The "raiding" of the Social Security Trust. What you don't know, and why you're probably an idiot.

[Flash]

[


How will you pay those that paid in back? You are going to get people to pay in, and not get back. This is the problem. The system can pay about a dime on every dollar of promise. Your idea is to burden your children and grandchildren with a stupid solution. I know that sounds blunt, but if you are going to end it, just end it.

For starters we can do away with welfare in this country. Instead of giving food stamps to illegals and welfare queens we use that money to pay back the people that paid into SS.

Ron Paul came up with a great doable plan in 2012 to reduce the Federal budget a trillion year and that was with continued funding of Social Security.

If we stop funding domestic entitlements and welfare and interventionism overseas we can get back on the track of fiscal responsibility.

 

[Flash]

[Q


The general fund is the borrower. Social Security is the lender. Since the General Fund is not liable for the promises of SS, it is not the lender. The bond is an asset to SS. It is a liability to the government. You might read the 2014 Trustees Report pages 256 and 257 in which the Trustees respond to critics of Trust-Fund Accounting.

FDR promise that he will take some of your money and keep it for you and then give you a pension when you retire.

You agree to it because you an idiot.

Then the government takes the money you paid in and spends a substantial amount of it on other shit. Who would have thunk it?

At some time there is not enough money to pay off all of the people that paid into the system.

The lesson from this is that we should never trust the government. Don't give them our money. Don't be stupid.

It ain't rocket science.

You are aware that Congress waived all of the tax increases that FDR wanted which were intended to pay for the system, right? So there wasn't ever a take your money. Congress just made it a benefit system at the expense of your kids program.

The scam is that we pay into the SS system with our payroll tax and we expect to get a pension one day for that but with a $56 trillion future liability it looks like a lot of people are going to get screwed because the government already spent a substantial portion of the money on other things.

The stupidity is allowing the government the ability to do it. By arguing the details of how we got there is nothing more than rearranging the deck chairs on the Titanic.

As a country we were stupid to ever allow the government to take our money. Of course the program was going to get corrupted. That always happens when you let people that are elected by special interest groups manage your money.

When are we ever going to learn?

 

[healthmyths]

A real school that thinks loaning money to yourself is an asset? So they are a "real" what exactly? Fortunately you paid them in Canadian dollars, not real money

You are not loaning yourself money. You are paying into a trust fund from which you are receiving debits that build up over time. When you retire, you will have a claim on the trust, which will pay down as you draw SS benefits. There are all sorts of financial entities which offer this. It's no different than how an annuity or defined contribution pension plan works.

Do you have a cash management service from a bank for your business? Are they investing in money market funds? That MM fund will be invested in Treasury bills, which are claims on the US Treasury. That MM fund is an asset of yours and a liability of the Treasury.

All debt is an asset of someone else. If you own debt of GE, that is an asset of yours and a liability of GE. If you own Treasury securities, that is an asset of yours and a liability of the US Treasury.

The SS trusts are no different. The assets of the SS trusts are what is owed to it by the US Treasury. The liabilities of the trusts are the claims on it from the recipients.

It isn't "us lending to ourselves." It is an inter-generational distribution of assets and liabilities within the nation.

If there is a social security trust fund, then your children pay for your social security in Federal taxes. If there is no trust fund, your children pay for your social security in Federal taxes.

At some point, you got lost in the syntax of securities and you forgot what they actually are

I know exactly what they are. As I explained in my link earlier in this thread, SS acts EXACTLY like a government bond fund. Except rather than issuing formal securities, the trusts are debited and credited as if they were buying and selling Treasury securities. The flow of funds and the balance sheets are EXACTLY the same. It is economically no different than you investing your retirement in a Fidelity government bond fund - which you can. The difference is that the trusts cut out the middle man.

There are some practical differences between issuing securities and nonmarketable liabilities, but the economics are the same.

The "Trusts" don't cut out the middle man. note the chart on the right.... the "middle man takes.. $6.7 billion or 0.8% of $840.2 billion.

If all the $840 billion were managed by Vanguard Intermediate Term Treasury Fund (VFITX) expense ratio of 0.20% or $1.7 billion... a savings of $5 billion.
https://www.ssa.gov/oact/tr/2013/tr2013.pdf

 

[JoeTheEconomist]

[


How will you pay those that paid in back? You are going to get people to pay in, and not get back. This is the problem. The system can pay about a dime on every dollar of promise. Your idea is to burden your children and grandchildren with a stupid solution. I know that sounds blunt, but if you are going to end it, just end it.

For starters we can do away with welfare in this country. Instead of giving food stamps to illegals and welfare queens we use that money to pay back the people that paid into SS.

Ron Paul came up with a great doable plan in 2012 to reduce the Federal budget a trillion year and that was with continued funding of Social Security.

If we stop funding domestic entitlements and welfare and interventionism overseas we can get back on the track of fiscal responsibility.

Ron Paul's plan was to make SS a ward of the state. In other words, he wanted to make it bigger and give it a larger revenue reach.

 

[flacaltenn]

A real school that thinks loaning money to yourself is an asset? So they are a "real" what exactly? Fortunately you paid them in Canadian dollars, not real money

You are not loaning yourself money. You are paying into a trust fund from which you are receiving debits that build up over time. When you retire, you will have a claim on the trust, which will pay down as you draw SS benefits. There are all sorts of financial entities which offer this. It's no different than how an annuity or defined contribution pension plan works.

Do you have a cash management service from a bank for your business? Are they investing in money market funds? That MM fund will be invested in Treasury bills, which are claims on the US Treasury. That MM fund is an asset of yours and a liability of the Treasury.

All debt is an asset of someone else. If you own debt of GE, that is an asset of yours and a liability of GE. If you own Treasury securities, that is an asset of yours and a liability of the US Treasury.

