http://money.cnn.com/2008/03/18/news/economy/sloan_socialsecurity.fortune/index.htm

Quote :

".... How can I say that, given Social Security's $2.3 trillion (and growing) trust fund? It's because the fund owns nothing but Treasury securities. Normally, of course, Treasury securities are the safest thing you can hold in a retirement account. But Social Security's Treasuries won't help cover the program's cash shortfall, because Social Security is part of the federal government. Having one arm of the government (Social Security) own IOUs from another arm (the Treasury) doesn't help the government as a whole cover its bills. ... "

3/19/2008 8:50:46 AM

<--- confused

So is the $2.3 trillion included in the national debt number?

This is what I know:

declared national debt ~ 9 trillion
implied debt ~ 55 trillion

Tell me how the trust fund fits in to the accounting.

3/19/2008 8:56:22 AM

Remember that "surplus" in the late 90's?

Those were Social Security receipts covering the gap between spending and General Revenues. Your "trust fund." Which has already been spent.

3/19/2008 9:49:33 AM

God I'd be so happy if it was gone by 2016.

3/19/2008 9:53:00 AM

Me too. the only thing i worry about are people like my parents who worked hard but only ever had enough to get by and thus didnt start utilizing 401ks until not too long ago. And at that point they havent had a lot of wiggle room to be contributing high percentages like I can. Theye both around 50 and are kind of in that dead space where SS will be gone but they dont have a well matured 401k to fall back on.

3/19/2008 10:13:02 AM

SS is nice, but it assumes that the next generation will always be larger than the previous generation, thus the next generation is able to keep the system afloat. This is clearly not the case in America, where the birthrate has declined. Now that the baby boomers are getting ready to retire, there aren't enough people contributing into SS to make it sustainable. About the only thing we can do at this point is just kill it already. The faster we rip the band-aid off, the less it will hurt in the long run.

3/19/2008 10:26:33 AM

gg government programs

3/19/2008 10:43:49 AM

I doubt they'll do away with it on a whim. They'll phase it out. So if your parents are 50 they'll receive all or a portion of their benefit.

Us? We probably won't receive any (thank God!) They just need to go ahead and start phasing it out as another example of Big Government run amok and maybe a lesson to those who wish a national health care plan.

3/19/2008 10:48:37 AM

Excellent point Oeuvre.

If a private firm had developed a ponzi scheme like social security, the CEO would be in prison by now for fraud.

3/19/2008 10:51:00 AM

^ haha, you're exactly right. Social Security is akin to a really, really bad insurance agency... of which many have been put in jail for a very long time for some of the same tactics. Selling something they can never produce.

3/19/2008 10:55:05 AM

Oeuvre, Social Security was developed before your parents were born and amended, rather then reformed over time. I also want to point out the comedy of you being relieved at the prospect of not receiving social security which is you saying the exact following:

"Boy am I glad they deducted Social Security from my paycheck for thirty years and I won't receive a penny of it!"

Whats needed is widespread system reform, rather then just tossing it out in the first place. If you can't trust your government to handle this, then you can't really trust your government for anything except bare bones national defense. Now I know a simpleton such as yourself and the average TSB poster a thing such as libertopia is an ideal situation, but I guarantee that in such a society people like me will profit at the expense of people like you, but thats an entirely different thread.

[Edited on March 19, 2008 at 11:00 AM. Reason : >.<]

3/19/2008 10:59:50 AM

Quote :

"If you can't trust your government to handle this, then you can't really trust your government for anything except bare bones national defense."

That's exactly right.

You want the government... to not only control your healthcare, but also control your livelihood when you're a senior? Really? Are you for fucking real? You want to trust the most inefficient of machines to basically run the things that matter most in your life?

Quote :

""Boy am I glad they deducted Social Security from my paycheck for thirty years and I won't receive a penny of it!""

I am saying that I understand that SS will not be there when I am older and I have made provisions for that. I will be ECSTATIC the day they quit taxing me, even if I am 30, in exchange for no benefits. I would sign up in a heartbeat.

I trust myself far more than I trust a corrupted government system.

[Edited on March 19, 2008 at 11:03 AM. Reason : .]

