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

[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.

Ah. So as I predicted, you jumped to respond without actually reading what I wrote.

The money is repaid. On a frequent basis. The bonds are short term instruments. The Trust is constantly increased by this behavior.

What are you smoking lib if the $2 trillion dollars stolen from Social Security has been repaid with interest then why is the damn thing insolvent and why are congressional leaders telling us the money is gone and why are we being told to salvage it they will have to raise the retirement age and implement means testing? The facts conflict with the nonsense you are spewing.

It's not insolvent you idiot.

It IS INSOLVENT you moron... From the SS Admin ---->

In that top chart -- you see a line for "primary income". That's actual dollars going into the fund every year.
The orange line is what's going out.. Ran surpluses (stolen money) from 1984 to about 2009. It went NEGATIVE (insolvent) ever since.

The happy horseshit you've been fed is that it won't ACTUALLY go insolvent until 2020 or so.. But THAT fiction uses the "interest in the trust fund" accounting gimmick to keep the torches and pitchfolks away.

It is insolvent in ANY year that the Treasury has to go borrow money (debt owed by YOU) to pay the income/expend gap.

And the "interest in trust fund" lie -- is because AS I POSTED FROM THE SSA and CBO -- there is NOTHING tangible in the SS trust fund to PAY that interest with. So it's USELESS to offset the deficits.

 

[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.

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.

.
" 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,"


Didn't the executives at Enron go to jail for this type of behavior?

Why yes...they did.

.

.

No because SS funds can only be spent on eligible SS benefits. This is not the government borrowing from itself because payroll tax revenues belong to present and future SS recipients.

Over a $$TRILL was taken from SS income and spent "on other things" between 1986 and 2009..

 

[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.

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.

Yes, the government legally requires itself to spend the money instead of saving it and so there is no actual trust fund. that was clever of them

Do you have any clue how many trust funds, retirement plans, pension funds, IRA's, 401K's, 403B's, etc., etc.,

have all or part of their money invested in US treasuries?

No, you probably don't because you're retarded.

SS is NOT invested in US treasuries. The Trust fund holds only "intragovernmental IOUs".. There IS a difference.

 

[flacaltenn]

The way previous proposals were written -- it was NOT privatization. In exchange for letting younger workers choose to keep 2 or 3% of their payroll taxes --- the workers agree to reduced or eliminated payments from the SS account at retirement. THEY WOULD STILL be paying the bulk of their payroll taxes as a "welfare tax" for the folks who need it.

If in 2004 or so -- we had ADOPTED this plan.. The amount of deferred SS taxes would have been payed out of the "EXCESS" -- because SS was running a surplus (overcharging) for about 30 years and pissing it away.

If that program had been adopted -- the stolen money would have gone to securing REDUCED future payments without affecting the income balance of that program.

Now that it's not running a surplus (or teetering on solvency a few billion either way) --- we no longer have that option..

Obama cut the payroll tax for 2 years. How many Americans would you guess put that into their retirements?

$20 bucks a month? Not many... But $20 times 100,000,000 --- was a big chunk stolen from the program revenue stream... How come you're not concerned about stealing from the SS revenue stream for THIS -- but you mock a plan that would have used SURPLUS money to defray future payments?

Nothing was stolen.

"Nothing was stolen"...

Lemme paint you a picture.

1) Where is all the money (about $1trillion) that was OVERCHARGED to working, taxpaying people and called a "SS Surplus" for about 35 years?

2) Who is responsible for the NEW DEBT that is issued to cover any yearly SS Deficits? (Regardless of book-keeping interest on the non-existent Trust Fund balance)?

If you can't answer answer those 2 questions -- it's quite clear WHY you don't know that you have been robbed twice...

Seriously -- at the bottom of any left-right dispute, you will find the largest problem is -- that leftists don't have a CLUE as to how stuff works..

I don't know what you're talking about in 1 above.

That refers to ALL of the SS payroll taxes that were spent on other things from 1984 til 2009 when SS was running big surpluses... Where is that money??

 

[NYcarbineer]

Privatization means that younger people stop paying the payroll tax. The payroll tax replenishes SS payouts each year, to maintain the Trust Fund balance, or increase it.

Once the payroll tax ends, the Trust Fund will have to pay current recipients with the principal and interest it holds and earns.

That will come out of general fund tax revenues, because it's the general fund that borrowed the money.

The way previous proposals were written -- it was NOT privatization. In exchange for letting younger workers choose to keep 2 or 3% of their payroll taxes --- the workers agree to reduced or eliminated payments from the SS account at retirement. THEY WOULD STILL be paying the bulk of their payroll taxes as a "welfare tax" for the folks who need it.

