Social Security is Not a Ponzi Scheme, Mr. Perry

[OohPooPahDoo]

Are you not aware OPDOO,, that for about 25 years, the SS program RAN A SURPLUS -- that was immediately STOLEN every year and spent on "everything but what it was intended for"???

It wasn't stolen you jackass, it was borrowed by the U.S. Treasury. Last time I was robbed the thief didn't leave a note backed by the full faith and credit of the United States government.

Lower wage workers and the middle class were OVERCHARGED for 25 years and TOLD that the overcharge was being "invested for them".. Are you stupid enough to believe that lie?

It was invested in the safest dollar denominated asset available other than hard currency - a U.S. Treasury obligation. Ask any investment advisor what the safest asset is - he'll tell you - Treasuries.

Guess what the FDIC has its funds in? Treasuries

Guess what a lot of your bank deposits get invested in? Treasuries

Guess what 700 billion in insurance reserves are kept in? Treasuries

Do you have an alternative that you think would have been more fruitful?

 

[Toro]

Are you not aware OPDOO,, that for about 25 years, the SS program RAN A SURPLUS -- that was immediately STOLEN every year and spent on "everything but what it was intended for"???

It wasn't stolen you jackass, it was borrowed by the U.S. Treasury. Last time I was robbed the thief didn't leave a note backed by the full faith and credit of the United States government.

Lower wage workers and the middle class were OVERCHARGED for 25 years and TOLD that the overcharge was being "invested for them".. Are you stupid enough to believe that lie?

It was invested in the safest dollar denominated asset available other than hard currency - a U.S. Treasury obligation. Ask any investment advisor what the safest asset is - he'll tell you - Treasuries.

Guess what the FDIC has its funds in? Treasuries

Guess what a lot of your bank deposits get invested in? Treasuries

Guess what 700 billion in insurance reserves are kept in? Treasuries

Do you have an alternative that you think would have been more fruitful?

SS isn't a Ponzi Scheme but it is one of the worst systems imaginable. People should be given the option of managing their SS account, and for those who want to remain in the system, SS should be run like a real pension fund.

 

[flacaltenn]

Actually, he was talking about "Working people have paid into this program all of their working careers. The government has squandered this money away on everything except for what it was intended for." -

"this money" refers to the money "Working people have paid into this program" - then he claims it has been spent on everything but what it was intended for - when in fact it was mostly spent on what it was intended for - paying benefits.

Are you not aware OPDOO,, that for about 25 years, the SS program RAN A SURPLUS -- that was immediately STOLEN every year and spent on "everything but what it was intended for"???

Lower wage workers and the middle class were OVERCHARGED for 25 years and TOLD that the overcharge was being "invested for them".. Are you stupid enough to believe that lie?

The surplus wasn't "stolen." It was run down as the recession caused a decline in contributions and an increase in payouts.

Nor was anyone overcharged. In fact people were undercharged. That's one reason why the trusts are underfunded.

Not YOU too Toro -- A "pay as you go" program running a $50B or $100B surplus should be a tip-off. Since there is NO fungible value in the "trust fund". The surplus was officially transferred to the General Fund every year with no value going into the "trust fund" and you don't see that as theft?

And running a surplus for a "pay as you go" program is NOT overcharging? What future benefit did the "surplus" generate except NEW debt being issued to cover present deficits?

 

[OohPooPahDoo]

SS isn't a Ponzi Scheme but it is one of the worst systems imaginable.

A lot of "real" pension funds are actually in the shitter right now

People should be given the option of managing their SS account, and for those who want to remain in the system, SS should be run like a real pension fund.

Its purpose is as insurance, not as a personal retirement account. The goal is to pay benefits to someone in old age or who is disabled - regardless of their luck in the stock market or their actually need for the benefits.

You can pay in your whole life and die the day before you get benefits. Its insurance its a bet. You lost.

Or you could live for 50 years after retirement, getting back far more than you put into it. Its insurance. Its a bet. You won.



