CDZ Social Security Trust Fund will go broke in 17 years

[flacaltenn]

With DOUBLE interest.

No.
Interest was paid to SocSec when they held the bonds.
Now interest is paid to the new bond buyer and the old SocSec bond is paid off.

You're wrong. And I told you why. Had the treasury BOUGHT BACK EXISTING bonds with the surplus, that interest would HAVE been ALREADY credited to the Trust Fund. INSTEAD the phony interest is a BOOK notation. Not a bank liquid account. AND CURRENT taxpayers ARE PAYING interest on the phony interest everytime the Treasury sells a bond to pay SS shortfalls.

 

[Toddsterpatriot]

And who exactly is paying for refinancing "the investment" principle and interest?

The Treasury.

Oh c'mon. You're smarter than the money grows on trees idiots..

Who said it did? Not me.

 

[Toddsterpatriot]

With DOUBLE interest.

No.
Interest was paid to SocSec when they held the bonds.
Now interest is paid to the new bond buyer and the old SocSec bond is paid off.

You're wrong. And I told you why. Had the treasury BOUGHT BACK EXISTING bonds with the surplus, that interest would HAVE been ALREADY credited to the Trust Fund. INSTEAD the phony interest is a BOOK notation. Not a bank liquid account. AND CURRENT taxpayers ARE PAYING interest on the phony interest everytime the Treasury sells a bond to pay SS shortfalls.

Had the treasury BOUGHT BACK EXISTING bonds with the surplus, that interest would HAVE been ALREADY credited to the Trust Fund.

Try this thought experiment.
The US Treasury has $1 trillion in outstanding debt (I wish, right?)

This year the SocSec Trust Fund has a $50 billion surplus, more taxes collected than benefits paid.
The rest of the government has a $100 billion deficit.

In your scenario, the Trust Fund goes out and buys $50 billion in already issued US Treasury bonds.
The Treasury goes out and sells $100 billion in bonds to finance the wasteful spending the government likes.

Now the Trust Fund has $50 billion in assets, the Treasury has $1.1 trillion in outstanding debt.
The Treasury pays interest on $1.05 trillion to the public owners and interest on $50 billion to SocSec.

With me so far?

 

[flacaltenn]

With DOUBLE interest.

No.
Interest was paid to SocSec when they held the bonds.
Now interest is paid to the new bond buyer and the old SocSec bond is paid off.

You're wrong. And I told you why. Had the treasury BOUGHT BACK EXISTING bonds with the surplus, that interest would HAVE been ALREADY credited to the Trust Fund. INSTEAD the phony interest is a BOOK notation. Not a bank liquid account. AND CURRENT taxpayers ARE PAYING interest on the phony interest everytime the Treasury sells a bond to pay SS shortfalls.

Had the treasury BOUGHT BACK EXISTING bonds with the surplus, that interest would HAVE been ALREADY credited to the Trust Fund.

Try this thought experiment.
The US Treasury has $1 trillion in outstanding debt (I wish, right?)

This year the SocSec Trust Fund has a $50 billion surplus, more taxes collected than benefits paid.
The rest of the government has a $100 billion deficit.

In your scenario, the Trust Fund goes out and buys $50 billion in already issued US Treasury bonds.
The Treasury goes out and sells $100 billion in bonds to finance the wasteful spending the government likes.

Now the Trust Fund has $50 billion in assets, the Treasury has $1.1 trillion in outstanding debt.
The Treasury pays interest on $1.05 trillion to the public owners and interest on $50 billion to SocSec.

With me so far?

You're not looking the time scale involved here. We're talking about money that was STOLEN from FICA wallets up to 30 years ago. What happens in 2017 or 2020 is NOT the issue. What the issue is that NO PROVISION was ever made to USE that surplus to defray the FUTURE costs of Soc Sec. Hence the 3 examples of what COULD have been done over that 30 years.

By creating a current year example -- you're ignoring 30 years of abuse and fraud.

 

[Toddsterpatriot]

With DOUBLE interest.

No.
Interest was paid to SocSec when they held the bonds.
Now interest is paid to the new bond buyer and the old SocSec bond is paid off.

You're wrong. And I told you why. Had the treasury BOUGHT BACK EXISTING bonds with the surplus, that interest would HAVE been ALREADY credited to the Trust Fund. INSTEAD the phony interest is a BOOK notation. Not a bank liquid account. AND CURRENT taxpayers ARE PAYING interest on the phony interest everytime the Treasury sells a bond to pay SS shortfalls.

