Social Security Discussion

[Kimura]

Treasuries are how the Treasury borrows dollars. Despite your misunderstanding.

Not really. Operationally, Treasuries aren't a requirement. They're simply a legal requirement under the current arrangement - a vestigial leftover from the days of the gold standard. The government basically spends by the FED crediting private account through Treasury authorizations.

Borrowers never misrepresented their income or assets? Okayyyyyyyyy.

I'm saying that blaming a global derivatives meltdown on low-income Americans is crazy talk and has zero basis in reality. Every major report compiled by FED, GAO, and various universities say otherwise. I posted like three of them, this information is the public domain.

Today, we can do better, without giving 12.4% of our lifetime income to government, in exchange for low returns.

Yeah, we can, by increasing payments ($2,000 minimum for retirees) and axing the SS tax.

Medicare! The program that is really bankrupting the country.

^^^^^

See, this is what I mean. C'mon, a sovereign currency issuer like the US cannot go bankrupt. It's operationally impossible, the government will always be able to pay any and all obligations.

Making it more expensive while reducing the taxes that pay for it would make it better in your mind?

I've tried to explain on multiple occasions how our federal taxes don't fund these programs. We're no longer on a convertible currency, there isn't some fixed quantity of money or pot of gold. Taxes a) regulate aggregate demand and b) create demand for the social unit of account by making sure all debts and assets are denominated in the national unit of account. Your dollars in your pocket are basically tax credits.

I'd have at least double the retirement income if I could invest it myself.
And a huge pile of money to pass on to my heirs. Your fears don't change those facts.

And I'm very proud of you.

Yes, increasing the payments makes the hole bigger.

You really don't get balance sheets, do you? This is all double-entry accounting, homie.

Increasing their taxes in 2030 to pay my benefits in 2030 isn't stealing from them? Wow!

For the 10,987th time, we don't need to increase taxes to fund SS. You're kids will still be able to work so they can produce and consume real goods and services. Deficits, past and present, can't alter this fact, nor can taxes.

 

[Rshermr]

Hello, McFly, You example is stupid, and shows your ignorance. Hello anyone in there?

Yeah, I meant 300 billion over the course of 10-12 years. The commissions are closer to 27 billion per year.



Talk about a fallacy of composition.

You’re looking at the micro level as opposed to the macro level which includes the entire US population.

In order for you to understand the macro picture, you need to comprehend that SS is the same as purchasing US government bonds.

With our current SS program, you give the government your dollars now, and it will give you back those dollars down the road. This is the EXACT SAME thing which occurs if you or I purchase a government bonds (or stick our $$$$ in a savings account). We give the government our dollars now for dollars later and some interest.

Sure, one might be a superior investment and give us a better return, but with exception of the rate of return, they’re basically the same. Congratulations, you’re now ahead of 99% of Congress!

Just to clarify, under your SS privatization proposal, the government would decrease SS payments and employees would invest that money in the stock market. Is this correct?



Where do you get this from? How can SS prevent our kids from working to produce real goods and services? SS actually creates spending power in the economy. Secondly, SS isn't a ponzi scheme, that's a nutty talking point for reactionaries.

Further, the so called "associations" referenced are not associations at all. They are suppositions written to defend the crime being subjected on the public.

You didn't read the paper, but that's okay.

SS is the same as purchasing U.S. government bonds? Really?

When I buy bonds I own them. I can look them up in my account and see what the balance is. And the government pays me interest on them every year so their value increases--maybe not always at the rate of inflation, but I will see a dollar gain year after year. If I need cash for an emergency or special purchase, I can cash them in at will. If I die before I cash them in, they become part of my estate and pass to my spouse or my children or anybody I so designate. And there are no tax consequences whether I keep them or spend them no matter how much additional income I earn.

The amounts I pay in Social security taxes however are never mine. It is a fixed amount confiscated from my paycheck or business profits on the promise of the government that they will pay me so much each month once I reach a certain age. I have to apply and qualify for it when I reach that age and I am limited to a fixed amount that provides a bare subsistnce every month. If I supplement it too much with other money they will tax me on my Social Security income again even though I already paid income taxes on it once. I can't draw extra in case of emergency or for other purposes. If I die before I collect it, it all goes to the government and my spouse, children, or other loved ones are likely entitled to no part of it. And the scary part? Social security was created with a simple majority vote of Congress and they could end it today with another simple majority vote. We get Social Security only if government sees fit to keep paying it out

My wife and I get $3500 in ss payments monthly. We do not need to live on that, but I am pretty sure $3500 is above poverty, me boy. And you do have to pay income taxes if you earn enough beyond ss. But it is not as you say.

 

[Rshermr]

I have read similiar opinions. But all those opinions assumed that everything else would stay the same. It wouldn't. Millions of people take advantage of tax deffered IRAs, 401Ks, and other savings/investment vehicles and other attractive savings plans when these are made available to them. Had I put all that social security money into such private, tax deferred investments when I first started paying social security, I would have been able to retire on a very comfortable income.

Yes there will always be the irresponsible who won't do it and who will end up penniless in their old age but those who would have no family or friend to move in with would likely be in very small numbers. And we as a society can decide what we will do about those. But I suspect, if we could change the cultural expectations of what decent, honorable, responsible people do, the poor would be in a distinct minority and we would have a tiny percentage of folks dependent on government.

