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ALL financial assets are claims on economic activity
Government securities are no different. Government has the power of taxation on the economic production of the nation. That is why they are (usually) the highest rated issuer in the country.
DEFINITION of 'Asset'The government's savings does not go up. The government's liabilities go up. Your savings go up. The government operates the trusts in the name of the recipients. It doesn't operate it in the name of itself.
When you pay FICA taxes, the accounting looks like this. Let's say you pay $100 in taxes. At that moment, the balance sheets look like this
You
Dr. $100 SS claim
Cr. $100 in cash
The SS Trust
Dr. $100 in government non-marketable liabilities
Cr. $100 owed to you
The Treasury
Dr. $100 in cash
Cr. $100 in government non-marketable liabilities owed to the Trust.
The Trust is the conduit through which your SS contributions pass. Eliminating the trust, the net effect is
Dr. $100 you are owed by the government
Cr. $100 the government owes to you.
That's the economic effect of SS. The government's debt is $100 it owes to you.
What I think you are getting confused on is what is in the Trust. In the Trust, there is a $100 asset, which is the debt owed to it by the government. I think this is where you are saying "you can't call a debt a liability." But that is netted out by the $100 the Trust owes to you. So if you count the debt owed to the Trust ($100) as an asset, you also have to count the amount owed by the government to the Trust and the liability owed to you ($100+$100=$200). The gross balance changes when running the cash flows through the Trust, but the net balance does not.
A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit.
The trust fund is an asset - In this case, your welfare check from social security will be 100% taken from your children
The trust fund is not an asset - In this case, your welfare check from social security will be 100% taken from your children
Do you need a definition of "economic value" or do you need help with that as well?
No more than you need a definition of welfare : "financial support given to people in need" Something like 20% of all benefits go to the wealthiest people in the nation.
I don't believe you. What is your source for "20%" benefits go to the wealthiest.
Facts: So you say $168 billion of the $840 billion goes to the wealthiest people.
A) How many people make up the "wealthiest"... because 1% of 310 million would be 3.1 million divided into $168 billion is $54,194 or $4,516 per person.
B) For example, if you retire at full retirement age in 2015, your maximum benefit would be $2,663.
What is the maximum Social Security retirement benefit payable?
So ONCE again hyperbole, exaggeration made out of total ignorance! YOU stated each of the wealthiest people make almost 70% MORE then allowed!
How can that be? Easy you don't know crap because It doesn't take anytime to blow your comment out of the water with FACTS!!!
View attachment 54969
My source is IRS tax returns, source of income. When I talk about wealthiest, it is based on income. If you can earn $50,000 per year while you are retired, chances are you are wealthy. Mind you this is just income that is recognized during the year. Fed data shows that the elderly are the wealthiest of any age demographic. Census data says the same thing.
Benefits are based on career work history, the highest benefits go to those with the most successful work history. If you actually knew how SS worked, you would realize that $2,663 is not the maximum. That is the max for a single person who retires at NRA. People are married, have kids, defer benefits. When you talk about ignorance, you are stepping beyond your understanding.
ALL financial assets are claims on economic activity
True, but not all claims on economic activity are financial assets. Since, per my example in the end, your kids are going to pay the exact same amount regardless of whether we follow the pretense of the fictitious so called "trust fund" or we don't. So again, where is the economic value in a transaction that changes nothing other than the flow of paper?
Government securities are no different. Government has the power of taxation on the economic production of the nation. That is why they are (usually) the highest rated issuer in the country.
pure deflection, irrelevant to the point. That government has the power to tax doesn't make a loan to itself an asset
ALL financial assets are claims on economic activity
True, but not all claims on economic activity are financial assets. Since, per my example in the end, your kids are going to pay the exact same amount regardless of whether we follow the pretense of the fictitious so called "trust fund" or we don't. So again, where is the economic value in a transaction that changes nothing other than the flow of paper?
