Social Security Warns Benefits Could Get Cut

" Just because you bought into the gov’t lies to cover their Unconstitutional Ponzi scheme means nothing. No offense, but your group think is a reason the Conservatives will NEVER shrink gov’t back to A1S8.

I haven't "bought into" anything. For the sake of clarity and consistency, I also believe that every penny of income tax ever collected by the Federal Government is owed back to the citizens who paid it.

Taxation of a man's income is both immoral and and unconstitutional under the "takings" clause.

Yes, I know there is a USSC case Fleming versus Nestor. This was a 5/4 split decision that was dissented to on three separate grounds. If you're going to knuckle under and say that because the Warren Court made a mistake over half a century ago this is "settled law" then you might as well give up on Obamacare and Abortion as well.

The Supreme Court can call white black all day long. That doesn't make it so.

Your reference to Article 1 Section 8 is a worthy goal, bearing in mind that this nation existed until 1913 without any form of tax on income. The income tax code is unconstitutional based on the language of that same article, in which it states "but all Duties, Imposts and Excises shall be uniform throughout the United States;" The Income Tax (and its red-headed stepchild the payroll tax) are the very antithesis of uniformity.

I'm not arguing the de facto existence of income and payroll taxes. I'm stating that since their imposition, we have been living in a police state sustained by the immoral confiscation of wealth.

I do want to thank you for you comment however. Your assertion that I was practicing "group think" gave me the best laugh I'm likely to have all week.

(TOL & Sal - Pinged for your entertainment.)

For ultimate irony, they tax Himself on his SS which was already taxed, before.

Entitlement, my pink ass.

LOL. Aside from me limping across the finish line on ‘name recognition’ alone...No, I’d never win. I wouldn’t promise anyone a chicken in every pot/etc. Let alone vilified as stone heart’d from drying up the ‘security/safety’ nets, etc.

Sorry, but there is no ‘paid back’; there can only be triage to stop the flow TO D.C. We’re already $120T+ in the hole; there’s NO way to get out of that unless we can agree it is GONE and pissed away.

Income tax, aside from your ‘takings’ example (which is correct), also falls to the 13th (slavery). Let alone those that say we no longer have a debtors prison (it’d say ask those in jail per the IRS).

Fleming/Nestor, IMHO, was correct. As Congress has NO authority to distribute income (let alone ‘invest’ for ones’ retirement), SS and the like ARE taxes (just dressed up for selling to The People) and therefor SS can be abolished whenever and what was ‘paid’ does not need to be ‘paid back’.

You are correct there too, We the People are the FINAL arbiters of the Constitution. We gave the gov’t some authority, We say what’s what.

Completely concur re: police state. It’s a damn shame most have no awoken sometime in the last 100+ yrs. to see the same.

Glad to give a laugh. I meant ‘group think’ as those of like minds “Keep your hands off XYZ”.

All I can say is I'm glad our Social Security is in Al Gore's lock box and is safe and secure. At least Grandma won't get thrown out into the snow for partisan political reasons when 0bama and the Dems really get down to brass tacks, er, knuckles!

I also understand everyone will be getting a free turkey for Christmas this year...

If he can blame it on the GOP he’ll withhold SS payments to grandma in a heartbeat

He can and he will. Be assured his whoring "news" media will support him fully in this. Before they are done, Boehner will be growing fangs and killing Grandma.

The GOP had better get out in front of this one, fast. They know (or should know) it is coming. It is a 70 year old tactic which has worked every time it is used.

Remember the House voted to fund the NIH but the Senate rejected it and the MSM still ran sob stories about mean old Republicans denying them sick kids cancer treatments. All without mentioning any facts of course.

PLEASE explain how any of us seniors are responsible for this empty fund?

Most of us here are not, but many others are.

Low information voters can also be seniors and many of them date all the way back to voting for FDR. They will vote for the shiniest bauble on the shelf which in this case are slimy politicians who always promise them the moon while they are busy stealing their grandkid's pabulum and cementing their own power and fortunes in Washington.

It is also the fault of the Gibsmedats and the Free Sh!t Army who vote for these politicians.

Please don't get me going on the fault of the "news media" in all this...

