Posted on 03/14/2010 7:46:01 AM PDT by Kartographer
The retirement nest egg of an entire generation is stashed away in this small town along the Ohio River: $2.5 trillion in IOUs from the federal government, payable to the Social Security Administration.
It's time to start cashing them in.
(Excerpt) Read more at news.yahoo.com ...
Those printers are going to wear out.
I would like to see what a multibillion dollar bond looks like, hee hee. Maybe they can sell it on ebay once the IOU is cashed in.
I'm thinking that now is not the time divest myself of my metal investments. I think I'll be buying more in fact.
Those printers are going to wear out...
No problem, I know this little town in Ohio that will give us the money for new ones in exchange for an IOU.
Kick the can, kick the can, eventually the can hits a brick wall.
Kept in a file cabinet in some dinky office bldg in WVA - the cynic in me senses an impending reichstag fire, followed by a court ruling that the bonds cannot be cashed, since the SSA can’t produce them...
... followed by an announcement that since the trust fund is now gone, we will just have to raise SS taxes, or granny will starve...
The only reason they are in a file cabinet in physical form iirc, is because somebody kept inquiring “where” the bonds were.
I don’t know much about treasury securities, but these are “special” bonds, as in they are not marketable treasury securities. I’m not sure if that’s good or bad from the standpoint of America. Probably bad. If they aren’t marketable, then they can be more characterized as an IOU, since they can’t be sold afaik.
The “lockbox” was un-locked in 1968, in order to make the budget look good after billions in social spending and defense spending because of the cold war/Vietnam War. So all the tax income came in to the general fund rather than kept in a social security pool.
This is the result of Ronald Reagan’s greatest mistake: raising Social Security tax rates (”to save the Social Security System”) without demanding some sort of true “lock-box” for the surplus funds that accumulated in the Treasury. What happened to that money? Congress “borrowed” it and spent it. Had it been used to invest in interest bearing corporate bonds, growth stocks or whatever, the SS fund would be huge by now.
“I’m thinking that now is not the time divest myself of my metal investments. I think I’ll be buying more in fact. “
You got that right.
The revolution will start with our elders. When they realize their SS is going to get cut, granny (my parents and in-laws who fought in WWII) are going to kick some Government booty, both at the ballot box and elsewhere.
We need to create a bunch more jobs or prepare for any number of exremely unpleasent realities. Other people’s money is running out.
The “lockbox” was un-locked in 1968, in order to make the budget look good after billions in social spending and defense spending because of the cold war/Vietnam War. So all the tax income came in to the general fund rather than kept in a social security pool.
You are both wrong.
SS surplus funds have been “Invested” in special government securities from the first day that the SS Pay Roll tax was collected.
The SS system from day one was a tax scheme and the SS retirement system was a way to make it palatable and get it through congress.
It has been accurately called a Ponzi scheme and that is why it is failing and always had to from the beginning.
The only way the SS system can be fixed is to raise the retirement age to above the age at which most of the people in the system will die before they reach the age at which they can collect benefits. That was the original design of the system.
Uncle Franklin’s Ponzi scheme is running out of suckers?
The boomer generation starts to retire and F.D.R.’s Ponzi scheme finally collapses,but wait if we legalize 20 million illegals with amnesty then we can keep the scam going! Sadly what these dual “citizens” will do is work off the books or send the money home under the radar so that the anticipated revenue will be nothing but an illusion.
The SS Trust Fund contains non-market T-bills, which can only be redeemed by the USG. The SSTF is part of the national debt and is held under Intragovernmental Holdings. They are IOUs, nothing more. We just owe the money to ourselves. In order to redeem the IOUs, the federal government must take the money out of the General Fund.
The “lockbox” was un-locked in 1968, in order to make the budget look good after billions in social spending and defense spending because of the cold war/Vietnam War. So all the tax income came in to the general fund rather than kept in a social security pool.
The Social Security system is primarily a pay-as-you-go system, meaning that payments to current retirees come from current payments into the system. In the early 1980s, however, the financial projections of the Social Security Administration indicated near-term revenue from payroll taxes would not be sufficient to fully fund near-term benefits (thus raising the possibility of benefit cuts).
The federal government appointed the National Commission on Social Security Reform, headed by Alan Greenspan (who had not yet been named Chairman of the Federal Reserve), to investigate what changes to federal law were necessary to shore up the fiscal health of the Social Security program. In addition to recommending tax increases to alleviate the short-term funding problem, the Greenspan Commission projected that the system would be solvent for the entirety of its 75-year forecast period.
The changes to federal law enacted in 1983 pursuant to the recommendations of the Greenspan Commission increased the Social Security payroll tax so that revenues derived from the tax would exceed the amounts needed to fully fund current benefits, thus causing a reserve to accumulate, which could be drawn upon when necessary. The resulting surplus is accounted for in the Social Security Trust Fund.
The article failed to point out that the absolute large majority of these funds were spent by Democratic Congresses. But it’s written by AP, what do you expect?
The vast majority of Mexicans and South Americans who immigrate here illegally will never, ever play "European Welfare State" even if made legal. Never. Exactly as you say they'll go black market within their own communities and like southern Europe we'll have a good 25% or higher chunk of the economy that is black market.
It'll collapse in short order. Ofcourse, that may be the plan.
That's probably true. And I agree it is a giant Ponzi scheme.
But where would the money come from if you want to cash in these "special government securities". I know the answer - the government would either raise taxes or borrow the money from the Chinese and the Fed. There is nothing behind those "special government securities" except a promise to pay by the U.S. Government. It didn't have to be that way.
And yes, the stealing from the SS system started before Reagan. But he could have stopped it and he didn't.
I have a sickly feeling that your right!
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.