Government securities are no different. Government has the power of taxation on the economic production of the nation. That is why they are (usually) the highest rated issuer in the country.
pure deflection, irrelevant to the point. That government has the power to tax doesn't make a loan to itself an asset
The government owes you - you, kaz, personally. The funds flows through the SS trusts. The government owes the trusts and the trusts owe you.
You're getting hung up on double-entry bookkeeping.
And yes, all claims on the government - whether they are securities or future SS payments - have economic value backed by the taxation power of the United States government.
I get paid the same amount, my kids pay the same amount regardless. What does the government owing me have to do with anything? In no scenario do I get more or less money based on the existence of the bogus fund. The existence of this fantasy fund effects who?
Your are correct about EITC. It is not the negative income tax proposal of Richard Nixon. It is less sweeping and tied to tax liability not income; still, it is much better than nothing.I have never said anything that would lead anyone to think I want to end Social Security. I do think we need something like the negative income tax plan proposed by Richard Nixon. Lowering the ceiling in order to raise the floor is just good carpentry.When you say that "the structure of Social Security is very similar to check kiting," you are making an analogy. I'll bet you didn't know that, did you? The analogy is a silly one for more reasons than I care to mention. The federal government is not a bank. Without getting into a lot of legal and fiscal details that will only make your head spin, I'll try to make this simple for you: when was the last time the federal government gave you a toaster for paying your taxes?Phony analogies such as Ponzi Scheme and check kiting are neither legal, political nor economic arguments. They are merely fact-free name calling and not worth a response.
The simple-minded Lemonade Stand School of Economics works by (as the name implies) analogy. Real economics does not work by analogy, it works by quantitative data.
The Social Security law has a payroll tax at one end and a schedule of benefits at the other. The laws and policies connecting the two ends of Social Security are, apparently, too difficult for the Lemonade Stand School to grasp.
So-called conservatives have great difficulty understanding ideas with which they do not agree. American conservatives are actually reactionary anarchists. They hate government. They wish there was no government. They don't want to understand government. Instead, they prefer pretend that federal macroeconomic and fiscal policy is a form of consumer household economy writ large. They imagine that Social Security is a passbook savings account. They just don't get it. They don't want to get it. They are too mad at everything to analyze anything. These are the walking wounded from the great battle of Reaganomics. Sad
The response to Ponzi Scheme is ready-baked. You don't have a response for check kiting - so you are reduced to name calling. These aren't analogies.
The structure of Social Security is very similar to check kiting. We write a check to one person in order to cash the last check written. That is a fact about how the system works.
The laws and policies do not connect. That is why there is a nearly $26 trillion shortfall.
Given the inter-generational nature of the SS system, the shortfall is inevitable -- in fact, it was foreseen and provided for in 1990 -- but not critical. After all the right wing screaming and stalling is over, the solution to the shortfall is quick and simple: remove the income cap from the FICA tax and apply FICA to capital gains as well as earned income. Voila! Huge surpluses arrive immediately; so huge in fact that it will be possible to cut FICA tax rates substantially.
If that weren't spectacular enough, means testing payments and phasing out benefits to retirees with incomes in excess of 300% of poverty will allow very significant increases in benefits to the truly needy. When these proposals are made as solutions to a reduction in benefits the 10% or so fringe right congresscritters standing on the tracks as the Social Security Express thunders down on them will disappear.
Don't take my word for it. When was the last time that SS benefits were cut? Where are the politicians who ran on phasing out the program? See what I mean?
I see what you mean. You want to end Social Security, and replace it with a welfare program. You realize that FDR specifically warned against what you are proposing. Genius. Here is a better end. End Social Security, and transfer the assets to a welfare program of your choice. My guess is that you don't know what check kiting is.
There IS a negative income tax. It's called EITC. And I don't want you as builder or a carpenter.
Calling me a "Moon Bat" is a sign of weakness on the issues and a childish impulse to call names rather than analyze issues.[
Given the inter-generational nature of the SS system, the shortfall is inevitable -- in fact, it was foreseen and provided for in 1990 -- but not critical. After all the right wing screaming and stalling is over, the solution to the shortfall is quick and simple: remove the income cap from the FICA tax and apply FICA to capital gains as well as earned income. Voila! Huge surpluses arrive immediately; so huge in fact that it will be possible to cut FICA tax rates substantially.
