|
|
Post by aztecwin on Jul 31, 2010 8:12:16 GMT -8
I wonder who to believe? The one that says a surplus is a surplus even though there are no assets in the account (just good faith and credit  ) or one that says while taxes can fund current SS commitments for now, but when the demand really kicks in, the treasury (read that - the tax payer) will have to cough up trillions that are not currently in the tax equation? www.heritage.org/Research/Reports/2004/09/Misleading-the-Public-How-the-Social-Security-Trust-Fund-Really-WorksWhy the Social Security Trust Fund Differs from Real Trust Funds. Private-sector trust funds invest in real assets ranging from stocks and bonds to mortgages and other financial instruments. However, the Social Security trust funds are only "invested" in a special type of Treasury bond that can only be issued to and redeemed by the Social Security Administration. As the Congressional Research Service noted in a report on May 5, 1998: "When the government issues a bond to one of its own accounts, it hasn't purchased anything or established a claim against another entity or person. It is simply creating a form of IOU from one of its accounts to another." According to the Office of Management and Budget under the Clinton Administration in 1999: "These [trust fund] balances are available to finance future benefit payments and other trust fund expenditures--but only in a bookkeeping sense. These funds are not set up to be pension funds, like the funds of private pension plans. They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury, that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. [Emphasis added.]" In short, the Social Security trust fund is really only an accounting mechanism. The trust fund shows how much the government has borrowed from Social Security, but it does not provide any way to finance future benefits. The money to repay the IOUs will have to come from taxes that are being used today to pay for other government programs. For that reason, the most important date for Social Security is 2018, when taxpayers must begin to repay the IOUs, not 2042, when the trust fund is exhausted. Social Security's financial crisis will begin far sooner than many politicians claim. In less than three years, the first baby boomer will reach retirement age. Once that happens, Social Security (and Medicare) will be on a slippery slope toward insolvency. While Social Security can continue to use its tax receipts to pay full retirement benefits until 2018, Congress cannot wait that long to act. Misleading the public into believing that Social Security is secure until 2042 or beyond will only make the impending crisis more difficult to avoid. Furthermore, huge impending deficits are only one of the problems facing Social Security. The sad reality is that millions of workers receive a dismal rate of return on their Social Security retirement taxes. Making matters worse, the current program does not enable workers to build up investments and cash savings to supplement their monthly Social Security checks. The debate about Social Security's future should be about how to improve each American's personal retirement security and how to enable each American to build a nest egg for the future. Otherwise, Americans will lose a real opportunity to improve the lives of future retirees. The best way to fix Social Security is to provide younger workers with the opportunity to invest part of their Social Security taxes in personal retirement accounts.
I don't know about you, but half of my 401k is in those "no asset accounts "(government treasuries) as you so blithely refer to them. I have noted also the fact that my government securities have consistently paid interest for the twenty years I have invested in them. "The best way to fix Social Security is to provide younger workers with the opportunity to invest part of their Social Security taxes in personal retirement accounts."I also have a private investment account based on the SP 500. It is about 26% less valuable than was. My last statement showed an overall loss in that portfolio of over 11% in a two month period (4/30 to 6/30). So. . .Just what guarantee can you make that all those young people will not lose their shirts before they retire? Keep in mind, if you will, that society will have to do something about them if they are all broke. The fact is that there must be a stable backstop to private investment. Most people do not have the expertise (I submit that the self proclaimed genius experts do not either.) to play the market with skill. You want to place the entire burden for survival on the individual person. Individuals who have already lost pensions, health insurance, unions, long term employment, seen their real incomes flatten and drop, had to send their wives to work, had to send their kids to ever longer periods of education, to remain economically where they were in 1970. Why in the hell do you think we coalesced into societies anyway if not to provide mutual support against risk and specialize survival functions? So, what the hell is all this for? Why do you think the United States was created? You think the patriots fought to allow 300,000,000 individuals to flounder on their own without the support of their fellow citizens? If that's true, national defense should be eliminated, since we are on our own anyway. If private investments crash then what? Can a society allow a major portion of its elderly to live in poverty? That is the situation as it was before social security was created. Oh, one other thing, if you think the elderly should be cast adrift, that is. Studies indicate that human society began to flower, guess when? When we began to take care of our elderly!!!". . .or one that says while taxes can fund current SS commitments for now, but when the demand really kicks in, the treasury" Taxes currently fund the current payments and surplus. The surplus was designed to cover the lower future contributions. Darn! You understand this, right? I know you do! Small adjustments will fix the shortfall. This issue can not be fully fleshed out in this kind of forum. You have to consider the return of bonds vs inflation. You have to look at well managed accounts vs the SP500. Very few managers can beat the SP500 in the long run, but they can take Conservative positions that smooth out dips at the expense of long term returns. One size and one answer does not fit all. I am glad that Waztec is happy with his approach. It is just that it would not be adequate for me. |