SS and other government taxes are nothing to many politicians but a vote buying scheme. These politicians should be hanging from lamp posts instead of hanging in fancy bars and planning new conquests with each other and the K Street crowd.

In a more just world, they still might...

Remember the House voted to fund the NIH but the Senate rejected it...

I know, I know.

You'd figure they would know by this time how to play this political game without the benefit if the DNC media, but I guess not.

Maybe they could put Ted Cruz on a retainer and use him?

Surprised how you bought into the fear mongering. Odd, you are usually pretty steady. The only thing we have to fear is fear itself.

Perhaps Obama has a death wish. His minions perpetrating his demands sound like it.

I am sorry but you are wrong. You quote the Social Security Administration, which bases it’s numbers on assumptions of economic growth and workforce participation that are not realistic. They claim they are living off ‘interest’ which is laughable since the interest they are talking about is the rate of expansion of the debt, not appreciation of any tangible asset. Every penny of that interest is money that will have to be taken away from other budget items, so basically they’re saying that all the other entitlement programs will be reduced and discretionary spending will be wiped out, but we’ll keep printing those monthly checks.

They also assume that life expectancy will not rise. By 2085 it would not surprise me to see one worker for every retiree, so good luck with pay as you go. Or maybe that’s what the Death Panels are designed to prevent.

Raising the payroll tax would lower net revenue to the government, as we are already on the wrong side of the Laffer curve. It would also take away incentive to cut unsustainable programs which would leach off any ‘surplus’. The discussion is moot anyway, as they will keep issuing new debt to cover the Ponzi Scheme until a few years from now when the world wakes up and realizes it’s time for a new reserve currency.

We are on a glide path to collapse, and there is no fuel in the tanks to pull out of it. Barring a breakthrough in cheap energy to change the paradigm, the collapse will happen in our lifetimes.

Even assuming you are correct, Social Security provides a lesser benefit for future workers at a higher tax rate, which means that it is theft from young or unborn future workers to provide an indefensible payment level to current and near term retirees. You should be ashamed of yourself for even suggesting a nation founded on the idea of equal protection under the laws should give you a benefit that is stolen from your posterity.

No, the money is in a lockbox and Al Gore has the key. Do you feel better now?

” $50 paid in S.S. in the 1950’s would have paid for food for a family of five for a week.”
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Your memory is faulty or you are not really old enough to remember the fifties. In that era you needed a pickup truck to haul fifty dollars worth of food. If you planned well and didn’t try to eat like rich people a week could have been done on five in my area. I clearly remember my father pitching a fit becaause our ELECTRIC BILL FOR A WHOLE MONTH hit eight dollars. He earned about twelve a day and one day’s pay was expected to cover two months of electricity or very close to it. I also remember going with my mother in my older brother’s car to the supermarket, it was a big Mercury and the trunk was empty. We packed the trunk as tight as we possibly could, not one air space left, then my seven year old kid brother and I got in the back seat, we piled all we could over the rear seatback ledge until you could not see out the rear, then they handed bags to us to pack around us until we could not move, not even our feet,
then my mother sat down in the passenger seat and piled bags around her until she could not move. My older brother then squeezed into the driver’s side and drove us home. Mother spent just over thirty dollars. This is fact, no BS and that happened in late 1959 or early 1960. I know because my brother bought the car after finishing high school in 1959.

I also recall from that era that MONY (Mutual of New York) used to run ads offering to send info on their annuities. The ad said they would tell you how to retire in fifteen years with $300.00 a month income. The point being that retiring on that sounded to most people like the good life. If you had a house paid for and an income of %300. monthly you could move to Florida and play golf like the couple in the ad. Now you would need to offer $300. A DAY and in fifteen years that might not even buy you a bag of balls. People who are not old enough to remember have no idea what a dollar would buy in the fifties. Those were the days when a schoolboy who bought a ten cent Baby Ruth or Butterfinger bar gave half of it to his brother or his best friend because he could not eat the whole bar. The nickle bar was all any normal kid ever wanted.

I am sorry but you are wrong. You quote the Social Security Administration, which bases it’s numbers on assumptions of economic growth and workforce participation that are not realistic.