How come you Moon Bats always think that the answer to everything is more taxes?
Yes you can always bring more money into the pockets of the bureaucrats if you raise taxes but not only is that damaging to our economy but it is the immoral thing to do.
These people that would get hit with that increase in taxation are the ones already paying the bulk of the trillion a year in come taxes while 50% of Americans pay none to that tax pool and you want to tax them even more. How come you are so greedy? Shame on you!
Back before retiring I usually met the income cap by late Spring or early summer. Then I had a 7.5% increase in take home pay. I spent that money in the productive economy instead of giving it to the filthy ass government and that was always a good thing.
If you need money then stop spending so much. Ron Paul's 2012 Restore America budget cut a trillion a year out of the Federal budget while maintaining defense and not touching Social Security or Medicare. That was a much better approach than raising taxes to provide even more money to an already bloated government.
Don't you think we need to cut out unnecessary government spending before we go raising taxes on the American people?
The combined Federal, State and Local government collects almost 40% of the GDP in taxes.
When is enough going to be enough for you Moon Bats?
Calling me a "Moon Bat" is a sign of weakness on the issues and a childish impulse to call names rather than analyze issues.[
Given the inter-generational nature of the SS system, the shortfall is inevitable -- in fact, it was foreseen and provided for in 1990 -- but not critical. After all the right wing screaming and stalling is over, the solution to the shortfall is quick and simple: remove the income cap from the FICA tax and apply FICA to capital gains as well as earned income. Voila! Huge surpluses arrive immediately; so huge in fact that it will be possible to cut FICA tax rates substantially.
How come you Moon Bats always think that the answer to everything is more taxes?
Yes you can always bring more money into the pockets of the bureaucrats if you raise taxes but not only is that damaging to our economy but it is the immoral thing to do.
These people that would get hit with that increase in taxation are the ones already paying the bulk of the trillion a year in come taxes while 50% of Americans pay none to that tax pool and you want to tax them even more. How come you are so greedy? Shame on you!
Back before retiring I usually met the income cap by late Spring or early summer. Then I had a 7.5% increase in take home pay. I spent that money in the productive economy instead of giving it to the filthy ass government and that was always a good thing.
If you need money then stop spending so much. Ron Paul's 2012 Restore America budget cut a trillion a year out of the Federal budget while maintaining defense and not touching Social Security or Medicare. That was a much better approach than raising taxes to provide even more money to an already bloated government.
Don't you think we need to cut out unnecessary government spending before we go raising taxes on the American people?
The combined Federal, State and Local government collects almost 40% of the GDP in taxes.
When is enough going to be enough for you Moon Bats?
More money is needed for Social Security and Medicare because of demographic shifts in the population and the rising costs of medical care and living expenses. The rise in government spending as a percent of GDP is a world-wide phenomenon and the USA is not the biggest spender by any means.
Back in the day before hip transplants and fresh vegetables year round, the cost of keeping poor people alive was much lower. Do you want to go back?
The money has to come from where the money went, and from the past generation all the increase in GDP has gone to the richest 1%.
As for cutting "unnecessary government spending" who could disagree with that idea? What specific spending do you have in mind?
You don't have to agree with the idea of an adjustable safety net for our society and you can believe that making the rich richer is in the best interests of America, but you don't advance either idea by discourtesy. I don't say this disapprovingly; it is OK by me to exchange humorous insults etc. but the heat extinguishes the light. Do you want to discuss the issue or have a round of grab-ass?
I get paid the same amount, my kids pay the same amount regardless. What does the government owing me have to do with anything? In no scenario do I get more or less money based on the existence of the bogus fund. The existence of this fantasy fund effects who?
You will get paid an amount based upon your contributions to the fund. That's what the government owes you for your SS contributions, and that's EXACTLY how a defined contribution pension plan or annuity works.
Whether or not you will get the amount promised - and I don't think you will - is another story. But the economics of how SS works is no different than any other pooled capital of retirement savings.