3/19/2008 11:02:52 AM

Quote :

"You want the government... to not only control your healthcare, but also control your livelihood when you're a senior? Really? Are you for fucking real? You want to trust the most inefficient of machines to basically run the things that matter most in your life? "

Going to extremes in an effort to prove a point isn't going to add any strength to your argument. I can play the doomsday scenario game as well:

Question: Would you entrust a greedy corporation whose only motive is profit and shareholder returns with the control of your personal healthcare knowing full well that they benefit from not helping you as often as possible? Are you for real? You want to trust the most greed of social organisms with your health?

Quote :

"I am saying that I understand that SS will not be there when I am older and I have made provisions for that. I will be ECSTATIC the day they quit taxing me, even if I am 30, in exchange for no benefits. I would sign up in a heartbeat."

Thats not what you said at all nor is that how the situation would happen. Most likely, you'd be far older when they decided to pull the plug, if they do in fact decide to do that, and you'll have lost years of investment in the system.

3/19/2008 11:13:37 AM

I don't consider it an investment. I consider it a tax. I don't have an account where I can see what my "investment" does.


And your "doomsday analogy" is some weak sauce. Those "greedy corporations who have greedy shareholders" also have....... competition. I can take my business elsewhere. Good luck having Britain take over your health care when you decide that America isn't doing the job it promised... like it won't be doing the job it promised to our seniors.



And maybe I will be older than 30 when they take it away. I hope it comes sooner more than later, but I will not care if they rip it from me when I'm 64.999999999999 because I am not banking on that "investment" for my livelihood. And neither should you.


I would rather trust the most greedy of social organisms with my healthcare than the government. The social organism still has to work for my patronage. THe government has guns. THey don't have to. I have to pay them regardless of services rendered.

[Edited on March 19, 2008 at 11:18 AM. Reason : .]

3/19/2008 11:15:58 AM

It would be better if they privatized it. Keep taking in the same percentage, just dont allow the govt to spend it. Then, allow people to pass down thier benefits to thier relatives. If you have 100k in your account when you die, you should be allowed to pass that to whoever you want.. after all it is YOUR money. After several generations, there would be a ton of money for individuals.

The problem will be class warfare. People will still complain that someone who put in more money, has more money in their account.. Surely some politician has the balls to just say STFU.

3/19/2008 11:20:29 AM

Quote :

"And your "doomsday analogy" is some weak sauce. Those "greedy corporations who have greedy shareholders" also have....... competition. I can take my business elsewhere. "

Is that right? Have you actually shopped for healthcare that wasn't employer provided? I have. As a healthy male at 22 years of age, I was quoted between 150-450$ a month for health insurance for coverage that was acceptable and not completely stripped of any benefit. $150 being the bottom of acceptable and 450 being the max. After thirty years of this system, its cheaper for me to insure my house and my car(an expensive BMW) then it is for me to insure myself.

After thirty years of your freemarket deciding healthcare, the US has the most expensive system in the world and is still outclassed by stellar nations such as Costa Rica, Dominica, Morocco and Columbia (guess our drug money comes in handy).

I'm not even going to bother talking about employer provided healthcare, which you have no choice over.

Quote :

" Good luck having Britain take over your health care when you decide that America isn't doing the job it promised... like it won't be doing the job it promised to our seniors. "

Britian is another nation and has no control over American government. I don't know if you were aware of this, but I thought I'd clue you in.

3/19/2008 11:24:27 AM

The problem with your logic, eyedrb, is that social security is supposed to be more generalized so that the poor can benefit from it as well. I agree that the payout should scale somewhat, but it's not supposed to be like an individual 401k, it's supposed to be a safety net for society. It's not meant to be relied on solely.

I understand the argument you're making, and can somewhat appreciate it, but disagree in general with you, though I do believe that the government should *never* be able to spend the funds.

3/19/2008 11:27:21 AM

Quote :

"Britian is another nation and has no control over American government. I don't know if you were aware of this, but I thought I'd clue you in."

sarcasm much?

Quote :

"its cheaper for me to insure my house and my car(an expensive BMW) then it is for me to insure myself."

