Alan Simpson Calls GOP Refusal To Raise Revenue ‘Absolute Bullshit’

[Toddsterpatriot]

If the SS trust IOUs were a real asset, then CON$ couldn't say that SS is bankrupt as they do. We've reached the point where there is no more yearly SS Surplus to raid for tax cuts for the rich and now as more boomers retire it's time to tap those nonexistant SS trust "assets," but when Uncle Sam got there the cupboard was bare.

So the government must either raise taxes, cut benefits, borrow money, print money or default. The GOP limits the choices to cut benefits or default.

Are you saying the government "must either raise taxes, cut benefits, borrow money, print money or default" to pay SS benefits, despite having trillions in the "Trust Funds"?

Let me know when you figure out what an asset is and what a liability is and how to add them together.

There is not one penny in the SS "trust" fund, just a bunch of government IOUs and no material assets, so when it comes time to pay back those IOUs with interest the money has to be raised somehow or defaulted on.

Exactly! No assets, so no liabilities either.
So government debt is not $14 trillion, it's the debt held by the public.
$9.749 trillion as of July 7th.
That's why the deficit in 2006 was $161 billion. No assets were saved in the "Trust Fund".

 

[edthecynic]

What makes you think that a continuation of reaganomics is going to save the day?

A proven track record through the 80's and 90's. Just as the Keynesian policies of Dear Leader have a proven track record of failure.

Of course, spending stimulus money to buy Mexican drug lords their guns does skew the multiplier - but that the fucking moron Obama for you....

Holder: "Hey Barry, what can really get the economy moving"
Obama: "I know, let's buy guns and give them to Mexican cartels - then we can blame Arizona and repeal the second Amendment."
Holder: "Brilliant my lord, it is a plan worthy of an Emperor."

That "proven track record" of the 80's and 90' means we need to quadruple the national debt.

Of course, spending borrowed money to buy America hating terrorists their guns does skew the multiplier - but that's the fucking moron Reagan for you....

DICK Cheney: "Hey St Ronnie, what can really get the economy moving"
Reagan: "I know, let's buy guns and give them to Osama Bin Laden - then we can blame Clinton and start a perpetual war on terror."
DICK Cheney: "Brilliant my Lord, it is a plan worthy of a God."

 

[Toddsterpatriot]

The interest debited to the trusts is a blend of 1 to 15 year government bonds (I believe) and is currently compounding somewhere in the 3% range.

The interest credited to the funds is near 3%.
I'll bet the interest debited to the Treasury is the same near 3% number.
Don't tell the guys who can't add, it'll ruin their day.

I'm not sure exactly how it is calculated, but since the returns in the trusts are supposed to mimic the returns of government bonds, the amount debited to the trusts should offset the amounts credited to the Treasury. IOW, they should be the same.

Yes, that's why in my Amex example I said to ignore the interest.
Because it's the same on both sides.

 

[edthecynic]

Are you saying the government "must either raise taxes, cut benefits, borrow money, print money or default" to pay SS benefits, despite having trillions in the "Trust Funds"?

Let me know when you figure out what an asset is and what a liability is and how to add them together.

There is not one penny in the SS "trust" fund, just a bunch of government IOUs and no material assets, so when it comes time to pay back those IOUs with interest the money has to be raised somehow or defaulted on.

Exactly! No assets, so no liabilities either.
So government debt is not $14 trillion, it's the debt held by the public.
$9.749 trillion as of July 7th.
That's why the deficit in 2006 was $161 billion. No assets were saved in the "Trust Fund".

There are no liabilities only if you default on on the IOUs, which, of course, is the GOP plan, defaulting on $4.6 trillion in SS and pension funds.

 

[Toro]

SS is supposed to mimic a government bond fund. The economics are similar to a government bond mutual fund, except without the fees. So any interest debited to the trusts should offset the amount paid by the Treasury.

 

[Toddsterpatriot]

There is not one penny in the SS "trust" fund, just a bunch of government IOUs and no material assets, so when it comes time to pay back those IOUs with interest the money has to be raised somehow or defaulted on.