[Q
Calling me a "Moon Bat" is a sign of weakness on the issues and a childish impulse to call names rather than analyze issues.
More money is needed for Social Security and Medicare because of demographic shifts in the population and the rising costs of medical care and living expenses. The rise in government spending as a percent of GDP is a world-wide phenomenon and the USA is not the biggest spender by any means.
Back in the day before hip transplants and fresh vegetables year round, the cost of keeping poor people alive was much lower. Do you want to go back?
The money has to come from where the money went, and from the past generation all the increase in GDP has gone to the richest 1%.
As for cutting "unnecessary government spending" who could disagree with that idea? What specific spending do you have in mind?
You don't have to agree with the idea of an adjustable safety net for our society and you can believe that making the rich richer is in the best interests of America, but you don't advance either idea by discourtesy. I don't say this disapprovingly; it is OK by me to exchange humorous insults etc. but the heat extinguishes the light. Do you want to discuss the issue or have a round of grab-ass?
on my Bloomberg screen with a bid yield of 2.294%.
DEFINITION of 'Asset'
A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit.
The trust fund is an asset - In this case, your welfare check from social security will be 100% taken from your children
The trust fund is not an asset - In this case, your welfare check from social security will be 100% taken from your children
Do you need a definition of "economic value" or do you need help with that as well?
No more than you need a definition of welfare : "financial support given to people in need" Something like 20% of all benefits go to the wealthiest people in the nation.
I don't believe you. What is your source for "20%" benefits go to the wealthiest.
Facts: So you say $168 billion of the $840 billion goes to the wealthiest people.
A) How many people make up the "wealthiest"... because 1% of 310 million would be 3.1 million divided into $168 billion is $54,194 or $4,516 per person.
B) For example, if you retire at full retirement age in 2015, your maximum benefit would be $2,663.
What is the maximum Social Security retirement benefit payable?
So ONCE again hyperbole, exaggeration made out of total ignorance! YOU stated each of the wealthiest people make almost 70% MORE then allowed!
How can that be? Easy you don't know crap because It doesn't take anytime to blow your comment out of the water with FACTS!!!
View attachment 54969
My source is IRS tax returns, source of income. When I talk about wealthiest, it is based on income. If you can earn $50,000 per year while you are retired, chances are you are wealthy. Mind you this is just income that is recognized during the year. Fed data shows that the elderly are the wealthiest of any age demographic. Census data says the same thing.
Benefits are based on career work history, the highest benefits go to those with the most successful work history. If you actually knew how SS worked, you would realize that $2,663 is not the maximum. That is the max for a single person who retires at NRA. People are married, have kids, defer benefits. When you talk about ignorance, you are stepping beyond your understanding.
A) I don't need to know I use the internet and went to this page assuming the SS people would know maybe more then you!
What is the maximum Social Security retirement benefit payable?
B) The discussion was SS payments to people.PER THE SS maximum of $2,663. And I proved that was impossible as you contend 20% of all benefits
go to the wealthiest and that would mean double what the SS said possible.
C) Finally once again... where are YOUR sources for your comments? I don't believe unsourced statements that can't be verified and you are guessing when
you made that statement:"Something like 20% of all benefits go to the wealthiest people in the nation"..
You of all people are now showing YOUR ignorance.... at least I source my information even though I may be "stepping beyond your understanding"!
View attachment 54972
Calling me a "Moon Bat" is a sign of weakness on the issues and a childish impulse to call names rather than analyze issues.[
Given the inter-generational nature of the SS system, the shortfall is inevitable -- in fact, it was foreseen and provided for in 1990 -- but not critical. After all the right wing screaming and stalling is over, the solution to the shortfall is quick and simple: remove the income cap from the FICA tax and apply FICA to capital gains as well as earned income. Voila! Huge surpluses arrive immediately; so huge in fact that it will be possible to cut FICA tax rates substantially.
How come you Moon Bats always think that the answer to everything is more taxes?
Yes you can always bring more money into the pockets of the bureaucrats if you raise taxes but not only is that damaging to our economy but it is the immoral thing to do.