Had the treasury BOUGHT BACK EXISTING bonds with the surplus, that interest would HAVE been ALREADY credited to the Trust Fund.

Try this thought experiment.
The US Treasury has $1 trillion in outstanding debt (I wish, right?)

This year the SocSec Trust Fund has a $50 billion surplus, more taxes collected than benefits paid.
The rest of the government has a $100 billion deficit.

In your scenario, the Trust Fund goes out and buys $50 billion in already issued US Treasury bonds.
The Treasury goes out and sells $100 billion in bonds to finance the wasteful spending the government likes.

Now the Trust Fund has $50 billion in assets, the Treasury has $1.1 trillion in outstanding debt.
The Treasury pays interest on $1.05 trillion to the public owners and interest on $50 billion to SocSec.

With me so far?

You're not looking the time scale involved here. We're talking about money that was STOLEN from FICA wallets up to 30 years ago. What happens in 2017 or 2020 is NOT the issue. What the issue is that NO PROVISION was ever made to USE that surplus to defray the FUTURE costs of Soc Sec. Hence the 3 examples of what COULD have been done over that 30 years.

By creating a current year example -- you're ignoring 30 years of abuse and fraud.

By creating a current year example -- you're ignoring 30 years of abuse and fraud.

We can talk about the history in a moment.
Do you follow my logic or not?

 

[flacaltenn]

During Clinton/Bush SS overcharges were contributing up $30B a year. That's about 4 or 5% of ALL govt income. Bush proposed USING that surplus (while it existed) to defray benefits by allowing some people to PARTIALLY opt out (spend the $30B annually on SOMETHING that would actually BENEFIT the future fund). It would have raised about $800B in REDUCED liabilities on the fund. But the Dems demagogue this and the spineless Repubs folded.

THAT PLAN would have been "an investment" in the future of Soc Sec now. It would have produced REAL reduced liabilities today. But NOTHING like was allowed to happen. So NO assets were accrued with those overpayments.

At a time when -- CONGRESS and the Prez claimed to have balance the Fed Budget. Albeit on the backs of squandering the surplus. So don't tell me how bonds would have to be floated because spending would have continued unabated. The fact that the theft was not HALTED -- aided and abetted the out of control spending.

 

[Toddsterpatriot]

During Clinton/Bush SS overcharges were contributing up $30B a year. That's about 4 or 5% of ALL govt income. Bush proposed USING that surplus (while it existed) to defray benefits by allowing some people to PARTIALLY opt out (spend the $30B annually on SOMETHING that would actually BENEFIT the future fund). It would have raised about $800B in REDUCED liabilities on the fund. But the Dems demagogue this and the spineless Repubs folded.

THAT PLAN would have been "an investment" in the future of Soc Sec now. It would have produced REAL reduced liabilities today. But NOTHING like was allowed to happen. So NO assets were accrued with those overpayments.

At a time when -- CONGRESS and the Prez claimed to have balance the Fed Budget. Albeit on the backs of squandering the surplus. So don't tell me how bonds would have to be floated because spending would have continued unabated. The fact that the theft was not HALTED -- aided and abetted the out of control spending.

Yes, privatizing would have reduced future liabilities and given higher growth to recipients.
Still has nothing to do with the accounting issue we're discussing.

 

[Toro]

It does NOT INVEST a thing. There is no EQUITY or LIQUIDITY of any type associated with an OFF- Budget IOU,..

I gave you the statement from the SSA stating there is nothing of value in those "investments" with which to pay bills. Forget the fairy tales. That's the truth behind the criminal charade..

SS does not invest in the conventional sense, but it works just like a government bond mutual fund you could buy from Fidelity. If you wanted to buy a government bond fund at Fidelity, you would send Fidelity your money and the fund would buy US government bonds. SS is no different (other than it is like a defined contribution plan rather than a mutual fund). It could be set up to buy US government bonds, but the debiting and crediting of the SS trusts is actually more efficient because it cuts out steps in the issuing process. There is nothing criminal about it. It's just confusing.

I understand why it's confusing. I've spent much of my career in and around the pension fund industry. And even there, many people don't understand how SS works.

 

[Toro]

With DOUBLE interest.

