Posted on 01/15/2011 10:25:37 AM PST by MostlyAnti-Lib
Some say Social Security will be solvent for decades to come. Others say the Social Security fund is nothing but a bunch of IOU’s. Who’s lying to us? Are they all lying to us?
I contend that, in varying degrees, they all are.
They treat us like school children. They answer our questions with half-truths and little white lies, because, to quote Jack Nicholson, “We can’t handle the truth!”
On Neil Cavuto’s “Your World” recently, Nancy Altman, the Co-director of Social Security Works, stated that there is plenty of money available to fund Social Security for many years to come, and Cavuto rebutted with, in so many words, “No there isn’t”.
And that was it. End of discussion. Cut to a commercial.
Nobody howled, “Well, that’s a darned lie!”. Nobody whipped out a stack of evidence substantiating their claim. The viewer was left sitting there, open-mouthed, wondering, “What did I just see?”
Back in 2003, when the Bush administration questioned the management of Fannie and Freddie, Barney Frank said, “I do not think we are facing any kind of a crisis”. In 2008, after the S.S. Fannie and Freddie had hit the sand big time and the country had damn near gone into the dumper, good ol’ Barney was singing quite a different song, but he, Chris Dodd, Franklin Raines, Jamie Gorelick and others came out smelling like a rose (while surreptitiously stuffing millions of dollars in their pockets), while the beleaguered taxpayers pondered, “What the hell just happened?”
The Federal Reserve, with Ben Bernanke at the helm, operates in some kind of Twilight Zone where there is no congressional oversight and no one dares to question the decrees that are formulated behind the closed doors of that august office.
Of course, the manipulation of interest rates by the Fed were instrumental in the housing meltdown, and the current “quantitative easing” and other financial sleight-of-hand measures apparently have unintended consequences that leave the American people asking, in disbelief, “Are they trying to destroy us?”
The incumbent crop of politicians (on both sides of the aisle) certainly appear to be a lost cause, but perhaps we can put pressure to bear on the newly-elected freshmen to live up to their campaign rhetoric and “drain the swamp” (that Nancy Pelosi deepened and made ever more murky) and ask the hard questions that have gone unanswered for decades.
Are you high? Is the Pope Catholic? Is snow white?
Is that a rhetorical question or do you really not understand it.
The Social Security lockbox is as real as man-made global warming.
The SSTF is included in the $14 trillion national debt and is under the heading "Intragovernmental Holdings," to distinguish it from the publicly held debt. The fact that it is included in the national debt demonstrates that the SSTF represents an unfunded liability.
Its is a PONZI scheme, always has been.
YES.
I believe it is impossible for such a fund to even exist. There isn't a bunch of cash laying around in a safe. Money would have to be invested in something for a fund to exist, and just where is big enough to take this amount of money?
The USA has spent it all on the premise that the spending IS the investment.
And that was it. End of discussion. Cut to a commercial.
Nobody howled, “Well, that’s a darned lie!”. Nobody whipped out a stack of evidence substantiating their claim. The viewer was left sitting there, open-mouthed, wondering, “What did I just see?”
You based your entire rant on that? You've got to be kidding me. It's basic economic knowledge that the Social Security surplus has been spent and the so-called trust fund is devoid of any kind of real asset. What we need to do is get Washington to stop pretending otherwise.
If there was a big fire and all the SS bonds burned up would it make any practical difference? Obviously not.
Since the SS Trust Fund is tied up in US Government bonds, its as safe as any other investment in US Government bonds. And lots of people (including wealthy investors), funds, companies (including banks), and countries own US Government bonds. They are also to some extent liquid, because the Government can refinance that debt when the SS Trust Fund cashes it in.
Rather than default, the Government can keep printing money and pay off the debt with worthless dollars. The fact is that if the USG defaults, it will trigger a world-wide economic apocalypse. There will be bigger problems than SS (as old people probably won’t make effective rioters).
Or am I missing something here?
Both of which were invented by Al Gore.
What kind of retirement would you have if you kept borrowing from your savings ?
You will just end up with IOUs — from yourself.
“Social SECURITY” the name itself is an oxymoron.
Yes, you are definitely missing something here. Think of the Social Security Administration as being a huge insurance company. The company charges premiums and invests that money in wealth creation ventures so that they will have the ability to pay off any future claims down the road. When a catastrophic event occurs, the insurance company can then sell off those investments (which hold real value) and pay the claims.
The Social Security Administration has not done that. Instead, they have turned that money over to a firm that creates no wealth, holds no value, and loses money every single year, year after year after year. The name of that firm is the Federal Government. Was that a sound investment? HELL NO! If the executives of a real insurance company had done something like that, they would be looking at 40 years in federal PMITA prison.
That catastrophic event is coming, and it is coming soon. We are now in the position where the 'insurance company' has to pay out more money than it collects in premiums. And it will only get worse from here on. With the Baby Boomers reaching retirement age, there are more and more policy holders making claims, while there are less and less suckers (i.e. the American worker) paying premiums. So the question remains, where are they going to get that money?
They have nothing of value they can sell. All they have is these 'bonds' that no one will buy. So who is going to buy those bonds? Surely not the federal government. They have been losing money year after year. They don't have the ability to buy them.
Don't equate Treasury bonds that the Social Security Administration holds with T-bills that Japan, Germany, the UK, or China hold. They can selectively default on one while honoring the other. The bottom line here is that our Federal Government has a future liability that they cannot possibly cover. By the time I retire around 2040, there will be only two workers per retiree. You would have to tax each of those workers at 33% just so that I could have the same standard of living. So after you take that 33%, how would you pay for the rest of government?
The trust fund is full of Treasury bills. If you and I had a safe full of treasury bills, we could hand them to the government when they mature and demand payment in federal reserve notes (because that’s what you do with IOUs). But what does the government do when it has to redeem treasury notes? When it owes it itself? As we will see in a couple of weeks, they raise the debt ceiling and borrow more money. This is my understanding of it at least.
The only thing you are missing is that the T-bills in the SS Trust Fund can only be redeemed by the USG and are essentially non-transferable. The T-bills held by companies, China, etc. are part of the publicly held debt. They can be bought and sold on the market. The SSTF can’t sell its T-bills to China for other currencies or even dollars.
Post a serious question, and I will post a serious comment. Maybe you can tell me what is the difference between what Bernie Madoff did and what the Social Security Administration continues to do.
Wow!!
You’ve done your homework.
Maybe you should take over for Cavuto!
The SSTF can’t sell its T-bills to China for other currencies or even dollars.
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