I beg to differ.

I started my career as a stockbroker, and I was shocked at how little people of means saved. These weren't dumb people, either. They were usually educated people who made good income and lived in nice houses. (Poor people don't talk to stockbrokers.)

Even today, despite SS, people generally don't save enough based on their expected level of future income. If people truly had the will to save, they would live in smaller houses, drive older cars, and spend less generally. And the incremental amounts aren't much. Even saving an additional 2-3% each paycheck can make a world of difference. But they don't because they aspire to a standard of living today. Most can't conceptualize 20-30 years from now. If people have a hard time saving an incremental 3% under today's scheme, they sure as heck aren't going to save their 6% in FICA taxes plus the necessary incremental 3% on top of that. Instead, they'll save a part of the 6% and spend part, driving themselves further in the hole.

But you are looking at it through the prism of the entitlement generation. The generation that has been conditioned and trained, by its own government, to NOT look to themselves for their own security. I am looking at it through the eyes of those as they were before the entitlement motif was thrust upon us.

Sure you are. At when hundreds of thousands were on the street. When millions lived in poverty after their working days. But then, you only look at the good in the fact that the relatively wealthy did great. Got it. And you do not believe a non investment plan, essentially a public insurance program, is a rational solution. Got it.

Now, since the great majority think ss is a good thing, what you think really does not matter. You are, as they say, immaterial. Your beliefs really make no difference. You will not see ss privatized, and you will not see it go away. You will see it adjusted, to pay as it does today.

Because we vote, and you lost, as you will again if you are behind privatizing ss.

 

[Kimura]

However, I do have ideas:

My long term solution to fix this system would be to:
A) Let entering youth opt out just as Priests & the Amish & some Federal workers are allowed to opt out today. This makes SS voluntary just as it already is for some people.
B) For anyone who has paid a dime into SS, offer them a cash buyout pro-rated by what they put in and adjusted for inflation. Anyone not taking the cash buyout continues to receive monthly checks per the old system. Paying for the cash buyouts would be done by printing cash at the Fed, selling US land assets and such. Paying for the people who don't take the buyout would be by the people who stay on with the SS system.
C) Provide a requirement for some amount of the citizen's 401k assets to remain in "safe" investments up to and until they show they have enough in 401k safe assets to remit in retirement the current amount of the Max SS/medicare checks.

So you're along the lines of most privatization proponents.

A) The government takes less $$$$ money from our pay checks.
B) We use the additional $$$$ to purchase stocks.
C) We collect some less $$$$ in SS payments when we retire, but we own stocks that will be worth more $$$$ then the SS payments we gave up.

Yada, yada, yada.....

Basically, the bottom line is the government would decrease payments and the people would put the $$$$ into the stock market.

Under our current monetary system (US debt issuance), the US Treasury would have to issue more paper and sell more securities to cover decreased revenues (again, under the current model).

Employees will purchase stocks from someone else, meaning all the stocks do is change hands so to speak. There's no new money in the economy.

We'd have employees who stop buying into SS, which is fundamentally the same as purchasing a US bond, and purchase stocks instead. And other people will have sold stocks and purchased new government bonds. If we analyze this from the MACRO level, all that's occurred is stocks changed hands, some bonds changes hands, etc. Total net outstanding bonds (if we also count SS as a bond purchase) and total stocks will have stayed about the same. This wouldn't affect total savings, and have zero affect on the overall economy, except for generating fees/commissions. See?

In this scenario, under the current system, you must realize that the total amount of stocks held by the non-government sector (us, the public) hasn't changed, privatization wouldn't change anything in the economy from a macro standpoint.

Lastly, what privatization proponents must realize is that this in no way, shape, or form changes which stocks the public at large would hold for investment. At the MACRO level, this isn't a case of the free market doing better than the government. And many conservative economists know this, but they don't care, and will continue to peddle this nonsense. It boils down to ideology at the end of the day I would assume.

 

[Kimura]

I beg to differ.

I started my career as a stockbroker, and I was shocked at how little people of means saved. These weren't dumb people, either. They were usually educated people who made good income and lived in nice houses. (Poor people don't talk to stockbrokers.)

Even today, despite SS, people generally don't save enough based on their expected level of future income. If people truly had the will to save, they would live in smaller houses, drive older cars, and spend less generally. And the incremental amounts aren't much. Even saving an additional 2-3% each paycheck can make a world of difference. But they don't because they aspire to a standard of living today. Most can't conceptualize 20-30 years from now. If people have a hard time saving an incremental 3% under today's scheme, they sure as heck aren't going to save their 6% in FICA taxes plus the necessary incremental 3% on top of that. Instead, they'll save a part of the 6% and spend part, driving themselves further in the hole.

But you are looking at it through the prism of the entitlement generation. The generation that has been conditioned and trained, by its own government, to NOT look to themselves for their own security. I am looking at it through the eyes of those as they were before the entitlement motif was thrust upon us.

Sure you are. At when hundreds of thousands were on the street. When millions lived in poverty after their working days. But then, you only look at the good in the fact that the relatively wealthy did great. Got it. And you do not believe a non investment plan, essentially a public insurance program, is a rational solution. Got it.

Now, since the great majority think ss is a good thing, what you think really does not matter. You are, as they say, immaterial. Your beliefs really make no difference. You will not see ss privatized, and you will not see it go away. You will see it adjusted, to pay as it does today.