And you're bitching about wanting your social security check and how expensive health care is.... HAHAHA... laughable... and plenty of people (including myself) pay between $150 and $400 for employer sponsored health care.

Quote :

"I'm not even going to bother talking about employer provided healthcare, which you have no choice over."

Because only I can be a patron of an insurance provider? Does not my employer also choose their insurance provider?

Quote :

"After thirty years of your freemarket deciding healthcare, the US has the most expensive system in the world and is still outclassed by stellar nations such as Costa Rica, Dominica, Morocco and Columbia (guess our drug money comes in handy)."

Tort law has nothing to do with this does it? You have doctors so scared of making the wrong decision that they order every test in the book to be sure they "cover their asses." Result: Higher cost of health care.

Then you have the federal and state government telling insurance providers that THEY HAVE TO INSURE X AND Y and basically determining what it thinks is a good health plan. If I could purchase a plan that didn't include insurance against massive bee torso growth disease, then that also would be much cheaper.

It hasn't been 30 years of capitalism in healthcare. THe government has regulated that for a very, very long time. Hardly capitalist anymore.

3/19/2008 11:29:09 AM

Quote :

" And you're bitching about wanting your social security check and how expensive health care is.... HAHAHA... laughable... and plenty of people (including myself) pay between $150 and $400 for employer sponsored health care. "

Its not for my sake, as I'm not a libertarian. Its for the sake of people less fortunate then me because I remember clearly the time I had to have x-ray work done without insurance.

Quote :

"Because only I can be a patron of an insurance provider? Does not my employer also choose their insurance provider?"

Your employer chooses providers based on a criteria different then yours.

Quote :

" Tort law has nothing to do with this does it? You have doctors so scared of making the wrong decision that they order every test in the book to be sure they "cover their asses." Result: Higher cost of health care. "

You will have to back up this claim to make a solid case.

Quote :

" Then you have the federal and state government telling insurance providers that THEY HAVE TO INSURE X AND Y and basically determining what it thinks is a good health plan. If I could purchase a plan that didn't include insurance against massive bee torso growth disease, then that also would be much cheaper. "

Again, you'd have to point to specific cases as this is a very general statement. State's choose their own health providers based on general criteria outlined by their legislative bodies. Its not as if you have no say in that matter either. Democracy and such.

Quote :

" It hasn't been 30 years of capitalism in healthcare. THe government has regulated that for a very, very long time. Hardly capitalist anymore. "

Once again, a general blanket statement that can apply to a lot of things. Regulated what part specifically and how?

3/19/2008 11:35:56 AM

Quote :

"Its not for my sake, as I'm not a libertarian. Its for the sake of people less fortunate then me because I remember clearly the time I had to have x-ray work done without insurance."

Trade in your beamer and get a corolla and donate the money. Put your money where your mouth is.


Oh what's that?



You'd rather put my money where your mouth is. How convenient.




http://www.google.com/search?q=state+mandates+on+health+insurance&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a

Great article on state mandates on health insurance and the effect on the insurance industry by the Cato institutue: http://www.cato.org/pubs/regulation/reg15n4g.html

From Lou Dobbs on Tort Reform:

Quote :

"The idea of tort reform is important to the future of this country because of the enormous burden that tort litigation costs place on the economy. It's estimated that costs of the U.S. tort system exceed $200 billion a year, and at 2 percent of our nation's gross domestic product, that's more than double the average in much of Western Europe, Canada and Japan. And unless some changes are made to our current system, costs could rise as much as 8 percent over the next few years, bringing tort costs up to $1,000 per person. But simply putting a $250,000 limit on medical malpractice awards for pain and suffering, as proposed by this administration, is not the answer to this growing problem."

These things are out there if you care to read it.

[Edited on March 19, 2008 at 11:41 AM. Reason : .]

3/19/2008 11:37:49 AM

Very well reasoned reply that rounds up a nice personal insult. Ironic considering your Ad Hominem post in the other thread.

Also ironic, because you're telling me what to do with my money which is going against your idealogy.