No.
Interest was paid to SocSec when they held the bonds.
Now interest is paid to the new bond buyer and the old SocSec bond is paid off.

You're wrong. And I told you why. Had the treasury BOUGHT BACK EXISTING bonds with the surplus, that interest would HAVE been ALREADY credited to the Trust Fund. INSTEAD the phony interest is a BOOK notation. Not a bank liquid account. AND CURRENT taxpayers ARE PAYING interest on the phony interest everytime the Treasury sells a bond to pay SS shortfalls.

Had the treasury BOUGHT BACK EXISTING bonds with the surplus, that interest would HAVE been ALREADY credited to the Trust Fund.

Try this thought experiment.
The US Treasury has $1 trillion in outstanding debt (I wish, right?)

This year the SocSec Trust Fund has a $50 billion surplus, more taxes collected than benefits paid.
The rest of the government has a $100 billion deficit.

In your scenario, the Trust Fund goes out and buys $50 billion in already issued US Treasury bonds.
The Treasury goes out and sells $100 billion in bonds to finance the wasteful spending the government likes.

Now the Trust Fund has $50 billion in assets, the Treasury has $1.1 trillion in outstanding debt.
The Treasury pays interest on $1.05 trillion to the public owners and interest on $50 billion to SocSec.

With me so far?

You're not looking the time scale involved here. We're talking about money that was STOLEN from FICA wallets up to 30 years ago. What happens in 2017 or 2020 is NOT the issue. What the issue is that NO PROVISION was ever made to USE that surplus to defray the FUTURE costs of Soc Sec. Hence the 3 examples of what COULD have been done over that 30 years.

By creating a current year example -- you're ignoring 30 years of abuse and fraud.

No money was ever stolen from SS. There is no abuse and fraud in the SS trusts. Within the federal government? That's another matter.

 

[dblack]

Single ....


Payer!

 

[martybegan]

Time to raise (or better yet, eliminate) the earnings cap.

Will we also raise the benefits cap for those contributing more?

 

[martybegan]

From the SSTF trustees point of view the SSA is solvent accounting-wise in that it has a bunch of IOUs accumulated from past years when payins exceeded payouts. Those IOUs are actually an asset on the SSTF books and therefore the SSTF is not insolvent. But as we know, for some years now the SSA has been taking in less money than they're paying out, so they are cashing in those IOUs to makeup the difference. Each year for the next 17 years they will run through those IOUs until they're all gone, and from that point the SSA will not be solvent any longer. It's an accounting gimmick to be sure, the US Treasury still has to issue new debt to cover those IOUs along with every other deficits the gov't accrues each year. Maybe this is nothing more than semantics, but the SSTF is not issuing new debt, the US Treasury is. Actually, I don't believe the SSTF or the SSA even has the authority to issue new debt, which means that when all those IOUs are gone the SSTF will be forced to pay beneficiaries a lot less money than they're getting now. That's if the Gov't doesn't do something about that, which they apparently do not have the guts to do.

If I'm not mistaken, the SSTF by law could not keep the excess funds that exceeded the payouts, it had to be in effect turned over to the US Treasury to spend on other things, who in turn gave the SSTF an IOU for that money. [BTW, that's how Clinton ended up with a surplus in his last year.] We can point fingers at who is responsible until the cows come home, but the problem is this: for the next 17 years or so the SSTF can and will cash in the IOUs it has accumulated since the inception of the SSTF, and for the next 17 years SSA beneficiaries will get their full amount due. BUT - once those IOUs are gone, the US Gov't cannot by law makeup the difference between how much the SSTF takes in and how much it pays out. Sooner or later Congress will have to take the bull by the horns and finally do something about this or else in 2034 millions of beneficiaries are going to take a big hit in the monthly SSA checks.

The author of the post does not understand SS.

• All money collected by the SS trusts are turned over to the government and is spent.
• All assets in the trusts are effectively government IOUs
• The government will not "run through" all the IOUs in 17 years because the IOUs are liabilities of the Treasury. They cannot "run through" them
• The SS trusts will not be bankrupt in 17 years. Instead, what will happen at some point in the future is that in about 17 years or so, there will not be enough IOUs in the trusts to meet the obligations of all Americans in the future. It will be "underfunded" by something like 20%-30%. That will require a change in SS. Either benefits will have to be cut, taxes raised, or the whole system reformed.

