USA topic -- Potential changes to social security

[Jingthing]

With the new government coming in there is now serious discussion about major changes to both social security and Medicare.

This topic is about social security.

In the link there is a link to a very wonky PDF file about all the change goals. Any wonks here want to take a stab at it and translate?


"

But let’s be clear: most people would see cuts. Look for yourself, on Table B2!"

http://www.slate.com/blogs/the_slatest/2016/12/09/top_republican_releases_social_security_plan.html

[mania]

Your constant  "The sky is falling"  Fear mongering about the NEXT administration & what they MIGHT or MIGHT NOT do

knows no limit

 

Keep your political rhetoric & fear mongering in the world news section

 

Your last topic about the "Maybe"  medicare changes was closed for the same reason

Edited December 11, 2016 by mania

[Strange]

Its very unlikely, regardless of whatever clickbait provided, that Americans eligible for SS benefits will be negatively effected. 

 

Nobody is gonna screw Americans that have been paying into it for their whole lives and deserve it. 

 

Myself, at 33, will not depend, nor plan on SS benefits when the time comes. 

[Jingthing]

Well the change proposal is real.

So where will it go?

http://nymag.com/daily/intelligencer/2016/12/are-republicans-crazy-enough-to-go-after-social-security.html

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1. Johnson likes the idea, and wants to start a discussion, with no expectation it will result in a law during the next two years.

2. Republicans actually plan to jam this through, perhaps in a rapid big-bang fiscal bill at the start of Trump’s term.

3. It’s part of a devious plan to introduce a deliberately radical, unpopular version of the idea, with the expectation that it will generate attention but not many Republican endorsements, allowing Trump to publicly attack it, burnishing his populist credibility.

 

 

[gk10002000]

I am 59 1/2 and can now access without penalty my IRAs both Roth and Traditional.  For better or for worse I plan on taking social security on the early side of things, i.e. around my early retirement age of 62 1/2 or so instead of waiting for my full social security age of 65 or 66 or whatever it is.  I just started a new permanent salary job with some pretty good financial and benefits and time off, medical,  decent southern California location, etc., so if I still like it just under 3 years from now I may work a bit longer.  But in general my thoughts are to start pulling social security payments sooner than later.  I will evaluate every year

[Jingthing]

Well, as far as that goes, the change proposals IF PASSED would not impact people currently at full retirement age. You're not and won't at 62 either. 

[taxout]

It looks like cancelling COLA adjustments for those with higher incomes would apply to all, regardless of age. But it's not perfectly clear.

In any event, I agree this can easily become scare-mongering here. Nonetheless, if you want to do something, then organize a letter-writing campaign to Congress. Those campaigns can be effective: congressmen do pay attention to their mail.

Edited December 11, 2016 by taxout

[JimGant]

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Since implementing these cuts alone would make the law politically unpalatable, it would increase benefits for some of the lowest-income, longest-working earners, while the highest future earners would see the largest benefit cuts

http://www.slate.com/blogs/the_slatest/2016/12/09/top_republican_releases_social_security_plan.html

 

Christ, it's a no-brainer that the SS program needs to be adjusted with the aging population. Pay-as-you-go has become a no go. Simpson-Bowles, strictly non-partisan, addressed this. But Obama found it politically untenable, even tho' the recommended adjustments would affect the upper strata much more than the Obama voter level. For sure, means testing has to become a much bigger player. It already is, to the extent that the SS recipients getting the largest checks, i.e., the well-off, are getting a lower return on the dollars they paid in compared to the blue collar worker. Thus, the "social" in the social security label. Or, possibly viewed as insurance against living in dire poverty (but certainly not purely insurance, otherwise the fat cat would get nothing).

