Posted on 01/13/2023 9:58:29 AM PST by SeekAndFind
Social Security Trust Funds have squandered billions of dollars on an antiquated investment policy.
That loss tells us a lot about the financial crisis coming to Social Security.
In 2019, Social Security lost roughly $1 billion because the system invests the excess reserves on exactly the wrong minute of the year. Any other day or any minute early in the day, saves the program money.
It is 2023, and the beat goes on. Over the course of 2022, Social Security redeemed more than $100 billion in high-yield debt, and lost nearly $5 billion in interest earnings in the process. The program just gave it away.
Here is the problem: Social Security generally needs cash to pay its bills in the back half of the year. Unfortunately, the program locks up all its loose cash on June 30. So, starting July 1, the program needs to redeem bonds, and the Treasury Department picks the wrong bonds for redemption based on a policy that literally dates back to the era of black-and-white TV.
To illustrate, in November, Social Security needed extra cash to pay the bills, and redeemed nearly $100 billion in bonds at par, which earned 4 percent interest. At the same time, it kept bonds that pay less than 1 percent on the books. Given the process, the program lost nearly $2 billion in interest.
For those so inclined to look at the loss in terms of math: 95.7B * (4-.075) * 7/12 months = a lot of money that has been simply thrown away. This is not terribly different from someone spending $1,000 on ATM fees.
This underlying problem was identified more than 20 years ago. Yet, nothing has been done about it since then. The solution is not terribly difficult.
(Excerpt) Read more at americanthinker.com ...
Isn’t there currently $2.8 billion in the SS trust fund?
Yes it’s been theft and yes I’d rather have a welfare program than paying people that don’t need it.
SS is a giant disaster and needs to be shut down. Means testing is just the only viable method I can think of that can drag it out longer.
HOW TO SAVE SOCIAL SECURITY FOR IDIOTS
- Stop using the Social Security program as a mechanism for wealth distribution.
- Return to the original Social Security guidelines that defined who was eligible to receive benefits.
- Stop paying "benefits" (unearned wealth distribution) to illegals, bums, non-workers and others
who have not paid into the program and/or were not eligible for benefits under the original guidelines.Voila! - Social Security Is Saved!
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"On August 14, 1935, the Social Security Act established a system of old-age benefits for workers, benefits for victims of industrial
accidents, unemployment insurance, and aid for dependent mothers and children, persons who are blind, and persons with disabilities."Read More Here: https://www.ssa.gov/history/50ed.html
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
“This simple fix could help save Social Security”
mandate that everyone receiving social security get covid-vaxed once a month until no one remains?
$31T in hock and legal Americans think there still is some separate fund for SSI?
LOL:-)
BTW just retired and got on it so no I don’t think it’s a joke.
Yes, but that just increases Fed.gov interest expensive paid on its debt.
Its robbing from Peter to pay Paul
Capping SS taxes isn’t “means testing.” SS taxes are capped because SS benefits are capped at fixed amounts.
Oh God, no.
Social Security will be “saved” through 3 basic measures imposed by the government:
1. Deliberately underreport inflation rates to keep cost of living adjustments for SS recipients artificially lower than real inflation rates.
2. Flood the country with immigrants who won’t even realize they’re only here to pay the cost of supporting retired American citizens.
3. Euthanize old people.
So apparently ‘cutting payouts’ isn’t an obvious solution as well? Oh well..
The whole idea behind SS was to call it "insurance" so as to not stigmatize the recipients because it was for one and all. We always had general welfare for the truly needy.
Means testing would just admit that it was, in fact, plain old welfare by another name. The wealthier would start to resent it; the poor would be stigmatized just like the old days.
Unfortunately this ain't the old days and welfare recipients are no longer stigmatized by it.
Well Portnoy, here’s my complaint. They’ve been taking my money since I was in sixth grade. It’s not an entitlement.
Just because I’ve managed to save and invest despite their theft doesn’t mean they can welch out of paying what I’m owed with a “means test”.
And, who gets to decide when a person has “enough”?
Welcome to Free Republic, by the way.
If they changed the method, the market would adjust.
The problem with “solutions” is they assume that behavior won’t change in reaction.
I am not saying this won’t work. I am just saying that “simple” changes don’t result in massive gains very often.
The middle class and wealthy would have stigmatized recipients if they were paying in at the high rates we have with no expected return to themselves.
It's a mess, all right. I wish it had never started, and we'd continue to take care of the needy as needed. But, here we are, and the system is broke. I don't think allowing early retirement and eligibility at age 62 was too bright when people are living longer, for one thing.
Pyramid schemes are by their very nature unfixable.
Someone always takes it in the shorts when it collapses.
There are no exceptions to this rule.
I can tell you how to fix Social Security. First, realize that the program is exactly what its name implies - social security. Something to keep old and sick people from starving to death and sleeping in the streets and under bridges. The fact is, that the program is, in reality, the only thing most people have to rely on when they reach retirement age. Therefore, remove all limitations on earning for social security tax. If you make a million dollars, you still pay social security. Think of it as a tax, not an investment. Make it apply to gambling in the stock market. The only stocks subject to capital gains, are those held over 1 year at a minimum. That means the day trader gamblers
pay self-employment tax on their dillying and dallying.
Second, conservatives need to knock off their crap about the system. Social Security is an easy fix, and you don’t even have to go as far as I advocate.
The REAL problem with Medicare and particularly Medicaid, is FRAUD and Criminality. Those are not easily fixed. To fix them, doctors and hospital admins need to be prosecuted and jailed. Nearly 99% of them are in violation of long-standing anti-trust provisions. Not to mention, down right scams in their charging. BUT, to fix this will cause a major depression. A short-lived one, but a depression nonetheless because we need to reduce medical expenditures from 20% or so of our economy down to about 8%, like other civilized countries. We need national health coverage.
Here is a great link explaining the problem:
https://market-ticker.org/akcs-www?post=234584
Amen!
give everybody whatever they paid in plus their employers contributions....after that, means test it.....
again, we paid for medicare our whole lives....and its a boondoggle since you still have to pay extra for part B and a supplement....so what did it get us?...nothing much...
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