Posted on 09/29/2009 4:42:13 AM PDT by native texan
WASHINGTON -- Big job losses and a spike in early retirement claims from laid-off seniors will force Social Security to pay out more in benefits than it collects in taxes the next two years, the first time that's happened since the 1980s.
The deficits -- $10 billion in 2010 and $9 billion in 2011 -- won't affect payments to retirees because Social Security has accumulated surpluses from previous years totaling $2.5 trillion. But they will add to the overall federal deficit.
Applications for retirement benefits are 23 percent higher than last year, while disability claims have risen by about 20 percent. Social Security officials had expected applications to increase from the growing number of baby boomers reaching retirement, but they didn't expect the increase to be so large.
What happened? The recession hit and many older workers suddenly found themselves laid off with no place to turn but Social Security. ....more at http://www.theeagle.com/nation/Rise-in-claims-will-put-Social-Security-to-the-test
We coulda had a lock box, we got global warming. (/s)
SS has a 2.5 Trillion surplus? That’s impossible because a democrat has never met a surplus it didn’t spend. No way that money would of just sat there.
It is bogus book keeping. Clinton set it up years ago.
Well, if we do have $2.5 trillion in the bank then all we need is about $53.5 trillion more to find so we don’t go bankrupt.
SS should have 2.5 trillion “saved up” from all of our contributions. In reality the money was “loaned” to the treasury so the money has been spent and in order to pay benefits, the feds will need to cut spending (yeah right), borrow from other sources (possible but who wants to lend to the US now), print more money (that trick is getting old) or raise taxes.
I theory the surplus that is supposed to exist would last a few more years as the baby boomers really start collecting.
The ponzi scheme is falling apart faster than expected.
There is no Social Security, Medicare or Medicaid fund. It is all part of the General Fund that the IRS puts revenue into and Congress sucks money out of. This is the way FDR and LBJ set it up, so their socialist programs would never go belly up...unless the USA ceases to exist.
I think the dog ate the money.
The SS surplus is in the form of an IOU only. The government has spent the actual money.
This article is an AP story that was released last weekend. More interesting info here:
http://www.freerepublic.com/focus/f-news/2349596/posts
It’s a paper surplus. The FedGov has been raiding SS for years; leaving behind IOU’s that likely will never be repaid, as you know.
This notion of the shortfall in SS payments/disbursements adding to the deficit, though...that cheeses me big time. The Ponzi scheme that is SS should never have been comingled with other Federal monies. It’s supposed to be a self funding program (right!), not a budget item.
It’s time to stop all this thievery and skulduggery by career politicians. It’s time to take back the country.
No Problem. We just need to push Retirement age back to 90.
The Social Security ‘surplus’ resides in the same place as Bernie Madoff Ponzi scheme.
You have to wonder how a bad economy causes 20% higher DISABILITY claims.
Bernie Maddoff is LOL.
If you had IOUs in your left pants pocket totalling $2.5 Trillion, and nothing whatsoever in your right pants pocket but a bus token, you would be in the same situation as the United States of America.
In the case of SS saying they have $2.5 Trillion in assests; well, that’s just your left pants pocket talking.
There is nothing there but IOUs that can only be redeemed by taxing the cash from the American People.
I second that, seriously. No half measures. I want this 70 year socialist experiment ENDED.
Well it's going to end, willy nilly, as it is simply not sustainable. We need to control the collapse or we'll wind up losing more than the socialist experiment, we'll lose the country and the entire American commitment to "Life Liberty and the pursuit of Happiness".
It will be nothing more than a faded memory.
Two words which affect the integrity of the question are "accumulated" and "surplus".
What the Social Security Trust Fund, trust being another misleading word, has accumulated is a large batch of I.O.U.s backed only by the ability of the government to tax the citizens to pay the I.O.U.s.
Surplus means having more than is needed at any given time. Social Security has a surplus of I.O.U.s. at this time.