The SS trusts are no different. The assets of the SS trusts are what is owed to it by the US Treasury. The liabilities of the trusts are the claims on it from the recipients.

It isn't "us lending to ourselves." It is an inter-generational distribution of assets and liabilities within the nation.

Here's the diff between GE and the thieves in Washington..

The money was "borrowed" (stolen) for 35 yrs but YET -- no DEBT went on the books of the Treasury as pertains to the Unified budget. The treasury could not issue "Treasury Bonds" to the Trust Fund because that would give away the fraud. Nobody would believe claiming the same money was both a debt and an asset. So they took SS "off-book" so that the phoney debt (intragovernmental notes) would not cause them to book REAL debt in the annual budget. Remember -- every Treasury Bond issued goes into the debt and deficit. SSA will tell you -- that what they've given for T.F. are NOT Treasury Bonds. It's felony book-keeping..

WHY? Because the government then refused to cut budget to OFFSET the money they stole. And BOOM 35 yrs later -- the surplus ends and the deficits begin. So they BORROW money to repay the stolen (excuse me -- borrowed) money from excess payroll taxes, THUS ---- quite simply ---- they borrowed the same money TWICE.

And who is responsible for borrowing both dollars? Yup.. Now you got it..

And GE doesn't have taxpayers backing up their borrowing. Even if they borrow it twice. Thought you'd realize that.

 

[Flash]

[Q


Ron Paul's plan was to make SS a ward of the state. In other words, he wanted to make it bigger and give it a larger revenue reach.

I quoted Paul's Restore America budget because it was a reasonable way to cut back on Federal expenditures a trillion dollars a year. You asked how could we afford to pay back the people that paid in to Social Security and that budget produced a trillion a year to do it.

His budget included an increase in defense spending and continued funding of Social Security and Medicare. He even continues funding of several welfare program although at reduced spending.

I think his budget proposal was a good start but I would have cut back much more than that. I would have curtailed all government transfer payments.

However, lets not lose sight of the fatal flaw in Social Security. The thing we have to admit before any reforms can be made.

The fatal flaw is that the American people made a huge mistake allowing the Federal government, which is managed by politicians elected by special interest groups, to take their money with the promise to give it back (maybe if they don't die early) sometime in the future.

How could the American people be that naive and stupid?

 

[NYcarbineer]

A real school that thinks loaning money to yourself is an asset? So they are a "real" what exactly? Fortunately you paid them in Canadian dollars, not real money

You are not loaning yourself money. You are paying into a trust fund from which you are receiving debits that build up over time. When you retire, you will have a claim on the trust, which will pay down as you draw SS benefits. There are all sorts of financial entities which offer this. It's no different than how an annuity or defined contribution pension plan works.

Do you have a cash management service from a bank for your business? Are they investing in money market funds? That MM fund will be invested in Treasury bills, which are claims on the US Treasury. That MM fund is an asset of yours and a liability of the Treasury.

All debt is an asset of someone else. If you own debt of GE, that is an asset of yours and a liability of GE. If you own Treasury securities, that is an asset of yours and a liability of the US Treasury.

The SS trusts are no different. The assets of the SS trusts are what is owed to it by the US Treasury. The liabilities of the trusts are the claims on it from the recipients.

It isn't "us lending to ourselves." It is an inter-generational distribution of assets and liabilities within the nation.

Here's the diff between GE and the thieves in Washington..

The money was "borrowed" (stolen) for 35 yrs but YET -- no DEBT went on the books of the Treasury as pertains to the Unified budget. The treasury could not issue "Treasury Bonds" to the Trust Fund because that would give away the fraud. Nobody would believe claiming the same money was both a debt and an asset. So they took SS "off-book" so that the phoney debt (intragovernmental notes) would not cause them to book REAL debt in the annual budget. Remember -- every Treasury Bond issued goes into the debt and deficit. SSA will tell you -- that what they've given for T.F. are NOT Treasury Bonds. It's felony book-keeping..

WHY? Because the government then refused to cut budget to OFFSET the money they stole. And BOOM 35 yrs later -- the surplus ends and the deficits begin. So they BORROW money to repay the stolen (excuse me -- borrowed) money from excess payroll taxes, THUS ---- quite simply ---- they borrowed the same money TWICE.

And who is responsible for borrowing both dollars? Yup.. Now you got it..

And GE doesn't have taxpayers backing up their borrowing. Even if they borrow it twice. Thought you'd realize that.

You're still clinging to that lie. Hilarious.

 

[flacaltenn]

There is much discussion on this on this board. Almost any time SS and it's solvency (or lack thereof) is discussed, everyone talks about how SS has been "raided" and used to pay for other things. The problem here is that most of you, Democrat and Republican alike, who say this don't have a clue what you're talking about. So here, I'll explain it to you. I'd like to say that we could put the issue to rest once and for all, but I doubt that will be the case.

Before I begin, a prediction: Many of you will rush to respond without bothering to read, and in the process you'll jump to conclusions and make an ass out of yourself. Some will rail off on wild tangents. Many dissenters will be folks who claim to be conservatives, but are really just fake ass Cinos who like to complain and whine, and will be completely oblivious to the highly damaging implications I'll be presenting against the entire SS system. But you'll feel good because touching yourself always feels good. Many dissenters will be liberals, who will "like" this post, will note the Cinos dissenting for all the wrong reasons, and based upon that, will launch into your Hooray for Government dance, as if idiots being wrong instantly means that government is the solution to all our problems. Finally, if most people are adequately drawn to my blue highlighting of this paragraph so as to read it, and subsequently see their planned reaction described herein, few responses will be made because you'll realize that you've already been identified and you're now embarrassed at how much of an ass of yourself you were about to make.

Okay, now that that's cleared up, let's talk about the Social Security Trust, and what happens to the money.....

