Social Security is Not a Ponzi Scheme, Mr. Perry

[Raoul_Duke]

Yes, and links were posted to both Krugman and Samuelson saying so. I am pretty sure the SS actuaries have names also, I just have not looked them up, and have no plans to do so.

Krugman and Samuelson did not say what you said they said :

The Ponzi Thing - NYTimes.com

From your link.

Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today’s young may well get less than they put in).

Does that not sound like he is saying it is unsustainable, which is the exact thing you are trying to tell me he is not saying?

OK, here's the single sentence you excerpted put back into the context of what he actually said :

Well, I gather that a lot of right-wingers are quoting selectively from a piece I wrote 15 years ago in the Boston Review, in which I said that Social Security had a “Ponzi game aspect.” As always, you should read what I actually wrote. Here’s the passage:

Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today’s young may well get less than they put in).

Notice what I didn’t say. I didn’t say that the system was a fraud; I didn’t say that it would collapse. I said that in the past it had benefited from the fact that each generation paying in to the system was bigger than the generation that preceded it, and that this luxury would be ending in the years ahead.

So why did I use the P-word? Basically because Paul Samuelson had done the same; he was basically just being cute, and I was emulating him — which now turns out to be a mistake.

But anyway, anyone who uses my statement as some kind of defense of Rick Perry and all that is playing word games. I explained what I meant in that Boston Review article, and it was nothing at all like the claims that Social Security is a fraud, is destined to collapse, and all that. Social Security is and always has been mainly a pay-as-you-go system, which is nothing at all like a classic Ponzi scheme.

Of course, the usual suspects won’t pay any attention to what I’ve just said. But if anyone is actually listening …

Now how about that link to SS actuaries saying that SS is going to collapse next year?

 

[flacaltenn]

RAOUL_DUKE::

I've already posted the actual fact that Soc Sec is running in deficit NOW. To a person that understands there is nothing of value in the Trust Fund, that might be interpreted as "in danger of collapse".. Depends on how much more debt this nation can pile up on top of "stimuluses" and Solyndra and 3 wars --- whether collapse is imminent..

No link required for the fact that it's ALREADY in deficit. Look it up.. HERE'S the more important point from the SSA that you are missing..

http://www.socialsecurity.gov/history/pdf/tr09summary.pdf

Social Security’s annual surpluses
of tax income over expenditures are expected to fall sharply this
year and to stay about constant in 2010 because of the economic recession,
and to rise only briefly before declining and turning to cash flow
deficits beginning in 2016 that grow as the baby-boom generation retires.

The combined difference grows each year, so that by 2016, net revenue
flows from the general fund would total $369 billion (1.8 percent of
GDP). The positive amounts that begin in 2016 for OASDI, and started in
2008 for HI, initially represent payments the Treasury must make to the
trust funds when assets are depleted to help pay benefits in years prior to
exhaustion of the funds. 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.

So they were WAAAY wrong even in 2009.. The balance sheets went negative in 2010 not 2016. And from the HORSE'S ASS --- there is NOTHING of value in the trust fund..

The actuaries at the SSA just told you that. The rest of the report is a fairy-tale fiction intended to calm all those seniors. Got it now???

 

[Raoul_Duke]

RAOUL_DUKE::

I've already posted the actual fact that Soc Sec is running in deficit NOW. To a person that understands there is nothing of value in the Trust Fund, that might be interpreted as "in danger of collapse".. Depends on how much more debt this nation can pile up on top of "stimuluses" and Solyndra and 3 wars --- whether collapse is imminent..

No link required for the fact that it's ALREADY in deficit. Look it up.. HERE'S the more important point from the SSA that you are missing..

http://www.socialsecurity.gov/history/pdf/tr09summary.pdf

Social Security’s annual surpluses
of tax income over expenditures are expected to fall sharply this
year and to stay about constant in 2010 because of the economic recession,
and to rise only briefly before declining and turning to cash flow
deficits beginning in 2016 that grow as the baby-boom generation retires.