 

Quote

--Lower-income workers come out ahead. Low-income workers enjoy higher rates of return by design, because Social Security's benefit formula is weighted toward lower-earning beneficiaries and their payroll tax contributions will be relatively lower. A very low-income couple born in 1943 will receive a 6.79 percent annual return, compared with 3.92 percent for their high-earning counterparts.

http://www.reuters.com/article/us-column-miller-socialsecurity-idUSBRE89H0YG20121018

 

Thus, for solvency, we need to crank in more means testing, and raise the cap on income subject to SS taxes. Or entirely eliminate the cap and tax all income, not just earned income, enabling lowering rates on the peasants. Now, the latter would never fly, with a valid argument that SS had become strictly a welfare program (and shoot a big hole in the argument that SS is a retirement program for all who pay into it).

 

Of course, the biggest complainers would be those who still argue against a graduated income tax (a system that, even most on the right, have come to accept).

 

[CaptHaddock]

22 hours ago, JimGant said:

 

Christ, it's a no-brainer that the SS program needs to be adjusted with the aging population. Pay-as-you-go has become a no go. Simpson-Bowles, strictly non-partisan, addressed this. But Obama found it politically untenable, even tho' the recommended adjustments would affect the upper strata much more than the Obama voter level. For sure, means testing has to become a much bigger player. It already is, to the extent that the SS recipients getting the largest checks, i.e., the well-off, are getting a lower return on the dollars they paid in compared to the blue collar worker. Thus, the "social" in the social security label. Or, possibly viewed as insurance against living in dire poverty (but certainly not purely insurance, otherwise the fat cat would get nothing).

 

 

Thus, for solvency, we need to crank in more means testing, and raise the cap on income subject to SS taxes. Or entirely eliminate the cap and tax all income, not just earned income, enabling lowering rates on the peasants. Now, the latter would never fly, with a valid argument that SS had become strictly a welfare program (and shoot a big hole in the argument that SS is a retirement program for all who pay into it).

 

Of course, the biggest complainers would be those who still argue against a graduated income tax (a system that, even most on the right, have come to accept).

 

 

Speaking of no-brainer, nearly every assertion in this junk post is wrong, based on junk beliefs that the poster could have cleared up by researching it a little.

 

1.  The aging of the population is not a large problem for the SSA since it was forseen well in advance.  To the extent that it was a problem at all the Greenspan Commission of 1983 (under Reagan) addressed it by increasing the payroll tax which hit the baby boomer generation the most since we were entering our earning years then.  The purpose of the increased payroll tax was to create a substantial SS Trust Fund for the first time in anticipation of the increased demands on the system of the retirements of us boomers, making our generation the first ones to pay for our own benefits rather than the benefits of our parents.  So, from then on the SS system was not entirely pay-as-you-go.  The purpose of the Trust Fund, which now has about $2.3 trillion,  was not to last forever, but to be paid down to nothing over the course of the 30 years or so of the boomer retirements.  The SS system is not in any way close to insolvency and has never been since the reforms of 1983.  Even the Trust Fund is not yet decreasing since the interest on the Treasury bonds it holds enables full benefits to be paid out. 

 

2.  The Bowles-Simpson Commission included both Democrats and Republicans, virtually all of whom, including especially Alan Simpson and Erskine Bowles had been long-standing enemies of SS.  Simpson, a former Republican senator, had previously called SS ""a milk cow with 250 million tits."  Erskine Bowles, although a Democrat, represented big business as a member of the board of Morgan Stanley and the owner of his own investment firm.  The recommendations of the Commission were not accepted by the public or the Congress.

 

3.  Social Security benefits are delayed wages which the workers have paid for and earned.  They are not a kind of largesse of the government, which is merely the Trustee of the SS system, not its owner.  To deny earned benefits based on some formulation of "need" would be exactly like denying or reducing interest payments on US Treasury bonds to holders of those bonds like Bill Gates and Warren Buffett, simply because they don't "need" them.  We don't hear proposals of that kind.  Of course, the Republicans would scream that such a denial of interest that the government is obligated to pay is simply default, which it would be.  The SS system has similarly no right to default on its obligation to pay benefits that workers have earned.