These people that would get hit with that increase in taxation are the ones already paying the bulk of the trillion a year in come taxes while 50% of Americans pay none to that tax pool and you want to tax them even more. How come you are so greedy? Shame on you!
Back before retiring I usually met the income cap by late Spring or early summer. Then I had a 7.5% increase in take home pay. I spent that money in the productive economy instead of giving it to the filthy ass government and that was always a good thing.
If you need money then stop spending so much. Ron Paul's 2012 Restore America budget cut a trillion a year out of the Federal budget while maintaining defense and not touching Social Security or Medicare. That was a much better approach than raising taxes to provide even more money to an already bloated government.
Don't you think we need to cut out unnecessary government spending before we go raising taxes on the American people?
The combined Federal, State and Local government collects almost 40% of the GDP in taxes.
When is enough going to be enough for you Moon Bats?
More money is needed for Social Security and Medicare because of demographic shifts in the population and the rising costs of medical care and living expenses. The rise in government spending as a percent of GDP is a world-wide phenomenon and the USA is not the biggest spender by any means.
Back in the day before hip transplants and fresh vegetables year round, the cost of keeping poor people alive was much lower. Do you want to go back?
The money has to come from where the money went, and from the past generation all the increase in GDP has gone to the richest 1%.
As for cutting "unnecessary government spending" who could disagree with that idea? What specific spending do you have in mind?
You don't have to agree with the idea of an adjustable safety net for our society and you can believe that making the rich richer is in the best interests of America, but you don't advance either idea by discourtesy. I don't say this disapprovingly; it is OK by me to exchange humorous insults etc. but the heat extinguishes the light. Do you want to discuss the issue or have a round of grab-ass?
A) You asked: "As for cutting "unnecessary government spending" who could disagree with that idea? What specific spending do you have in mind?"
The primary change needs to be in the concept that the Federal government must control our lives from "womb to tomb".
It is not financially reasonable much less responsible to create a totally dependent society.
These are specific examples of gross injustice of wasting tax dollars in the attempt to control our lives from "womb to tomb".
10. Outhouse in Alaska:$98,670.
The Interior Department spent nearly $100,000 to install an outhouse on an Alaskan trail, which includes a single toilet with no internal plumbing.
9. A bus stop with heated pavement for the Washington area: $1 million.
A lavish bus stop with heated pavement was built in Arlington, VA, but it has failed to keep commuters warm or dry.
8. Grant for a pole dancing performance: $10,000.
Utility poles, that is. The National Endowment for the Arts provided a grant to PowerUP for Austin Energy employees to perform an artsy dance with 20 utility poles, accompanied by a live orchestra.
7. Pizza — from a printer: $124,995.
NASA gave a six-figure grant to a company that aspires to make pizza from a 3-D printer.
6. Study to find out if couples are happier when the woman calms down after argument: $335,525.
“[M]arriages that were the happiest were the ones in which the wives were able to calm down quickly during marital conflict,” found a study of 81 couples funded by the National Institutes of Health.
5. Booze and crystal for the State Department: $5.4 million.
The State Department went on a bender the week before the government shutdown, purchasing $5 million of “exquisite” crystal glassware to presumably drink the $400,000 in booze they purchased in 2013.
4. Monitoring depression on Twitter: $82,000.
The National Institutes of Health is funding a study “to use Twitter for surveillance on depressed people,” according to the Free Beacon.
3. Seven-figure stack of rocks at the London Embassy: $1 million.
The American Embassy in London will be receiving a granite sculpture from an artist “whose work resembles stacked piles of paving stones,” according to the Daily Mail.
2. Artwork for Veterans Affairs offices: $562,000.
The Department of Veterans Affairs went on a spending spree during “use it or lose it” season, purchasing over half a million in artwork and millions in furniture in a single week.
1. Government employee trip to luxury hotel in the Caribbean: priceless.
Federal employees took a taxpayer-funded trip to the Buccaneer Hotel in St. Croix—the same hotel made famous on TV’s “The Bachelor.” The bill was divided among a number of agencies, making a final tally difficult to come by.