The only thing you left out is that when SS calls in these IOU's the only place they come from is the Federal General Fund, which means every cashed in $ is something that adds to the current federal budget deficit.

 

[Toddsterpatriot]

From the SSTF trustees point of view the SSA is solvent accounting-wise in that it has a bunch of IOUs accumulated from past years when payins exceeded payouts. Those IOUs are actually an asset on the SSTF books and therefore the SSTF is not insolvent. But as we know, for some years now the SSA has been taking in less money than they're paying out, so they are cashing in those IOUs to makeup the difference. Each year for the next 17 years they will run through those IOUs until they're all gone, and from that point the SSA will not be solvent any longer. It's an accounting gimmick to be sure, the US Treasury still has to issue new debt to cover those IOUs along with every other deficits the gov't accrues each year. Maybe this is nothing more than semantics, but the SSTF is not issuing new debt, the US Treasury is. Actually, I don't believe the SSTF or the SSA even has the authority to issue new debt, which means that when all those IOUs are gone the SSTF will be forced to pay beneficiaries a lot less money than they're getting now. That's if the Gov't doesn't do something about that, which they apparently do not have the guts to do.

If I'm not mistaken, the SSTF by law could not keep the excess funds that exceeded the payouts, it had to be in effect turned over to the US Treasury to spend on other things, who in turn gave the SSTF an IOU for that money. [BTW, that's how Clinton ended up with a surplus in his last year.] We can point fingers at who is responsible until the cows come home, but the problem is this: for the next 17 years or so the SSTF can and will cash in the IOUs it has accumulated since the inception of the SSTF, and for the next 17 years SSA beneficiaries will get their full amount due. BUT - once those IOUs are gone, the US Gov't cannot by law makeup the difference between how much the SSTF takes in and how much it pays out. Sooner or later Congress will have to take the bull by the horns and finally do something about this or else in 2034 millions of beneficiaries are going to take a big hit in the monthly SSA checks.

The author of the post does not understand SS.

• All money collected by the SS trusts are turned over to the government and is spent.
• All assets in the trusts are effectively government IOUs
• The government will not "run through" all the IOUs in 17 years because the IOUs are liabilities of the Treasury. They cannot "run through" them
• The SS trusts will not be bankrupt in 17 years. Instead, what will happen at some point in the future is that in about 17 years or so, there will not be enough IOUs in the trusts to meet the obligations of all Americans in the future. It will be "underfunded" by something like 20%-30%. That will require a change in SS. Either benefits will have to be cut, taxes raised, or the whole system reformed.

The only thing you left out is that when SS calls in these IOU's the only place they come from is the Federal General Fund, which means every cashed in $ is something that adds to the current federal budget deficit.

which means every cashed in $ is something that adds to the current federal budget deficit.

Just as every previous surplus $ subtracted from the previous federal budget deficit.

 

[martybegan]

From the SSTF trustees point of view the SSA is solvent accounting-wise in that it has a bunch of IOUs accumulated from past years when payins exceeded payouts. Those IOUs are actually an asset on the SSTF books and therefore the SSTF is not insolvent. But as we know, for some years now the SSA has been taking in less money than they're paying out, so they are cashing in those IOUs to makeup the difference. Each year for the next 17 years they will run through those IOUs until they're all gone, and from that point the SSA will not be solvent any longer. It's an accounting gimmick to be sure, the US Treasury still has to issue new debt to cover those IOUs along with every other deficits the gov't accrues each year. Maybe this is nothing more than semantics, but the SSTF is not issuing new debt, the US Treasury is. Actually, I don't believe the SSTF or the SSA even has the authority to issue new debt, which means that when all those IOUs are gone the SSTF will be forced to pay beneficiaries a lot less money than they're getting now. That's if the Gov't doesn't do something about that, which they apparently do not have the guts to do.

If I'm not mistaken, the SSTF by law could not keep the excess funds that exceeded the payouts, it had to be in effect turned over to the US Treasury to spend on other things, who in turn gave the SSTF an IOU for that money. [BTW, that's how Clinton ended up with a surplus in his last year.] We can point fingers at who is responsible until the cows come home, but the problem is this: for the next 17 years or so the SSTF can and will cash in the IOUs it has accumulated since the inception of the SSTF, and for the next 17 years SSA beneficiaries will get their full amount due. BUT - once those IOUs are gone, the US Gov't cannot by law makeup the difference between how much the SSTF takes in and how much it pays out. Sooner or later Congress will have to take the bull by the horns and finally do something about this or else in 2034 millions of beneficiaries are going to take a big hit in the monthly SSA checks.