Old Age Insurance is the basis for retirement planning.
The next should be to own your home by the time you retire.
Stock market investments are the third level.

Everyone should be working on all three of those.

Do you have any idea how much you'd have to have saved for retirement to live an arbitrary number of years at inflation adjusted income? About 50 times your annual income. And then its almost all going into treasuries anyway!

 

[mudwhistle]

Nationalize American assets in China? Let the Yuan float to a more China favorable place?

Seriously -- THEY don't have to do a thing. The international markets would pummel the T-Bonds and the Dollar because of our insistence on "paying ourselves first". You think the EU is allowing GREECE to honor all it's internal commitments FIRST?

Maybe. But when it looked like the US was going to default and the US was downgraded, Treasury bond prices and the dollar rose.

As for Greece, the end game to your answer ultimately is "yes."

Strange indeed but I attribute that to the fact that SOMEONE (not to be mentioned) took a stance FINALLY to cut spending. We all knew back in the Clinton days that the onlly way we'd survive the baby boom bubble was to enter the bubble with a sound budget and less debt.. Shouldnt' be a surprise to any one -- except maybe OOPYDOO..

(or maybe circa 2000 --- a lockbox)

Oh.....don't mention spending cuts....they call that terrorism these days.

 

[flacaltenn]

It was invested in the safest dollar denominated asset available other than hard currency - a U.S. Treasury obligation. Ask any investment advisor what the safest asset is - he'll tell you - Treasuries.

Guess what the FDIC has its funds in? Treasuries

Guess what a lot of your bank deposits get invested in? Treasuries

Guess what 700 billion in insurance reserves are kept in? Treasuries

Do you have an alternative that you think would have been more fruitful?

Did you MISS THESE LINKS OPYDOO??

http://www.usmessageboard.com/4113015-post189.html

There are no TREASURIES in the Trust Fund. The Soc Sec Admin SAYS SO...

And the CBOffice (as cited in the link above) tells you that NOTHING OF VALUE comes out of the Trust Fund.

Start playing along eh??

 

[Toro]

Are you not aware OPDOO,, that for about 25 years, the SS program RAN A SURPLUS -- that was immediately STOLEN every year and spent on "everything but what it was intended for"???

Lower wage workers and the middle class were OVERCHARGED for 25 years and TOLD that the overcharge was being "invested for them".. Are you stupid enough to believe that lie?

The surplus wasn't "stolen." It was run down as the recession caused a decline in contributions and an increase in payouts.

Nor was anyone overcharged. In fact people were undercharged. That's one reason why the trusts are underfunded.

Not YOU too Toro -- A "pay as you go" program running a $50B or $100B surplus should be a tip-off. Since there is NO fungible value in the "trust fund". The surplus was officially transferred to the General Fund every year with no value going into the "trust fund" and you don't see that as theft?

And running a surplus for a "pay as you go" program is NOT overcharging? What future benefit did the "surplus" generate except NEW debt being issued to cover present deficits?

SS operates like a government bond fund, except the government doesn't issue any bonds. It debits and credits people's accounts as if it were a real bond fund. The difference is that the government cuts out the middleman and credits and debits your account as if they were buying and selling bonds and collecting interest for you. If you put all your retirement funds into government bonds, the economics would be exactly the same as the SS system. As someone who has spent my career in the capital markets, I would tell you that is a very inefficient retirement system. But it is not a Ponzi Scheme in the true sense of the meaning.

 

[flacaltenn]

MudWhistle:

Oh.....don't mention spending cuts....they call that terrorism these days.

That's why I added (not to mention names).. Because I'm not gonna be a snitch for Homeland Security.

 

[OohPooPahDoo]

Are you not aware OPDOO,, that for about 25 years, the SS program RAN A SURPLUS -- that was immediately STOLEN every year and spent on "everything but what it was intended for"???

Lower wage workers and the middle class were OVERCHARGED for 25 years and TOLD that the overcharge was being "invested for them".. Are you stupid enough to believe that lie?