Top 10 Examples of Government Waste in 2013
I get paid the same amount, my kids pay the same amount regardless. What does the government owing me have to do with anything? In no scenario do I get more or less money based on the existence of the bogus fund. The existence of this fantasy fund effects who?
You will get paid an amount based upon your contributions to the fund. That's what the government owes you for your SS contributions, and that's EXACTLY how a defined contribution pension plan or annuity works.
Whether or not you will get the amount promised - and I don't think you will - is another story. But the economics of how SS works is no different than any other pooled capital of retirement savings.
Do you have a source for this statement?
You really can't figure it out yourself? By necessity, SS must pay out less than it collects. The operational costs of managing the program alone demand this. If it weren't true then the whole thing would have gone belly up before most of us were even born.
DEFINITION of 'Asset'Actually, there is a major "practical difference." The government saved zero, it spent the money as it came in, and like if there was no trust fund, your children will be taxed to pay for it.
Whether there is a "trust fund" or not, there is no economic difference. The government has no assets other than those which are cancelled out by debt. When you add a number to it's negative, you get zero every time, and that's the net value of the the "trust fund." Read your post, you demonstrate exactly my point that you're lost in syntax and the actual meaning of assets and securities has been lost to you. A security based on an asset with an underlying value of zero isn't a real asset, it's a scam when it's treated as being an asset, and that's what social security is, a scam
The government's savings does not go up. The government's liabilities go up. Your savings go up. The government operates the trusts in the name of the recipients. It doesn't operate it in the name of itself.
When you pay FICA taxes, the accounting looks like this. Let's say you pay $100 in taxes. At that moment, the balance sheets look like this
You
Dr. $100 SS claim
Cr. $100 in cash
The SS Trust
Dr. $100 in government non-marketable liabilities
Cr. $100 owed to you
The Treasury
Dr. $100 in cash
Cr. $100 in government non-marketable liabilities owed to the Trust.
The Trust is the conduit through which your SS contributions pass. Eliminating the trust, the net effect is
Dr. $100 you are owed by the government
Cr. $100 the government owes to you.
That's the economic effect of SS. The government's debt is $100 it owes to you.
What I think you are getting confused on is what is in the Trust. In the Trust, there is a $100 asset, which is the debt owed to it by the government. I think this is where you are saying "you can't call a debt a liability." But that is netted out by the $100 the Trust owes to you. So if you count the debt owed to the Trust ($100) as an asset, you also have to count the amount owed by the government to the Trust and the liability owed to you ($100+$100=$200). The gross balance changes when running the cash flows through the Trust, but the net balance does not.
A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit.
The trust fund is an asset - In this case, your welfare check from social security will be 100% taken from your children
The trust fund is not an asset - In this case, your welfare check from social security will be 100% taken from your children
Do you need a definition of "economic value" or do you need help with that as well?
The assets in the government trusts are held in trust for the recipients. It's no different than a trust held at a bank.
If you set up a $100 trust for yourself that could only hold government bonds, the economics would look like this
You
Dr. $100 claim on trust
Cr. $100 in cash
Trust held at bank
Dr. $100 in Treasury securities
Cr. $100 owed to you
The Treasury
Dr. $100 in cash
Cr. $100 in Treasury securities
The assets and liabilities of the trust are kept on the bank's balance sheet. The assets of the bank will increase by $100 and the liabilities of the bank will increase by $100 but the net balance of the bank will be $0. Because the government has sold the trust a $100 bond, which it then spends the proceeds, the net liability of the government will be $100.
Go back and look at the balance sheets of SS.
You
Dr. $100 SS claim
Cr. $100 in cash
The SS Trust
Dr. $100 in government non-marketable liabilities
Cr. $100 owed to you
The Treasury
Dr. $100 in cash
Cr. $100 in government non-marketable liabilities owed to the Trust.
It's the same balance sheet as the one held at bank. The only difference is the trust administrator.