This is why I don't respect people like you. You argue for the sake of arguing and change your tone and resort to personal attacks when cornered. You don't actually stick to conservative ideology vis-a-vie the idealized Southern Conservative Gentlemen. You only nerd rage and neckbeard strike like a typical ron paul supporter when faced with the truth that their man is slightly left of loony.

3/19/2008 11:41:12 AM

where did I attack you?


All I said is put your money where your mouth is. And I stand by that. I'm suggesting what you should do with your money. Afterall, I'm for the government not taxing you for my benefit. I'm not forcibly taking your beamer from you, trading it in, and giving to the poor.

[Edited on March 19, 2008 at 11:46 AM. Reason : .]

3/19/2008 11:42:34 AM

I should also point out that the Cato Institute is a libertarian think tank.

3/19/2008 11:47:03 AM

point?


does that make them evil and wrong?

3/19/2008 11:47:49 AM

No, it makes them severely biased.

Just like it would make the report of a liberal think tank severely biased in the opposite direction.

3/19/2008 11:59:59 AM

Quote :

"Now I know a simpleton such as yourself and the average TSB poster a thing such as libertopia is an ideal situation, but I guarantee that in such a society people like me will profit at the expense of people like you, but thats an entirely different thread."

Sounds like more tough-guy talk from yet another internet neckbeard.

3/19/2008 12:57:41 PM

monky, the benefit would occur over generations. Someone who makes less, should get less. I know that is a radical statement, but its how the world works. So maybe you only have 60k built up at retirement, but have your home paid off. If you have any money left over when you die, you can will that onto your kids. If you dont have kids and didnt will it somewhere... i guess it goes to the pot. Im saying it should be more like a 401k, where YOU own YOUR money. Still limit the amount to withdrawl. So if you have 500k built up, you cant take out 400k for a house. Just a steady form of secondary retirement income.

Well our govt didnt spend the ss surplus for years.. one dipped into it, and they are generally praised for doing so. Sad actually.

3/19/2008 1:38:37 PM

The comments in this thread are ridiculous.

you've managed to twist this in to the general, disgusting, conversation about big government.

Who is out there actually talking about doing away with the system? Some of the candidates were talking about it, but after the primary field narrowed, I don't know if anyone has been talking about it. Do you really think anything is going to change as long as the government can mathematically continue into the next year?

No, I don't have any expectations to get SS money back. That's not because I hate the government or think it's an evil system. It just can't continue, any responsible young individual will not plan to depend on it.

Now someone tell me how the $2.3 trillion is accounted for.

3/19/2008 2:41:56 PM

You're right. It won't ever change... it has to crumble... and it will. It inevitably will.

3/19/2008 3:10:59 PM

save like SS doesnt exist. count SS as part of your taxes to help the greatest generation in their golden years and move on. theyve probably earned it.

3/19/2008 3:18:08 PM

No, they didn't earn it and that's meant as no respect to that fantastic generation.


THEY PAID FOR IT.

3/19/2008 3:18:47 PM

a lot of them really didn't earn it because it didn't necessarily exist when they started working or were born. talking about some of the really old ones here.

3/19/2008 4:10:13 PM

Quote :

"Now someone tell me how the $2.3 trillion is accounted for."

I already said it once, but here's a more detailed account:

The government collects Social Security as FICA. It then pays out existing obligations.

Until 2016, this results in a surplus, which is invested in government bonds. Those government bonds are then used to finance other spending not covered by General Revenues.

Thus, when someone tells you we ran a budget surplus, they're lying. We never had a budget surplus - the deficit was simply small enough that the Social Security revenues, when invested into government bonds, more than covered the deficit. However, this was money still owed to Social Security. In other words, debt.

So, here comes 2016. Social Security will no longer draw in as much as it puts out, and thus start cashing some of those bonds. Oh shit, how do we pay back those bonds? Because effectively, they're an IOU - the government wrote a check to itself, and now rent's due.

Well, shit. Guess we're fucked.

3/19/2008 4:37:10 PM

No, this doesn't cover everything. 2.3 trillion WILL NOT DESTROY THE GOVERNMENT.

We are talking about something much bigger, and I just don't see how on earth it's all accounted for. So SS has so much they take in, so much interest at a quantifiable rate, and so much they save (yes, i know it's government bonds, but this money is accounted for in the national debt).

