Taxing those who make money

[MIPS]

Specifically what do we do differently to have a "funded" social security liability?

In a nutshell, we need to change the rate and timing at which we pay out benefits, there have been very workable proposals which have been ignored, some of the best came out of the Kerrey-Danforth Commission (1994 - report killed by Senior Lobbies before getting anywhere), Report of the Kerrey-Danforth Commission

if you're interested in a detailed, non-partisan analysis I would strongly recommend this book:
[ame=http://www.amazon.com/Running-Empty-Democratic-Republican-Bankrupting/dp/0312424620/ref=sr_1_1?ie=UTF8&s=books&qid=1266283218&sr=1-1]Amazon.com: Running on Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It (9780312424626): Peter G. Peterson: Books[/ame]

 

[SpidermanTuba]

Specifically what do we do differently to have a "funded" social security liability?

In a nutshell, we need to change the rate and timing at which we pay out benefits, there have been very workable proposals which have been ignored, some of the best came out of the Kerrey-Danforth Commission (1994 - report killed by Senior Lobbies before getting anywhere), Report of the Kerrey-Danforth Commission

if you're interested in a detailed, non-partisan analysis I would strongly recommend this book:
[ame=http://www.amazon.com/Running-Empty-Democratic-Republican-Bankrupting/dp/0312424620/ref=sr_1_1?ie=UTF8&s=books&qid=1266283218&sr=1-1]Amazon.com: Running on Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It (9780312424626): Peter G. Peterson: Books[/ame]

So what is "funding" the liability in this case?

 

[MIPS]

Specifically what do we do differently to have a "funded" social security liability?

In a nutshell, we need to change the rate and timing at which we pay out benefits, there have been very workable proposals which have been ignored, some of the best came out of the Kerrey-Danforth Commission (1994 - report killed by Senior Lobbies before getting anywhere), Report of the Kerrey-Danforth Commission

if you're interested in a detailed, non-partisan analysis I would strongly recommend this book:
[ame=http://www.amazon.com/Running-Empty-Democratic-Republican-Bankrupting/dp/0312424620/ref=sr_1_1?ie=UTF8&s=books&qid=1266283218&sr=1-1]Amazon.com: Running on Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It (9780312424626): Peter G. Peterson: Books[/ame]

So what is "funding" the liability in this case?

Read the links I provided.

 

[SpidermanTuba]

In a nutshell, we need to change the rate and timing at which we pay out benefits, there have been very workable proposals which have been ignored, some of the best came out of the Kerrey-Danforth Commission (1994 - report killed by Senior Lobbies before getting anywhere), Report of the Kerrey-Danforth Commission

if you're interested in a detailed, non-partisan analysis I would strongly recommend this book:
Amazon.com: Running on Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It (9780312424626): Peter G. Peterson: Books

So what is "funding" the liability in this case?

Read the links I provided.

Why can't you just tell me?

If I want to send my son to harvard, and I want the liability to be "funded" - I can buy treasury bills which mature just before and around the time his schooling starts.

If I want to make social security a "funded liability" - I need an asset. Which asset do I buy? I have a feeling that since you can't answer this very simple question, neither will your links.

 

[MIPS]

So what is "funding" the liability in this case?

Read the links I provided.

Why can't you just tell me?

If I want to send my son to harvard, and I want the liability to be "funded" - I can buy treasury bills which mature just before and around the time his schooling starts.

If I want to make social security a "funded liability" - I need an asset. Which asset do I buy? I have a feeling that since you can't answer this very simple question, neither will your links.

Okay, I thought you were interested in the details of the problem, however we could easily invest in foreign bonds, equities, gold, land, or a basket of assets that balance risk with acceptable returns.....however under the current methodology we're not "investing" it in anything except the debasement of our currency, since essentially we're just printing money to put into a mythical trust fund because we are SPENDING the SS revenues and replacing it with self issued debt instruments and we still have over $14 TRILLION in unfunded liabilities in SS over and above said debt instruments in the "trust fund".

 

[SpidermanTuba]

Read the links I provided.

Why can't you just tell me?