Overall, the Social Security Trust is fairly simple. Money goes in with the express purpose of being used to fund Social Security. It can't be used to pay to fuel up Air Force One for Obama's latest golfing venture. Simple. That being said, money static is money lost. That is to say, if money just sits on the coffee table, it's not doing anything except sitting there. In our personal lives most people know that building up a nest egg of cash that is doing nothing typically means lost opportunities. We could invest that money and make more money. Even something as simple and safe as putting it into a Certificate of Deposit with your bank might return a little bit of cash, all while you sit back and play video games for the next 18 months. If you're not going to be using your nest egg anyway, it's like giving up free money to just let it sit there.

That's why many, many years ago Congress passed a law that requires excess funds in the Social Security Trust to be "invested." Instead of just sitting there and collecting dust, the excess is invested and collects interest, which is then rolled back into the Trust. This "investing" is done in the form of intra-governmental loans. Basically, the government borrows money from itself, on a short term basis, in pretty much the same fashion as other government borrowing occurs. A bond is given to the Trust, and a few months later the Trust is repaid with interest.

Now, you might be thinking that "Well, this really does amount to raiding the SS Trust to pay for other things." On it's surface, it might appear that way. But in reality, it's not that way. And there are two reasons for that:

1 - At it's core, it's little more more than moving around cash. If your car broke down on Wed and you were short on cash, causing you to transfer $500 from your savings into your checking until payday Friday, at which point you put back the $500 plus added your normal per-paycheck savings contribution, would you call that "raiding" your savings account to pay you mechanic? Of course not. All you did was move your own cash around so that your check won't bounce.

2 - The law requires that the Trust be invested in his way. It doesn't matter how much or how little the government is spending on other things. Congress could pass a balanced budget, and the same thing would happen. Heck, the Congress could pass a budget that only authorizes $1,500 in spending, and the same thing would still happen. The Trust would still be invested, and the government would still borrow from itself.

This is why you may have heard such seemingly absurd things as "The debt is $18 trillion, but the real dept is only $10 trillion." What the "real" debt refers to is the amount of debt that is not in the form of intra-governmental loans; intra-governmental loans are included in the official calculation of the debt, so a sizable part of the $18 trillion includes cash that the government has just shifted around between accounts. (***Note: I do not know the actual figures off the top of my head, the $10 trillion amount is merely an explanatory tool).

Now that we understand that investing the excess funds in the Social Security Trust by means of intra-governmental debt is a long standing legal requirement that happens without regard to how much the government spends, some people might be ready to rejoice in the alleged marvel that is the Social Security system. Some might feel relieved that in fact the SS Trust is not being "raided" and might even see this as evidence that SS can remain solvent for many decades to come. But don't be so fast to celebrate. Because everything I've just said actually underscores the fact that Social Security is a drain on the American economy, and on the taxpayer.

As I explained, when excess funds from the SS Trust are loaned out to other parts of the government they are paid back with interest. This brings more money into the Trust. That money didn't come from your SS payroll taxes. It comes directly from your income tax. You are investing more money into the SS Trust than just your SS taxes!! The SS Trust is like a black hole. It sucks in money from every direction, and all it spits out are the decayed remnants of what's left over.

And.... This pot of money is roughly 2.8 trillion. It is held in reserve against 30 trillion in unfunded obligations.

The amount of money a person receives in terms of SS retirement benefits will almost always be less than what you've paid into it as SS taxes. And now that we understand that we invest more than just our SS taxes into the SS Trust, the disparity of return is understood to be even greater. Allowing individuals to retain their SS taxes would allow them to instead invest those funds into retirement plans that would yield better returns, resulting in having more funds available for their own retirement. Additionally, the interest that the SS Trust sucks in from the taxpayers would result in a net savings of government expenses, allowing for lower deficits.

Do you have a source for this statement? If you allow individuals to retain their SS taxes, we will simply have to have more taxes from somewhere else.

The concept of voluntary opting out of a small percentage of SS for individuals is a 2 way street. The IS slightly less income while the individual works -- but in return -- that individual collects LESS in the future.

When SS was running surpluses. This idea was brilliant. And the left demagogued it to death. It was SMART because the surplus would FUND the opt-outs and keep that money from being stolen by Congress. And had we done that BACK THEN --- it would have relieved the BabyBoomer "crisis" NOW..

But that ship has sailed. Because there's nothing but debt now. And after the BOOM -- we're expecting a BUST.

 

[NYcarbineer]

A real school that thinks loaning money to yourself is an asset? So they are a "real" what exactly? Fortunately you paid them in Canadian dollars, not real money

You are not loaning yourself money. You are paying into a trust fund from which you are receiving debits that build up over time. When you retire, you will have a claim on the trust, which will pay down as you draw SS benefits. There are all sorts of financial entities which offer this. It's no different than how an annuity or defined contribution pension plan works.

Do you have a cash management service from a bank for your business? Are they investing in money market funds? That MM fund will be invested in Treasury bills, which are claims on the US Treasury. That MM fund is an asset of yours and a liability of the Treasury.

All debt is an asset of someone else. If you own debt of GE, that is an asset of yours and a liability of GE. If you own Treasury securities, that is an asset of yours and a liability of the US Treasury.

The SS trusts are no different. The assets of the SS trusts are what is owed to it by the US Treasury. The liabilities of the trusts are the claims on it from the recipients.

It isn't "us lending to ourselves." It is an inter-generational distribution of assets and liabilities within the nation.

If there is a social security trust fund, then your children pay for your social security in Federal taxes. If there is no trust fund, your children pay for your social security in Federal taxes.

At some point, you got lost in the syntax of securities and you forgot what they actually are

I know exactly what they are. As I explained in my link earlier in this thread, SS acts EXACTLY like a government bond fund. Except rather than issuing formal securities, the trusts are debited and credited as if they were buying and selling Treasury securities. The flow of funds and the balance sheets are EXACTLY the same. It is economically no different than you investing your retirement in a Fidelity government bond fund - which you can. The difference is that the trusts cut out the middle man.