Exactly! No assets, so no liabilities either.
So government debt is not $14 trillion, it's the debt held by the public.
$9.749 trillion as of July 7th.
That's why the deficit in 2006 was $161 billion. No assets were saved in the "Trust Fund".

There are no liabilities only if you default on on the IOUs, which, of course, is the GOP plan, defaulting on $4.6 trillion in SS and pension funds.

Unfunded liabilities aren't debt. Glad you get it now.

 

[Toddsterpatriot]

SS is supposed to mimic a government bond fund. The economics are similar to a government bond mutual fund, except without the fees. So any interest debited to the trusts should offset the amount paid by the Treasury.

Yeah, the fees are minimal when you pay your left pocket from your right pocket.

 

[Toro]

There is not one penny in the SS "trust" fund, just a bunch of government IOUs and no material assets, so when it comes time to pay back those IOUs with interest the money has to be raised somehow or defaulted on.

Exactly! No assets, so no liabilities either.
So government debt is not $14 trillion, it's the debt held by the public.
$9.749 trillion as of July 7th.
That's why the deficit in 2006 was $161 billion. No assets were saved in the "Trust Fund".

There are no liabilities only if you default on on the IOUs, which, of course, is the GOP plan, defaulting on $4.6 trillion in SS and pension funds.

There are legal liabilities within the SS trust funds. The assets of the trusts are the liabilities of the Treasury.

SS used to hold nothing but Treasury bills, notes and bonds. The trusts were in the market every day buying and selling US debt. In the 1980s, the government decided to no longer buy government bonds but instead create assets in the trusts as if they were buying and selling government bonds. In the old way, the assets of the trusts were the government bonds. Now the assets of the trusts are the promises by the government to pay, or IOUs as some people say. However, all a Treasury bond is is an IOU of the government, a promise by the government to pay. So the economics of the trusts are the same as if it were a "real" pension fund that invested in government bonds.

 

[Toddsterpatriot]

Exactly! No assets, so no liabilities either.
So government debt is not $14 trillion, it's the debt held by the public.
$9.749 trillion as of July 7th.
That's why the deficit in 2006 was $161 billion. No assets were saved in the "Trust Fund".

There are no liabilities only if you default on on the IOUs, which, of course, is the GOP plan, defaulting on $4.6 trillion in SS and pension funds.

There are legal liabilities within the SS trust funds. The assets of the trusts are the liabilities of the Treasury.

SS used to hold nothing but Treasury bills, notes and bonds. The trusts were in the market every day buying and selling US debt. In the 1980s, the government decided to no longer buy government bonds but instead create assets in the trusts as if they were buying and selling government bonds. In the old way, the assets of the trusts were the government bonds. Now the assets of the trusts are the promises by the government to pay, or IOUs as some people say. However, all a Treasury bond is is an IOU of the government, a promise by the government to pay. So the economics of the trusts are the same as if it were a "real" pension fund that invested in government bonds.

Legal liabilities which can be changed by act of Congress.

If you count the trust as an asset, you must subtract that asset from total debt.

 

[Toro]

There are no liabilities only if you default on on the IOUs, which, of course, is the GOP plan, defaulting on $4.6 trillion in SS and pension funds.

There are legal liabilities within the SS trust funds. The assets of the trusts are the liabilities of the Treasury.

SS used to hold nothing but Treasury bills, notes and bonds. The trusts were in the market every day buying and selling US debt. In the 1980s, the government decided to no longer buy government bonds but instead create assets in the trusts as if they were buying and selling government bonds. In the old way, the assets of the trusts were the government bonds. Now the assets of the trusts are the promises by the government to pay, or IOUs as some people say. However, all a Treasury bond is is an IOU of the government, a promise by the government to pay. So the economics of the trusts are the same as if it were a "real" pension fund that invested in government bonds.

Legal liabilities which can be changed by act of Congress.

If you count the trust as an asset, you must subtract that asset from total debt.

You are absolutely correct. The liabilities can be changed by Congress. And I expect they will. However, that can also occur with tradable government debt. The government can simply stop paying what they owe. That may happen next month!

The assets of the trusts are the liabilities of the government. However, they net out. So total debt can rise while net debt can stay flat or even fall, as it did in the 90s.