If in 2004 or so -- we had ADOPTED this plan.. The amount of deferred SS taxes would have been payed out of the "EXCESS" -- because SS was running a surplus (overcharging) for about 30 years and pissing it away.

If that program had been adopted -- the stolen money would have gone to securing REDUCED future payments without affecting the income balance of that program.

Now that it's not running a surplus (or teetering on solvency a few billion either way) --- we no longer have that option..

Obama cut the payroll tax for 2 years. How many Americans would you guess put that into their retirements?

$20 bucks a month? Not many... But $20 times 100,000,000 --- was a big chunk stolen from the program revenue stream... How come you're not concerned about stealing from the SS revenue stream for THIS -- but you mock a plan that would have used SURPLUS money to defray future payments?

Nothing was stolen.

"Nothing was stolen"...

Lemme paint you a picture.

1) Where is all the money (about $1trillion) that was OVERCHARGED to working, taxpaying people and called a "SS Surplus" for about 35 years?

2) Who is responsible for the NEW DEBT that is issued to cover any yearly SS Deficits? (Regardless of book-keeping interest on the non-existent Trust Fund balance)?

If you can't answer answer those 2 questions -- it's quite clear WHY you don't know that you have been robbed twice...

Seriously -- at the bottom of any left-right dispute, you will find the largest problem is -- that leftists don't have a CLUE as to how stuff works..

Here's the money past and present:

OASI Trust Fund, a Social Security fund

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.

Ah. So as I predicted, you jumped to respond without actually reading what I wrote.

The money is repaid. On a frequent basis. The bonds are short term instruments. The Trust is constantly increased by this behavior.

What are you smoking lib if the $2 trillion dollars stolen from Social Security has been repaid with interest then why is the damn thing insolvent and why are congressional leaders telling us the money is gone and why are we being told to salvage it they will have to raise the retirement age and implement means testing? The facts conflict with the nonsense you are spewing.

It's not insolvent you idiot.

It IS INSOLVENT you moron... From the SS Admin ---->

In that top chart -- you see a line for "primary income". That's actual dollars going into the fund every year.
The orange line is what's going out.. Ran surpluses (stolen money) from 1984 to about 2009. It went NEGATIVE (insolvent) ever since.

The happy horseshit you've been fed is that it won't ACTUALLY go insolvent until 2020 or so.. But THAT fiction uses the "interest in the trust fund" accounting gimmick to keep the torches and pitchfolks away.

It is insolvent in ANY year that the Treasury has to go borrow money (debt owed by YOU) to pay the income/expend gap.

And the "interest in trust fund" lie -- is because AS I POSTED FROM THE SSA and CBO -- there is NOTHING tangible in the SS trust fund to PAY that interest with. So it's USELESS to offset the deficits.

The SS investment earns interest like any other investment.

 

[NYcarbineer]

Obama cut the payroll tax for 2 years. How many Americans would you guess put that into their retirements?

$20 bucks a month? Not many... But $20 times 100,000,000 --- was a big chunk stolen from the program revenue stream... How come you're not concerned about stealing from the SS revenue stream for THIS -- but you mock a plan that would have used SURPLUS money to defray future payments?

Nothing was stolen.

"Nothing was stolen"...

Lemme paint you a picture.

1) Where is all the money (about $1trillion) that was OVERCHARGED to working, taxpaying people and called a "SS Surplus" for about 35 years?

2) Who is responsible for the NEW DEBT that is issued to cover any yearly SS Deficits? (Regardless of book-keeping interest on the non-existent Trust Fund balance)?

If you can't answer answer those 2 questions -- it's quite clear WHY you don't know that you have been robbed twice...

Seriously -- at the bottom of any left-right dispute, you will find the largest problem is -- that leftists don't have a CLUE as to how stuff works..

I don't know what you're talking about in 1 above.

That refers to ALL of the SS payroll taxes that were spent on other things from 1984 til 2009 when SS was running big surpluses... Where is that money??

It is held in securities like any other investment in US government bonds. If you have a pension, or insurance, or a money market account,

chances are much of your money, or money owed you in the future, is in US government securities.

 

[NYcarbineer]

Obama cut the payroll tax for 2 years. How many Americans would you guess put that into their retirements?

$20 bucks a month? Not many... But $20 times 100,000,000 --- was a big chunk stolen from the program revenue stream... How come you're not concerned about stealing from the SS revenue stream for THIS -- but you mock a plan that would have used SURPLUS money to defray future payments?

Nothing was stolen.