There are some practical differences between issuing securities and nonmarketable liabilities, but the economics are the same.

The "Trusts" don't cut out the middle man. note the chart on the right.... the "middle man takes.. $6.7 billion or 0.8% of $840.2 billion.

If all the $840 billion were managed by Vanguard Intermediate Term Treasury Fund (VFITX) expense ratio of 0.20% or $1.7 billion... a savings of $5 billion.
https://www.ssa.gov/oact/tr/2013/tr2013.pdf

View attachment 54904

.8% to run the SSA? Vanguard is not going to run the SSA for .8% or less.

 

[NYcarbineer]

There is much discussion on this on this board. Almost any time SS and it's solvency (or lack thereof) is discussed, everyone talks about how SS has been "raided" and used to pay for other things. The problem here is that most of you, Democrat and Republican alike, who say this don't have a clue what you're talking about. So here, I'll explain it to you. I'd like to say that we could put the issue to rest once and for all, but I doubt that will be the case.

Before I begin, a prediction: Many of you will rush to respond without bothering to read, and in the process you'll jump to conclusions and make an ass out of yourself. Some will rail off on wild tangents. Many dissenters will be folks who claim to be conservatives, but are really just fake ass Cinos who like to complain and whine, and will be completely oblivious to the highly damaging implications I'll be presenting against the entire SS system. But you'll feel good because touching yourself always feels good. Many dissenters will be liberals, who will "like" this post, will note the Cinos dissenting for all the wrong reasons, and based upon that, will launch into your Hooray for Government dance, as if idiots being wrong instantly means that government is the solution to all our problems. Finally, if most people are adequately drawn to my blue highlighting of this paragraph so as to read it, and subsequently see their planned reaction described herein, few responses will be made because you'll realize that you've already been identified and you're now embarrassed at how much of an ass of yourself you were about to make.

Okay, now that that's cleared up, let's talk about the Social Security Trust, and what happens to the money.....

Overall, the Social Security Trust is fairly simple. Money goes in with the express purpose of being used to fund Social Security. It can't be used to pay to fuel up Air Force One for Obama's latest golfing venture. Simple. That being said, money static is money lost. That is to say, if money just sits on the coffee table, it's not doing anything except sitting there. In our personal lives most people know that building up a nest egg of cash that is doing nothing typically means lost opportunities. We could invest that money and make more money. Even something as simple and safe as putting it into a Certificate of Deposit with your bank might return a little bit of cash, all while you sit back and play video games for the next 18 months. If you're not going to be using your nest egg anyway, it's like giving up free money to just let it sit there.

That's why many, many years ago Congress passed a law that requires excess funds in the Social Security Trust to be "invested." Instead of just sitting there and collecting dust, the excess is invested and collects interest, which is then rolled back into the Trust. This "investing" is done in the form of intra-governmental loans. Basically, the government borrows money from itself, on a short term basis, in pretty much the same fashion as other government borrowing occurs. A bond is given to the Trust, and a few months later the Trust is repaid with interest.

Now, you might be thinking that "Well, this really does amount to raiding the SS Trust to pay for other things." On it's surface, it might appear that way. But in reality, it's not that way. And there are two reasons for that:

1 - At it's core, it's little more more than moving around cash. If your car broke down on Wed and you were short on cash, causing you to transfer $500 from your savings into your checking until payday Friday, at which point you put back the $500 plus added your normal per-paycheck savings contribution, would you call that "raiding" your savings account to pay you mechanic? Of course not. All you did was move your own cash around so that your check won't bounce.

2 - The law requires that the Trust be invested in his way. It doesn't matter how much or how little the government is spending on other things. Congress could pass a balanced budget, and the same thing would happen. Heck, the Congress could pass a budget that only authorizes $1,500 in spending, and the same thing would still happen. The Trust would still be invested, and the government would still borrow from itself.

This is why you may have heard such seemingly absurd things as "The debt is $18 trillion, but the real dept is only $10 trillion." What the "real" debt refers to is the amount of debt that is not in the form of intra-governmental loans; intra-governmental loans are included in the official calculation of the debt, so a sizable part of the $18 trillion includes cash that the government has just shifted around between accounts. (***Note: I do not know the actual figures off the top of my head, the $10 trillion amount is merely an explanatory tool).

Now that we understand that investing the excess funds in the Social Security Trust by means of intra-governmental debt is a long standing legal requirement that happens without regard to how much the government spends, some people might be ready to rejoice in the alleged marvel that is the Social Security system. Some might feel relieved that in fact the SS Trust is not being "raided" and might even see this as evidence that SS can remain solvent for many decades to come. But don't be so fast to celebrate. Because everything I've just said actually underscores the fact that Social Security is a drain on the American economy, and on the taxpayer.

As I explained, when excess funds from the SS Trust are loaned out to other parts of the government they are paid back with interest. This brings more money into the Trust. That money didn't come from your SS payroll taxes. It comes directly from your income tax. You are investing more money into the SS Trust than just your SS taxes!! The SS Trust is like a black hole. It sucks in money from every direction, and all it spits out are the decayed remnants of what's left over.

And.... This pot of money is roughly 2.8 trillion. It is held in reserve against 30 trillion in unfunded obligations.

The amount of money a person receives in terms of SS retirement benefits will almost always be less than what you've paid into it as SS taxes. And now that we understand that we invest more than just our SS taxes into the SS Trust, the disparity of return is understood to be even greater. Allowing individuals to retain their SS taxes would allow them to instead invest those funds into retirement plans that would yield better returns, resulting in having more funds available for their own retirement. Additionally, the interest that the SS Trust sucks in from the taxpayers would result in a net savings of government expenses, allowing for lower deficits.