The author of the post does not understand SS.

• All money collected by the SS trusts are turned over to the government and is spent.
• All assets in the trusts are effectively government IOUs
• The government will not "run through" all the IOUs in 17 years because the IOUs are liabilities of the Treasury. They cannot "run through" them
• The SS trusts will not be bankrupt in 17 years. Instead, what will happen at some point in the future is that in about 17 years or so, there will not be enough IOUs in the trusts to meet the obligations of all Americans in the future. It will be "underfunded" by something like 20%-30%. That will require a change in SS. Either benefits will have to be cut, taxes raised, or the whole system reformed.

The only thing you left out is that when SS calls in these IOU's the only place they come from is the Federal General Fund, which means every cashed in $ is something that adds to the current federal budget deficit.

which means every cashed in $ is something that adds to the current federal budget deficit.

Just as every previous surplus $ subtracted from the previous federal budget deficit.

yep, for decades we subsidized additional federal spending with supposed retirement $$, and now we have to use federal spending to pay it back.

 

[Toddsterpatriot]

From the SSTF trustees point of view the SSA is solvent accounting-wise in that it has a bunch of IOUs accumulated from past years when payins exceeded payouts. Those IOUs are actually an asset on the SSTF books and therefore the SSTF is not insolvent. But as we know, for some years now the SSA has been taking in less money than they're paying out, so they are cashing in those IOUs to makeup the difference. Each year for the next 17 years they will run through those IOUs until they're all gone, and from that point the SSA will not be solvent any longer. It's an accounting gimmick to be sure, the US Treasury still has to issue new debt to cover those IOUs along with every other deficits the gov't accrues each year. Maybe this is nothing more than semantics, but the SSTF is not issuing new debt, the US Treasury is. Actually, I don't believe the SSTF or the SSA even has the authority to issue new debt, which means that when all those IOUs are gone the SSTF will be forced to pay beneficiaries a lot less money than they're getting now. That's if the Gov't doesn't do something about that, which they apparently do not have the guts to do.

If I'm not mistaken, the SSTF by law could not keep the excess funds that exceeded the payouts, it had to be in effect turned over to the US Treasury to spend on other things, who in turn gave the SSTF an IOU for that money. [BTW, that's how Clinton ended up with a surplus in his last year.] We can point fingers at who is responsible until the cows come home, but the problem is this: for the next 17 years or so the SSTF can and will cash in the IOUs it has accumulated since the inception of the SSTF, and for the next 17 years SSA beneficiaries will get their full amount due. BUT - once those IOUs are gone, the US Gov't cannot by law makeup the difference between how much the SSTF takes in and how much it pays out. Sooner or later Congress will have to take the bull by the horns and finally do something about this or else in 2034 millions of beneficiaries are going to take a big hit in the monthly SSA checks.

The author of the post does not understand SS.

• All money collected by the SS trusts are turned over to the government and is spent.
• All assets in the trusts are effectively government IOUs
• The government will not "run through" all the IOUs in 17 years because the IOUs are liabilities of the Treasury. They cannot "run through" them
• The SS trusts will not be bankrupt in 17 years. Instead, what will happen at some point in the future is that in about 17 years or so, there will not be enough IOUs in the trusts to meet the obligations of all Americans in the future. It will be "underfunded" by something like 20%-30%. That will require a change in SS. Either benefits will have to be cut, taxes raised, or the whole system reformed.

The only thing you left out is that when SS calls in these IOU's the only place they come from is the Federal General Fund, which means every cashed in $ is something that adds to the current federal budget deficit.

which means every cashed in $ is something that adds to the current federal budget deficit.

Just as every previous surplus $ subtracted from the previous federal budget deficit.

yep, for decades we subsidized additional federal spending with supposed retirement $$, and now we have to use federal spending to pay it back.

Yup.