"Nothing was stolen"...

Lemme paint you a picture.

1) Where is all the money (about $1trillion) that was OVERCHARGED to working, taxpaying people and called a "SS Surplus" for about 35 years?

2) Who is responsible for the NEW DEBT that is issued to cover any yearly SS Deficits? (Regardless of book-keeping interest on the non-existent Trust Fund balance)?

If you can't answer answer those 2 questions -- it's quite clear WHY you don't know that you have been robbed twice...

Seriously -- at the bottom of any left-right dispute, you will find the largest problem is -- that leftists don't have a CLUE as to how stuff works..

I don't know what you're talking about in 1 above.

That refers to ALL of the SS payroll taxes that were spent on other things from 1984 til 2009 when SS was running big surpluses... Where is that money??

The money was spent on other things because the SS Trust Fund loaned it to the government.

Do you even know what a trust fund is?

Prove it.

 

[flacaltenn]

The way previous proposals were written -- it was NOT privatization. In exchange for letting younger workers choose to keep 2 or 3% of their payroll taxes --- the workers agree to reduced or eliminated payments from the SS account at retirement. THEY WOULD STILL be paying the bulk of their payroll taxes as a "welfare tax" for the folks who need it.

If in 2004 or so -- we had ADOPTED this plan.. The amount of deferred SS taxes would have been payed out of the "EXCESS" -- because SS was running a surplus (overcharging) for about 30 years and pissing it away.

If that program had been adopted -- the stolen money would have gone to securing REDUCED future payments without affecting the income balance of that program.

Now that it's not running a surplus (or teetering on solvency a few billion either way) --- we no longer have that option..

Obama cut the payroll tax for 2 years. How many Americans would you guess put that into their retirements?

$20 bucks a month? Not many... But $20 times 100,000,000 --- was a big chunk stolen from the program revenue stream... How come you're not concerned about stealing from the SS revenue stream for THIS -- but you mock a plan that would have used SURPLUS money to defray future payments?

Nothing was stolen.

"Nothing was stolen"...

Lemme paint you a picture.

1) Where is all the money (about $1trillion) that was OVERCHARGED to working, taxpaying people and called a "SS Surplus" for about 35 years?

2) Who is responsible for the NEW DEBT that is issued to cover any yearly SS Deficits? (Regardless of book-keeping interest on the non-existent Trust Fund balance)?

If you can't answer answer those 2 questions -- it's quite clear WHY you don't know that you have been robbed twice...

Seriously -- at the bottom of any left-right dispute, you will find the largest problem is -- that leftists don't have a CLUE as to how stuff works..

Here's the money past and present:

OASI Trust Fund, a Social Security fund

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.

Ah. So as I predicted, you jumped to respond without actually reading what I wrote.

The money is repaid. On a frequent basis. The bonds are short term instruments. The Trust is constantly increased by this behavior.

What are you smoking lib if the $2 trillion dollars stolen from Social Security has been repaid with interest then why is the damn thing insolvent and why are congressional leaders telling us the money is gone and why are we being told to salvage it they will have to raise the retirement age and implement means testing? The facts conflict with the nonsense you are spewing.

It's not insolvent you idiot.

It IS INSOLVENT you moron... From the SS Admin ---->

In that top chart -- you see a line for "primary income". That's actual dollars going into the fund every year.
The orange line is what's going out.. Ran surpluses (stolen money) from 1984 to about 2009. It went NEGATIVE (insolvent) ever since.

The happy horseshit you've been fed is that it won't ACTUALLY go insolvent until 2020 or so.. But THAT fiction uses the "interest in the trust fund" accounting gimmick to keep the torches and pitchfolks away.

It is insolvent in ANY year that the Treasury has to go borrow money (debt owed by YOU) to pay the income/expend gap.

And the "interest in trust fund" lie -- is because AS I POSTED FROM THE SSA and CBO -- there is NOTHING tangible in the SS trust fund to PAY that interest with. So it's USELESS to offset the deficits.

The SS investment earns interest like any other investment.

$20 bucks a month? Not many... But $20 times 100,000,000 --- was a big chunk stolen from the program revenue stream... How come you're not concerned about stealing from the SS revenue stream for THIS -- but you mock a plan that would have used SURPLUS money to defray future payments?

Nothing was stolen.

"Nothing was stolen"...

Lemme paint you a picture.

1) Where is all the money (about $1trillion) that was OVERCHARGED to working, taxpaying people and called a "SS Surplus" for about 35 years?

2) Who is responsible for the NEW DEBT that is issued to cover any yearly SS Deficits? (Regardless of book-keeping interest on the non-existent Trust Fund balance)?