Do you have a source for this statement? If you allow individuals to retain their SS taxes, we will simply have to have more taxes from somewhere else.

The concept of voluntary opting out of a small percentage of SS for individuals is a 2 way street. The IS slightly less income while the individual works -- but in return -- that individual collects LESS in the future.

When SS was running surpluses. This idea was brilliant. And the left demagogued it to death. It was SMART because the surplus would FUND the opt-outs and keep that money from being stolen by Congress. And had we done that BACK THEN --- it would have relieved the BabyBoomer "crisis" NOW..

But that ship has sailed. Because there's nothing but debt now. And after the BOOM -- we're expecting a BUST.

No money was stolen. You need to stop lying.

 

[Flash]

A real school that thinks loaning money to yourself is an asset? So they are a "real" what exactly? Fortunately you paid them in Canadian dollars, not real money

You are not loaning yourself money. You are paying into a trust fund from which you are receiving debits that build up over time. When you retire, you will have a claim on the trust, which will pay down as you draw SS benefits. There are all sorts of financial entities which offer this. It's no different than how an annuity or defined contribution pension plan works.

Do you have a cash management service from a bank for your business? Are they investing in money market funds? That MM fund will be invested in Treasury bills, which are claims on the US Treasury. That MM fund is an asset of yours and a liability of the Treasury.

All debt is an asset of someone else. If you own debt of GE, that is an asset of yours and a liability of GE. If you own Treasury securities, that is an asset of yours and a liability of the US Treasury.

The SS trusts are no different. The assets of the SS trusts are what is owed to it by the US Treasury. The liabilities of the trusts are the claims on it from the recipients.

It isn't "us lending to ourselves." It is an inter-generational distribution of assets and liabilities within the nation.

If there is a social security trust fund, then your children pay for your social security in Federal taxes. If there is no trust fund, your children pay for your social security in Federal taxes.

At some point, you got lost in the syntax of securities and you forgot what they actually are

I know exactly what they are. As I explained in my link earlier in this thread, SS acts EXACTLY like a government bond fund. Except rather than issuing formal securities, the trusts are debited and credited as if they were buying and selling Treasury securities. The flow of funds and the balance sheets are EXACTLY the same. It is economically no different than you investing your retirement in a Fidelity government bond fund - which you can. The difference is that the trusts cut out the middle man.

There are some practical differences between issuing securities and nonmarketable liabilities, but the economics are the same.

The "Trusts" don't cut out the middle man. note the chart on the right.... the "middle man takes.. $6.7 billion or 0.8% of $840.2 billion.

If all the $840 billion were managed by Vanguard Intermediate Term Treasury Fund (VFITX) expense ratio of 0.20% or $1.7 billion... a savings of $5 billion.
https://www.ssa.gov/oact/tr/2013/tr2013.pdf

View attachment 54904

The new proposed budget that was debated a few weeks ago takes $150 billion out of pension payments and transfers it to disability, which is one of the most corrupted programs the government has.

Budget Deal Robs Social Security To Pay Disability, Again - Breitbart

Budget Deal Robs Social Security To Pay Disability, Again

Now, with the DI program expected to face a 19% shortfall next year, Obama and Republicans plan to “borrow” the needed funds from the main Social Security program to make up for the shortfall. After all, the old-age benefits trust fund will only face insolvency in 2033 so there is time to kick the can down the road. I guess they figure that once we are diverting $141 billion from the original purpose of the program, why not throw in an extra $30 billion?

The budget deal reached last night attempts to stave off depletion of the Disability Insurance (DI) trust fund at the end of 2016 by “reallocating” about $150 billion over the next three years from the Social Security Trust Fund to the Disability Insurance Trust Fund.

 

[flacaltenn]

What a load of crap. Taking our Social Security contributions and spending it on other crap without any means of repaying the money is not investing it. That will land you right in prison in the private sector. 2% interest that will never be paid is $0.00

That these corrupt thieves now tell us they have to raise the retirement age so that some of us will die before collecting a dime, and others will get less than promised or nothing at all is a clue that the money was not 'invested'. Government stole the money, they spent it, they can't pay us back so now they want to screw us over.

Yup and you can thank LBJ for putting SS in the General fund when he needed money for the Vietnam war. They have been robbing it ever since.

They rob our SS but they don't rob their own which is separate from ours.

You realize that Social Security at the time of LBJ was a pay-as-you-go system. There was almost nothing to put into the general fund certainly not enough to pay for Vietnam. But it sounds so reasonable.

Sorry to tell you but SS has 2.6 Trillion dollars in it. That's what its worth.

What Happened to the $2.6 Trillion Social Security Trust Fund?

And yes. The Govt. uses SS for non SS purposes.

Social Security Trust Fund - Wikipedia, the free encyclopedia

The Trust Fund has nothing in it that helps to pay the deficits that SS is now running. It's full of IOUs (not investments) and when those IOUs are cashed into the Treasury --- they have to issue NEW debt so SS can get paid. They borrowed the money TWICE and taxpayers pick up the tab for the fraud..

Now I don't expect you to believe me. But -- I've posted the exact statement from SS Admin and CBO about 3 times in this thread. Saying that (roughly) neither the bonds held in SS Trust or the interest on those bonds helps the treasury cover SS income shortfalls. You've been misled.. Because you only read the first few pages of the yearly SSA prospectus. And after the fictitious book keeping makes folks happy -- they admit that surplus was stolen -- there is nothing of value in the T.F. -- and the taxpayers have to pay AGAIN to borrow the same money.

 

[JoeTheEconomist]

Here's the diff between GE and the thieves in Washington..