 

[Toro]

From the SSTF trustees point of view the SSA is solvent accounting-wise in that it has a bunch of IOUs accumulated from past years when payins exceeded payouts. Those IOUs are actually an asset on the SSTF books and therefore the SSTF is not insolvent. But as we know, for some years now the SSA has been taking in less money than they're paying out, so they are cashing in those IOUs to makeup the difference. Each year for the next 17 years they will run through those IOUs until they're all gone, and from that point the SSA will not be solvent any longer. It's an accounting gimmick to be sure, the US Treasury still has to issue new debt to cover those IOUs along with every other deficits the gov't accrues each year. Maybe this is nothing more than semantics, but the SSTF is not issuing new debt, the US Treasury is. Actually, I don't believe the SSTF or the SSA even has the authority to issue new debt, which means that when all those IOUs are gone the SSTF will be forced to pay beneficiaries a lot less money than they're getting now. That's if the Gov't doesn't do something about that, which they apparently do not have the guts to do.

If I'm not mistaken, the SSTF by law could not keep the excess funds that exceeded the payouts, it had to be in effect turned over to the US Treasury to spend on other things, who in turn gave the SSTF an IOU for that money. [BTW, that's how Clinton ended up with a surplus in his last year.] We can point fingers at who is responsible until the cows come home, but the problem is this: for the next 17 years or so the SSTF can and will cash in the IOUs it has accumulated since the inception of the SSTF, and for the next 17 years SSA beneficiaries will get their full amount due. BUT - once those IOUs are gone, the US Gov't cannot by law makeup the difference between how much the SSTF takes in and how much it pays out. Sooner or later Congress will have to take the bull by the horns and finally do something about this or else in 2034 millions of beneficiaries are going to take a big hit in the monthly SSA checks.

The author of the post does not understand SS.

• All money collected by the SS trusts are turned over to the government and is spent.
• All assets in the trusts are effectively government IOUs
• The government will not "run through" all the IOUs in 17 years because the IOUs are liabilities of the Treasury. They cannot "run through" them
• The SS trusts will not be bankrupt in 17 years. Instead, what will happen at some point in the future is that in about 17 years or so, there will not be enough IOUs in the trusts to meet the obligations of all Americans in the future. It will be "underfunded" by something like 20%-30%. That will require a change in SS. Either benefits will have to be cut, taxes raised, or the whole system reformed.

The only thing you left out is that when SS calls in these IOU's the only place they come from is the Federal General Fund, which means every cashed in $ is something that adds to the current federal budget deficit.

That's true of all government debt.

 

[martybegan]

From the SSTF trustees point of view the SSA is solvent accounting-wise in that it has a bunch of IOUs accumulated from past years when payins exceeded payouts. Those IOUs are actually an asset on the SSTF books and therefore the SSTF is not insolvent. But as we know, for some years now the SSA has been taking in less money than they're paying out, so they are cashing in those IOUs to makeup the difference. Each year for the next 17 years they will run through those IOUs until they're all gone, and from that point the SSA will not be solvent any longer. It's an accounting gimmick to be sure, the US Treasury still has to issue new debt to cover those IOUs along with every other deficits the gov't accrues each year. Maybe this is nothing more than semantics, but the SSTF is not issuing new debt, the US Treasury is. Actually, I don't believe the SSTF or the SSA even has the authority to issue new debt, which means that when all those IOUs are gone the SSTF will be forced to pay beneficiaries a lot less money than they're getting now. That's if the Gov't doesn't do something about that, which they apparently do not have the guts to do.

If I'm not mistaken, the SSTF by law could not keep the excess funds that exceeded the payouts, it had to be in effect turned over to the US Treasury to spend on other things, who in turn gave the SSTF an IOU for that money. [BTW, that's how Clinton ended up with a surplus in his last year.] We can point fingers at who is responsible until the cows come home, but the problem is this: for the next 17 years or so the SSTF can and will cash in the IOUs it has accumulated since the inception of the SSTF, and for the next 17 years SSA beneficiaries will get their full amount due. BUT - once those IOUs are gone, the US Gov't cannot by law makeup the difference between how much the SSTF takes in and how much it pays out. Sooner or later Congress will have to take the bull by the horns and finally do something about this or else in 2034 millions of beneficiaries are going to take a big hit in the monthly SSA checks.

The author of the post does not understand SS.

• All money collected by the SS trusts are turned over to the government and is spent.
• All assets in the trusts are effectively government IOUs
• The government will not "run through" all the IOUs in 17 years because the IOUs are liabilities of the Treasury. They cannot "run through" them
• The SS trusts will not be bankrupt in 17 years. Instead, what will happen at some point in the future is that in about 17 years or so, there will not be enough IOUs in the trusts to meet the obligations of all Americans in the future. It will be "underfunded" by something like 20%-30%. That will require a change in SS. Either benefits will have to be cut, taxes raised, or the whole system reformed.