If you can't answer answer those 2 questions -- it's quite clear WHY you don't know that you have been robbed twice...

Seriously -- at the bottom of any left-right dispute, you will find the largest problem is -- that leftists don't have a CLUE as to how stuff works..

I don't know what you're talking about in 1 above.

That refers to ALL of the SS payroll taxes that were spent on other things from 1984 til 2009 when SS was running big surpluses... Where is that money??

It is held in securities like any other investment in US government bonds. If you have a pension, or insurance, or a money market account,

chances are much of your money, or money owed you in the future, is in US government securities.

There is no money in the T.F. No Treasury Bonds in the T.F. No Interest in the T.F. Have you forgotten the disclaimer that the SS Admin gives you in every year report?

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

Neither the redemption of trust fund bonds, nor
interest paid on those bonds, provides any new net income to the Treasury,
which must finance redemptions and interest payments through
some combination of increased taxation, reductions in other government
spending, or additional borrowing from the public.

Payment of any ficticuous interest comes from BORROWING MONEY FROM THE PUBLIC..

Stolen the 1st time when the SS surplus was squandered.
Stolen the 2nd time when NOW they come back to you float more debt to pay their worthless IOUs..

 

[flacaltenn]

It's no wonder that leftists hate the concept of folks managing their own retirement funds. They have NO CLUE how to read a prospectus, determine value, or figure out how stuff works.. Or when they are being scammed.

They really DO need help..

 

[NYcarbineer]

[

It is insolvent in ANY year that the Treasury has to go borrow money (debt owed by YOU) to pay the income/expend gap.

That is 100% WRONG. That is where your confusion comes from.

Again. DO YOU KNOW WHAT A TRUST FUND IS?

 

[flacaltenn]

[

It is insolvent in ANY year that the Treasury has to go borrow money (debt owed by YOU) to pay the income/expend gap.

That is 100% WRONG. That is where your confusion comes from.

Again. DO YOU KNOW WHAT A TRUST FUND IS?

If it belongs to ME -- I do.. Your mistake is assuming the Fed Govt plays by the same rules.
You should at least listen to that statement from the SS Admin I posted. They are TRYING to tell you that
the cupboard is bare. Without inciting a riot..

There is nothing of value in that fund. Just like there is nothing in the HiWay Trust Fund or the Indian Trust Fund that has been raided more times than a wooden frontier fort.. The Federal Govt is PROHIBITED from saving any cash or holding investments. It's year to year baby...

 

[SwimExpert]

I didn't read the OP.

Next!

 

[SwimExpert]

Didn't the executives at Enron go to jail for this type of behavior?

Actually no. But thanks for playing.

Actually yes. How old are you?

Old enough to know the difference. What the guys at Enron did was to intentionally deceive their investors and shareholders, hiding the company's debts while creating an artificial image of profitability. That is not what happens with the SS Trust. All assets and debts are reported. Hence why the debt figure is $18, despite the fact that a sizable part of that is merely intra governmental loans.

 

[Fishlore]

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.

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.

Yes, the government legally requires itself to spend the money instead of saving it and so there is no actual trust fund. that was clever of them

Do you have any clue how many trust funds, retirement plans, pension funds, IRA's, 401K's, 403B's, etc., etc.,

have all or part of their money invested in US treasuries?

No, you probably don't because you're retarded.

SS is NOT invested in US treasuries. The Trust fund holds only "intragovernmental IOUs".. There IS a difference.

The is a difference; however that difference is basically that special issue investments cannot be sold to a third party. They are issued by the U.S. Treasury and backed by the full faith and credit of the federal government. Special interest investments bear interest determined by a different formula than traded T. bonds.

The scare nonsense designed by right wingers in hopes of getting voters to agree to abolish Social Security is both dishonest and pathetic. Social Security is the most popular government program in the history of the country. Carping about it is a suicide move for an elected politician but a popular trope for demagogues seeking to whip up the know-nothing base of the GOP.

 

[SwimExpert]

At the risk of sounding like a bleeding heart liberal, raising the Social Security tax on the working poor would not be wise. I have read where some liberals want to eliminate the payroll tax altogether below a certain income, Just saying.

Yeah, understand what you mean. My point was just that someone's excuse that syphoning money out of income taxes was the purpose of SS is ridiculous.

 

[BluesLegend]

It's no wonder that leftists hate the concept of folks managing their own retirement funds. They have NO CLUE how to read a prospectus, determine value, or figure out how stuff works.. Or when they are being scammed.

They really DO need help..

