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To: mountainlion
I guess it boils down to the semantics of who is reporting the situation. 60 minutes program a few years ago called Social Security a warehouse of IOUs. The funds were used for other spending which means political double speak of we took the money and bought... If a private trust fund was handled like the government did people would go to jail.

The SSTF is included in our national debt. The "surplus" contributions were invested in T-bills. The USG is obligated to honor those T-bills in much the same way that it must honor the payment of the Chinese T-bills or those accumulated by the Fed.

The most important thing to remember is that even if those T-bills were exchanged for cash and deposited in a CD, SS will still go broke. It is unsustainable actuarily. In 1950 we had 16 workers for every retiree, now it is about three and in 20 years it will be 2 workers for every retiree.

Medicare is in even worse shape. It's trust funds will be exhausted in 2023. And the SS disability fund will be exhausted in 2016. Within the next few years, Congress must approve moving T-bills from the SSTF to the SSDI trust fund to continue making payments. This will impact the effective date the SSTF runs out T-bills.

Semantics and spin is what we got here. We may never know the truth.

The truth is known. You just have to read the annual Trustee Reports for SS and Medicare. What many people don't understand is that we must borrow money to continue to redeem the T-bills in the trust funds so we can pay full benefits.

Also, many do not know that by law, the premiums for Medicare Parts B and D (SMI Trust Fund) cover only 25% of the costs. The remaining 75% comes from the General Fund. In 2012 that amounted to $214.8 billion. In 2012 the GF also had to come up with $97.7 billion to redeem SSTF T-bills. With 10,000 baby boomers retiring every day for the next 20 years, Medicare and SS will eventually consume the entire federal budget if they are not reformed.

These programs are unsustainable because they pay out more in benefits than they collect in revenue. It has nothing to do with the USG "stealing" the money.

44 posted on 12/16/2013 2:59:38 PM PST by kabar
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To: kabar
Nute Gingrich talked about Congress “Raiding Social Security” every year. Did they spend the money on pork or did they buy treasuries? Do you really think any of the money “used to buy treasuries” will ever be repaid? I think this mismanagement of the system will be used later to crash the retirement systems and the government will confiscate IRAs and 401ks to “save the system” which will really enslave us in socialism. You see the laws and manipulating the fund and I see the theft of my future and resources enslavement of the country.
45 posted on 12/16/2013 3:16:51 PM PST by mountainlion (Live well for those that did not make it back.)
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