Because we vote, and you lost, as you will again if you are behind privatizing ss.

 

[flacaltenn]

However, I do have ideas:

My long term solution to fix this system would be to:
A) Let entering youth opt out just as Priests & the Amish & some Federal workers are allowed to opt out today. This makes SS voluntary just as it already is for some people.
B) For anyone who has paid a dime into SS, offer them a cash buyout pro-rated by what they put in and adjusted for inflation. Anyone not taking the cash buyout continues to receive monthly checks per the old system. Paying for the cash buyouts would be done by printing cash at the Fed, selling US land assets and such. Paying for the people who don't take the buyout would be by the people who stay on with the SS system.
C) Provide a requirement for some amount of the citizen's 401k assets to remain in "safe" investments up to and until they show they have enough in 401k safe assets to remit in retirement the current amount of the Max SS/medicare checks.

So you're along the lines of most privatization proponents.

A) The government takes less $$$$ money from our pay checks.
B) We use the additional $$$$ to purchase stocks.
C) We collect some less $$$$ in SS payments when we retire, but we own stocks that will be worth more $$$$ then the SS payments we gave up.

Yada, yada, yada.....

Basically, the bottom line is the government would decrease payments and the people would put the $$$$ into the stock market.

Under our current monetary system (US debt issuance), the US Treasury would have to issue more paper and sell more securities to cover decreased revenues (again, under the current model).

Employees will purchase stocks from someone else, meaning all the stocks do is change hands so to speak. There's no new money in the economy.

We'd have employees who stop buying into SS, which is fundamentally the same as purchasing a US bond, and purchase stocks instead. And other people will have sold stocks and purchased new government bonds. If we analyze this from the MACRO level, all that's occurred is stocks changed hands, some bonds changes hands, etc. Total net outstanding bonds (if we also count SS as a bond purchase) and total stocks will have stayed about the same. This wouldn't affect total savings, and have zero affect on the overall economy, except for generating fees/commissions. See?

In this scenario, under the current system, you must realize that the total amount of stocks held by the non-government sector (us, the public) hasn't changed, privatization wouldn't change anything in the economy from a macro standpoint.

Lastly, what privatization proponents must realize his in no way, shape, or form changes which stock the public at large would hold for investment. At the MACRO level, this isn't a case of the free market doing better than the government. And many conservative economists know this, but they don't care, and will continue to peddle this nonsense

You are full of irrational beliefs about SS.. Like for instance, SS is like buying a bond.
But to respond to your idea of what privatization as it was LAST PROPOSED was supposed to do..

It was an OPTION to USE the SS surplus (while it existed) to BENEFIT future retirees and workers --- Instead of being STOLEN AND SQUANDERED as it always was.

If a person opted into the concept -- they would be "allowed" to keep a small portion of their SS contributions, IN EXCHANGE for pledging to WAIVE a portion of their future benefits. This was to be funded to the EXTENT that the surplus THEN ALLOWED.

No more surplus --- no more options to TRULY use the surplus to defer further costs. The future is today when SS in now in deficit and every dollar of the Trust Fund that is REDEEMED is costing CURRENT taxpayers over $2.50 to pay out. (the dollar that was stolen from surplus, plus the new dollar in debt that goes on the books, plus interest.)

Had the privatization plan been implemented --- TODAY we would be borrowing less money from China to pay for the deficit that SS is running.

Of course -- you deny even the EXISTENCE of such a thing as the deficit and still believe that objects of value are stored in the SS Trust Fund. Guess there's no sense rehashing GOOD ideas that never got traction 15 yrs ago because of folks like you.

 

[jasonnfree]

Treasuries are how the Treasury borrows dollars. Despite your misunderstanding.

Not really. Operationally, Treasuries aren't a requirement. They're simply a legal requirement under the current arrangement - a vestigial leftover from the days of the gold standard. The government basically spends by the FED crediting private account through Treasury authorizations.

Borrowers never misrepresented their income or assets? Okayyyyyyyyy.

I'm saying that blaming a global derivatives meltdown on low-income Americans is crazy talk and has zero basis in reality. Every major report compiled by FED, GAO, and various universities say otherwise. I posted like three of them, this information is the public domain.



Yeah, we can, by increasing payments ($2,000 minimum for retirees) and axing the SS tax.



^^^^^

See, this is what I mean. C'mon, a sovereign currency issuer like the US cannot go bankrupt. It's operationally impossible, the government will always be able to pay any and all obligations.



I've tried to explain on multiple occasions how our federal taxes don't fund these programs. We're no longer on a convertible currency, there isn't some fixed quantity of money or pot of gold. Taxes a) regulate aggregate demand and b) create demand for the social unit of account by making sure all debts and assets are denominated in the national unit of account. Your dollars in your pocket are basically tax credits.



And I'm very proud of you.

Yes, increasing the payments makes the hole bigger.

You really don't get balance sheets, do you? This is all double-entry accounting, homie.

Increasing their taxes in 2030 to pay my benefits in 2030 isn't stealing from them? Wow!

For the 10,987th time, we don't need to increase taxes to fund SS. You're kids will still be able to work so they can produce and consume real goods and services. Deficits, past and present, can't alter this fact, nor can taxes.

"sovereign currency issuer like the US cannot go bankrupt" Does Obama and the other politicians not know this? They act like they don't.