If I could manage the $18,000 I was forced to contribute to Social Security this year I'd still have it, instead the government spent all MY money as soon as the check cleared. And they are worried I might lose 10% investing it in the stock market, what vs the government spending every last penny? How is the government protecting my money when they spend it all, seriously WTF.

 

[Toro]

I didn't read the OP.

Next!

I've spent nearly 20 years working in the pension industry, and know more about how SS works than everyone here combined multiplied by 10.

I read your OP. You make some relevant points. Ultimately, as it is configured, SS is unsustainable. It won't pay out all that is promised.

Having said that, you - and most others - misunderstand the nature of SS. It essentially is a pension plan that invests 100% of its assets in government debt. The economic nature of SS is no different than a mutual fund offered by Fidelity, Federated or T Rowe Price that invests in government Treasury bills, notes and bonds. No more, no less. The one and only difference is that the liabilities are not transferable, and can be altered through legislation, effectuating a "default" by changing the eligibility of SS receipts.

 

[Toro]

It's no wonder that leftists hate the concept of folks managing their own retirement funds. They have NO CLUE how to read a prospectus, determine value, or figure out how stuff works.. Or when they are being scammed.

They really DO need help..

If I could manage the $18,000 I was forced to contribute to Social Security this year I'd still have it, instead the government spent all MY money as soon as the check cleared. And they are worried I might lose 10% investing it in the stock market, what vs the government spending every last penny? How is the government protecting my money when they spend it all, seriously WTF.

Before I started working in the pension industry, I was a retail stock broker.

Most individuals have no clue - zero, zip, nada - how to invest.

There is an ideological belief amongst a section of the American population that the government can never do better than the individual. Having spent over 20 years in capital markets, I believe that this belief is dead fucking wrong. Most people would be better keeping their retirement in SS than investing themselves, just like most people should listen to what their doctor says rather than prescribing their medical maladies themselves.

Having said that, I do think that individuals should have the right to manage their retirement if they want. SS should be managed as a professional pension fund, like the Canada Pension Plan. And if people think they can do better than the professionals - and 99.9% of people cannot - then they should have the right to do so.

 

[Freewill]

Didn't the executives at Enron go to jail for this type of behavior?

Actually no. But thanks for playing.

Actually yes. How old are you?

Old enough to know the difference. What the guys at Enron did was to intentionally deceive their investors and shareholders, hiding the company's debts while creating an artificial image of profitability. That is not what happens with the SS Trust. All assets and debts are reported. Hence why the debt figure is $18, despite the fact that a sizable part of that is merely intra governmental loans.

Since the SS administration reports that receipts are greater then expense and the asset of the SS trust fund has increased for a good many years. If the government didn't "borrow" the money would that mean it would just be borrowed from someone else, or the federal government would go belly up?

Investing in US securities was and still seems to be a good investment whether you or SS is the one investing. Unfortunately the debt has risen too far I am afraid the US government has no were to go but default. Then the screwing really begins.

 

[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.

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.

Yes, the government legally requires itself to spend the money instead of saving it and so there is no actual trust fund. that was clever of them

Do you have any clue how many trust funds, retirement plans, pension funds, IRA's, 401K's, 403B's, etc., etc.,

have all or part of their money invested in US treasuries?

No, you probably don't because you're retarded.

SS is NOT invested in US treasuries. The Trust fund holds only "intragovernmental IOUs".. There IS a difference.

The is a difference; however that difference is basically that special issue investments cannot be sold to a third party. They are issued by the U.S. Treasury and backed by the full faith and credit of the federal government. Special interest investments bear interest determined by a different formula than traded T. bonds.

The scare nonsense designed by right wingers in hopes of getting voters to agree to abolish Social Security is both dishonest and pathetic. Social Security is the most popular government program in the history of the country. Carping about it is a suicide move for an elected politician but a popular trope for demagogues seeking to whip up the know-nothing base of the GOP.

They are not Treasury Bonds. The file cabinet holding the "trust fund" is full of book keeping entries for "intragovernmental transfers".. Essentially an IOU. But the MAIN distinction is when YOU buy a "govt backed security" -- the taxpayers pay for that ONCE with interest.

When the govt STEALS the SS tax surplus and issues an IOU -- the taxpayers pay TWICE for the same benefit which includes both the principle and BOTH sets of interest...

And "my goal" --- if I have one -- is to just get folks to realize that Govt can't be trusted with Trust Funds or Universal anything. Because eventually SS will be turned from a UNIVERSAL insurance program into a welfare benefit. I have no aim to destroy the contract that's be made so far -- but the citizens need to hold the thieves accountable..