The combined difference grows each year, so that by 2016, net revenue
flows from the general fund would total $369 billion (1.8 percent of
GDP). The positive amounts that begin in 2016 for OASDI, and started in
2008 for HI, initially represent payments the Treasury must make to the
trust funds when assets are depleted to help pay benefits in years prior to
exhaustion of the funds. 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.

So they were WAAAY wrong even in 2009.. The balance sheets went negative in 2010 not 2016. And from the HORSE'S ASS --- there is NOTHING of value in the trust fund..

The actuaries at the SSA just told you that. The rest of the report is a fairy-tale fiction intended to calm all those seniors. Got it now???

SS is taking in less than it's paying out at the moment because employees are currently enjoying a 50% payroll tax -- that means that SS receives less money than normal, right? -- and because millions of formerly working people - who were formerly paying SS -- are out of work and thus not currently paying SS taxes.

Can you point out to me exactly where the SS actuaries say that there's nothing of value in the SS trust fund? And can you point out the parts that you think are fairy tale fiction? If such a widely read report contains such a large amount of fiction can you point to any public debunking of the report by an individual or group with any credibility? If the SS report is fictional surely the GOP would have dragged all the SS actuaries in front of a public committee by now? Where is any public GOP claim that the report is fictional?

 

[flacaltenn]

Raoul::

Can you point out to me exactly where the SS actuaries say that there's nothing of value in the SS trust fund?

OMG Man.. Can you READ??

It's right in my last post BOLDED AND OVERsized.. Direct quote from the SSA Actuarial report for 2009...

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 made it a little larger this time so that you'd have a better chance of reading it.. If you can't COMPREHEND that this means EXACTLY that there is NOTHING OF VALUE in the Trust Fund --- I can't help you.. Ask your 4th grade teacher to help you with the big words.

I normally don't pick on folks.. That's not why I'm here. But this is just pitiful...

 

[Raoul_Duke]

Raoul::

Can you point out to me exactly where the SS actuaries say that there's nothing of value in the SS trust fund?

OMG Man.. Can you READ??

It's right in my last post BOLDED AND OVERsized.. Direct quote from the SSA Actuarial report for 2009...

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 made it a little larger this time so that you'd have a better chance of reading it.. If you can't COMPREHEND that this means EXACTLY that there is NOTHING OF VALUE in the Trust Fund --- I can't help you.. Ask your 4th grade teacher to help you with the big words.

I normally don't pick on folks.. That's not why I'm here. But this is just pitiful...

Putting it in BLOCK CAPS doesn't make it any more truthful and doesn't make you look too smart.

Now, if there's NOTHING OF VALUE in the SS trust fund, like you say, and SS is currently taking in less money than it's paying out, which is actually true, exactly how is SS still paying 100% of benefits?

 

[OohPooPahDoo]

The Federal Reserve IS banks.

No dipshit, its composed of member banks.

YOU'RE SUCH A TWAT

 

[OohPooPahDoo]

They are technically borrowing the money from the government, so the government requires that the loan be secured, mostly by pieces of paper that says the government owes them money.

Yeah that makes a ton of sense.
The federal reserve isn't anything new. Before the Fed - banks did the same fucking thing. They issued notes in exchange for assets - INCLUDING Treasury securities. The only major difference is that instead of thousands of banks issuing notes independntly of one another its more centralized.

That does not mean the collateral backs the money, it backs the loan of the money.

Right, those are two completely different things.

Can you explain why the government would require a private bank to carry collateral that backs government currency?

Uhh - because they are BORROWING the money?

 

[NYcarbineer]

Raoul::

Can you point out to me exactly where the SS actuaries say that there's nothing of value in the SS trust fund?

OMG Man.. Can you READ??

It's right in my last post BOLDED AND OVERsized.. Direct quote from the SSA Actuarial report for 2009...

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 made it a little larger this time so that you'd have a better chance of reading it.. If you can't COMPREHEND that this means EXACTLY that there is NOTHING OF VALUE in the Trust Fund --- I can't help you.. Ask your 4th grade teacher to help you with the big words.