 

4.  It's true that some adjustment to SS may be needed, but not mostly because of increased longevity in the population.  The real unforseen change is in the portion of earned income on which the payroll tax is calculated.  Formerly, 90% of earned income was subject to payroll tax.  Currently, it is about 81%.  This loss of revenue to the SS system has come about because the rich and upper income faction have succeeded in shielding more and more of their income from the payroll tax by such means as stock options, 401k contributions, contributions to health savings accounts, and the artificial ceiling on income subject to the payroll tax, which has not kept pace with wage growth. 

 

Social Security was never designed to be an adequate national pension system.  It is an insurance program, which is why your retirement benefit is referred to as your "Primary Insurance Amount."  Its goal was to reduce old age poverty, which it did successfully, and to serve with along with private pensions and savings to fund retirements.  Since the corporations have since largely withdrawn private pensions, the SS system should be expanded into a national pension system, but that's not going to happen in the current political climate.

 

It's possible that no adjustment at all will be necessary if the economy or productivity were to continue to grow at postwar average rates.  However, the current level of growth of both is below those averages, so the right fix would be to raise the cap on earned income subject to the payroll tax and/or tax unearned income such as interest, dividends, and capital gains. 

[Ahab]

The following is from the GOP.com website (party platform). Like all party platforms it gives an idea of what the party says it plans to do, whether or not they actually do it is a whole other discussion.

"Saving Social Security  (Top)

We reject the old maxim that Social Security is the “Third Rail” of American politics, deadly for anyone who would change it. The Democratic Party still treats it that way, even though everyone knows that its current course will lead to a financial and social disaster. Younger Americans have lost all faith in the program and expect little return for what they are paying into it. As the party of America’s future, we accept the responsibility to preserve and modernize a system of retirement security forged in an old industrial era beyond the memory of most Americans. Current retirees and those close to retirement can be assured of their benefits. Of the many reforms being proposed, all options should be considered to preserve Social Security. As Republicans, we oppose tax increases and believe in the power of markets to create wealth and to help secure the future of our Social Security system. Saving Social Security is more than a challenge. It is our moral obligation to those who trusted in the government’s word."

[JimGant]

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The purpose of the Trust Fund, which now has about $2.3 trillion,  was not to last forever, but to be paid down to nothing over the course of the 30 years or so of the boomer retirements.  The SS system is not in any way close to insolvency and has never been since the reforms of 1983.  Even the Trust Fund is not yet decreasing since the interest on the Treasury bonds it holds enables full benefits to be paid out. 

 

This is where your research comes up short. Since 2010 cash flow has been negative, i.e., paying out more benefits than SS taxes are covering. Heretofore, almost a quarter of SS taxes were surplus (at least from 1983), thus going into the general fund to buy whatever -- and generating special Treasury IOU's for the payees of those SS taxes. No longer. SS taxes ain't covering the pay-as-you-go bill. What is? Money from the big pot, the pot paid by general taxation -- and borrowing from our Chinese friends, from ourselves. And this payout from non SS tax input will continue -- unless some relatively simple fixes, as previously discussed -- like means testing and raising the SS tax cap -- are addressed (which you seem to agree with).

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Since 2010, the combined trust funds have run cash-flow deficits, which are projected to continue indefinitely under current law.

https://www.google.co.th/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&ved=0ahUKEwjWl7bwlvHQAhUGSY8KHZWVDPYQFgg7MAU&url=http%3A%2F%2Fwww.fas.org%2Fsgp%2Fcrs%2Fmisc%2FRL33514.pdf&usg=AFQjCNF3VU-SO9meyjjUZW61PWd5U-B46w&sig2=_tD89PlNRGF3P5UwpyWw-A

 

We legally can do this, because the SS Trust Fund is in "surplus" when you figure in the interest being earned. But this interest just generates more 'special IOU's'. It's not IOU's that represent bullion at Fort Knox, nor Euro Bonds, nor anything of value on its own -- it's only paper that Congress guarantees to pay those of us who have paid our FICA taxes. But, that should be a good enough guarantee for most of us -- 'cause SS really is the third rail that Congress can't possibly screw us on (well, maybe it can in increments). But, yes, like in 1983 -- and like what Simpson-Bowles recommended -- some changes are going to have to take place to get us back to pay-as-you-go solvency. And I think we'll get there.