The surplus wasn't "stolen." It was run down as the recession caused a decline in contributions and an increase in payouts.

Nor was anyone overcharged. In fact people were undercharged. That's one reason why the trusts are underfunded.

Not YOU too Toro -- A "pay as you go" program running a $50B or $100B surplus should be a tip-off. Since there is NO fungible value in the "trust fund". The surplus was officially transferred to the General Fund every year with no value going into the "trust fund" and you don't see that as theft?

And running a surplus for a "pay as you go" program is NOT overcharging? What future benefit did the "surplus" generate except NEW debt being issued to cover present deficits?

Once again - the surplus was transfered into U.S. Treasury obligations as good as any other treasury.

 

[OohPooPahDoo]

It was invested in the safest dollar denominated asset available other than hard currency - a U.S. Treasury obligation. Ask any investment advisor what the safest asset is - he'll tell you - Treasuries.

Guess what the FDIC has its funds in? Treasuries

Guess what a lot of your bank deposits get invested in? Treasuries

Guess what 700 billion in insurance reserves are kept in? Treasuries

Do you have an alternative that you think would have been more fruitful?

Did you MISS THESE LINKS OPYDOO??

http://www.usmessageboard.com/4113015-post189.html

There are no TREASURIES in the Trust Fund. The Soc Sec Admin SAYS SO...

And the CBOffice (as cited in the link above) tells you that NOTHING OF VALUE comes out of the Trust Fund.

Start playing along eh??

Here's a list of investments held by the Trust Fund

Investments held at end of month

 

[Toro]

SS isn't a Ponzi Scheme but it is one of the worst systems imaginable.

A lot of "real" pension funds are actually in the shitter right now

People should be given the option of managing their SS account, and for those who want to remain in the system, SS should be run like a real pension fund.

Its purpose is as insurance, not as a personal retirement account. The goal is to pay benefits to someone in old age or who is disabled - regardless of their luck in the stock market or their actually need for the benefits.

You can pay in your whole life and die the day before you get benefits. Its insurance its a bet. You lost.

Or you could live for 50 years after retirement, getting back far more than you put into it. Its insurance. Its a bet. You won.



Old Age Insurance is the basis for retirement planning.
The next should be to own your home by the time you retire.
Stock market investments are the third level.

Everyone should be working on all three of those.

It's called insurance but it is not really insurance. It's a retirement pension fund.

SS is a very poor system. It compounds at the rate of government bonds. Over the very long term, government bonds earn 4%. Stocks earn 10%. A real pension fund has a portfolio of stocks, bonds, real estate, etc., and earns about 8% per year over long periods of time. $100 million compounded at 4% over 50 years yields $460 million. Compounding at 8%, it's $4.6 billion. You could easily fund all SS obligations and give everyone a tax cut if SS were run like a real pension fund.

 

[bripat9643]

Once again - the surplus was transfered into U.S. Treasury obligations as good as any other treasury.

Treasuries are an obligation to the U.S. government, dipstick. They aren't an asset for the government.

 

[boedicca]

It's called insurance but it is not really insurance. It's a retirement pension fund.

SS is a very poor system. It compounds at the rate of government bonds. Over the very long term, government bonds earn 4%. Stocks earn 10%. A real pension fund has a portfolio of stocks, bonds, real estate, etc., and earns about 8% per year over long periods if time. $100 million compounded at 4% over 50 years yields $460 million. Compounding at 8%, it's $4.6 billion. You could easily fund all SS obligations and give everyone a tax cut if SS were run like a real pension fund.

We'd be better off with a Chilean model in which individuals own their retirement accounts, with the government not being able to borrow and to spend the money, and to stuff said accounts with IOUs.

 

[Trajan]

clevergirl's concern is addressed here. The money is more than sufficient if the Congress would keep its hands off of it, Dem and Pub congresses alike. Leave the funding alone, and the ship will right itself.