The government is holding the liabilities and assets in trust, just like a bank holds liabilities and assets in trust. The difference is that because the government is holding the assets and liabilities for you in SS, it consolidates the SS trusts and counts its liability as an asset. But the asset is offset by a liability so the net indebtedness does not change. It is still $100.
The government holds the assets and liabilities of the SS trust on its balance sheet. A bank does the same thing.
No, it's completely different, the bank is holding an asset that belongs to one entity (person, company, ...) and a liability that belongs to another entity. They don't create an asset and a liability, one from the other to the same entity.
Again, your children will write a check to government that goes to you. Well, some of it will, whatever isn't just wasted.
Whether you call the trust fund real or not is immaterial to that equation. I understand all the securities you're talking about, always did, that isn't the point in question.
My question is, if the social security fund is a trust, an asset, where is the economic value that makes it an asset? The money is going to be taken from your children in the future. You're being stubborn on this, clearly there is zero economic value, and that means it's not an asset and not a trust fund
In my trust example, the asset is a government Treasury security. That is debt owed to you by the United States government. In my SS example, you have debits in the SS trust. That is debt owed to you by the United States government.
They are both debt owed to you by the United States government. The only difference is the administrator of the trust - in one case the government, the other case the bank. If the government went and bought the bank, then that difference would effectively disappear.
And of course government debt has value. The 2.25% November 15, 2025 Treasury Bond is being quoted at 99-20 on my Bloomberg screen with a bid yield of 2.294%.
According to your argument, that bond is worth $0 because "we owe it to ourselves" and thus has no economic value. You better call the bond market and tell them about your exciting news. I'm sure they'd like to know!
Your are correct about EITC. It is not the negative income tax proposal of Richard Nixon. It is less sweeping and tied to tax liability not income; still, it is much better than nothing.I have never said anything that would lead anyone to think I want to end Social Security. I do think we need something like the negative income tax plan proposed by Richard Nixon. Lowering the ceiling in order to raise the floor is just good carpentry.When you say that "the structure of Social Security is very similar to check kiting," you are making an analogy. I'll bet you didn't know that, did you? The analogy is a silly one for more reasons than I care to mention. The federal government is not a bank. Without getting into a lot of legal and fiscal details that will only make your head spin, I'll try to make this simple for you: when was the last time the federal government gave you a toaster for paying your taxes?The response to Ponzi Scheme is ready-baked. You don't have a response for check kiting - so you are reduced to name calling. These aren't analogies.
The structure of Social Security is very similar to check kiting. We write a check to one person in order to cash the last check written. That is a fact about how the system works.
The laws and policies do not connect. That is why there is a nearly $26 trillion shortfall.
Given the inter-generational nature of the SS system, the shortfall is inevitable -- in fact, it was foreseen and provided for in 1990 -- but not critical. After all the right wing screaming and stalling is over, the solution to the shortfall is quick and simple: remove the income cap from the FICA tax and apply FICA to capital gains as well as earned income. Voila! Huge surpluses arrive immediately; so huge in fact that it will be possible to cut FICA tax rates substantially.
If that weren't spectacular enough, means testing payments and phasing out benefits to retirees with incomes in excess of 300% of poverty will allow very significant increases in benefits to the truly needy. When these proposals are made as solutions to a reduction in benefits the 10% or so fringe right congresscritters standing on the tracks as the Social Security Express thunders down on them will disappear.
Don't take my word for it. When was the last time that SS benefits were cut? Where are the politicians who ran on phasing out the program? See what I mean?
I see what you mean. You want to end Social Security, and replace it with a welfare program. You realize that FDR specifically warned against what you are proposing. Genius. Here is a better end. End Social Security, and transfer the assets to a welfare program of your choice. My guess is that you don't know what check kiting is.
There IS a negative income tax. It's called EITC. And I don't want you as builder or a carpenter.
I take your response about a carpenter for floors and ceilings to imply that you are satisfied with the current pattern of income distribution. Is that correct?
No more than you need a definition of welfare : "financial support given to people in need" Something like 20% of all benefits go to the wealthiest people in the nation.