 

Here's where Cpt Haddock, and many others, get confused:

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The purpose of the Trust Fund, which now has about $2.3 trillion,  was not to last forever, but to be paid down to nothing over the course of the 30 years

 

Again, the Trust fund has paper IOU's, nothing of value outside the Federal Treasury system. Ideally, the trust fund would just remain where it is, due to the post 1983 mega surplus -- at $2.3T, increasing annually with interest earned. This would remind Congress of what it is on the hook for -- should annual FICA taxes not cover annual SS benefit payouts. But, it's this latter entry -- cash flow -- that needs to get Congress's attention -- negative cash flow. And how to eliminate it, with benefit and tax manipulations. The Trust fund is a mirage, actually -- but a mirage whose sole benefit is reminding Congress of what's owed.

 

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 Social Security benefits are delayed wages which the workers have paid for and earned...Social Security was never designed to be an adequate national pension system.  It is an insurance program, which is why your retirement benefit is referred to as your "Primary Insurance Amount."  Its goal was to reduce old age poverty,

 

Which is it, Cpt Haddock -- a retirement program, where you'll get back principal plus earnings -- or an insurance program against old age poverty? Suggest you do a little more research of your own.

 

 

 

[1FinickyOne]

On December 12, 2559 BE at 2:15 AM, gk10002000 said:

I am 59 1/2 and can now access without penalty my IRAs both Roth and Traditional.  For better or for worse I plan on taking social security on the early side of things, i.e. around my early retirement age of 62 1/2 or so instead of waiting for my full social security age of 65 or 66 or whatever it is.  I just started a new permanent salary job with some pretty good financial and benefits and time off, medical,  decent southern California location, etc., so if I still like it just under 3 years from now I may work a bit longer.  But in general my thoughts are to start pulling social security payments sooner than later.  I will evaluate every year

 

In doing your evaluations, one thing that is left out of many calculations that I have seen is that if you take it early and invest it, there will be accrual and profits from investments, which could be substantial if you are willing to assume risk. But, even if not, if invested conservatively, there will still be some profits on that money... most of the calculations that I have seen assume that if the funds are drawn out early, that they will be spent. 

 

I chose to take my distributions as early as possible. 

[CaptHaddock]

11 hours ago, JimGant said:

 

This is where your research comes up short. Since 2010 cash flow has been negative, i.e., paying out more benefits than SS taxes are covering. Heretofore, almost a quarter of SS taxes were surplus (at least from 1983), thus going into the general fund to buy whatever -- and generating special Treasury IOU's for the payees of those SS taxes. No longer. SS taxes ain't covering the pay-as-you-go bill. What is? Money from the big pot, the pot paid by general taxation -- and borrowing from our Chinese friends, from ourselves. And this payout from non SS tax input will continue -- unless some relatively simple fixes, as previously discussed -- like means testing and raising the SS tax cap -- are addressed (which you seem to agree with).

 

We legally can do this, because the SS Trust Fund is in "surplus" when you figure in the interest being earned. But this interest just generates more 'special IOU's'. It's not IOU's that represent bullion at Fort Knox, nor Euro Bonds, nor anything of value on its own -- it's only paper that Congress guarantees to pay those of us who have paid our FICA taxes. But, that should be a good enough guarantee for most of us -- 'cause SS really is the third rail that Congress can't possibly screw us on (well, maybe it can in increments). But, yes, like in 1983 -- and like what Simpson-Bowles recommended -- some changes are going to have to take place to get us back to pay-as-you-go solvency. And I think we'll get there.