That is true but their raiding the social security funds (both parties over history) are what makes it look very similar to a ponzie scheme.

Good point though!

They don't 'raid' it. SS invests its money in treasuries. FOR THE INTEREST INCOME.

whats the current interest rate on the SSI deposits ?

 

[Toro]

It's called insurance but it is not really insurance. It's a retirement pension fund.

SS is a very poor system. It compounds at the rate of government bonds. Over the very long term, government bonds earn 4%. Stocks earn 10%. A real pension fund has a portfolio of stocks, bonds, real estate, etc., and earns about 8% per year over long periods if time. $100 million compounded at 4% over 50 years yields $460 million. Compounding at 8%, it's $4.6 billion. You could easily fund all SS obligations and give everyone a tax cut if SS were run like a real pension fund.

We'd be better off with a Chilean model in which individuals own their retirement accounts, with the government not being able to borrow and to spend the money, and to stuff said accounts with IOUs.

People should be given an option. If people want to manage their own money, that's fine. Let them do it. Truth is, however, most people do better in a defined benefit plan than managing money on their own.

 

[Toro]

That is true but their raiding the social security funds (both parties over history) are what makes it look very similar to a ponzie scheme.

Good point though!

They don't 'raid' it. SS invests its money in treasuries. FOR THE INTEREST INCOME.

whats the current interest rate on the SSI deposits ?

It's on the web site somewhere. It's in the 3%-4% range.

 

[flacaltenn]

Toro:

SS operates like a government bond fund, except the government doesn't issue any bonds. It debits and credits people's accounts as if it were a real bond fund. The difference is that the government cuts out the middleman and credits and debits your account as if they were buying and selling bonds and collecting interest for you. If you put all your retirement funds into government bonds, the economics would be exactly the same as the SS system. As someone who has spent my career in the capital markets, I would tell you that is a very inefficient retirement system. But it is not a Ponzi Scheme in the true sense of the meaning.

Oh I know it's NOT a Ponzi scheme. I agree with the OP that in many ways it's criminally worse.

"....as if it were a real bond fund".

Well there you go.. Proof that if it walks like a bond fund, squacks like a bond fund --- it still MIGHT NOT be an actual bond fund..

No dude -- it ain't "just like a bond fund".... NOTHING of value comes out of it without issuing NEW debt on the treasury.. That's the crappy little detail that kills the analogy... Why is that? Because the PRINCIPAL capital dissappeared years ago.

 

[Toro]

Oh I know it's NOT a Ponzi scheme. I agree with the OP that in many ways it's criminally worse.

"....as if it were a real bond fund".

Well there you go.. Proof that if it walks like a bond fund, squacks like a bond fund --- it still MIGHT NOT be an actual bond fund..

No dude -- it ain't "just like a bond fund".... NOTHING of value comes out of it without issuing NEW debt on the treasury.. That's the crappy little detail that kills the analogy... Why is that? Because the PRINCIPAL capital dissappeared years ago.

SS is a government bond fund but the liabilities are nontradable government obligations. Every single pension plan in America owns government liabilities, i.e. bonds, but almost all own other things too. SS is 100% invested in government liabilities. That's remarkably inefficient. However, the economics of the liabilities held by SS and held by every other pension plan is the same.

 

[flacaltenn]

OPYDOO:

Here's a list of investments held by the Trust Fund

Investments held at end of month

Did ya miss the disclaimer at the top of the chart???

Today, the trust funds hold only special issues.

Special issues
(available only to the trust funds)

Those are NOT US Treasury Bonds. They are made up intergovernmental transfers that cannot pay a dime without the Treasury actually issuing NEW debt to cover them..

They cannot be transferred. They cannot be SOLD. They are accounting gimmicks in an elaborate fraud to convince poor souls like you that the US can dip into a pot of gold in the "trust fund"...

Please OPYDOODLE --- don't go anywhere NEAR the market. I really worry about you...

 

[JimH52]

If the GOP thinks Mister Anti Social Security stands a chance, they are crazy.