The money was "borrowed" (stolen) for 35 yrs but YET -- no DEBT went on the books of the Treasury as pertains to the Unified budget. The treasury could not issue "Treasury Bonds" to the Trust Fund because that would give away the fraud. Nobody would believe claiming the same money was both a debt and an asset. So they took SS "off-book" so that the phoney debt (intragovernmental notes) would not cause them to book REAL debt in the annual budget. Remember -- every Treasury Bond issued goes into the debt and deficit. SSA will tell you -- that what they've given for T.F. are NOT Treasury Bonds. It's felony book-keeping..


WHY? Because the government then refused to cut budget to OFFSET the money they stole. And BOOM 35 yrs later -- the surplus ends and the deficits begin. So they BORROW money to repay the stolen (excuse me -- borrowed) money from excess payroll taxes, THUS ---- quite simply ---- they borrowed the same money TWICE.


And who is responsible for borrowing both dollars? Yup.. Now you got it..


And GE doesn't have taxpayers backing up their borrowing. Even if they borrow it twice. Thought you'd realize that.

You have some points even if GE is a bank, and is protected by the government.


If the Unified Budget doesn't show the debt, that means that people who quote the UB aren't very bright. The debt held by SS is counted for example to the debt ceiling. You are right. Nobody would believe accounting which claimed “the same money was both a debt and an asset.” So why are you quoting it. (It is actually worse than that)..


No one will tell you that the TF holds Treasury Bonds. Anyone with any knowledge of the subject will tell you that the TF hold securities that are indistinguishable from Treasury Bonds. The fact is that the TF holds better assets but that is a longer story.


Since inception the system has collected about 17 trilllion. 15 has been distributed as benefits. About 1.5 was generated financing interest. So what money are you suggesting that was stolen?

 

[flacaltenn]

There is much discussion on this on this board. Almost any time SS and it's solvency (or lack thereof) is discussed, everyone talks about how SS has been "raided" and used to pay for other things. The problem here is that most of you, Democrat and Republican alike, who say this don't have a clue what you're talking about. So here, I'll explain it to you. I'd like to say that we could put the issue to rest once and for all, but I doubt that will be the case.

Before I begin, a prediction: Many of you will rush to respond without bothering to read, and in the process you'll jump to conclusions and make an ass out of yourself. Some will rail off on wild tangents. Many dissenters will be folks who claim to be conservatives, but are really just fake ass Cinos who like to complain and whine, and will be completely oblivious to the highly damaging implications I'll be presenting against the entire SS system. But you'll feel good because touching yourself always feels good. Many dissenters will be liberals, who will "like" this post, will note the Cinos dissenting for all the wrong reasons, and based upon that, will launch into your Hooray for Government dance, as if idiots being wrong instantly means that government is the solution to all our problems. Finally, if most people are adequately drawn to my blue highlighting of this paragraph so as to read it, and subsequently see their planned reaction described herein, few responses will be made because you'll realize that you've already been identified and you're now embarrassed at how much of an ass of yourself you were about to make.

Okay, now that that's cleared up, let's talk about the Social Security Trust, and what happens to the money.....

Overall, the Social Security Trust is fairly simple. Money goes in with the express purpose of being used to fund Social Security. It can't be used to pay to fuel up Air Force One for Obama's latest golfing venture. Simple. That being said, money static is money lost. That is to say, if money just sits on the coffee table, it's not doing anything except sitting there. In our personal lives most people know that building up a nest egg of cash that is doing nothing typically means lost opportunities. We could invest that money and make more money. Even something as simple and safe as putting it into a Certificate of Deposit with your bank might return a little bit of cash, all while you sit back and play video games for the next 18 months. If you're not going to be using your nest egg anyway, it's like giving up free money to just let it sit there.

That's why many, many years ago Congress passed a law that requires excess funds in the Social Security Trust to be "invested." Instead of just sitting there and collecting dust, the excess is invested and collects interest, which is then rolled back into the Trust. This "investing" is done in the form of intra-governmental loans. Basically, the government borrows money from itself, on a short term basis, in pretty much the same fashion as other government borrowing occurs. A bond is given to the Trust, and a few months later the Trust is repaid with interest.

Now, you might be thinking that "Well, this really does amount to raiding the SS Trust to pay for other things." On it's surface, it might appear that way. But in reality, it's not that way. And there are two reasons for that:

1 - At it's core, it's little more more than moving around cash. If your car broke down on Wed and you were short on cash, causing you to transfer $500 from your savings into your checking until payday Friday, at which point you put back the $500 plus added your normal per-paycheck savings contribution, would you call that "raiding" your savings account to pay you mechanic? Of course not. All you did was move your own cash around so that your check won't bounce.

2 - The law requires that the Trust be invested in his way. It doesn't matter how much or how little the government is spending on other things. Congress could pass a balanced budget, and the same thing would happen. Heck, the Congress could pass a budget that only authorizes $1,500 in spending, and the same thing would still happen. The Trust would still be invested, and the government would still borrow from itself.

This is why you may have heard such seemingly absurd things as "The debt is $18 trillion, but the real dept is only $10 trillion." What the "real" debt refers to is the amount of debt that is not in the form of intra-governmental loans; intra-governmental loans are included in the official calculation of the debt, so a sizable part of the $18 trillion includes cash that the government has just shifted around between accounts. (***Note: I do not know the actual figures off the top of my head, the $10 trillion amount is merely an explanatory tool).

Now that we understand that investing the excess funds in the Social Security Trust by means of intra-governmental debt is a long standing legal requirement that happens without regard to how much the government spends, some people might be ready to rejoice in the alleged marvel that is the Social Security system. Some might feel relieved that in fact the SS Trust is not being "raided" and might even see this as evidence that SS can remain solvent for many decades to come. But don't be so fast to celebrate. Because everything I've just said actually underscores the fact that Social Security is a drain on the American economy, and on the taxpayer.