I am sorry but you don't have a clue about SS and how it operates. This is a report by the Medicare and SS Trustees. They have both government and public members.

The Board of Trustees is comprised of six members. Four serve by virtue of their positions with the federal government: Jacob J. Lew, Secretary of the Treasury and Managing Trustee; Carolyn W. Colvin, Acting Commissioner of Social Security; Kathleen Sebelius, Secretary of Health and Human Services; and Seth D. Harris, Acting Secretary of Labor. The two public trustees are Charles P. Blahous, III and Robert D. Reischauer.

The public members provide non-partisan review of the programs. I met one such former member, Tom Savings, who served a long time on the Board. They use accepted actuarial standards. They have been remarkably accurate in their projections over the years.

They claim they are living off ‘interest’ which is laughable since the interest they are talking about is the rate of expansion of the debt, not appreciation of any tangible asset. Every penny of that interest is money that will have to be taken away from other budget items, so basically they’re saying that all the other entitlement programs will be reduced and discretionary spending will be wiped out, but we’ll keep printing those monthly checks.

LOL. No, they are talking about the interest payments associated with the $2.4 trillion in T-bills in the SS Trust Fund. The USG is required to pay interest on these T-bills just as much as they must do the same for those held by the Chinese. Under the law governing SS, the benefits paid out by SS will be reduced once the fund (including interest) is exhausted. Then, by law, the amount of benefits paid will be circumscribed by the amount of payroll taxes collected. Hence, if SS is not reformed, it will go bust in 2033 or thereabouts. The SS DI trust fund runs out of money in 2016.

They also assume that life expectancy will not rise. By 2085 it would not surprise me to see one worker for every retiree, so good luck with pay as you go. Or maybe that’s what the Death Panels are designed to prevent.

Here is the documentation for the methodology for the long term projections

Here are the long range demographic assumptions. If you read it, you will learn that they do indeed project an increase in life spans over the projected 75 year period required by the report.

Here is the methodology Here are the short term projection methodology and assumptions.

We are on a glide path to collapse, and there is no fuel in the tanks to pull out of it. Barring a breakthrough in cheap energy to change the paradigm, the collapse will happen in our lifetimes.

That is assuming no changes will be made. There will be. Paul Ryan is already talking about means testing SS. The program will implode if no changes are made, which is why the politicians will be forced to make them. Politicians need a crisis before they will act. We have known for a very long time that these programs are unsustainable. The Trustees have been documenting it every year if you ever read their reports.

Even assuming you are correct, Social Security provides a lesser benefit for future workers at a higher tax rate, which means that it is theft from young or unborn future workers to provide an indefensible payment level to current and near term retirees.

I said it was a Ponzi scheme. Do you understand how a Ponzi scheme operates?

You should be ashamed of yourself for even suggesting a nation founded on the idea of equal protection under the laws should give you a benefit that is stolen from your posterity.

Ashamed of what? I said that these programs are so imbedded into the social fabric of this country that they will never be repealed. They are unsustainable as currently structured and must be reformed.

Do you consider the progressive income tax to be equal protection under the law? You are naive if you don't understand that we are well down the road to socialism. The federal government controls 25% of the GDP and all government--federal, state, and local--controls 45% of GDP. Wealth is being redistributed on a gargantuan scale and the government is doing the redistributing. We just added another huge entitlement program--Obamacare. Bush 43 added the prescription drug program, which represents a $7.3 trillion unfunded liability.

There is no Trust Fund and there never was. It consists of pieces of paper denominating money spent long ago. These pieces of paper are not magic, they are not capable of generating revenue. You have somehow managed to convince yourself that these IOUs are an asset, when the fact is Social Security would operate exactly the same if those pieces of paper were never printed.

All benefits payments are made from the General Fund. Always have been, always will be. All FICA taxes collected have always gone into the General Fund, always have, always will. You could use those really fancy pieces of paper to record the payments, or use a spreadsheet on a PC, it doesn’t make any difference, the money follows the exact same path.

