Posted on 10/30/2011 4:58:03 AM PDT by Stajack
Now, Social Security is sucking money out of the Treasury. This year, it will add a projected $46 billion to the nation’s budget problems, according to projections by system trustees. Replacing cash lost to a one-year payroll tax holiday will require an additional $105 billion. If the payroll tax break is expanded next year, as President Obama has proposed, Social Security will need an extra $267 billion to pay promised benefits.
(Excerpt) Read more at washingtonpost.com ...
I seem to recall SS already being in the red even before this year’s “payroll tax holiday”.
Since the “Social Security Trust Fund” has long been spent, and in order for the Social Security Administration to redeem one dollar in its bonds the Treasury Department must sell one dollar of bonds elsewhere, the Social Security Trust Fund should be recognized as the accounting fiction it is and declared Null and Void.
From now on, Social Security payouts should be funded solely by FICA tax revenues.
This requires, of course, some combination of increasing the retirement age and means-testing all recipients, at a minimum.
Raising the retirement age, of course, worsens the unemployment problem.
I’ve been saying for some time that “much unpleasantness lies ahead, no matter what anyone does”.
Many on this site are still in self delusion over our problems.
but...but....you forgot the four freedoms....
Freedom of speech and expression (yes that is in the Constitution)
Freedom of worship (yes that is in the Constitution)
Freedom from want (???? WHAT?...thats communism)
Freedom from fear (????? fear...fear of what...the landlord, the credit card companies...thats communism too..)
OK...piss on him
You may be right. But whether it's raiding 401's or something else, I agree that now that the politicians have procrastinated until the system is actually in crisis, their medicine will taste nasty.
Someone please correct me if I’m wrong.
You are absolutely correct. There is no such thing as a "Social Security Fund". Like I said I used the analogy of picture Fort Knox, now picture that filled up with all the money for Social Security, that doesn't exist.
All of the money paid to Social Security recipients comes out of the General Treasury, it is no different than funding the military, paying government salaries, ect...
It is con groups like AARP that are trying to brainwash Seniors that there is some mythical Fort Knox filled with funds that are labeled "The Social Security Fund" all of which is only to be spent on Social Security. Complete con.
Think of a simple x / y graph. At a certain point the money going in towards social security by those working and money being paid out has hit the point where more money is paid out than coming into the Treasury. I don't know how to do graphics but I think this little explanation should sum it up for those not familiar with how Social Security works.
Sardonic wit noted ;-)
Wise planning. I would hope for best, but plan for the worst. By the time your ready to retire who knows. The best case scenario might be an age of 75 before one is eligible to start collecting. If you want to retire at 65 or before, you'll need to live off of investments...
Good point. You're technically right, the building in West Virginia that's supposed to hold the SS Trust Funds was raided years ago, but the projections were that costs wouldn't exceed revenues until 2032. Seems we're there already.
Social Security operated "in the black", continuously I believe, from its creation until recently. Otherwise it wouldn't have a $4 trillion "Trust Fund".
That does not mean it was not doomed to fail from the beginning.
Ida Mae Fuller, the first Social Security recipient, paid roughly $24 in FICA taxes from the beginning of the program until her retirement, and then collected roughly $22000 in benefits. A 100000% return on her investment. Ponzi schemes are generally good deals for those who get in early.
There is, in fact, a "Fort Knox" filled with funds that are labeled "The Social Security Fund" all of which is only to be spent on Social Security. It's somewhere in West Virginia.
The problem is that the trust fund has long been spent and for every bond the Social Security Administration redeems in order to pay Social Security benefits in excess of FICA revenue the Treasury Department must sell another bond of equal value.
As such, the Trust Fund is an accounting fiction and should be declared Null and Void, making Social Security a pay-as-you-go program, to be phased out completely over the next 40 years.
I belonged to AARP for about fifteen minutes when I turned fifty. That’s how long it took for me to realize that NO, I AM NOT IMAGINING THINGS, THEY HAVE NOTHING TO OFFER ME FOR MY MONEY!!! It took me a while to stop wondering why anyone joins, the dues were about eight dollars a year then which is not worth worrying about but I couldn’t see where they offered anything worth even eight cents.
Not true for SS Disability.
The work requirement is waived for applicants who can prove that they became disabled at or before the age of 22, as these individuals may be allowed to collect on their parent's or parents' work credits. The parent(s) experience no loss of benefits.
How would you do that? Have the Mint print up a bunch of $1,000,000 bills and store them in Ft. Knox?
I hope competition for greeter jobs a Wal*Mart doesn’t heat up too much in the next 5-10 years.
And what did no COLA for 2 years put into the system. My rent went up. Food went up. Gas went up....but no cola. It really hurt.
The projections did not allow for a depression.
What really set me off about AARP in particular was an article they had in their magazine. It was an interview with notorious anti-American hack Harry Belafonte. This guy literally despises the country.
I do admit that the AARP scare ads are humorous, it is typical lefty tactics of trying to scare granny.
There is a limit to how much the retirement age could be raised on those that actually work for a living. I doubt it could be raised at all for those workers.
There are only so many walmart greeter jobs.
It depends on what they did with the separate fund.
As currently implemented, the "trust fund" was essentially invested in US Treasury bonds. They aren't marketable bonds, but they are bonds: they really do exist in a file cabinet in some government office.
If the "trust fund" had been kept separate and just invested in real US Treasury bonds, the outcome would have been the same: the return on investment would have been very similar, and would have to be redeemed with current tax revenues.
The only way that the "trust fund" would have done any better is to invest it in something OTHER than US government bonds, that have historically yielded a better return. Of course, there have been multiple opportunities to do better, but also many to do worse.
And frankly, I think that if the Social Security administration had invested it in something else, they would have screwed it up. It would have Solyendra multiplied by thousands.
Congress would have never let competent investment managers choose assets wisely, based on yield, risk, etc. They would have been constantly interfering: you have to invest in this boondoggle, you can't invest in this politically-incorrect industry. The results would likely have been worse than it is now.
The real problem with Social Security is demographics and policy. If benefit payments had been tied to sound actuarial projections, it would be in much better shape. But, between the unsupportable cost-of-living increases and the unfunded disability benefits, Social Security has turned into a mess.
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