The idea being that there is no need to collect the I.O.U.s while Social Security is able to collect more in taxes than it pays out in benefits at any given time. By the way, lest there be any doubt, Social Security is a tax and not a welfare program. The Supreme Court took this decision long ago because if Social Security were welfare it would be unconstitutional. A further note worth commenting on is that since it is a tax the government is under no legal or constitutional obligation to pay recipients anything ever.
What the socialist mean when they say Social Security is not broken is that it is not broken if they constantly fix it. They have constantly fixed it since 1950 by raising the maximum amount an individual is required to pay each year over 27,000%. That is not a typo, 27,000 per cent is correct. I bother to mention this because this figure often takes people by surprise and they tend to discount it. Their nonsensical way of relieving the dire straits Social Security is in is to assert that when Social Security has to pay out more than it collects, it will simply cash in the I.O.U.s rather than raise the Social Security tax. How will the government honor the I.O.U.s? By raising your taxes of course. As long as government has the power of unlimited taxation Social Security will never be beyond repair in the future; your future of unlimited taxation.
“Does anyone on FR know about this $2.5 trillion in surpluses? I thought SS was broke.”
The author is a complete moron. The “surplus” is in the Social Security Trust Fund. You can read about it here:
http://en.wikipedia.org/wiki/Social_Security_Trust_Fund
The only investments in the “fund” are——get this——debt issued by the US Government. Get the catch? The US Government borrowed the money from itself and spent it. Under any rational accounting rules the fund would be a look-through and have zero value.
Here is an example I wrote up on FR a few years ago:
Let’s say I am saving for my child’s college education. I start saving when the child is born, putting 1K per year into the account. When the child is 13, and the account now has say 15K in it, I decide I want a new sports car. So I take the money out of the account, write a “Daddy Bond” payable by me to the account, and then I buy the car. So if you were to ask me how much I have saved for my child’s college, would it be rational for me to say I saved 15K so far? Well, that’s exactly what the US Government started doing during the 1990s.
Sure, it is the lock box, that magical file cabinet in some West Virginia building, surely with Byrd in its name. Just like a Japanese businessman's briefcase crossing the Italian border, it has impressive documents with numbers and lots of zeroes on their face. [cue Carl Sagan] Billions and billions of dollars worth. We're saved!!!
Well, not quite. cause the money behind those certificates is long gone. Spent by Congress many, many moons ago. So when the certificate is presented for redemption, where will the money come from? Taxes. More taxes. Lots of taxes. Crushing taxes.
Welcome to the generational transfer nightmare. Of course there will be death panels. Our children and grandchildren will have no other choice.
The “surpluses” are all worthless IOU’s. Congress has been spending the surplus as fast as they have received it for over 40 years.
You paid the money in, Congress spent it, and now YOU get to pay it back! What a deal!
SS is a pay as you go system. Here is how it works. Each year, after SS pays out all of the benefits from the FICA revenue, any "surplus" is deposited into the General Fund. In turn, Treasury issues non market, interest bearing T-Bills (IOUs) in the amound of the "surplus" and deposits it into the SS Trust Fund. The amount of the Trust Fund is around $2.5 trillion, which represents an unfunded liability, which is why it is part of the national debt carried in "Intragovernmental Holdings."
For the next two years, SS will be paying out more than it is taking in, which means that it must redeem some of its T-Bills in the Trust Fund to cover the amount of the deficit. Thus, the USG must come up with money from the General Fund to redeem those T-bills. In other words, it will add to the deficit.
By 2016, the SS will be paying out more than it is taking in until 2036 when all of the T-bills are exhausted. The reality is that the Trust Fund is filled with IOUs and SS becomes a black hole rather than a cash cow in 2016. It is the USG that is broke.
Those who are AARP members believe that fairy tale.
The AARP regularly tells them that there is a "trust fund" with all this money in a "lock box".
I can't find the link, but essentially the theory was that there are folks who have lost their jobs, can't find new ones, and can legally qualify for SSD.
They didn't apply for SSD before because they were making more at their old job.
Seems like a possible explanation.
Thanks for the reference. I am passing this along to others.
It is broke. That “surplus” has already been been spent by Congress and is owed to Social Security by, ummmm, taxpayers. The money has to come out of the Federal budget.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.