How accurate were your magic Trustees at predicting a lost decade of economic stagnation? How can you trust that their crystal ball is correct that 2018 is the year the US economy magically starts to grow, when all Economic growth for the past 5 years has been less than the borrowed money added to the National Debt. But, again, none of that matters because the Trustees are making calculations based on magic paper.

Ponzi schemes collapse, you admitted that Social Security is a Ponzi scheme, and you say it must be reformed. Yet in effect you stated earlier that one solution is to make it a bigger Ponzi scheme by feeding more money into it.

The progressive income tax is unconstitutional. It is well documented that the 16th amendment was never properly ratified by a sufficient number of States, and the US Government has been lawlessly funded for over 100 years. Are you trying to convince me how good it is since it’s deeply ingrained in society?

We are not well down the road to Socialism, we have been there since the 1930s. We are well down the road to the consequences of socialism, which is collapse. I find it difficult from reading your closing paragraph to tell whether you are for or against it.

SS is solvent (on the books anyway) way into the future. It shouldn’t cost the feds anything because they’r still paying back what has already been paid in.

There is no Trust Fund and there never was. It consists of pieces of paper denominating money spent long ago. These pieces of paper are not magic, they are not capable of generating revenue. You have somehow managed to convince yourself that these IOUs are an asset, when the fact is Social Security would operate exactly the same if those pieces of paper were never printed.

Of course there is a SS Trust Fund, just like there is a Medicare Trust Fund, Federal Pension Trust Fund, etc. They are a reality and show up as part of our $17 trillion national debt under "Intragovernmental Holdings." I never said they were an asset to the USG, but they are an asset to the SSA, which uses them to pay benefits. To make it a little simpler for you to understand, the Chinese consider the $1 trillion it owns in US T-bills as an asset. We consider it an unfunded liability. The SSA considers the Trust Fund as an asset backed by the full faith and credit of the US. The USG considers it as a debt, which is why the SSTF and other trust funds are included in the national debt and they count against the debt ceiling.

SS would not operate the same way without the Trust Fund. SS went into the red in 2010 and will continue to do so until the SSTF runs out of money. Under the law, benefits are tied to the revenue taken in by the SSA thru the payroll tax. Benefits can only be paid up to the amount the SSA has available. Without the SSTF to make up the shortfall, SS benefits would have had to be cut in 2010 by law and every year thereafter.

All benefits payments are made from the General Fund. Always have been, always will be. All FICA taxes collected have always gone into the General Fund, always have, always will. You could use those really fancy pieces of paper to record the payments, or use a spreadsheet on a PC, it doesn’t make any difference, the money follows the exact same path.

Sorry, but that is simply not true. The payroll tax collections go into SSTF, which is used to dispense benefits. They don't go into the General Fund.

The Social Security Trust Funds are the Old-Age and Survivors Insurance (OASI) and the Disability Insurance (DI) Trust Funds. These funds are accounts managed by the Department of the Treasury. They serve two purposes: (1) they provide an accounting mechanism for tracking all income to and disbursements from the trust funds, and (2) they hold the accumulated assets. These accumulated assets provide automatic spending authority to pay benefits. The Social Security Act limits trust fund expenditures to benefits and administrative costs.

Benefits to retired workers and their families, and to families of deceased workers, are paid from the OASI Trust Fund. Benefits to disabled workers and their families are paid from the DI Trust Fund. More than 98 percent of total disbursements in 2012 were for benefit payments.

By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are "special issues" of the United States Treasury. Such securities are available only to the trust funds.

In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. Marketable securities are subject to the forces of the open market and may suffer a loss, or enjoy a gain, if sold before maturity. Investment in special issues gives the trust funds the same flexibility as holding cash.

How accurate were your magic Trustees at predicting a lost decade of economic stagnation? How can you trust that their crystal ball is correct that 2018 is the year the US economy magically starts to grow, when all Economic growth for the past 5 years has been less than the borrowed money added to the National Debt. But, again, none of that matters because the Trustees are making calculations based on magic paper.

I gave you the methodology and actuarial basis for their projections. The SS Trustees have predicted with some precision exactly where we are now. They have moved up the dates when the funds are exhausted by a few years, but like life insurance actuaries, they crunch the numbers and come up with some fairly accurate numbers.