The only thing you left out is that when SS calls in these IOU's the only place they come from is the Federal General Fund, which means every cashed in $ is something that adds to the current federal budget deficit.

That's true of all government debt.

But remember SS was sold as something separate, people paying into a system over time and taking that money out when they retired.
Government run, but technically not government funded. Once they started using the surplus to prop up the general fund, however, even that veneer of independence disappeared.

The surplus should have been invested in real securities like any other pension fund.

 

[flacaltenn]

It does NOT INVEST a thing. There is no EQUITY or LIQUIDITY of any type associated with an OFF- Budget IOU,..

I gave you the statement from the SSA stating there is nothing of value in those "investments" with which to pay bills. Forget the fairy tales. That's the truth behind the criminal charade..

SS does not invest in the conventional sense, but it works just like a government bond mutual fund you could buy from Fidelity. If you wanted to buy a government bond fund at Fidelity, you would send Fidelity your money and the fund would buy US government bonds. SS is no different (other than it is like a defined contribution plan rather than a mutual fund). It could be set up to buy US government bonds, but the debiting and crediting of the SS trusts is actually more efficient because it cuts out steps in the issuing process. There is nothing criminal about it. It's just confusing.

I understand why it's confusing. I've spent much of my career in and around the pension fund industry. And even there, many people don't understand how SS works.

That's idiotic to compare the useless book entries in the "trust fund" to a commercial bond fund. First of all, the stolen money was not actually PAID anything for 30 years and couldn't be "re-invested" with market changes. There was nothing of VALUE created. Cash value was manipulated. Nothing ever came from the Debits towards interest like with regular T-Bills. THEY NEVER BOOKED THE INTEREST PAID for 30 years...

Don't piss on my leg and tell me it's raining..

 

[flacaltenn]

With DOUBLE interest.

No.
Interest was paid to SocSec when they held the bonds.
Now interest is paid to the new bond buyer and the old SocSec bond is paid off.

You're wrong. And I told you why. Had the treasury BOUGHT BACK EXISTING bonds with the surplus, that interest would HAVE been ALREADY credited to the Trust Fund. INSTEAD the phony interest is a BOOK notation. Not a bank liquid account. AND CURRENT taxpayers ARE PAYING interest on the phony interest everytime the Treasury sells a bond to pay SS shortfalls.

Had the treasury BOUGHT BACK EXISTING bonds with the surplus, that interest would HAVE been ALREADY credited to the Trust Fund.

Try this thought experiment.
The US Treasury has $1 trillion in outstanding debt (I wish, right?)

This year the SocSec Trust Fund has a $50 billion surplus, more taxes collected than benefits paid.
The rest of the government has a $100 billion deficit.

In your scenario, the Trust Fund goes out and buys $50 billion in already issued US Treasury bonds.
The Treasury goes out and sells $100 billion in bonds to finance the wasteful spending the government likes.

Now the Trust Fund has $50 billion in assets, the Treasury has $1.1 trillion in outstanding debt.
The Treasury pays interest on $1.05 trillion to the public owners and interest on $50 billion to SocSec.

With me so far?

You're not looking the time scale involved here. We're talking about money that was STOLEN from FICA wallets up to 30 years ago. What happens in 2017 or 2020 is NOT the issue. What the issue is that NO PROVISION was ever made to USE that surplus to defray the FUTURE costs of Soc Sec. Hence the 3 examples of what COULD have been done over that 30 years.

By creating a current year example -- you're ignoring 30 years of abuse and fraud.

No money was ever stolen from SS. There is no abuse and fraud in the SS trusts. Within the federal government? That's another matter.

Where is $1Trill in SS Payments that got transferred to the toilet bowl of the Gen Fund? They were STOLEN AND SPENT. With nothing of VALUE towards the future liquidity of the fund created.

EVERY PENNY of SS debt is now paid by NEW SPENDING. In the year incurred. NOTHING of value is in the Trust Fund "locker".. Ever SEE the Trust Fund?


Does this look like it's holds a couple $Trill in negotiable bonds and interest payments??

 

[flacaltenn]

That's like Fidelity responding to your sell order by saying

"Hold on" We're Good for It". Gotta have the finance guys go get a loan to pay you back...