I normally don't pick on folks.. That's not why I'm here. But this is just pitiful...

The Treasury has to do that with all the bonds it has sold. You're an idiot.

 

[NYcarbineer]

RAOUL_DUKE::

I've already posted the actual fact that Soc Sec is running in deficit NOW. To a person that understands there is nothing of value in the Trust Fund, that might be interpreted as "in danger of collapse".. Depends on how much more debt this nation can pile up on top of "stimuluses" and Solyndra and 3 wars --- whether collapse is imminent..

No link required for the fact that it's ALREADY in deficit. Look it up.. HERE'S the more important point from the SSA that you are missing..

http://www.socialsecurity.gov/history/pdf/tr09summary.pdf

Social Security’s annual surpluses
of tax income over expenditures are expected to fall sharply this
year and to stay about constant in 2010 because of the economic recession,
and to rise only briefly before declining and turning to cash flow
deficits beginning in 2016 that grow as the baby-boom generation retires.

The combined difference grows each year, so that by 2016, net revenue
flows from the general fund would total $369 billion (1.8 percent of
GDP). The positive amounts that begin in 2016 for OASDI, and started in
2008 for HI, initially represent payments the Treasury must make to the
trust funds when assets are depleted to help pay benefits in years prior to
exhaustion of the funds. 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.

So they were WAAAY wrong even in 2009.. The balance sheets went negative in 2010 not 2016. And from the HORSE'S ASS --- there is NOTHING of value in the trust fund..

The actuaries at the SSA just told you that. The rest of the report is a fairy-tale fiction intended to calm all those seniors. Got it now???

Social Security revenues exceeded payments in 2010, by 92 billion.

 

[OohPooPahDoo]

Funny how many economists, and even the SS actuaries, disagree. They are saying that SS is unsustainable the way it works now. Tweaking it the way some people here keep saying will delay the inevitable, but eventually someone is going to have to deal with the outright collapse of the system.

Yet, for some reason I am unable to fathom, people want to focus on semantics rather than admit there is a problem and fix it.

And do "they" have names?

Yes, and links were posted to both Krugman and Samuelson saying so. I am pretty sure the SS actuaries have names also, I just have not looked them up, and have no plans to do so.

So you have links of Krugman and Samuelson saying that "they" have names. How specific.

 

[OohPooPahDoo]

RAOUL_DUKE::

I've already posted the actual fact that Soc Sec is running in deficit NOW. To a person that understands there is nothing of value in the Trust Fund, that might be interpreted as "in danger of collapse".. Depends on how much more debt this nation can pile up on top of "stimuluses" and Solyndra and 3 wars --- whether collapse is imminent..

To a person? You mean to a moron? Because only a moron would think 2.5 trillion dollars of U.S. Treasury obligations was worthless.

The interest rate on 30 year treasuries is like 3.3%. Do you have any clue what that means?

 

[Quantum Windbag]

Yeah that makes a ton of sense.
The federal reserve isn't anything new. Before the Fed - banks did the same fucking thing. They issued notes in exchange for assets - INCLUDING Treasury securities. The only major difference is that instead of thousands of banks issuing notes independntly of one another its more centralized.

Only the Treasury can issue Treasury securities. If a bank issued them it would be fraud or counterfeiting. Do you seriously want to take that position?

But you did just hit on why the Federal Reserve system was created, to centralize the monetary supply. Just remember that the Fed does not issue money, so its assets do not back the money.

That does not mean the collateral backs the money, it backs the loan of the money.

Right, those are two completely different things.

You are getting it now.

Can you explain why the government would require a private bank to carry collateral that backs government currency?

Uhh - because they are BORROWING the money?

Exactly. Now can you explain how assets that secure the a loan can be used to back the actual money that is being loaned?

 

[Raoul_Duke]

Funny how many economists, and even the SS actuaries, disagree. They are saying that SS is unsustainable the way it works now. Tweaking it the way some people here keep saying will delay the inevitable, but eventually someone is going to have to deal with the outright collapse of the system.