 

[Kimura]

However, I do have ideas:

My long term solution to fix this system would be to:
A) Let entering youth opt out just as Priests & the Amish & some Federal workers are allowed to opt out today. This makes SS voluntary just as it already is for some people.
B) For anyone who has paid a dime into SS, offer them a cash buyout pro-rated by what they put in and adjusted for inflation. Anyone not taking the cash buyout continues to receive monthly checks per the old system. Paying for the cash buyouts would be done by printing cash at the Fed, selling US land assets and such. Paying for the people who don't take the buyout would be by the people who stay on with the SS system.
C) Provide a requirement for some amount of the citizen's 401k assets to remain in "safe" investments up to and until they show they have enough in 401k safe assets to remit in retirement the current amount of the Max SS/medicare checks.

So you're along the lines of most privatization proponents.

A) The government takes less $$$$ money from our pay checks.
B) We use the additional $$$$ to purchase stocks.
C) We collect some less $$$$ in SS payments when we retire, but we own stocks that will be worth more $$$$ then the SS payments we gave up.

Yada, yada, yada.....

Basically, the bottom line is the government would decrease payments and the people would put the $$$$ into the stock market.

Under our current monetary system (US debt issuance), the US Treasury would have to issue more paper and sell more securities to cover decreased revenues (again, under the current model).

Employees will purchase stocks from someone else, meaning all the stocks do is change hands so to speak. There's no new money in the economy.

We'd have employees who stop buying into SS, which is fundamentally the same as purchasing a US bond, and purchase stocks instead. And other people will have sold stocks and purchased new government bonds. If we analyze this from the MACRO level, all that's occurred is stocks changed hands, some bonds changes hands, etc. Total net outstanding bonds (if we also count SS as a bond purchase) and total stocks will have stayed about the same. This wouldn't affect total savings, and have zero affect on the overall economy, except for generating fees/commissions. See?

In this scenario, under the current system, you must realize that the total amount of stocks held by the non-government sector (us, the public) hasn't changed, privatization wouldn't change anything in the economy from a macro standpoint.

Lastly, what privatization proponents must realize his in no way, shape, or form changes which stock the public at large would hold for investment. At the MACRO level, this isn't a case of the free market doing better than the government. And many conservative economists know this, but they don't care, and will continue to peddle this nonsense

You are full of irrational beliefs about SS.. Like for instance, SS is like buying a bond.
But to respond to your idea of what privatization as it was LAST PROPOSED was supposed to do..

It was an OPTION to USE the SS surplus (while it existed) to BENEFIT future retirees and workers --- Instead of being STOLEN AND SQUANDERED as it always was.

If a person opted into the concept -- they would be "allowed" to keep a small portion of their SS contributions, IN EXCHANGE for pledging to WAIVE a portion of their future benefits. This was to be funded to the EXTENT that the surplus THEN ALLOWED.

No more surplus --- no more options to TRULY use the surplus to defer further costs. The future is today when SS in now in deficit and every dollar of the Trust Fund that is REDEEMED is costing CURRENT taxpayers over $2.50 to pay out. (the dollar that was stolen from surplus, plus the new dollar in debt that goes on the books, plus interest.)

Had the privatization plan been implemented --- TODAY we would be borrowing less money from China to pay for the deficit that SS is running.

Of course -- you deny even the EXISTENCE of such a thing as the deficit and still believe that objects of value are stored in the SS Trust Fund. Guess there's no sense rehashing GOOD ideas that never got traction 15 yrs ago because of folks like you.

#1 - We don't borrow money from China. The US doesn't have to borrow that which it freely issues. China desires to save in US financial assets.

#2 - Under SS, in its current incarnation, we give dollars to Uncle Sam, and Uncle Sam gives them back to us later. This is the SAME thing that happens when we purchase government bonds - or if you decide to keep your money in your local savings accounts. You give Uncle Sam dollars now, Uncle Sam gives you back dollars plus some accrued interest. Barring interest rates, they're both very similar.

#3 - The SS Trust Fund was created for political reasons. All we need is a funding guarantee from Congress to fund it out of the general revenue into perpetuity. Problem solved, say good riddance to the regressive SS tax and the SS Trust Fund.

 

[Kimura]

"sovereign currency issuer like the US cannot go bankrupt" Does Obama and the other politicians not know this? They act like they don't.

Apparently not. The whole politics of the sequester is built around this nonsense. The only constraint faced by the federal government - or any other sovereign currency issuer - is that of inflation.

 

[flacaltenn]

So you're along the lines of most privatization proponents.

A) The government takes less $$$$ money from our pay checks.
B) We use the additional $$$$ to purchase stocks.
C) We collect some less $$$$ in SS payments when we retire, but we own stocks that will be worth more $$$$ then the SS payments we gave up.

Yada, yada, yada.....

Basically, the bottom line is the government would decrease payments and the people would put the $$$$ into the stock market.

Under our current monetary system (US debt issuance), the US Treasury would have to issue more paper and sell more securities to cover decreased revenues (again, under the current model).

Employees will purchase stocks from someone else, meaning all the stocks do is change hands so to speak. There's no new money in the economy.