If I want to send my son to harvard, and I want the liability to be "funded" - I can buy treasury bills which mature just before and around the time his schooling starts.

If I want to make social security a "funded liability" - I need an asset. Which asset do I buy? I have a feeling that since you can't answer this very simple question, neither will your links.

Okay, I thought you were interested in the details of the problem, however we could easily invest in foreign bonds, equities, gold, land, or a basket of assets that balance risk with acceptable returns.....however under the current methodology we're not "investing" it in anything except the debasement of our currency, since essentially we're just printing money to put into a mythical trust fund because we are SPENDING the SS revenues and replacing it with self issued debt instruments and we still have over $14 TRILLION in unfunded liabilities in SS over and above said debt instruments in the "trust fund".

I'm finding it very hard to get through to you. You're telling me how NOT to make SS a funded liability, but that's not what I asked. Please read the question again:


If I want to make social security a "funded liability" - I need an asset. Which asset do I buy?

 

[MIPS]

Why can't you just tell me?

If I want to send my son to harvard, and I want the liability to be "funded" - I can buy treasury bills which mature just before and around the time his schooling starts.

If I want to make social security a "funded liability" - I need an asset. Which asset do I buy? I have a feeling that since you can't answer this very simple question, neither will your links.

Okay, I thought you were interested in the details of the problem, however we could easily invest in foreign bonds, equities, gold, land, or a basket of assets that balance risk with acceptable returns.....however under the current methodology we're not "investing" it in anything except the debasement of our currency, since essentially we're just printing money to put into a mythical trust fund because we are SPENDING the SS revenues and replacing it with self issued debt instruments and we still have over $14 TRILLION in unfunded liabilities in SS over and above said debt instruments in the "trust fund".

I'm finding it very hard to get through to you. You're telling me how NOT to make SS a funded liability, but that's not what I asked. Please read the question again:


If I want to make social security a "funded liability" - I need an asset. Which asset do I buy?

I've come to the conclusion that you cannot read, sorry.

 

[SpidermanTuba]

Okay, I thought you were interested in the details of the problem, however we could easily invest in foreign bonds, equities, gold, land, or a basket of assets that balance risk with acceptable returns.....however under the current methodology we're not "investing" it in anything except the debasement of our currency, since essentially we're just printing money to put into a mythical trust fund because we are SPENDING the SS revenues and replacing it with self issued debt instruments and we still have over $14 TRILLION in unfunded liabilities in SS over and above said debt instruments in the "trust fund".

I'm finding it very hard to get through to you. You're telling me how NOT to make SS a funded liability, but that's not what I asked. Please read the question again:


If I want to make social security a "funded liability" - I need an asset. Which asset do I buy?

I've come to the conclusion that you cannot read, sorry.

That's great, but yet again, you fail to answer a simple question.

A "funded liability" is one which has an asset to back it, correct? So if we wanted to make social security a "funded liability", which asset would we buy to back it? Treasuries? Houses? Large bricks of gold? Stocks? Designer clothing?

 

[MIPS]

I'm finding it very hard to get through to you. You're telling me how NOT to make SS a funded liability, but that's not what I asked. Please read the question again:


If I want to make social security a "funded liability" - I need an asset. Which asset do I buy?

I've come to the conclusion that you cannot read, sorry.

That's great, but yet again, you fail to answer a simple question.

A "funded liability" is one which has an asset to back it, correct? So if we wanted to make social security a "funded liability", which asset would we buy to back it? Treasuries? Houses? Large bricks of gold? Stocks? Designer clothing?

Okay, I thought you were interested in the details of the problem, however we could easily invest in foreign bonds, equities, gold, land, or a basket of assets that balance risk with acceptable returns.....however under the current methodology we're not "investing" it in anything except the debasement of our currency, since essentially we're just printing money to put into a mythical trust fund because we are SPENDING the SS revenues and replacing it with self issued debt instruments and we still have over $14 TRILLION in unfunded liabilities in SS over and above said debt instruments in the "trust fund".

Your turn .....

