Posted on 01/29/2024 6:28:45 AM PST by reaganator
Never heard with the endless talk about "protecting Social Security" are suggestions for the ending of the surplus Social Security contributions being moved to the general fund and spent by Congress. Every Social Security contribution, past and present has been spent and is gone. In place of this money are government bonds, the Social Security "Trust Fund." A government bond is nothing more than a promise by the government to collect money from future taxpayers. Not even the federal government can spend and save the same money. The spent money is gone. When determining the solvency of the Social Security system the government bonds are erroneously used. The only money in the Social Security system are the current contributions as they pass through being spent. This Ponzi Scheme has only survived because its victims are mandated by law to participate. Any fix to the Social Security system should begin with the ending of the surplus contributions being spent, the only way to do this is to allow participants to own their own accounts and be able to invest a portion of their contributions in real, actual investments. Please feel free to tell me where I am wrong.
Watch this magic trick carefully:
https://www.ssa.gov/oact/progdata/specialissues.html
“The trust funds now hold only special issues”
So what are these “special issues”?
Follow the pea while I move my hands quickly:
https://crsreports.congress.gov/product/pdf/IF/IF10564
“Section 201 of the Social Security Act (42 U.S.C. §401)
requires the managing trustee of the Social Security trust
funds (the Secretary of the Treasury) to invest Social
Security tax revenues in special “nonmarketable” federal
public-debt obligations called special issues”
In other words—Ponzi scheme.
“”I am led to believe that currently the Social Security contributions coming in to the system are greater than the cost going out in benefit checks and administrative costs.””
I wonder....I don’t know how that could be refuted..
Administrative costs could always rise - thanks to whoever is in charge - thus, those costs could eat up any surplus. If what you say is true, how long will it be before THEY figure that out? “Gee, the cost of administering those funds just overwhelms us.”
Are we jaded - skeptical? You bet and why wouldn’t we be? Our government has proven to be untrustworthy!!!! It’s not the way some or perhaps MOST of us at FR started out in life. We listened - now we are finding out that we’ve always been lied to - but probably not to the extent as we are now....
Thank you for that. You’re apparently more in tune with the nitty gritty of the investment of SS funds than I am...I DO know that it could be changed if Congress would do their jobs for the American people and change it. Letting us use our own contributions for investment makes more sense than anything the government comes up with. I guess THEY are looking out for us as we’re not smart enough to take care of ourselves - besides we might spend too much money buying lottery tickets - can’t have that!
Your SSA gov link says "The trust funds now hold only special issues, but they have held public issues in the past.". Any idea when the change happened?
“Any idea when the change happened?”
Good question—at least partially since 1985—this is mentioned in passing in this article:
https://rollcall.com/2023/03/02/obscure-law-contains-debt-limit-escape-hatch-for-social-security/
These scam artists are very sneaky.
Together with their open border plan is nothing more than another aspect of the Cloward-Piven strategy to overload our welfare and social security systems and use the resulting chaos to usher in and implement Marxism by public demand.
Also, don't make too much about my statement of China being the largest foreign owner of U.S. treasuries. Every now and then China sells some and Japan buys some making Japan the largest foreign debt holder, then they swap places back. It's probably best to think of China and Japan always tying for first place as our largest foreign debt holders.
But for the most part, it's American institutions that own US debt. For most of my life it was the SS fund that had the most. Then with our decade and a half of Quantitative Easing by the Federal Reserve and them increasing their balance sheet, the Fed Reserve became the largest US debt holder. With the recent Quantitative Tapering (reducing the Fed's balance sheet), I wouldn't be surprised if the SS fund is now back to being #1.
And then there's all the state-run pension plans. If you add them all together they are a sizable chunk of US debt holders. Particularly with the PBGC pension insurance regulations (think FDIC for banks, only for pensions) saying only a portion of a pension's investments can be in equities. Given that the PBGC's regulations say that the "safe" portion of pension investments can be in bonds, and since treasury bonds have a better return that savings accounts but are safer than corporate bonds, the federal government is basically saying through the PBGC regulations that state pensions have to have a significant portion of investments in US debt. IMHO, that's the federal government forcing the states to invest in the federal government, which drives up the price of treasuries (lowering treasury rates).
Teresa Ghilarducci
Thanks.