We'd have employees who stop buying into SS, which is fundamentally the same as purchasing a US bond, and purchase stocks instead. And other people will have sold stocks and purchased new government bonds. If we analyze this from the MACRO level, all that's occurred is stocks changed hands, some bonds changes hands, etc. Total net outstanding bonds (if we also count SS as a bond purchase) and total stocks will have stayed about the same. This wouldn't affect total savings, and have zero affect on the overall economy, except for generating fees/commissions. See?

In this scenario, under the current system, you must realize that the total amount of stocks held by the non-government sector (us, the public) hasn't changed, privatization wouldn't change anything in the economy from a macro standpoint.

Lastly, what privatization proponents must realize his in no way, shape, or form changes which stock the public at large would hold for investment. At the MACRO level, this isn't a case of the free market doing better than the government. And many conservative economists know this, but they don't care, and will continue to peddle this nonsense

You are full of irrational beliefs about SS.. Like for instance, SS is like buying a bond.
But to respond to your idea of what privatization as it was LAST PROPOSED was supposed to do..

It was an OPTION to USE the SS surplus (while it existed) to BENEFIT future retirees and workers --- Instead of being STOLEN AND SQUANDERED as it always was.

If a person opted into the concept -- they would be "allowed" to keep a small portion of their SS contributions, IN EXCHANGE for pledging to WAIVE a portion of their future benefits. This was to be funded to the EXTENT that the surplus THEN ALLOWED.

No more surplus --- no more options to TRULY use the surplus to defer further costs. The future is today when SS in now in deficit and every dollar of the Trust Fund that is REDEEMED is costing CURRENT taxpayers over $2.50 to pay out. (the dollar that was stolen from surplus, plus the new dollar in debt that goes on the books, plus interest.)

Had the privatization plan been implemented --- TODAY we would be borrowing less money from China to pay for the deficit that SS is running.

Of course -- you deny even the EXISTENCE of such a thing as the deficit and still believe that objects of value are stored in the SS Trust Fund. Guess there's no sense rehashing GOOD ideas that never got traction 15 yrs ago because of folks like you.

#1 - We don't borrow money from China. The US doesn't have to borrow that which it freely issues. China desires to save in US financial assets.

#2 - Under SS, in its current incarnation, we give dollars to Uncle Sam, and Uncle Sam gives them back to us later. This is the SAME thing that happens when we purchase government bonds - or if you decide to keep your money in your local savings accounts. You give Uncle Sam dollars now, Uncle Sam give you back dollars plus some accrued interest. Barring interest rates, they're both very similar.

#1) Did you not read my quotes from SSA about a page ago????

Neither the redemption of trust fund bonds, nor
interest paid on those bonds, provides any new net income to the Treasury,
which must finance redemptions and interest payments through
some combination of increased taxation, reductions in other government
spending, or additional borrowing from the public.

Has been no increased taxation to cover the SS shortfall, no significant reduction in spending, and SSA is making redemption requests at the treasury.. Oh --- what was the 3rd Choice?? ADDITIONAL BORROWING FROM THE PUBLIC?? Of course, that's it. DEBT is being issued to cover the SS deficit.. You get to pay TWICE for every dollar that is "redeemed" by SSA.. Once when it was stolen from your FICA paycheck and now AGAIN when you get put in hock to China.. WITH INTEREST, which of course is ALSO paid by CURRENT taxpayers..

#2 Such a deal.. How lucky are we? That dollar stolen from your paycheck got spent on Viagra for the military. No DEBT was ever issued from the Treasury books. And there is nothing of value put into the SS Trust fund. No BONDS were ever bought. There are IOUs in a drawer. AND NEW DEBT must now be issued to cover the IOUs. Had they BOUGHT BONDS on the open market with the surplus --- the story would be different because the DEBT WOULD already be on the ledger. But they didn't.

Go back and read the description of how this scam REALLY OPERATES.. I quoted SSA and CBO. And you know how damn trustworthy those govt sources are....

 

[flacaltenn]

This is almost qualified to be included in someone's footer.. It is so Alice in WonderLand as to be comical..

The US doesn't have to borrow that which it freely issues.

Money DOES grow on trees. Or at least in the warehouse at Treasury.gov

 

[Kimura]

#1) Did you not read my quotes from SSA about a page ago????

Neither the redemption of trust fund bonds, nor
interest paid on those bonds, provides any new net income to the Treasury,
which must finance redemptions and interest payments through
some combination of increased taxation, reductions in other government
spending, or additional borrowing from the public.

I look at daily Treasury statements. Again, it's not 'borrowing' in the conventional sense. Under a fiat system, the government has to spend before we can use the currency or there's any type of borrowing. Basically, spending operationally precedes borrowing and/or extinguishing any tax obligations through the Treasury.

Has been no increased taxation to cover the SS shortfall, no significant reduction in spending, and SSA is making redemption requests at the treasury.. Oh --- what was the 3rd Choice?? ADDITIONAL BORROWING FROM THE PUBLIC?? Of course, that's it. DEBT is being issued to cover the SS deficit.. You get to pay TWICE for every dollar that is "redeemed" by SSA.. Once when it was stolen from your FICA paycheck and now AGAIN when you get put in hock to China.. WITH INTEREST, which of course is ALSO paid by CURRENT taxpayers..