 

[Uncensored2008]

That "proven track record" of the 80's and 90' means we need to quadruple the national debt.

Dear Leader already did that - with no positive effect.

Of course, the military buildup to defeat the USSR was not the main catalyst for the economy, but it did build debt.

Of course, spending borrowed money to buy America hating terrorists their guns does skew the multiplier - but that's the fucking moron Reagan for you....

More bullshit from the lying left. The only arms deal with Iran yielded millions in profits. Yeah, he spent it on defeating your beloved Marxist comrades in Nicaragua, but the claim of spending borrowed money is an utter lie.

And arming the Mujahadeen was a Carter program. No one, neither Carter or Reagan, ever gave bin Laden a dime - as your handlers know. What bin Laden brought to the game was his $300 million.

So do you think Obama should be impeached for Operation Fast and Furious?

Mexico lawmakers livid over US 'Operation Fast and Furious' - CSMonitor.com

 

[Uncensored2008]

There are no liabilities only if you default on on the IOUs, which, of course, is the GOP plan, defaulting on $4.6 trillion in SS and pension funds.

Really? You can offer evidence of that, Edtheliar?

Serious question, do you think that by lying for your shameful party, you'll be rewarded in the afterlife?

 

[Toddsterpatriot]

There are legal liabilities within the SS trust funds. The assets of the trusts are the liabilities of the Treasury.

SS used to hold nothing but Treasury bills, notes and bonds. The trusts were in the market every day buying and selling US debt. In the 1980s, the government decided to no longer buy government bonds but instead create assets in the trusts as if they were buying and selling government bonds. In the old way, the assets of the trusts were the government bonds. Now the assets of the trusts are the promises by the government to pay, or IOUs as some people say. However, all a Treasury bond is is an IOU of the government, a promise by the government to pay. So the economics of the trusts are the same as if it were a "real" pension fund that invested in government bonds.

Legal liabilities which can be changed by act of Congress.

If you count the trust as an asset, you must subtract that asset from total debt.

You are absolutely correct. The liabilities can be changed by Congress. And I expect they will. However, that can also occur with tradable government debt. The government can simply stop paying what they owe. That may happen next month!

The difference is, if Congress reduces our SS liabilities, our credit standing will improve, if they do the other, it will tank.

The assets of the trusts are the liabilities of the government. However, they net out. So total debt can rise while net debt can stay flat or even fall, as it did in the 90s.

Yes, they net out.

 

[Uncensored2008]

SS is supposed to mimic a government bond fund.

But it doesn't, there is no maturity nor annuity to the fund. It's operated like a letter of credit, with no spending limit nor call date.

 

[edthecynic]

That "proven track record" of the 80's and 90' means we need to quadruple the national debt.

Dear Leader already did that - with no positive effect.

Of course, the military buildup to defeat the USSR was not the main catalyst for the economy, but it did build debt.

Of course, spending borrowed money to buy America hating terrorists their guns does skew the multiplier - but that's the fucking moron Reagan for you....

More bullshit from the lying left. The only arms deal with Iran yielded millions in profits. Yeah, he spent it on defeating your beloved Marxist comrades in Nicaragua, but the claim of spending borrowed money is an utter lie.

And arming the Mujahadeen was a Carter program. No one, neither Carter or Reagan, ever gave bin Laden a dime - as your handlers know. What bin Laden brought to the game was his $300 million.

You are just a pathological liar. St Ronnie's liaison, Dana Rohrabacker, was the one who brought stinger missiles to OBL knowing that Osama wanted to kill Americans as much as Russians. Reagan owns 9/11

http://www.ocweekly.com/features/features/dr-frankenbacher/22375/

"These weren’t American weapons," said Rohrabacher. "By and large, it was done with Russian equipment bought from Egypt or one of the other states that was once allied with Russia but was now friendly to us. About the only American weapons they had were the Stinger missiles."...

... the majority of U.S. military-aid recipients were unsavory, even unstable characters. The Central Intelligence Agency (CIA), which coordinated the efforts on the ground in Afghanistan, was never very choosy about who got arms.

