Posted on 03/10/2005 4:21:50 PM PST by HankReardon
Social Security as it is today is not a fully funded savings and investment system. It is redistribution system, workers pay in, beneficiaries receive payments and the surplus is lent to the federal government and spent. My first question, What type of bond is held by the Social Security System for the money owed it by the federal government?
I think it was 1968 this started, almost 4 decades ago. Estimated SS contributions for the year 2005 are $575 billion, the estimated pay out is $515 billion, the $60 billion dollars will be lent to the federal goverment and spent. After 36 years of this borrowing how much is now owed the system? Including gained interest. I have heard estimates of over $1 trillion.
When Democrats say that the Social Security System is okay until 2043 are they using this money that was lent and spent by the federal government? We all know there is no actual money there, if it was to be paid back to the system it would have to be done with deficit spending.
When naysayers lament about how much it would cost to reform the SS system I would love to hear someone come back with, "The federal government owes the system over $1 trillion, how many billions do you thimk it will cost to reform the system?"
Anybody out there in the Public Employees Retirement System (risky scheme?)that would rather be in the Social Security System?
This system can't be reformed, it has been thoroughly looted, and there's nothing there to reform. A government IOU to itself is completely worthless, the money has to come from somewhere, it DID come from somewhere, and it has been completely spent. To cover the eventual shortfalls the government will need to take money out of other revenues, meaning that we're going to pay for it a second time whether we like it or not.
People are going to have to make their own arrangements for old-age survival. The generations that actually saw/will see money out of Social Security have basically stolen it from everyone else.
My question is about the SSDI [disablaity program]? Are they going to reform this one too? My son [he has Down Syndrome] & I recieve this.
The shame of all of this is that, if something along the lines of what is being proposed now had been undertaken say 20 or 25 years ago the transition would have been much, much smoother and the private Accounts would be very much ahead of the game. (Check out the annualized return of the S & P 500 Index over the past 20-25 years)
Unfortunately, despite the fact that, even at that point in time, SS was widely recognized as a financial bomb waiting to go off, it was also described as the 'Third Rail' of Politics and the Interest Groups united to quash any efforts to correct this deeply flawed scheme.
In the intervening years, the Gov't has borrowed the surpluses from the fund and essentially wasted them. So now we find ourselves like the irresponsible Credit Card user who went on shopping binges and purchased junk. We have the Debt but nothing at all to show for it. A mess but one that, IMO, was completely predictable and was in fact predicted to end this way by many.
It will be done away with.
SS is but 1 of them...& the only 1 where the inflow/outflow can be directly ID'd.
Insolvency by 2042 , etc ??? what BS.
If the Fed needs money, they can sell something, or not build something.
All this "reform" discussion, to what end ?
You mean the money isn't in a lock box?!
There was a good post on this subject a couple weeks ago, but unfortunately, I haven't been able to dig it out yet.
I think that the indebtedness was originally treated as a ledger entry only, no bonds, notes or documentation of any kind, but now there is some form of paper, but I believe that it is of an unusual kind.
Similarly, since this is basically a current account transaction, I do not believe that this indebtedness is included in the National Debt. I would be extremely surprised if it is, since it is purely an internal government accounting transaction.
To what end?
What sort of person are you to ask such a question?
The "end" is to end theft.
I'm sorry about your son's condition.
This is unfortunately one of the problems with social security.
What began as a noble program to give the indigent elderly a choice other than either working until they died or starving to death has been corrupted by the government into a giant social welfare program.
Instead of supporting those in need (like your son) out of general revenue, the government in it's finite wisdom decided to pay for his care out of social security. Now, perhaps millions of persons (most far less deserving than your son) receive SSI- some for 'disabilities' such as obesity and drug addiction.
This constant 'mission creep' has resulted in social security payouts growing at a rate that is unsupportable by payroll taxes. Add this to the fact that there is not now and never was a "social security trust fund" (the monies having been spent on day-to-day operations, which lands you in jail if you manage a private pension fund) and you see why the system is in such trouble.