Yet, for some reason I am unable to fathom, people want to focus on semantics rather than admit there is a problem and fix it.

Can you show me where the SS actuaries disagree please? I'm sure you can find ojne or two economists, but these will be the kind of perfect markets Chicago guys who cheerled us into the 2008 economic meltdown, guys who are absolutely ideologically opposed to anything the government does and have recently seen the events of 2008 obliterate their entire ideology.

There really isn't a problem. The "problem" requires an increase in SS funding of about 0.6% of GDP to make SS fully solvent for at least the next 75 years. To put 0.6% in perspective we increased military and homeland security spending by about four times that much after 9/11 without the end of the world happening.

The current actuary report says that, unless Congress fixes it, SS will collapse next year, and SS will collapse by 2035. You cited it yourself, if that is your definition sustainable then you have to go back to school.

Still waiting for a link to this report. Where is it?

 

[bripat9643]

To a person? You mean to a moron? Because only a moron would think 2.5 trillion dollars of U.S. Treasury obligations was worthless.

They are worthless to the Treasury, dipstick. They are obligations to the Treasury, which means it has to pay them. So how are they of any value to the Treasury?

The interest rate on 30 year treasuries is like 3.3%. Do you have any clue what that means?

I just wrote myself an I.O.U that pays an interest rate of 5000% to myself.

What do you think that means?

 

[Poli_Sigh]

The idea was "not to spend the money" - in other words the government didn't put the money in interest bearing anythings - but they spent the money. Rather than a Ponzi Scheme, more like the FED Govt embezzled the money - perhaps with the intention of paying it back and perhaps not.

The biggest waste is more than likely in Medicare because of the government's ineptitude with all forms of administration / management.

However, I do hope the next time we hear from the Republicans (or the Democrats) they do their fact checking before opening their mouths. For one thing, Reagan raised taxes more than any Republican Prez before him, he prevailed upon Congress 18 or 19 times to raise the debt ceiling and he praised FDR for implementing the Social Security System.

I'm so tired of politician who think everyone is as stupid, dishonest and self-involved as they. Some of us actually know what our elected officials did when in office.

 

[Quantum Windbag]

Can you show me where the SS actuaries disagree please? I'm sure you can find ojne or two economists, but these will be the kind of perfect markets Chicago guys who cheerled us into the 2008 economic meltdown, guys who are absolutely ideologically opposed to anything the government does and have recently seen the events of 2008 obliterate their entire ideology.

There really isn't a problem. The "problem" requires an increase in SS funding of about 0.6% of GDP to make SS fully solvent for at least the next 75 years. To put 0.6% in perspective we increased military and homeland security spending by about four times that much after 9/11 without the end of the world happening.

The current actuary report says that, unless Congress fixes it, SS will collapse next year, and SS will collapse by 2035. You cited it yourself, if that is your definition sustainable then you have to go back to school.

Still waiting for a link to this report. Where is it?

It has been posted a few times, and it was in a link you quoted once, but I will provide it again simply to rub your nose in it.

Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative corrections if disruptive consequences for beneficiaries and taxpayers are to be avoided.
The financial challenges facing Social Security and Medicare should be addressed soon. If action is taken sooner rather than later, more options and more time will be available to phase in changes so that those affected can adequately prepare.

Trustees Report Summary

 

[editec]

IF the debts we owe to the AMERICAN WORKERS aren't PREFERRED DEBTS?


One wonders why they are not.

Do we care more about those debts we owe to other nation than to our own people?

Apparently we do.

Now seriously....who do our masters really work for?

The American people, or somebody else?

 

[NYcarbineer]

To a person? You mean to a moron? Because only a moron would think 2.5 trillion dollars of U.S. Treasury obligations was worthless.

They are worthless to the Treasury, dipstick. They are obligations to the Treasury, which means it has to pay them. So how are they of any value to the Treasury?

The interest rate on 30 year treasuries is like 3.3%. Do you have any clue what that means?

I just wrote myself an I.O.U that pays an interest rate of 5000% to myself.

What do you think that means?