#2 Such a deal.. How lucky are we? That dollar stolen from your paycheck got spent on Viagra for the military. No DEBT was ever issued from the Treasury books. And there is nothing of value put into the SS Trust fund. No BONDS were ever bought. There are IOUs in a drawer. AND NEW DEBT must now be issued to cover the IOUs. Had they BOUGHT BONDS on the open market with the surplus --- the story would be different because the DEBT WOULD already be on the ledger. But they didn't.

Go back and read the description of how this scam REALLY OPERATES.. I quoted SSA and CBO. And you know how damn trustworthy those govt sources are....

Okay, let's say China decides to buy US paper. They have a reserve account over at the FED, correct? Well....this reserve account has dollars in it. Those dollars are used to buy US paper and had to have been spent into existence at some point by the federal government.

Again, it's not debt in the conventional sense, since it simply reflects the private sector's desire to save in US financial assets. It should be referred to as a national equity in its current incarnation.

 

[Kimura]

This is almost qualified to be included in someone's footer.. It is so Alice in WonderLand as to be comical..

The US doesn't have to borrow that which it freely issues.

Money DOES grow on trees. Or at least in the warehouse at Treasury.gov

Are you saying that there's a fixed quantity of dollars out there? Where do you think that little tax credit in your pocket comes from?

The federal government basically spends by having the FED credit private bank accounts.

For the teh kids on teh internets:

1)The Treasury spends base money into existence.

2) The FED loans base money into existence.

 

[RKMBrown]

However, I do have ideas:

My long term solution to fix this system would be to:
A) Let entering youth opt out just as Priests & the Amish & some Federal workers are allowed to opt out today. This makes SS voluntary just as it already is for some people.
B) For anyone who has paid a dime into SS, offer them a cash buyout pro-rated by what they put in and adjusted for inflation. Anyone not taking the cash buyout continues to receive monthly checks per the old system. Paying for the cash buyouts would be done by printing cash at the Fed, selling US land assets and such. Paying for the people who don't take the buyout would be by the people who stay on with the SS system.
C) Provide a requirement for some amount of the citizen's 401k assets to remain in "safe" investments up to and until they show they have enough in 401k safe assets to remit in retirement the current amount of the Max SS/medicare checks.

So you're along the lines of most privatization proponents.

A) The government takes less $$$$ money from our pay checks.
B) We use the additional $$$$ to purchase stocks.
C) We collect some less $$$$ in SS payments when we retire, but we own stocks that will be worth more $$$$ then the SS payments we gave up.

Yada, yada, yada.....

Basically, the bottom line is the government would decrease payments and the people would put the $$$$ into the stock market.

Under our current monetary system (US debt issuance), the US Treasury would have to issue more paper and sell more securities to cover decreased revenues (again, under the current model).

Employees will purchase stocks from someone else, meaning all the stocks do is change hands so to speak. There's no new money in the economy.

We'd have employees who stop buying into SS, which is fundamentally the same as purchasing a US bond, and purchase stocks instead. And other people will have sold stocks and purchased new government bonds. If we analyze this from the MACRO level, all that's occurred is stocks changed hands, some bonds changes hands, etc. Total net outstanding bonds (if we also count SS as a bond purchase) and total stocks will have stayed about the same. This wouldn't affect total savings, and have zero affect on the overall economy, except for generating fees/commissions. See?

In this scenario, under the current system, you must realize that the total amount of stocks held by the non-government sector (us, the public) hasn't changed, privatization wouldn't change anything in the economy from a macro standpoint.

Lastly, what privatization proponents must realize is that this in no way, shape, or form changes which stocks the public at large would hold for investment. At the MACRO level, this isn't a case of the free market doing better than the government. And many conservative economists know this, but they don't care, and will continue to peddle this nonsense. It boils down to ideology at the end of the day I would assume.

Basically, you are a FOS liar who can't read even one sentence of someone else's without completely rewriting it to mean the exact opposite, then exclaiming how wrong your re-written version is.

 

[Toddsterpatriot]

Treasuries are how the Treasury borrows dollars. Despite your misunderstanding.

Not really. Operationally, Treasuries aren't a requirement. They're simply a legal requirement under the current arrangement - a vestigial leftover from the days of the gold standard. The government basically spends by the FED crediting private account through Treasury authorizations.

Borrowers never misrepresented their income or assets? Okayyyyyyyyy.

I'm saying that blaming a global derivatives meltdown on low-income Americans is crazy talk and has zero basis in reality. Every major report compiled by FED, GAO, and various universities say otherwise. I posted like three of them, this information is the public domain.



Yeah, we can, by increasing payments ($2,000 minimum for retirees) and axing the SS tax.



^^^^^

See, this is what I mean. C'mon, a sovereign currency issuer like the US cannot go bankrupt. It's operationally impossible, the government will always be able to pay any and all obligations.



I've tried to explain on multiple occasions how our federal taxes don't fund these programs. We're no longer on a convertible currency, there isn't some fixed quantity of money or pot of gold. Taxes a) regulate aggregate demand and b) create demand for the social unit of account by making sure all debts and assets are denominated in the national unit of account. Your dollars in your pocket are basically tax credits.



And I'm very proud of you.

Yes, increasing the payments makes the hole bigger.

You really don't get balance sheets, do you? This is all double-entry accounting, homie.

Increasing their taxes in 2030 to pay my benefits in 2030 isn't stealing from them? Wow!

For the 10,987th time, we don't need to increase taxes to fund SS. You're kids will still be able to work so they can produce and consume real goods and services. Deficits, past and present, can't alter this fact, nor can taxes.