As I explained, when excess funds from the SS Trust are loaned out to other parts of the government they are paid back with interest. This brings more money into the Trust. That money didn't come from your SS payroll taxes. It comes directly from your income tax. You are investing more money into the SS Trust than just your SS taxes!! The SS Trust is like a black hole. It sucks in money from every direction, and all it spits out are the decayed remnants of what's left over.

And.... This pot of money is roughly 2.8 trillion. It is held in reserve against 30 trillion in unfunded obligations.

The amount of money a person receives in terms of SS retirement benefits will almost always be less than what you've paid into it as SS taxes. And now that we understand that we invest more than just our SS taxes into the SS Trust, the disparity of return is understood to be even greater. Allowing individuals to retain their SS taxes would allow them to instead invest those funds into retirement plans that would yield better returns, resulting in having more funds available for their own retirement. Additionally, the interest that the SS Trust sucks in from the taxpayers would result in a net savings of government expenses, allowing for lower deficits.

Do you have a source for this statement? If you allow individuals to retain their SS taxes, we will simply have to have more taxes from somewhere else.

The concept of voluntary opting out of a small percentage of SS for individuals is a 2 way street. The IS slightly less income while the individual works -- but in return -- that individual collects LESS in the future.

When SS was running surpluses. This idea was brilliant. And the left demagogued it to death. It was SMART because the surplus would FUND the opt-outs and keep that money from being stolen by Congress. And had we done that BACK THEN --- it would have relieved the BabyBoomer "crisis" NOW..

But that ship has sailed. Because there's nothing but debt now. And after the BOOM -- we're expecting a BUST.

No money was stolen. You need to stop lying.

Let's take baby steps here -- because you're not DISCUSSING or correcting anything that I've said. You're merely accusing me of lying. You could be an ADULT and point out errors in my explanation of the fraudulent accounting. But how about one step at a time?

1) Where did the 35 years of SS surplus (overcharging the plan participants) go??

Clue -- it did not get invested in anything tangible or redeemable for cash..

 

[healthmyths]

A real school that thinks loaning money to yourself is an asset? So they are a "real" what exactly? Fortunately you paid them in Canadian dollars, not real money

You are not loaning yourself money. You are paying into a trust fund from which you are receiving debits that build up over time. When you retire, you will have a claim on the trust, which will pay down as you draw SS benefits. There are all sorts of financial entities which offer this. It's no different than how an annuity or defined contribution pension plan works.

Do you have a cash management service from a bank for your business? Are they investing in money market funds? That MM fund will be invested in Treasury bills, which are claims on the US Treasury. That MM fund is an asset of yours and a liability of the Treasury.

All debt is an asset of someone else. If you own debt of GE, that is an asset of yours and a liability of GE. If you own Treasury securities, that is an asset of yours and a liability of the US Treasury.

The SS trusts are no different. The assets of the SS trusts are what is owed to it by the US Treasury. The liabilities of the trusts are the claims on it from the recipients.

It isn't "us lending to ourselves." It is an inter-generational distribution of assets and liabilities within the nation.

If there is a social security trust fund, then your children pay for your social security in Federal taxes. If there is no trust fund, your children pay for your social security in Federal taxes.

At some point, you got lost in the syntax of securities and you forgot what they actually are

I know exactly what they are. As I explained in my link earlier in this thread, SS acts EXACTLY like a government bond fund. Except rather than issuing formal securities, the trusts are debited and credited as if they were buying and selling Treasury securities. The flow of funds and the balance sheets are EXACTLY the same. It is economically no different than you investing your retirement in a Fidelity government bond fund - which you can. The difference is that the trusts cut out the middle man.

There are some practical differences between issuing securities and nonmarketable liabilities, but the economics are the same.

The "Trusts" don't cut out the middle man. note the chart on the right.... the "middle man takes.. $6.7 billion or 0.8% of $840.2 billion.

If all the $840 billion were managed by Vanguard Intermediate Term Treasury Fund (VFITX) expense ratio of 0.20% or $1.7 billion... a savings of $5 billion.
https://www.ssa.gov/oact/tr/2013/tr2013.pdf

View attachment 54904

.8% to run the SSA? Vanguard is not going to run the SSA for .8% or less.

What expertise do you source for that statement because just your opinion means little.
I gave facts. Where are your facts?

 

[JoeTheEconomist]

The Trust Fund has nothing in it that helps to pay the deficits that SS is now running. It's full of IOUs (not investments) and when those IOUs are cashed into the Treasury --- they have to issue NEW debt so SS can get paid. They borrowed the money TWICE and taxpayers pick up the tab for the fraud..

Now I don't expect you to believe me. But -- I've posted the exact statement from SS Admin and CBO about 3 times in this thread. Saying that (roughly) neither the bonds held in SS Trust or the interest on those bonds helps the treasury cover SS income shortfalls. You've been misled.. Because you only read the first few pages of the yearly SSA prospectus. And after the fictitious book keeping makes folks happy -- they admit that surplus was stolen -- there is nothing of value in the T.F. -- and the taxpayers have to pay AGAIN to borrow the same money.

Without the Trust Fund today benefits would be automatically reduced by law. So by definition the Trust Fund must have something that helps pay the deficits that SS is now running.

Sadly, I have read more than the first few pages of the yearly Trustees report. I have to confess that I regret time that I can't get back. The exact statement from OMB (I think your actual source) is painfully misconstrued. The bonds held by the Trust Fund will not help the government pay SS benefits. This is a stupid comment because the government distributes benefits. It does not pay them. Payroll taxes pay them. This is what the quote from OMB reduces to : the bonds held by the TF will not help the government repay the bonds held by the TF.

 

[JoeTheEconomist]

The new proposed budget that was debated a few weeks ago takes $150 billion out of pension payments and transfers it to disability, which is one of the most corrupted programs the government has.