SS is not part of the general fund. That's why SS LOANS money to the general fund, in order to generate INTEREST INCOME for current and future beneficiaries. AKA investment.

Why is that so hard to understand?

 

[OohPooPahDoo]

Yeah that makes a ton of sense.
The federal reserve isn't anything new. Before the Fed - banks did the same fucking thing. They issued notes in exchange for assets - INCLUDING Treasury securities. The only major difference is that instead of thousands of banks issuing notes independntly of one another its more centralized.

Only the Treasury can issue Treasury securities. If a bank issued them it would be fraud or counterfeiting. Do you seriously want to take that position?

I DIDN'T take that position. CAN YOU FUCKING READ ENGLISH? Under the National Bank system, banks would ISSUE NOTES in EXCHANGE for TREASURY SECURITIES bough on the open market. Please - use a dictionary or ask if you can't comprehend that simply English sentence.

But you did just hit on why the Federal Reserve system was created, to centralize the monetary supply. Just remember that the Fed does not issue money, so its assets do not back the money.

LOL! OK then, what do its assets back? Its just a coincidence the Fed holds about 2.8 T in Treasuries, SDR's, mortgages, gold, and other marketable assets - AND also has about 2.8 T in liabilities in the form of notes and bank deposits? Is the Fed unlike any other entity - its assets actually do not cancel its liabilities? What are you retarded?

Exactly. Now can you explain how assets that secure the a loan can be used to back the actual money that is being loaned?

If the money isn't paid back, the Fed confiscates the assets. Duh Its just like a home mortgage loan genius

Do you know how banking works at all?

A brief overview of how the Fed creates the monetary base - two basic means to do it

1) Open market operations - In Open Market Operations - the Federal Reserve purchases assets off the market in exchange for newly created money. This money can be in the form of currency - or in the form of a deposit with the Fed. The asset it is exchanged for can in theory - be anything - though it is most useful for the Fed to buy liquid assets, such as Treasury securities, SDR's, gold, and now - mortgage backed securities. When the Fed buys assets, the money supply increases, when they sell assets (or as those assets expire into cash, like treasuries), it decreases.

2) Discount window - through the discount window, the Fed can make loans directly to banks. The bank must have sufficient collateral to pledge for these loans. This collateral could be any of the things mentioned above as well as loans the bank has made. The Fed makes the loan by creating new money - the bank receives notes or an increase in its reserve balance. When the loan is paid back, the money is "destroyed".

In both cases, the Federal Reserve Notes or reserve deposits that the Federal Reserve pays out in exchange for assets shows up as a liability on their balance sheet, while the things they buy with that money show up as assets. So for example, if I sell a $1000 T-Bill to the Federal Reserve, they will give me $1000 in Federal Reserve Notes, and I give them they T-Bill. The T-Bill is their asset, but the notes they issued to me are their liability - so the sum balance is zero.


Now - what happens when the Fed's assets are greater than their liabilities? This can happen when the assets they buy appreciate in value. If the Fed buys a 1 year T-Bill for $999 that pays $1000, they will give the seller $999 in Federal Reserve Notes. At the end of the year, the T-Bill will be a $1000 asset, while the FRN will still be a $999 liability - so the Fed has made $1. They may need $0.02 or so out of that $1 to pay for expenses, and in the end, they have 98 cents in profit. The Fed is not allowed to post a profit, however, so this gets sent to the general fund, I believe on an annual basis - restoring the Fed's balance sheet to zero. In effect then, the Fed essentially is paid no interest on the Treasury securities it has.

 

[OohPooPahDoo]

To a person? You mean to a moron? Because only a moron would think 2.5 trillion dollars of U.S. Treasury obligations was worthless.

They are worthless to the Treasury, dipstick. They are obligations to the Treasury, which means it has to pay them. So how are they of any value to the Treasury?

They aren't - they are liabilities to the Treasury - and assets to the Social Security Trust Fund. Basic accounting here.

]
I just wrote myself an I.O.U that pays an interest rate of 5000% to myself.

That's great.

What do you think that means?

It means you're stupid.