Posted on 01/26/2011 6:16:19 PM PST by markomalley
Sick and getting sicker, Social Security will run at a deficit this year and keep on running in the red until its trust funds are drained by about 2037, congressional budget experts said Wednesday in bleaker-than-previous estimates.
The massive retirement program has been suffering from the effects of the struggling economy for several years. It first went into deficit last year but had been projected to post surpluses for a few more years before permanently slipping into the red in 2016
This year alone, Social Security will pay out $45 billion more in retirement, disability and survivors' benefits than it collects in payroll taxes, the nonpartisan Congressional Budget Office said. That figure nearly triples — to $130 billion — when the new one-year cut in payroll taxes is included.
(Excerpt) Read more at news.yahoo.com ...
Lets see. In 2038 I will be 88 or so.......if I’m lucky enough to escape the death panels.
Yes, there is. It's a stack of special Treasury bonds in a file cabinet in West Virginia.
What you meant to say is that there are no assets backing those Treasury Bonds other than the federal government's ability to collect the taxes in the future to redeem those bonds.
However, you are correct that there is no "trust fund" accounting on a per-worker basis. What was left over after subtracting each month's benefits from the month's payroll tax collection was simply deposited in the "trust fund". Now that there is no surplus, the shortage must be made up out of the accumulated "trust fund".
The promised monthly benefits have only an tangential relationship to the taxes that you paid. The benefit formula in 2011:
The maximum average monthly earnings subject to the payroll tax in 2011 is $8,900. So, you can see how middle income taxpayers get truly screwed.
Oh, by the way: the latest Social Security Trustee's report -- which was conveniently delayed until after the election -- says that after the "trust fund" is gone, Social Security payroll taxes will only be able to fund 75% of the benefits currently being promised.
All of the money in the SS fund has been gone for years. We are spending $1,400,000,000,000 Trillion....that is One million, four hundred thousand Million a year in interest payments on our debt at what? 4% interest? What happens when the interest rates go to 12% If we spent NOTHING on Defense, Social Security or wages for Federal employees, we still need to cover the interest payments with $4.7 Billion PER DAY.
Which all that you account boils down to there is not Social Security Fund... it is nothing to paper with no money to back it... just a silly accounting transfer of the gross amounts - not individual amounts. The report for each tax paying citizen that pays into Social Security is just that - an account of one’s wages and what one has paid in... nothing more... just a ledger ...
What is not commonly understood is that the BORROWED money from the Social Security Trust Fund is squandered on general expenses... And there NO HOPE it could be paid back ... Social Security is a TRUE Ponzi Scheme - workers pay in - and currently eligible citizens get a check each month... stop or otherwise interrupt the pay in of wage deductions and the MONEY to the eligible recipients STOPS... if other tax money is not available to the government... And a Crook recently went to jail for doing this for a mere theft of 50 Billion dollars - a pittance by Social Security standards
And we knew this was going to happen for how many decades?
At least another useful argument against government-run anything to liberals.
What Fund? The one that was supposed to hold the excess. Sorry it is already spent. And now the expenditures are 10’s of billions more than social security is taking in. They now have to borrow onto the national debt to pay for that.
Americans you are getting charged twice. Once when you pay your social security tax, and a second time when you pay the interest on the money being borrowed to replace the money that was stolen.
Too bad retirees can’t get a lump sum. I’d grab that in a second! :)
What the hell are they talking about? IT’S EMPTY NOW! Congress has been raiding the “trust fund” for decades to pay for their pet projects and there isn’t a single nickel in it. That statement they send you every year around your birthday is just to remind you of how much they have stolen and spent.
If I live that long I will be 100 and won’t give a damn!!!!
Why do you think that the government doesn’t make a fuss about illegal aliens stealing SS numbers or making them up? Politicians look at it as “free money” into the treasury.
Reagan railed about it in the 1960's.
Now -- we're for a provision that destitution should not follow unemployment by reason of old age, and to that end we've accepted Social Security as a step toward meeting the problem.27 October 1964. Listen to it again.But we're against those entrusted with this program when they practice deception regarding its fiscal shortcomings, when they charge that any criticism of the program means that we want to end payments to those people who depend on them for a livelihood. They've called it "insurance" to us in a hundred million pieces of literature. But then they appeared before the Supreme Court and they testified it was a welfare program. They only use the term "insurance" to sell it to the people. And they said Social Security dues are a tax for the general use of the government, and the government has used that tax. There is no fund, because Robert Byers, the actuarial head, appeared before a congressional committee and admitted that Social Security as of this moment is 298 billion dollars in the hole. But he said there should be no cause for worry because as long as they have the power to tax, they could always take away from the people whatever they needed to bail them out of trouble. And they're doing just that.
Another absurd SS article. There is no fund to empty. There is no fund; there is no fund; there is no fund...
The author should be required to repeat this until it sinks in.
SS is cash negative at least part of the time, which is all that matters. Medicare is worse.
The assets in the Social Security "trust fund" are a special class of US Treasury Bonds. While they are just paper, they are not much different than the Treasury Bonds that are purchased by individual investors, mutual funds, and pension funds.
The report for each tax paying citizen that pays into Social Security is just that - an account of one’s wages and what one has paid in... nothing more... just a ledger ...
Yes, I think I just posted that. And benefits are based on the average monthly indexed earnings, using the formula I posted earlier. It's not based on individual balances in the "trust fund", and never has been. If it were, the amount of benefits would be staggering if the individual contributions were invested each year in long-term T-bonds at the prevailing rate. (I've done the calculations)
What is not commonly understood is that the BORROWED money from the Social Security Trust Fund is squandered on general expenses...
The bonds in the "trust fund" are at least on par with all the other government-issued securities. The federal government can't default on them without triggering a panic among public bond holders. Bond ratings would be lowered, and higher interest rates would have to be offered.
And there NO HOPE it could be paid back ...
It can be paid back, but what most don't realize is at what cost? The federal government has to fund the redemption of these bonds, on top of all the other things it is spending money for. So, there are three (simplified choices):
#1 will be a significant drag on the economy. #2 is politically unlikely. And #3 will cause the "official" public debt to grow very rapidly. The SS "trust fund" is NOT included in the public debt: it's considered a separate "account". Redeeming the special SS treasury bonds will probably require the sale of more Treasury Bonds or Treasury Bills to the public.
And when they are all redeemed, what happens next? Payroll taxes will only meet 75% of the needed revenue to maintain the promised benefits... and that percentage has been creeping down every year.
Just my luck, I was born in 63.
I would bet there's going to be a very high wall built around the Washington, D.C. Beltway to keep us riff-raff tax payers from petitioning our representatives.
Yep, and Obama keeps insisting that we "dig our way out of the hole"
Can you believe it???
Proverbs 11:15
He that is surety for a stranger shall smart for it: and he that hateth suretiship is sure.
If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem. -J. Paul Getty
We who depend on Gov't largess want to keep the ponzi scheme going until we die, as evidenced by many posts on this very thread. We'll let the Gov't get away with murder so that we can survive.
It means that, assuming you are still alive, the Democrats will put you down through socialized medicine.
Not only social security but also health care and salary. Why do the people ‘supposedly’ working for us, have better everything than we do? Unfortunately, our republic will go through, suffer and collapse the same way the Roman Empire did. Repeating the past over and over again will not give a different result.
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