. Congress has also used general fund transfers to pay for extra benefit credits to active-duty military between 1957 and 2001, special age-72 benefits for people not covered by the program by 1968, a payroll tax credit in 1984, and other reasons. Overall, nearly $260 billion has been transferred from the General Fund since 1965, or $300 billion in today's dollars.
The overages had to go somewhere. When SS collects more in taxes than it pays out, that money goes somewhere. When the government has to redeem the ious that represent the overages, it has to replace it with general funds or debt. This means the money went somewhere, which common sense says it went towards current budget(non SS) expenses. Everyone knows the fund is not sustainable. As in the past, it is likely rates will go up again, as they have since inception. This further degrades americans ability to self invest and grow personal wealth. The system is a growing socialist blob.
Okay, to work with your analogy you're saying Social Security was unable to pay benefits because the US Treasury defaulted on it's bonds? When did that happen?
No, the government was unable to reimburse the SS bonds and had to borrow or raise SS rates in order to stop the bleeding of the fund, which is on path to do so again. Higher rates and or redistributive taxation are not a worthy solution.
You are very confused, are using a false equivalence and obviously do not understand basic financial instruments and how they work.
Social security and the notes they own is no different than mutual funds, pension funds, other governments, corporations etc that invest in the exact same bills, notes and bonds. Besides credit worthiness, these investments are no different than investing in other fixed income instruments. They work exactly the same way.
The money could be invested in Chinese bonds, stocks, vanguard index funds etc if the laws were changed. The money is real, gets paid every single day and if the laws were changed could be invested elsewhere.
When I cash in an investment(company assets like buildings,inventories etc.), it is backed largely by hard assets. Government bonds are not hard assets. This is where mandatory private investments would be. This is where individuals would build real wealth.
True. But that same majority of people can't even spell Federal Insurance Contribution Act - yet they can tell you all about Dancing With The Stars, The Bachelor, Monday Night Football, and Big Bang Theory. Not to mention that they've kept up with the Kardashians, know all about Pitbull, Drake, Ariana Grande, Taylor Swift, Jay-Z, and Bruno Mars.
But ask that same majority about our government, what our government spends money on, the SS system and how it works -- nothing but crickets.
Perhaps we should implement an IQ test to receive SS benefits...
Last edited by SportyandMisty; 12-04-2018 at 07:28 PM..
First 20 years are with parental support
Next 45 years are spent working
Last 20 years are retirement years
Idea #1:
Those that are working are supporting everyone. Why not allow for SS benefits to be paid out irrespective of whether or not someone continues to work at age 65, or 69? Even if someone is making $100,000 in income at 65, that's still a contribution of $6200 from them and $6200 from their employer going into the program for direct SS payments, and the income tax generated will likely, in total, net to a surplus to the government.
Plus, many companies create a lot of value per employee far beyond the cost of the employee. A higher workforce percentage is good for a country.
Finally, people who are active tend to live longer and remain healthier. Sure that means they collect longer, but the longer they produce, the more realistic the program becomes.
In addition to this, more Soc Sec credits should be allowed to be earned after age 67, for those who don't already have a full amount of them. Since workers after age 67 and their employers still have to pay full contributions, why shouldn't they be given more credits, if they need them, for full benefits later?
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