I'm saying that blaming a global derivatives meltdown on low-income Americans is crazy talk and has zero basis in reality.

There was bad faith on both sides of the mortgage debacle, borrowers and lenders.
It wasn't just angelic borrowers exploited by evil bankers.

Operationally, Treasuries aren't a requirement.

You're right, the Treasury doesn't have to borrow to spend, they can print.
But when they borrow, they do so by selling Treasuries.

Yeah, we can, by increasing payments ($2,000 minimum for retirees) and axing the SS tax.

Yes, borrowing and spending works better than taxing and spending.

the government will always be able to pay any and all obligations.

Right, until suppliers refuse to accept your scrip.

You really don't get balance sheets, do you? This is all double-entry accounting, homie.

I understand just fine, slick.
You want to tax my kids to keep the program going.
12.4% of their earnings won't be enough, maybe 16% or 18% will be needed?
You think that won't be a problem, because.....double-entry accounting.
You think that won't be a problem, because.....the government will always be able to pay any and all obligations, by printing.

You're kids will still be able to work so they can produce and consume real goods and services.

Yes they will work and produce. They'll only be able to consume a shrinking portion of their own production, because an ever larger chunk will go to prop up Social Security for me, because I was prevented from investing my 12.4% of income in a much, much, much, much higher return way. Because you're afraid I can't invest wisely on my own.

 

[flacaltenn]

#1) Did you not read my quotes from SSA about a page ago????

Neither the redemption of trust fund bonds, nor
interest paid on those bonds, provides any new net income to the Treasury,
which must finance redemptions and interest payments through
some combination of increased taxation, reductions in other government
spending, or additional borrowing from the public.

I look at daily Treasury statements. Again, it's not 'borrowing' in the conventional sense. Under a fiat system, the government has to spend before we can use the currency or there's any type of borrowing. Basically, spending operationally precedes borrowing and/or extinguishing any tax obligations through the Treasury.

Has been no increased taxation to cover the SS shortfall, no significant reduction in spending, and SSA is making redemption requests at the treasury.. Oh --- what was the 3rd Choice?? ADDITIONAL BORROWING FROM THE PUBLIC?? Of course, that's it. DEBT is being issued to cover the SS deficit.. You get to pay TWICE for every dollar that is "redeemed" by SSA.. Once when it was stolen from your FICA paycheck and now AGAIN when you get put in hock to China.. WITH INTEREST, which of course is ALSO paid by CURRENT taxpayers..

#2 Such a deal.. How lucky are we? That dollar stolen from your paycheck got spent on Viagra for the military. No DEBT was ever issued from the Treasury books. And there is nothing of value put into the SS Trust fund. No BONDS were ever bought. There are IOUs in a drawer. AND NEW DEBT must now be issued to cover the IOUs. Had they BOUGHT BONDS on the open market with the surplus --- the story would be different because the DEBT WOULD already be on the ledger. But they didn't.

Go back and read the description of how this scam REALLY OPERATES.. I quoted SSA and CBO. And you know how damn trustworthy those govt sources are....

Okay, let's say China decides to buy US paper. They have a reserve account over at the FED, correct? Well....this reserve account has dollars in it. Those dollars are used to buy US paper and had to have been spent into existence at some point by the federal government.

Again, it's not debt in the conventional sense, since it simply reflects the private sector's desire to save in US financial assets. It should be referred to as a national equity in its current incarnation.

Of course you spend money into existence. AND expand the money supply.. LATELY as you should know if you read the Treas. Docs, a LOT of our spending is on buying OUR OWN DEBT. THAT Creation of greenbacks must have been immaculate conception eh? Private sector is getting FULL UP with 2% Treasury bonds. So QE is designed to clear inventory that the private sector isn't ready to pony up for.

But when you spend money into existence and match it with a debt obligation, you are approving FUTURE spending as well. Since the Chinese expect to be paid back and you have to impress the credit agencies with your oh so responsible management of the currency.

 

[flacaltenn]

This is almost qualified to be included in someone's footer.. It is so Alice in WonderLand as to be comical..

The US doesn't have to borrow that which it freely issues.

Money DOES grow on trees. Or at least in the warehouse at Treasury.gov

Are you saying that there's a fixed quantity of dollars out there? Where do you think that little tax credit in your pocket comes from?

The federal government basically spends by having the FED credit private bank accounts.

For the teh kids on teh internets:

1)The Treasury spends base money into existence.

2) The FED loans base money into existence.

The portion I find both sad and comical is the "freely issues" part.. As tho there is no limit on the money that gets birthed by DEBT ISSUANCE.. And that's the only fraction of "freely issued" that has any bearing on reissuing SS debt obligations. Did ya get the part about every dollar on redemption of "trust funds" cost $2.50 to the taxpayers? I think that is key to starting to feel justifiable RAGE about the theft and deception that has been perpetrated upon you... Go ahead -- Let it out.. I can't hear you anyway..


We can argue about the balance in the REST of money supply some other day.

 

[Kimura]

This is almost qualified to be included in someone's footer.. It is so Alice in WonderLand as to be comical..



Money DOES grow on trees. Or at least in the warehouse at Treasury.gov

Are you saying that there's a fixed quantity of dollars out there? Where do you think that little tax credit in your pocket comes from?