I don't believe you. What is your source for "20%" benefits go to the wealthiest.
Facts: So you say $168 billion of the $840 billion goes to the wealthiest people.
A) How many people make up the "wealthiest"... because 1% of 310 million would be 3.1 million divided into $168 billion is $54,194 or $4,516 per person.
B) For example, if you retire at full retirement age in 2015, your maximum benefit would be $2,663.
What is the maximum Social Security retirement benefit payable?
So ONCE again hyperbole, exaggeration made out of total ignorance! YOU stated each of the wealthiest people make almost 70% MORE then allowed!
How can that be? Easy you don't know crap because It doesn't take anytime to blow your comment out of the water with FACTS!!!
View attachment 54969
My source is IRS tax returns, source of income. When I talk about wealthiest, it is based on income. If you can earn $50,000 per year while you are retired, chances are you are wealthy. Mind you this is just income that is recognized during the year. Fed data shows that the elderly are the wealthiest of any age demographic. Census data says the same thing.
Benefits are based on career work history, the highest benefits go to those with the most successful work history. If you actually knew how SS worked, you would realize that $2,663 is not the maximum. That is the max for a single person who retires at NRA. People are married, have kids, defer benefits. When you talk about ignorance, you are stepping beyond your understanding.
A) I don't need to know I use the internet and went to this page assuming the SS people would know maybe more then you!
What is the maximum Social Security retirement benefit payable?
B) The discussion was SS payments to people.PER THE SS maximum of $2,663. And I proved that was impossible as you contend 20% of all benefits
go to the wealthiest and that would mean double what the SS said possible.
C) Finally once again... where are YOUR sources for your comments? I don't believe unsourced statements that can't be verified and you are guessing when
you made that statement:"Something like 20% of all benefits go to the wealthiest people in the nation"..
You of all people are now showing YOUR ignorance.... at least I source my information even though I may be "stepping beyond your understanding"!
View attachment 54972
You realize that your attachment verifies that you are wrong. $2,663 is not the maximum for one person. According to your own attachment the max for one person is $3,501.
A different cut of the same theme : "Over one-third of all Social Security benefits are paid to households in the top lifetime-earnings quintile, and nearly two-thirds flow to the top two quintiles."
Read more at: Conservative Social Security Reform | National Review Online
Thus far you have shown me little understanding of Social Security and a lot willingness to type. I am giving up.
Conservative Social Security Reform | National Review Online
very true, an average American could retire with an estate of $1.4 million rather than the dog food money they get from SS, assuming they live long enough to collect any of it.Allowing individuals to retain their SS taxes would allow them to instead invest those funds into retirement plans that would yield better returns,
Do you have any data to back-up that claim? And I am not counting spam on the internet.
I get paid the same amount, my kids pay the same amount regardless. What does the government owing me have to do with anything? In no scenario do I get more or less money based on the existence of the bogus fund. The existence of this fantasy fund effects who?
You will get paid an amount based upon your contributions to the fund. That's what the government owes you for your SS contributions, and that's EXACTLY how a defined contribution pension plan or annuity works.
Whether or not you will get the amount promised - and I don't think you will - is another story. But the economics of how SS works is no different than any other pooled capital of retirement savings.
Actually, other "pooled capital of retirement savings" typically involves actual money, not IOUs the pool wrote to itself. And the amount I get paid is irrelevant to the discussion because there is no connection between the amount I will be paid and whether or not those IOUs government wrote to itself are a "trust fund" or not..
What is relevant to the discussion is that the amount we get paid has nothing to do with whether SS has a "trust fund" or not, and there is no connection between what our children will pay and whether SS has a trust fund or not.
There is no cashflow connection to anyone regarding whether the government's IOUs to itself are considered a trust fun or not.
All other financial securities as assets affect cashflow to someone somewhere somehow. Social Security's phantom "trust fund" doesn't.
Seriously, with what you do for a living, and I do believe you even if we banter sometimes, how can you possibly consider something that EX-ANTE has no effect on cashflow, positive or negative, ever, to anyone, an economic asset? How is that possible?