We have not discussed where the problem comes from.

Take all the baby boomers, they invested some amount of money into SS. This money got a measurable rate with the bonds. In order for the system to be on a freight train path to destruction, the amount they are slated to get must be greater than their investment plus interest. Is it? If not, [/i]that account will never go[i] below zero. In order for a crisis to occur, that account would need to go at least like 10 trillion in the red.

By all means, this could happen, but that conclusion MUST have some that implication the baby boomers effectively paid less into the system than the law says they will get out. Or at least the ratio of what they get to what they pay must be much greater than previous generations. My understand is that that 2.3 trillion really needs to be more like 20 trillion to survive the storm to come.

[Edited on March 19, 2008 at 7:30 PM. Reason : ]

3/19/2008 7:30:09 PM

Quote :

"No, this doesn't cover everything. 2.3 trillion WILL NOT DESTROY THE GOVERNMENT."

$2.3 trillion is just the IOU's in the trust fund. It does not include the unfunded liabilities of the system, which will grow as baby boomers retire. It's more like $10 trillion over the lifetime of the retirement of the boomers, plus at least $30 trillion more for Medicare/Medicaid.

It's big, it's bad, it's an unfunded entitlement!

Quote :

"We are talking about something much bigger, and I just don't see how on earth it's all accounted for. So SS has so much they take in, so much, so much they save (yes, i know it's government bonds, but this money is accounted for in the national debt), and then interest on what we have."

Because $2.3 trillion is just the tip of the iceberg. We've already spent that money now - we're talking about a much larger problem.

Quote :

"We have not discussed where the problem comes from. Take all the baby boomers, they invested some amount of money into SS. This money got a measurable rate with the bonds. In order for the system to be on a freight train path to destruction, the amount they are slated to get must be greater than their investment plus interest. Is it? If not, that account will never go below zero. In order for a crisis to occur, that account would need to go at least like 10 trillion in the red."

Yes, and that's the point. First, there is no money "squirreled away" in the trust fund. They already spent it. ("They" being the Federal Government, as they took the money from the bonds to finance the national debt.) Post-2016, Social Security will be a net deficit on the budget, which means as it cashes in those "IOU's", it starts draining off money from General Revenues. Which in itself is simply an accounting trick - Social Security will be running a de facto deficit as soon as the demographics shift such that income is less than payouts.

Quote :

"By all means, this could happen, but that conclusion MUST have some that implication the baby boomers effectively paid less into the system than the law says they will get out. Or at least the ratio of what they get to what they pay must be much greater than previous generations. My understand is that that 2.3 trillion really needs to be more like 20 trillion to survive the storm to come."

That is the point - the demographics have shifted. You have the lowest number of workers per recipient in history supporting the fund as a very large generation retiring all at once.

[Edited on March 19, 2008 at 7:37 PM. Reason : .]

3/19/2008 7:36:43 PM

but the excuse that the ratio of workers to recipients right now is higher than ever doesn't cut it. In order to have such a little fund with a predicted wave of retirements you had to take revenue that was marked for the fund and used them elsewhere, completely avoiding the fund altogether, not just borrowing from another part of the government.

You have to make that money disappear.

3/19/2008 9:32:03 PM

This is precisely the point I've been making all along. This is exactly what has been happening.

We never ran a budget surplus. Ever. General Revenues never exceeded spending.

What happened was that Social Security brought in lots of extra money. This was plowed into government bonds.

These government bonds were thus used to finance deficit spending - something entirely unrelated to Social Security. More government bonds were bought by Social Security than the budget deficit - ergo, the talk of the surplus. In reality, this money was handed to the government when Social Security bought those bonds and spent right there. Which means the money is gone.

Meanwhile, the Social Security "trust fund" thus piled on bunches of government IOU's, while the government continued to spend into deficits - in fact, much bigger deficits than we are lead to believe. The money got spent on something else all along - deficit spending. What's left is a big stack of bonds (i.e., IOU's) waiting to be cashed in.