Source: CBO “Combined OASDI Trust Funds; January 2011 Baseline” 26 Jan 2011. Note: See “Primary Surplus” line (which is negative, indicating a deficit)

Ponzi schemes collapse, you admitted that Social Security is a Ponzi scheme, and you say it must be reformed. Yet in effect you stated earlier that one solution is to make it a bigger Ponzi scheme by feeding more money into it.

I have said all along it was a Ponzi scheme and unsustainable. You can make it sustainable by reducing benefits or increasing revenue or some combination thereof. It was done in 1983 when SS was in the red.

Why Social Security is a Ponzi Scheme

The progressive income tax is unconstitutional. It is well documented that the 16th amendment was never properly ratified by a sufficient number of States, and the US Government has been lawlessly funded for over 100 years. Are you trying to convince me how good it is since it’s deeply ingrained in society?

It is the law of the land. And I brought it up to demonstrate that the government has been in the redistribution of wealth for a long time and that we are well on the road to socialism with Medicare, Medicaid, SS, food stamps, etc. One out of every two Americans receives a check from the government.

We are not well down the road to Socialism, we have been there since the 1930s. We are well down the road to the consequences of socialism, which is collapse. I find it difficult from reading your closing paragraph to tell whether you are for or against it.

I think you must have a reading comprehension problem.

The progressive income tax started in 1913. The Socialist Labor Party (founded in 1876) and the Socialist Party of America (formed in 1901) looked to European models. Prior to that various utopian communities were formed as early as 1825 that embraced socialist type values.

Eugene Debs was the candidate of the Socialist Party of America for President of the United States on several occasions. Debs received 5.99% of the popular vote (a total of 901,551 votes) in 1912, while his total of 913,693 votes in the 1920 campaign remains the all-time high for a Socialist Party candidate.

I didn't say it was an investment scheme, just that you are using a lesser argument against it. The pay-as-you go bit makes it clearly a Ponzi scheme. However, it was presented as an investment scheme, and the numbers of in and out are in balance if it really were an investment scheme.

Comparing 55,000 in against 161,000 out is an apples to oranges comparison unless you include the time cost of money.

Assuming an interest rate for 30 year treasuries of 6%, putting in 2000 a year for 25 years ($50,000 in) leaves you with almost $110,000. Assuming you spend $12,000 a year after 65, you get to spend $150,000 before the pot is empty.

Granted, the 6% rate assumption isn't true anymore, but that is because of yet another financial rape of the common man, this time by the Federal Reserve and it's not-quite-zero interest rate program.

So your chart is bogus. The numbers are as they should be if the system was honest. Your chart implies that it is the common man that is cheating, getting more than they should. The problem is that the system is totally dishonest, a complete Ponzi scheme.

The question isn't whether or not Medicare (and Social Security) are busted and were crooked schemes to begin with, but what argument is the one to present that points the finger at the right crooks.

Not my intention - but people should be greatly, greatly concerned.

The simple fact of the matter is that although SS is mandatory spending, it is not guaranteed in the post-economic and political climate of a technical default. As many economists have stated this week, if the US Treasury has to issue a prioritization plan of payments (1. Interest on the Debt, 2. Pay Active Duty Troops, 3. EBT/Food Stamps, 4. Medicaid, etc) then all bets are off. You have Tea Party members going on Hannity saying that due to US monthly revenues of taxes that SS can be "paid in full" but that must be qualified by what Obama would and could do to poison the political well.

After watching him for years, I have zero doubts (none) that he would not consider giving recipients a percentage less of SS to emphasize that he didn't get his way, and to punish the older white voters who overwhelmingly collect Social Security. Only a portion of that base is "his people."

Further, if we do technically default, our interest payments on our current debt will skyrocket. They will. Paul Ryan said so yesterday, and his warning was serious and dire.

That leaves even a smaller slice for discretionary spending, and even mandatory programs are at great risk should we technically default. We will make our interest payments, I have no doubt, but as for the rest of government - all bets are off.

Finally, we will eventually lose our status as the world's reserve currency, and that will further accelerate the race to the pit.

I predict Washington will raise the debt ceiling.......eventually. They will either do it before great damage has been done to our economy, or after.