 

Here's where Cpt Haddock, and many others, get confused:

 

Again, the Trust fund has paper IOU's, nothing of value outside the Federal Treasury system. Ideally, the trust fund would just remain where it is, due to the post 1983 mega surplus -- at $2.3T, increasing annually with interest earned. This would remind Congress of what it is on the hook for -- should annual FICA taxes not cover annual SS benefit payouts. But, it's this latter entry -- cash flow -- that needs to get Congress's attention -- negative cash flow. And how to eliminate it, with benefit and tax manipulations. The Trust fund is a mirage, actually -- but a mirage whose sole benefit is reminding Congress of what's owed.

 

 

Which is it, Cpt Haddock -- a retirement program, where you'll get back principal plus earnings -- or an insurance program against old age poverty? Suggest you do a little more research of your own.

 

 

 

 

I know that it is difficult for you to grasp a concept that the right-wing bubble machine has not already drilled into your head, but do give it a try.   In 1983 the Greenspan Commission recognized that the SS system could not pay the promised benefits to the large baby boomer thirty years from then.  So, acting on the Commission's recommendation Congress raised the payroll tax above the level necessary just to pay out then-current benefits.  The surplus generated would go into the SS Trust Fund which would grow steadily and would also receive interest from the Treasury bonds it holds.   At the point where the boomers retired the SSA would draw down the Trust Fund to make up the portion of then-current benefits not covered by current payroll tax collection.  Seems simple enough.

 

In 2014 total income for the OASDI Trust Funds (i.e. excluding Disability) was $884 billion.  Total payout was $859 billion.  So the Trust Fund is still growing and not yet being drawn down.  Also in 2014 payroll tax collections were $756 billion.  So, where did the $103 billion come from to cover the shortfall in payroll tax collection?  Mostly from interest received from the Treasury on the bonds held by the Trust Fund ($98 billion.)  In addition, there was another $30 billion raised on income tax on SS benefits, which goes back into the Fund.  So, all benefits were paid and the Trust Fund has now grown to $2.79 trillion dollars and is still growing.

 

Since 2010 payroll taxes alone have not been sufficient to cover benefit payments in full as was forseen by the Greenspan Commission.  So, in that year the Fund started to use interest payments to make up the shortfall, as planned.  Eventually, as more boomers retire the interest alone won't be enough and the SSA will start to drawn the Trust Fund as planned.  No crisis.  The demographics have been well understood for decades. 

 

Now the right-wing billionaires like the leading US polluters, the Koch Brothers, really don't want to pay payroll taxes for their 30,000 employees at all.  So, they invest in a propaganda campaign along with other billionaires to undermine confidence in the Social Security System.  If they can break the system and end the payroll tax, their investment will have paid off handsomely and forever.  So, the fund campaigns to persuade the suitably uneducated public that US Treasury Bonds, which are rated the safest in the world by the bond markets, are somehow just "pieces of paper" or even, shudder, mere "IOUs."   And the members of the public of the appropriate intellectual caliber clammer to "manage" their own retirement funds, a move guaranteed to restore old age poverty to Great Depression levels.

 

So, you believe what the Koch brothers pay for you to believe.  Among other confusions, you are apparently unable to understand the difference between investment and insurance.  The SS system is not an investment program.  Until the creation of the Trust Fund it never invested in anything.  The necessity of holding funds in anticipation of needs a generation later compelled the Trustees to invest the Trust Fund, which they did in US Treasury Bonds, the safest instruments in the world.  Other than the $98 billion from Treasury interest in 2014 all benefits are paid from payroll taxes and are paid only to survivors, not to dead contributors as would be the case in an investment program.  Therefore, Social Security is an insurance program, not an investment program.  Life insurance companies almost never go bankrupt because of the Law of Large Numbers which makes mortality rates for large numbers of people highly predictable.  The living survivors are paid with the contributions of dead people, which are a lot easier to predict than, say, stock market returns.  The SS benefits are an annuity issued by what is in effect an insurance company, the SSA, paid for by the wages of workers.  Again, seems simple enough that anyone of higher than dolphin-level intelligence should be able to understand.