Now the government has to honor those bonds, i.e., "the trust fund," as Social Security comes back to cash those bonds in. Here's the problem - the government didn't have the money then (it wasn't running a surplus to begin with) and surely doesn't have the money to pay back those bonds all being called now.

Even if we play the game that Social Security itself is somehow solvent by the fact that it has a "credible debt" against the Federal Government (although how writing oneself an IOU and then proceeding to spend the money counts as anything approaching fiscally sound policy is beyond me), someone has to pay for those bonds. Which means the Federal Government is ponying up all that free money it took out of Social Security via bonds until that runs out - and then Social Security just starts plain running debts.

[Edited on March 19, 2008 at 9:57 PM. Reason : .]

3/19/2008 9:54:37 PM

I disagree. Taxes are taxes, for whatever reason the government said it was collecting them. That accountants are calculating an irrelevant number such as the Social Security trust fund does not make it any more binding.

Similarly, expeditures are expeditures, they exist as the pleasure of Congress. If Congress decided tomorrow to abolish Social Security payments, it could. People would piss and moan, which is why it is unlikely to occur, but it is certainly within their right as the purse holders.

3/19/2008 10:10:34 PM

Quote :

"I disagree. Taxes are taxes, for whatever reason the government said it was collecting them. That accountants are calculating an irrelevant number such as the Social Security trust fund does not make it any more binding."

The point is more that the Social Security "surpluses" are functionally out of the game. There is no "surplus" to fall back upon - it's already been spent, thanks to the fact that the government wrote itself an IOU for the funds by buying bonds from itself.

With that in mind, if one were to look at the simple revenue in vs. revenue out of the Federal Government, the effect is the same - more money is going to get paid out to Social Security. There is no "fallback surplus" or "trust fund," unless one plays accounting games.

3/19/2008 11:20:48 PM

Quote :

"People would piss and moan, which is why it is unlikely to occur, but it is certainly within their right as the purse holders."

Could this be the source of the majority of our troubles? Maybe the power of the purse strings does not belong in the hands of our leaders.

And I've never understood the concept of deficit spending. Why is the government allowed to spend money it does not have? The way it's described it sounds to me like deficit spending is when a government knows it can't afford something, so it pulls money out of thin air.

3/19/2008 11:22:03 PM

I would gladly just let them keep all the Social Security tax I've paid without ever getting any of the benefit if they would agree not to take any more away from me.

3/19/2008 11:47:11 PM

^

Seconded.

3/20/2008 2:57:06 AM

I don't know many people under 30 with actual jobs who don't agree with that.

3/20/2008 5:21:00 AM

Quote :

"I would gladly just let them keep all the Social Security tax I've paid without ever getting any of the benefit if they would agree not to take any more away from me."

3/20/2008 8:31:58 AM

^I agree. I just turned 30 and have been paying in the maximum amount for the last 3 years. They can keep it, just let me keep my money.

The problem is that if they did that, alot of younger people will piss it away and then whine that they are broke when they retire.

However, those of us who are saving like SS doesnt exit and paying the max are going to get screwed. Either ti wont be there when I retire, or ill get means tested out of it. "Youve got "enough" money saved, so you're inelligible for your benefits...that you paid for."

3/20/2008 8:42:15 AM

Quote :

"I would gladly just let them keep all the Social Security tax I've paid without ever getting any of the benefit if they would agree not to take any more away from me."

It looks to me that it will take one generation of Americans who are fed up enough and willing to let themselves get pretty much screwed over to get the country out from under the social security mistake.

We self-absorbed and selfish Boomers obviously won't, The Millennial generation might..but with their love of organization and general lack of contempt for gov't... I'm not sure.

My money is on the X-ers. The latch-key generation is used to taking care of itself and is bold enough to bring such an economic hardship upon themselves to give their kids a better chance.

[Edited on March 20, 2008 at 9:08 AM. Reason : .]

3/20/2008 9:07:45 AM

If only William Mckinley hadn't been assassinated none of this would have happened.

3/20/2008 9:12:58 AM

^^ Which generation is the Xers? Ours?

3/20/2008 10:43:24 AM

Can we execute Bush for his spending ?

3/20/2008 3:40:10 PM

set em up

3/20/2008 3:40:48 PM