Budget Deal Robs Social Security To Pay Disability, Again - Breitbart

Budget Deal Robs Social Security To Pay Disability, Again

Now, with the DI program expected to face a 19% shortfall next year, Obama and Republicans plan to “borrow” the needed funds from the main Social Security program to make up for the shortfall. After all, the old-age benefits trust fund will only face insolvency in 2033 so there is time to kick the can down the road. I guess they figure that once we are diverting $141 billion from the original purpose of the program, why not throw in an extra $30 billion?

The budget deal reached last night attempts to stave off depletion of the Disability Insurance (DI) trust fund at the end of 2016 by “reallocating” about $150 billion over the next three years from the Social Security Trust Fund to the Disability Insurance Trust Fund.

The irony here is of course that you have tended to discredit the loan-to-myself theory, and now espouse an I-stole-from-myself argument. You realize that DI is part of Social Security. Your article headline pretends that disability is not part of Social Security. This is an income transfer from future retirees to current beneficiaries who are disabled.

 

[flacaltenn]

What a load of crap. Taking our Social Security contributions and spending it on other crap without any means of repaying the money is not investing it. That will land you right in prison in the private sector. 2% interest that will never be paid is $0.00

That these corrupt thieves now tell us they have to raise the retirement age so that some of us will die before collecting a dime, and others will get less than promised or nothing at all is a clue that the money was not 'invested'. Government stole the money, they spent it, they can't pay us back so now they want to screw us over.

Yup and you can thank LBJ for putting SS in the General fund when he needed money for the Vietnam war. They have been robbing it ever since.

They rob our SS but they don't rob their own which is separate from ours.

You realize that Social Security at the time of LBJ was a pay-as-you-go system. There was almost nothing to put into the general fund certainly not enough to pay for Vietnam. But it sounds so reasonable.

Sorry to tell you but SS has 2.6 Trillion dollars in it. That's what its worth.

What Happened to the $2.6 Trillion Social Security Trust Fund?

And yes. The Govt. uses SS for non SS purposes.

Social Security Trust Fund - Wikipedia, the free encyclopedia

It is now 2.8 trillion. If LBJ was president now, that might be meaningful. He isn't. He was president about 50 years ago, when the Trust Fund held about 20 billion. No 20 billion did not pay for Vietnam. SS was a paygo system until about 1984. Nearly 15 years after LBJ left office.

The piece from Forbes is painfully spammed. I get it so regularly, that I put a response piece on my personal blog. The piece has too many factual problems to list here. (If you want to see them: Joe The Economist: What Happened to the $2.6 Trillion Social Security Trust Fund?”) The fact problems are bad enough, but keep in mind that his entire piece depends upon Geithner and Obama telling the truth. Sorry I don't buy that.

Wikipedia? If you have something from SSA, I will believe it. As in : The Social Security Trust Fund has never been "put into the general fund of the government." (source : Social Security History)

Bless you for showing up Joe. I need to work today, but this is important enough for me to participant in. Need reinforcements. The only beef I have with you is that the surpluses actually DID go into the General Fund. They were spent on bombs, Viagra, mohair subsidies.

Another example is when Obama and the Dems cut the SS payroll contributions (2009 or so) and precipitated an earlier insolvency in the fund. Essentially he payed for the SS deficit by adding debt to General Fund/Treasury who had to issue NEW debt to cover the shortfalls that they created.

 

[flacaltenn]

Social Security is socialism -- no doubt about it -- and America loves it. Medicare is the son of Social Security, and America loves it. These programs inspire wild hostility from the right because righties correctly see them as the nose of the camel under the tent.

Going back to the founding of Social Security under FDR, Democrats have done a lot of tap dancing to avoid having to state the obvious: that the "Social" in Social Security is socialism. What SS secures is society. It does this by guaranteeing a minimum standard of living for people who can no longer earn.

Social Security is not an investment. It is not a retirement policy. It is a tax supported inter-generational social contract to maintain social stability. Stupid Republicans criticize Social Security for failing to do something it isn't attempting to do. Nobody cares about the quibble until some idiotic GOP politician suggests abandoning Social Security. Then, BOOM! the roof falls in on the Republicans and they go back to bellyaching about something else.

Social Security is a friggin Ponzi Scheme with a bankrupting $65 trillion liability. The payroll tax that funds the program has become a slush fund for every corrupt politician to raid to fund whatever they think they need to buy somebody's vote.

FDR was an idiot trying to impose socialism on the US.

Social Security is most definitely NOT a Ponzi Scheme. All Ponzi Schemes are predicated on the sale of securities. Social Security doesn't sell anything. Ponzi Schemes are driven by the investors' desire for profit. Social Security has no investors and does not claim to make profit.

Social Security is a tax program. Ponzi Schemes are not tax programs. The taxation rate is fixed by Congress, as are the eligibility and payment features. It is true that Social Security is inter-generational, that the benefits paid out today were raised by taxes paid previously. Ponzi Schemes never last that long.

The "Ponzi Scheme" nonsense is a tired meme of talk radio. You are, of course, entirely within your rights to hate Social Security and explain why you do so. To use tendentious false analogies as evidence is mere propaganda of the lowest sort. Not that it matters much. The fringe right has about as much chance of toppling Social Security as a mutt pissing on the Washington Monument does of knocking over that noble obelisk..

I would not call it a Ponzi scheme. It's a different kind of fraud. It's phoney book keeping attached to a massive misinformation campaign to keep the plans participants dumb and happy..

 

[JoeTheEconomist]

What expertise do you source for that statement because just your opinion means little.
I gave facts. Where are your facts?

Social Security does more than Van Guard. Van Guard has large accounts over which to spread its costs. SSA is looking at 200 million accounts most of which are trivial in size. I think you have apples and oranges in your comparison.