 

The future of the SS system depends on growth in GDP, labor income, productivity, and its own tax revenue source.  The right solution would be to expand benefits to make it a true pension system able to replace 70% to 80% of labor income during retirement, rather than the current 40% level.  To finance expanded benefits the tax base should be expanded to include all earned income without a cap and including stock options and other benefits, but also to include non-labor sources of income such as interest, dividends, and capital gains.  The net effect would be to make the system much more progressive than currently. 

[JimGant]

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So, you believe what the Koch brothers pay for you to believe.

 

No, I believe in analyzing the numbers -- and what's behind them.

 

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Since 2010 payroll taxes alone have not been sufficient to cover benefit payments in full as was forseen by the Greenspan Commission.  So, in that year the Fund started to use interest payments to make up the shortfall, as planned.  Eventually, as more boomers retire the interest alone won't be enough and the SSA will start to drawn the Trust Fund as planned.  No crisis.  The demographics have been well understood for decades. 

 

What is it about cash flow (from the article I previously referenced) that you do not understand? The interest credited represents a bookkeeping entry, not cash.

 

Quote

Cash-flow deficits do not affect Social Security directly. However, if the non-Social Security portion of the federal budget is in deficit, redemption of trust fund bonds puts additional pressure on the overall federal budget. Since 2010, the combined trust funds have run cash-flow deficits, which are projected to continue indefinitely under current law. Beginning in 1975 [but fixed in 1983], the combined trust funds ran annual cash-flow deficits.The trust funds made up the difference between income and outgo during these years by redeeming some of the bonds accumulated in earlier years. In other words, in those years, the Social Security trust funds received net transfers from the Treasury’s general fund

 

And cash is what it's all about. Interest generated by SS surplus generates -- further Treasury special issues, not cash. And beneficiaries are paid in cash, not Treasury special issues. Thus, if cash coming in, from payroll taxes and income taxes on SS payouts, doesn't cover the cash being paid out to beneficiaries, the fund is in deficit -- and the fund must cash in some of its bonds for cash. Yes, it's nice that the new bonds generated by the fund's interest exceed the bonds cashed in (for now, anyway) -- thus generating a bookkeeping surplus. But the Federal deficit increases dollar-for-dollar for every dollar it pays the Social Security Administration to cover its cash flow deficit. You seem to think that the Trust fund is a magic source of money. It's not -- it's just a number that, yes, you can almost treat as cash 'cause it is backed by the “full faith and credit of the federal government.” And current and (some) future SS recipients should take some comfort that Congress is on the hook to make good on the amount in the Trust fund. (In spite of any bluster on reneging from Trump.). But it is NOT cash -- and to convert to cash from cashing in its bonds just exasperates the deficit.

 

I'm not sure why it is so hard to grasp the concept of the SS Trust Fund. Google leads to many excellent explanations. This one from the Wash Post is particularly good -- kind of equate Jack Lew with Cpt Haddock....

http://www.washingtonpost.com/wp-dyn/content/article/2011/03/10/AR2011031005932.html

 

So too this one from Forbes:

http://www.forbes.com/sites/merrillmatthews/2011/07/13/what-happened-to-the-2-6-trillion-social-security-trust-fund/#4619e3336153

 

Happy reading.

 

[JAFO]

19 hours ago, kenk24 said:

 

In doing your evaluations, one thing that is left out of many calculations that I have seen is that if you take it early and invest it, there will be accrual and profits from investments, which could be substantial if you are willing to assume risk. But, even if not, if invested conservatively, there will still be some profits on that money... most of the calculations that I have seen assume that if the funds are drawn out early, that they will be spent. 

 

I chose to take my distributions as early as possible. 

 

I am approaching this the same way kenk24. I never counted on SS benefits in my financial retirement plan, they were to subsidize my other investments and my IRA. So I will apply immediately at 62.5 and just save the SS benefits. To me it will be like a monthly bonus check.