The only recourse is to either
1. reform the current system (which would require billions in new revenue to take over social security's off-mission responsibilities)or
2. throw it out entirely and copy Chile's successful system (which would again require trillions to meet the current and future obligations of the existing system.)
When the Democrats state that the SS system is solvent until 2043 they MUST be applying what is owed the system by the federal government. Don't you think so?
There are at least twenty nations who have some form of individual pension accounts in their social security sytem. Some counties in Texas opted out of SS and are invested in mutual funds, etc. Here's how it adds up. My husband at sixteen invested $650 in Affiliated Fund in 1950 and left it until his hair turned gray. He didn't add a penny to the little nestegg, neither did he take a penny out. He reinvested the dividends. In 1997, his hair finally gray, his $650 had become $175,000. He started receiving the dividends then. The fund is still $165,000. Time and compounding works, but we need to get started now so our young people can retire similarly.
I believe that the debt is closer to $3 trillion
When Democrats say that the Social Security System is okay until 2043 are they using this money that was lent and spent by the federal government? We all know there is no actual money there, if it was to be paid back to the system it would have to be done with deficit spending.
Or by raising taxes.
Anybody out there in the Public Employees Retirement System (risky scheme?)that would rather be in the Social Security System?
I have heard that the Galveston, TX city government opted out of the SS system in 1980 and went to private accounts. Retirement checks of people on SS average less than $1000/mo compared to the Galveston employees who average almost $5,000 per month. I seriously doubt that there are any City of Galveston retirees who are unhappy about it.
It is but the congresscritters hold the keys!
Do some research. Here's a start:
http://www.ssa.gov/pressoffice/pr/trustee04-pr.htm
http://www.ssa.gov/qa.htm
http://www.ssa.gov/pubs/10055.html
http://www.ncpa.org/pub/st/st272/
http://advanced-stock-selection.com/SocialSecurityDraft.htm#FWI
http://www.advanced-stock-selection.com/social-security-II.htm
http://www.ssa.gov/OACT/TR/TR00/lr2F20.html
The above are pro's. This one is a "con". It makes assumptions that fix the outcome of the analysis IMHO, but you need to look at both sides.
http://www.safehaven.com/showarticle.cfm?id=2357&pv=1
Given my references, you can guess where I'm at.
Of course.
And it is just as meaningful and honest as me telling my daughter that I will pay for her college education with the IOUs I'm writing to myself and stuffing in the old cookie jar on top of the fridge.
The Social Security System is technically solvent today in the sense that it can cover current obligations from current revenues.
But it is handing over the surplus to the Treasury, where it is commingles with general funds and spent. Starting in about four years, the surplus will start to shrink, and the government will start to see the contribution of the SS System to general revenues start to shrink.
That is when the trouble will start.
20% of Chile's "successful" system is eaten up in fees.
BS
This is a lie. Perhaps you are just repeating the lie mindlessly, or maybe you are lying intentionally. I don't know.
But you ought not to do it in any case.
Perhaps, but the trend has always been for the Gov't to acquire more 'Assets' and lock them up (Example - Expansion of Wilderness Areas) or expand spending on ever more expensive and intrusive programs (Medicare/Medicaid among a few). I don't see this mindset changing anytime soon since the constituencies of these Programs will not permit any retrenchment and will, IMO, actually fight for even more expenditures. Similarly, I don't envision a Gov't Asset Sale to fund any needs.
"Insolvency by 2042 , etc ??? what BS."
By most any pension accounting protocol the System is virtually bankrupt now. The present value of future benefits greatly exceeds the amounts retained as accumulated surpluses over the past 70 or so years of the program. If you doubt this, just stop everything in place right now, take no new participants in AND do not make ANY further contributions. Then simply pay out the benefits that all existing participants have vested and you'll see this fact in action.
The only way to bring it into balance is to 1) Increase the age at which benefits begin (i.e., reduce the future benefit payout) or 2) Increase the funding rate to make up for the shortfall (i.e., increase either the rate of tax from the current 12+% and/or increase the Cap from 90,000 to some higher number)
I could write several books on this topic but trying to do it through a keyboard on a Thread is the best we've got.
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