L
The only thing that gives U.S. Treasury Notes any value just like any government bond is the power of the federal government to collect money from future taxpayers. In order to redeem the treasury notes new money must be collected from taxpayers or federal deficit spending exercised. There is no money in the Social Security trust fund just a promise by the government to collect new money from taxpayers. It is wrong to use the $2.7 trillion of treasury notes in the trust fund to demonstrate the solvency of Social Security.
I promise you that you and I are for the most part in agreement. I in no way meant to say that the giant ponzi scheme known as social security was in any way solvent, especially after the left's cultural adjustment to convincing Americans to embrace the "nuclear family" and reduce the number of kids we have to save us from the so-called "population bomb". Basically, there are a lot less future "investors" putting into the ponzi scheme, meaning it'll go broke even faster than it originally would.
I just want to make sure that us conservatives are correct in the details when we make our argument. So if you want to make an argument against the solvency of social security, which I 100% agree with, please be careful against using the argument in your prior post from a year ago that there is no SS account or (as some people say) none of us have a SS account. If someone on the fence of converting to our conservative position on SS hears that and realizes, "Wait a second, there really are SS accounts and there really is an SS trust fund", that person may decide not to believe our overall argument against the SS ponzi scheme. That's the kind of error I was trying to correct, not your overall premise that the SS system is insolvent.
I want all tariff revenue to be funneled into SS. This would make both tariffs and SS solvency even more popular. It would also make sure SS is there in the future.
What problem would be solved by confiscating more money for the front end of the pyramid scheme which is Social Security?
Where is YOUR Social Security account? All of your past Social Security contributions have been spent and are gone.
No surplus since 2020. And you would prefer the funds give up $63.7 Billion in interest per year and just sit on the incoming payroll taxes without investing them? (Bigger Social Security deficits then).
https://www.ssa.gov/OACT/STATS/table4a1.html
No surplus since 2020. There has been a financial shortfall over the last five years of approximately $200 billion. The government Social Security website tells us that this financial shortfall has been covered with the interest earned from the $2.7 trillion in the Social Security Trust Fund that represents the SPENT surplus contributions. I call BS on that. Either Federal deficit spending has covered the financial shortfall or the federal government which is more than $37.5 trillion in debt and has an annual budget deficit of $1.85 trillion has been able to pay interest on $2.7 trillion of U.S. Treasury Notes that merely represent SPENT money. The interest payment to the $2.7 trillion of U.S. Treasury Notes are nothing more than a ledger entry. Federal deficit spending has been covering the financial shortfall in Social Security.
The surplus Social Security contributions were “invested” in U. S. Treasury Notes which is not a real wealth creating investment. The only thing that gives a government bond any value is the power of the government to collect money from future taxpayers to cover that bond.
Yep, it is essentially a “Ponzi scheme”...I think we can all agree on that. My point in regard to your point is that it would be really dumb/fiscally criminal for the SS trustees to “sit” on (”cash under the mattress”) $2 Trillon in Social Security cash w/o earning a penny in interest. FDR/1937 politicians didn’t want the $$ in the stock market or foreign country bonds apparently, so here we are with the “special T-Bills” investment. T-bills issued by the Treasury for FedGov spending are bought by a lot of different people/entities but the buyer of last resort is the Federal Reserve with “printed”/keystroke “QE” money. The “special” SS T-Bills are purchased with “real” fiat payroll dollars from everyone’s paycheck/income.
No more “CR’s”, balance the annual budget then a surplus budget to start widdling down the $37 Trillion is debt, and then start making adjustments/changes to SS/Medicare so they break even annually. (Many ways to try and do that, including making SSDI/SS “if you didn’t pay in, we don’t pay out”...less of a Ponzi).
I never suggested the surplus Social Security contributions should not be invested. That is my point. The surplus Social Security contributions were NOT invested in any real wealth creating investments, they were put into U.S. Treasury Notes. Like any other government bond, a treasury note is merely a promise by the government to collect new money from taxpayers. The money was SPENT. Not even the federal government can spend and save the same money. There is no money in the Social Security Trust Fund until the treasury notes are redeemed by collecting money through taxation or federal deficit spending. The $200 billion Social Security financial shortfall over the last five years has been covered with federal deficit spending. In hindsight, participants in the program should have been required to put a portion of their Social Security contributions in real wealth creating investments and own their personal Social Security account.
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