The federal government basically spends by having the FED credit private bank accounts.

For the teh kids on teh internets:

1)The Treasury spends base money into existence.

2) The FED loans base money into existence.

The portion I find both sad and comical is the "freely issues" part.. As tho there is no limit on the money that gets birthed by DEBT ISSUANCE.. And that's the only fraction of "freely issued" that has any bearing on reissuing SS debt obligations. Did ya get the part about every dollar on redemption of "trust funds" cost $2.50 to the taxpayers? I think that is key to starting to feel justifiable RAGE about the theft and deception that has been perpetrated upon you... Go ahead -- Let it out.. I can't hear you anyway..


We can argue about the balance in the REST of money supply some other day.

Yes, as the monopoly issuer of the currency, the US freely issues the national unit of account - the US dollar.

We only issue 'debt' for legal reasons, not because it's an operational requirement. The existence of US pubic debt creates creates confusion. A monetarily sovereign country cannot run into debt problems.

At the end of the day, in order to obtain a flow of funds, we run deficits, which basically means the federal government credits private bank accounts more than it receives back in taxes - we call this 'spending'. The end result being an equal increase in bank deposits and bank reserves - all over at the FED. Banks are compelled to swap out any excess reserves for bonds, so that they can get a better rate of interest, and since we have a bond surplus, they'll be a demand for bonds.

As opposed to issuing bonds, which I've discussed a few times on here, the Federal Reserve could pay its target rate on all bank reserves. This would guarantee it hit its short-term interest rate target without the need to issue any public debt.

The SS Trust Fund is a different issue....

 

[RKMBrown]

Are you saying that there's a fixed quantity of dollars out there? Where do you think that little tax credit in your pocket comes from?

The federal government basically spends by having the FED credit private bank accounts.

For the teh kids on teh internets:

1)The Treasury spends base money into existence.

2) The FED loans base money into existence.

The portion I find both sad and comical is the "freely issues" part.. As tho there is no limit on the money that gets birthed by DEBT ISSUANCE.. And that's the only fraction of "freely issued" that has any bearing on reissuing SS debt obligations. Did ya get the part about every dollar on redemption of "trust funds" cost $2.50 to the taxpayers? I think that is key to starting to feel justifiable RAGE about the theft and deception that has been perpetrated upon you... Go ahead -- Let it out.. I can't hear you anyway..


We can argue about the balance in the REST of money supply some other day.

Yes, as the monopoly issuer of the currency, the US freely issues with the national unit of account - the US dollar.

We only issue 'debt' for legal reasons, not because it's an operational requirement. The existence of US pubic debt creates creates confusion. A monetarily sovereign country cannot run into debt problems.

At the end of the day, in order to obtain a flow of funds, we run deficits, which basically means the federal government credits private bank accounts more than it receives back in taxes - we call this 'spending'. The end result being an equal increase in bank deposits and bank reserves - all over at the FED. Banks are compelled to swap out any excess reserves for bonds, so that they can get a better rate of interest, and since we have a bond surplus, they'll be a demand for bonds.

As opposed to issuing bonds, which I've discussed a few times on here, the Federal Reserve could pay its target rate on all bank reserves. This would guarantee it hit its short-term interest rate target without the need to issue any public debt.

The SS Trust Fund is a different issue....

Unlimited expansion of credit is not spending. You are conflating the Fed operations with the operations of the US Government. In short, YOU HAVE NO CLUE WHAT YOU ARE TALKING ABOUT.

 

[Kimura]

The portion I find both sad and comical is the "freely issues" part.. As tho there is no limit on the money that gets birthed by DEBT ISSUANCE.. And that's the only fraction of "freely issued" that has any bearing on reissuing SS debt obligations. Did ya get the part about every dollar on redemption of "trust funds" cost $2.50 to the taxpayers? I think that is key to starting to feel justifiable RAGE about the theft and deception that has been perpetrated upon you... Go ahead -- Let it out.. I can't hear you anyway..


We can argue about the balance in the REST of money supply some other day.

Yes, as the monopoly issuer of the currency, the US freely issues with the national unit of account - the US dollar.

We only issue 'debt' for legal reasons, not because it's an operational requirement. The existence of US pubic debt creates creates confusion. A monetarily sovereign country cannot run into debt problems.

At the end of the day, in order to obtain a flow of funds, we run deficits, which basically means the federal government credits private bank accounts more than it receives back in taxes - we call this 'spending'. The end result being an equal increase in bank deposits and bank reserves - all over at the FED. Banks are compelled to swap out any excess reserves for bonds, so that they can get a better rate of interest, and since we have a bond surplus, they'll be a demand for bonds.

As opposed to issuing bonds, which I've discussed a few times on here, the Federal Reserve could pay its target rate on all bank reserves. This would guarantee it hit its short-term interest rate target without the need to issue any public debt.

The SS Trust Fund is a different issue....

Unlimited expansion of credit is not spending. You are conflating the Fed operations with the operations of the US Government. In short, YOU HAVE NO CLUE WHAT YOU ARE TALKING ABOUT.

I'm not the one that's confused here.

The FED is the monetary agent of Congress. It should be viewed as part of the government sector since it's the central bank of the US.

Yes, I'm sorry to break it to you, the federal government spends by having the FED credit private banks accounts. Do you need the A-Z on how this happens? We're talking base money, homie.