 

[SpidermanTuba]

Okay, I thought you were interested in the details of the problem, however we could easily invest in foreign bonds, equities, gold, land, or a basket of assets that balance risk with acceptable returns.

But aren't U.S. Treasuries the safest asset for U.S. dollars around? In terms of preservation of U.S. dollar denominated capital how do you expect to beat a U.S. Treasury?

If I was wanting to fund my kid's college education and wanted the safest possible investment vehicle, you'd honestly recommend I buy gold instead of U.S. treasuries?



Retirement savings in the form of U.S. treasuries are just as good as retirement savings in the form of social security obligations - BOTH represent money the U.S. Government does not presently have, and both are backed by the same thing - government credit. So would you tell a person that has $100,000,000 in T-bills but no other retirement savings (including SS) that their retirement is "unfunded" ? Of course not.

 

[MIPS]

Okay, I thought you were interested in the details of the problem, however we could easily invest in foreign bonds, equities, gold, land, or a basket of assets that balance risk with acceptable returns.

But aren't U.S. Treasuries the safest asset for U.S. dollars around? In terms of preservation of U.S. dollar denominated capital how do you expect to beat a U.S. Treasury?

Er.. not if we destroy our currency which is what we're in the process of doing with this chicanery, how do you expect we're going to pay for over $107 TRILLION in unfunded liabilities and over $12 TRILLION in cumulative operating deficits? by taking SS revenues and converting it into even more debt that we can't afford to pay? Our treasuries don't deserve their AAA credit rating NOW, what to you figure they are going to be sporting in say 10years, how about 20years , or how about tomorrow if all our foreign creditors decide to start dumping them (which China is already making noises about).

Anybody that thinks U.S. Treasuries are a "safe" long term investment needs a serious reality check.

 

[SpidermanTuba]

Anybody that thinks U.S. Treasuries are a "safe" long term investment needs a serious reality check.

By all means name one that is safer for investment of U.S. dollars, I'm still waiting.

Er.. not if we destroy our currency which is what we're in the process of doing with this chicanery, how do you expect we're going to pay for over $107 TRILLION in unfunded liabilities and over $12 TRILLION in cumulative operating deficits?

Your question doesn't even make sense. Inflation makes it easier to pay off debts, not harder.

 

[MIPS]

Anybody that thinks U.S. Treasuries are a "safe" long term investment needs a serious reality check.

By all means name one that is safer for investment of U.S. dollars, I'm still waiting.

Already gave you examples, personally I would recommend a diverse portfolio and I'm sure we could find someone in the this country that knows how to design one.

Er.. not if we destroy our currency which is what we're in the process of doing with this chicanery, how do you expect we're going to pay for over $107 TRILLION in unfunded liabilities and over $12 TRILLION in cumulative operating deficits?

Your question doesn't even make sense. Inflation makes it easier to pay off debts, not harder.

Except it doesn't exactly please the PAYEE now does it? Bond investors demand higher rates of interest for increased inflation risk, or should we just screw over the SS recipients and pay artificially low rates on the bonds in the "trust fund" and then turn around and give them worthless currency to add insult to injury?

 

[SpidermanTuba]

Anybody that thinks U.S. Treasuries are a "safe" long term investment needs a serious reality check.

By all means name one that is safer for investment of U.S. dollars, I'm still waiting.

Already gave you examples, personally I would recommend a diverse portfolio and I'm sure we could find someone in the this country that knows how to design one.

If there was someone who could design a portfolio safer than U.S. treasuries - don't you think they would have done so already and be presently selling this product to investors?

Personally I can't see how buying bonds issued by FOREIGN GOVERNMENTS denominated in FOREIGN CURRENCY is a safer place for my US DOLLARS than a US TREASURY BOND - maybe you can elaborate further on that point.

Er.. not if we destroy our currency which is what we're in the process of doing with this chicanery, how do you expect we're going to pay for over $107 TRILLION in unfunded liabilities and over $12 TRILLION in cumulative operating deficits?

Your question doesn't even make sense. Inflation makes it easier to pay off debts, not harder.

Except it doesn't exactly please the PAYEE now does it?

[/QUOTE]

Your question still doesn't make sense.