Roughly half the weapons the CIA supplied went to fundamentalist Afghan leader Gulbeddin Hekmatyar—"one of the most stridently anti-Western of the resistance leaders," according to Mary Ann Weaver’s May 1996 article in The Atlantic Monthly. Another arms customer was the blind Sheikh Omar Abdul-Rahman, later convicted of involvement in the 1993 botched bombing of the World Trade Center. Oh, and Osama bin Laden, the man whom George W. Bush says was behind the Sept. 11 attacks.

 

[Toro]

SS is supposed to mimic a government bond fund.

But it doesn't, there is no maturity nor annuity to the fund. It's operated like a letter of credit, with no spending limit nor call date.

A bond fund has no maturity nor a call date.

The annuity to the fund is the interest debited to the fund. If it were a "real" government bond fund, it would receive interest payments. Instead, the Treasury debits to its accounts liabilities that equate to interest payments as if the trust held government debt. So if the "real" fund held a $100 bond paying 3% payable semi-annually, the "real" fund would receive $1.50 twice a year. Instead, the Treasury debits $1.50 in liabilities twice a year to the trust.

The spending limit is the actuarial liability to the fund, no different than a defined benefit fund.

 

[Uncensored2008]

You are just a pathological liar. St Ronnie's liaison, Dana Rohrabacker, was the one who brought stinger missiles to OBL knowing that Osama wanted to kill Americans as much as Russians. Reagan owns 9/11

No Edtheliar, what you claim is a fabrication. The Mujahadeen <> Al Qaeda <> bin Laden.

You're just engaging in the sleazy slander you always do.

{ Former National Security Adviser under the Carter Administration, Zbigniew Brzezenski, has admitted that an American operation to infiltrate Afghanistan was launched long before Russia sent in its troops on 27 December 1979. Agence France Press reported that: &#8220;Despite formal denials, the United States launched a covert&#8232;operation to bolster anti-Communist guerrillas in Afghanistan at least six months before the 1979 Soviet invasion of the country, according to a former top US official.&#8221;[2]

Brzezenski stated that &#8220;We actually did provide some support to the Mujahedeen before the invasion.&#8221;[3] &#8220;We did not push the Russians into invading, but we knowingly increased the probability that they would.&#8221; He also bragged: &#8220;That secret operation was an excellent idea. The effect was to draw the Russians into the Afghan trap.&#8221;[4]}

So it was, as I stated, CARTER who began arming the Mujahadeen, not Reagan - as you keep lying..

But, you are a liar, that is your forte'

 

[Toro]

The difference is, if Congress reduces our SS liabilities, our credit standing will improve, if they do the other, it will tank.

This is probably true. However, if SS were a real pension fund with a captive vehicle that bought marketable Treasury securities - the bonds you and I can buy - then a default on those bonds alone would probably have the same affect.

 

[Toddsterpatriot]

The difference is, if Congress reduces our SS liabilities, our credit standing will improve, if they do the other, it will tank.

This is probably true. However, if SS were a real pension fund with a captive vehicle that bought marketable Treasury securities - the bonds you and I can buy - then a default on those bonds alone would probably have the same affect.

If SS were a real pension fund, the trustees would probably be in the cell next to Madoff.
I have a feeling that a fund with such a big funding shortfall would have probably already been shut down by the Feds.
Maybe there is a pension expert around here who can chime in?

 

[Toro]

The difference is, if Congress reduces our SS liabilities, our credit standing will improve, if they do the other, it will tank.

This is probably true. However, if SS were a real pension fund with a captive vehicle that bought marketable Treasury securities - the bonds you and I can buy - then a default on those bonds alone would probably have the same affect.

If SS were a real pension fund, the trustees would probably be in the cell next to Madoff.
I have a feeling that a fund with such a big funding shortfall would have probably already been shut down by the Feds.
Maybe there is a pension expert around here who can chime in?

I've spent most of my career around pension funds. SS doesn't have a huge shortfall. The typical pension fund is 70-80% funded. SS would be somewhere around that if it were a real fund.

Having said that, SS is about the last way I would design a pension. SS should be run like a real pension plan. You could eliminate the shortfall pretty quickly and reduce contributions IMO if it was a real fund.