 

I am not worried about the said changes of the OP.  If in the US . living in the US and plan on staying in the US hopefully they are planning outside of it. If anyone planned on their SS to getting them to the end was not really thinking ahead. It simply wont work. 

[Jingthing]

Depends on your age the potential impact.

[geronimo]

1 hour ago, Jingthing said:

Depends on your age the potential impact.

 

If you live in a country where the word "tax" is recognised, be prepared to be seriously shafted, if you haven't already.

[CaptHaddock]

17 hours ago, JimGant said:

 

No, I believe in analyzing the numbers -- and what's behind them.

 

 

What is it about cash flow (from the article I previously referenced) that you do not understand? The interest credited represents a bookkeeping entry, not cash.

 

 

And cash is what it's all about. Interest generated by SS surplus generates -- further Treasury special issues, not cash. And beneficiaries are paid in cash, not Treasury special issues. Thus, if cash coming in, from payroll taxes and income taxes on SS payouts, doesn't cover the cash being paid out to beneficiaries, the fund is in deficit -- and the fund must cash in some of its bonds for cash. Yes, it's nice that the new bonds generated by the fund's interest exceed the bonds cashed in (for now, anyway) -- thus generating a bookkeeping surplus. But the Federal deficit increases dollar-for-dollar for every dollar it pays the Social Security Administration to cover its cash flow deficit. You seem to think that the Trust fund is a magic source of money. It's not -- it's just a number that, yes, you can almost treat as cash 'cause it is backed by the “full faith and credit of the federal government.” And current and (some) future SS recipients should take some comfort that Congress is on the hook to make good on the amount in the Trust fund. (In spite of any bluster on reneging from Trump.). But it is NOT cash -- and to convert to cash from cashing in its bonds just exasperates the deficit.

 

I'm not sure why it is so hard to grasp the concept of the SS Trust Fund. Google leads to many excellent explanations. This one from the Wash Post is particularly good -- kind of equate Jack Lew with Cpt Haddock....

http://www.washingtonpost.com/wp-dyn/content/article/2011/03/10/AR2011031005932.html

 

So too this one from Forbes:

http://www.forbes.com/sites/merrillmatthews/2011/07/13/what-happened-to-the-2-6-trillion-social-security-trust-fund/#4619e3336153

 

Happy reading.

 

 

The hard money, deficit hawk worldview that you espouse sees government debt as inherently some kind of massive swindle, from which point of view you attempt your reductionist understanding of virtually everything.  Perhaps you think that the only trustworthy payment of SS benefits would have to be in gold bullion.  Why would you take "cash," by which you presumably mean dollar bills although most cash is not dollar bills, to be real when government bonds are nothing more than a deception to defraud the gullible?  The fact is dollar bills and bonds are both no more than obligations.  A government can certainly default on its bonds as the Republicans attempted to do in 2013 and on its currency as the Indian government just did.  The value of a country's currency and government bonds depends partly on just how likely they are to renege on their obligations.  So far, the US government enjoys the highest level of confidence of the global bond and currency markets, but it's true that the Republicans could change that.

 

The obligations of the Social Security system are indeed fundamentally social obligations, but that does not mean that they are not real and will not be honored.  It is only because you think there is some other kind of money which does not represent a government obligation that you think there is an alternative to social obligation.  So, probably you keep your pile of gold next to your gun and canned food in the basement.

 

By the way, thanks for making my point about the Koch brothers' having supplied you with your (anti-tax) worldview.  The journalist whom you cite, Charles Krauthammer, is indeed a paid member of the Koch brothers' network of right-wing, anti-tax propagandists. 