 

[MIPS]

By all means name one that is safer for investment of U.S. dollars, I'm still waiting.

If there was someone who could design a portfolio safer than U.S. treasuries - don't you think they would have done so already and be presently selling this product to investors?

Do you think congress is going to give up SS revenues to spend ? Heck Bush proposed using a small percentage of the SS funds to place in private accounts and I'm sure you remember how that one turned out.

Personally I can't see how buying bonds issued by FOREIGN GOVERNMENTS denominated in FOREIGN CURRENCY is a safer place for my US DOLLARS than a US TREASURY BOND - maybe you can elaborate further on that point.

There's no reason that it would be placed exclusively in foreign bonds, as I said I would recommend a diverse portfolio which would more than likely include foreign bonds but not be limited to them and I've already explained why the current strategy is unacceptably risky.

Your question still doesn't make sense.

higher inflation risk = higher interests rates = larger share of the budget for debt service = higher risk of default = higher interest rates = larger share of budget for debt service = etc..etc... , make sense yet?

 

[Care4all]

i wonder if our congress has intentionally allowed the Fed to artificially keep our interest rates low, so that they in congress could continue to overspend and to borrow money cheaply?

IF interest rates go up, then our interest payment on the same debt could go from $400 billion a year to $600 billion a year etc, no?

 

[MIPS]

Your question still doesn't make sense.

I think I have a good analogy for you which may clear it up for you ......

Let's say I have

a Piggy Bank (SS Revenue) with $100 in it
a Right Pocket (General Revenue) with $100 in it

If I take the $100 out the Piggy Bank, put the money in the right pocket, spend $200 then put $100 of IOUs in the piggy bank, what am I left with? is it an asset or a liability?

Let's say those IOU's specify that I pay $11 per week out of my right pocket income for 10 weeks, how much am I left with in the right pocket to spend in week #1 if my right pocket income is still $100? and does it meet my $200 in expenses, what if I take the $100 piggy bank income out in week #1 (and replace that with more IOUS) do I have enough money to meet the $200 in expenses? what happens in week#2 ?

The reason this all falls apart is that when you borrow money from yourself, it's a liability (debt), it isn't an asset, if you loan money to somebody else and receive an IOU (bond) for it that IOU is an asset.

 

[MIPS]

i wonder if our congress has intentionally allowed the Fed to artificially keep our interest rates low, so that they in congress could continue to overspend and to borrow money cheaply?

Congress doesn't "allow" the fed to do anything with respect to monetary policy, the fed sets monetary policy on it's own, what the fed does do is monetize treasury debt so that congress can overspend.

IF interest rates go up, then our interest payment on the same debt could go from $400 billion a year to $600 billion a year etc, no?

Correct and there is no "IF" about it , interest rates are going up in the not too distant future (probably late spring), the fed has no real choice in the matter since they've doubled the money supply over the last eighteen or so months, doing anything else will risk unacceptable or even hyper inflation.

 

[SpidermanTuba]

[
higher inflation risk = higher interests rates = larger share of the budget for debt service = higher risk of default = higher interest rates = larger share of budget for debt service = etc..etc... , make sense yet?

None of what you have said has made much sense. You seem to be sure there is some mystery portfolio which is safer than U.S. treasuries - yet you can't describe it in detail, nor can you tell me who can.


BY DEFINITION U.S. Treasuries are the safest place for U.S. dollars, as if Treasuries fail, so does the dollar.

 

[MIPS]

[
higher inflation risk = higher interests rates = larger share of the budget for debt service = higher risk of default = higher interest rates = larger share of budget for debt service = etc..etc... , make sense yet?

None of what you have said has made much sense. You seem to be sure there is some mystery portfolio which is safer than U.S. treasuries - yet you can't describe it in detail, nor can you tell me who can.


BY DEFINITION U.S. Treasuries are the safest place for U.S. dollars, as if Treasuries fail, so does the dollar.

Whatever , I've explained it to you 6 ways from sunday but you still don't seem to get that when you borrow money from yourself you're not creating an asset, which seems pretty evident to most people.