 

Koch Industries describes its semiannual shindigs, which began in 2003, as an "opportunity for attendees and presenters to discuss ways of preserving and advancing economic freedom in the United States and to share ideas about the free-market principles that have made our country great." The guest list for last weekend's meeting is still under wraps, but the June 2010 event in Aspen drew a who's who of conservative media stars; Besides Beck, there were Philip Anschutz, owner of the Examiner newspapers and the Weekly Standard; Charles Krauthammer, syndicated columnist and Weekly Standard contributor; Stephen Moore, Wall Street Journal editorial board member; and Ramesh Ponnuru, senior editor for The National Review.

 

http://www.motherjones.com/environment/2011/02/koch-brothers-media-beck-greenpeace

[JimGant]

Deficit hawk? Gosh, one of the first things you learn in B school is how to figure out the optimum debt-to-equity ratio. No less true for governments. And right now I'm fine with the US debt ratio. It's down the road I worry about.

 

And I worry about folks like you, who believe that SS is just fine, and that paying out more cash than comes in doesn't contribute to the national debt. And that folks who argue to fix it are right wing wackos. I guess we could borrow $2.6 trillion, plus interest, from the Chinese to cover the trust fund obligation (and borrow more later, when the trust fund runs out). Or we can fix it now, to have cash-in to cover cash-out. Means testing -- like we do now with Medicare premiums -- would be the first place to start.

Raising the cap would be the second. Both would affect the rich. It's what Simpson-Bowles argued for. And it failed -- because it would effectively increase negative cash flow on the rich. Can't have those fat cats dipping into their wallets anymore than necessary........

 

No, your entire argument shows that you believe the SS Trust fund has more intrinsic value than the obligation it represents. Government Accounting, however, disagrees with you. It's an esoteric concept -- but important enough to represent several hours on the CPA exam. And smart people, like Jack Lew, do get it wrong -- finding it hard to differentiate between cash and IOU's. So, it's understandable why folks of lesser intelligence, like yourself, struggle with the concept.

 

Oh, here's one more explanation. Try and put economics ahead of politics as you read it:

http://usatoday30.usatoday.com/news/opinion/editorials/2011-02-22-editorial22_ST_N.htm

 

 

 

 

 

 

[CaptHaddock]

2 minutes ago, JimGant said:

Deficit hawk? Gosh, one of the first things you learn in B school is how to figure out the optimum debt-to-equity ratio. No less true for governments. And right now I'm fine with the US debt ratio. It's down the road I worry about.

 

And I worry about folks like you, who believe that SS is just fine, and that paying out more cash than comes in doesn't contribute to the national debt. And that folks who argue to fix it are right wing wackos. I guess we could borrow $2.6 trillion, plus interest, from the Chinese to cover the trust fund obligation (and borrow more later, when the trust fund runs out). Or we can fix it now, to have cash-in to cover cash-out. Means testing -- like we do now with Medicare premiums -- would be the first place to start.

Raising the cap would be the second. Both would affect the rich. It's what Simpson-Bowles argued for. And it failed -- because it would effectively increase negative cash flow on the rich. Can't have those fat cats dipping into their wallets anymore than necessary........

 

No, your entire argument shows that you believe the SS Trust fund has more intrinsic value than the obligation it represents. Government Accounting, however, disagrees with you. It's an esoteric concept -- but important enough to represent several hours on the CPA exam. And smart people, like Jack Lew, do get it wrong -- finding it hard to differentiate between cash and IOU's. So, it's understandable why folks of lesser intelligence, like yourself, struggle with the concept.

 

Oh, here's one more explanation. Try and put economics ahead of politics as you read it:

http://usatoday30.usatoday.com/news/opinion/editorials/2011-02-22-editorial22_ST_N.htm

 

 

 

 

 

 

 

You lose me permanently at the point that you refer to bonds pejoratively and indiscriminately as "IOUs."  

 

Enjoy your life in the right-wing echo chamber.

[ubonjoe]

A post bringing politics into the discussion and a reply have been removed.

[Boon Mee]

On 12/15/2016 at 10:00 AM, CaptHaddock said:

 

You lose me permanently at the point that you refer to bonds... as "IOUs."  

 

 

Essentially, that's what they are?