|
|
|
Post by waztec on Jul 31, 2010 8:35:43 GMT -8
"The one that says a surplus is a surplus even though there are no assets in the account (just good faith and credit ) "
I don't know about you, but half of my 401k is in those "no asset accounts "(government treasuries) as you so blithely refer to them. I have noted also the fact that my government securities have consistently paid interest for the twenty years I have invested in them. "The best way to fix Social Security is to provide younger workers with the opportunity to invest part of their Social Security taxes in personal retirement accounts."I also have a private investment account based on the SP 500. It is about 26% less valuable than was. My last statement showed an overall loss in that portfolio of over 11% in a two month period (4/30 to 6/30). So. . .Just what guarantee can you make that all those young people will not lose their shirts before they retire? Keep in mind, if you will, that society will have to do something about them if they are all broke. The fact is that there must be a stable backstop to private investment. Most people do not have the expertise (I submit that the self proclaimed genius experts do not either.) to play the market with skill. You want to place the entire burden for survival on the individual person. Individuals who have already lost pensions, health insurance, unions, long term employment, seen their real incomes flatten and drop, had to send their wives to work, had to send their kids to ever longer periods of education, to remain economically where they were in 1970. Why in the hell do you think we coalesced into societies anyway if not to provide mutual support against risk and specialize survival functions? So, what the hell is all this for? Why do you think the United States was created? You think the patriots fought to allow 300,000,000 individuals to flounder on their own without the support of their fellow citizens? If that's true, national defense should be eliminated, since we are on our own anyway. If private investments crash then what? Can a society allow a major portion of its elderly to live in poverty? That is the situation as it was before social security was created. Oh, one other thing, if you think the elderly should be cast adrift, that is. Studies indicate that human society began to flower, guess when? When we began to take care of our elderly!!!". . .or one that says while taxes can fund current SS commitments for now, but when the demand really kicks in, the treasury" Taxes currently fund the current payments and surplus. The surplus was designed to cover the lower future contributions. Darn! You understand this, right? I know you do! Small adjustments will fix the shortfall. This issue can not be fully fleshed out in this kind of forum. You have to consider the return of bonds vs inflation. You have to look at well managed accounts vs the SP500. Very few managers can beat the SP500 in the long run, but they can take Conservative positions that smooth out dips at the expense of long term returns. One size and one answer does not fit all. I am glad that Waztec is happy with his approach. It is just that it would not be adequate for me. Win, I invest conservatively, because I do not trust business. I do not trust the people who run business. I do not trust the stock market. I am at a disadvantage in the stock market, because people I distrust control it. I invest holding my nose (and bowels), because I have no choice. I live with the urge to get out completely as a constant mental companion. I realize that business and profits are good, after all that is what I have been taught. But in a room full of those geniuses, I keep my hand on my wallet. In my opinion, investment is analogous to war. If more people viewed the stock market that way they would lose less money. There are winners and losers. And, with astonishing frequency, the same people always win and the same people always lose. When in a pool with sharks it is best to have some protection. |
|
|
|
Post by ptsdthor on Jul 31, 2010 8:44:58 GMT -8
"The one that says a surplus is a surplus even though there are no assets in the account (just good faith and credit ) "
I don't know about you, but half of my 401k is in those "no asset accounts "(government treasuries) as you so blithely refer to them. I have noted also the fact that my government securities have consistently paid interest for the twenty years I have invested in them. Does anything in your comment refute the fact that there is either going to be a crush of new taxes, or huge new debt, or reductions in payments (or all three) when the demand for SS exceeds the current SS tax collection run rate and there is actually nothing in the surplus but IOUs? I'm all for doing good for the public and that was not really the issue here. For me, it was the irresponsibility on how the US funds the SS Trust fund (or defunds it with IOUs) and over commits the long term pay-out by making it an entitlement where many receive benefits without having put in a dime. It is a Ponzi scheme and I guess some say a screwed up system is better than nothing. I agree but why settle? Oh year, I forgot... Congress and a President would actually have do something smart.
". . .a crush of new taxes"Just what is that? How do you know it will be a crush? If you consider it something like raising the income limitation, gradually or means testing, the adjustments are relatively small, for the benefit we all receive. At the very worst the current contributions will cover most of the expense. I do not buy the deficit at all. It can be managed. Clinton had us in a surplus. Old "belt buckle" "P'd" it away to people who were already inordinately benefiting from societies move away from mutual support and with the dumbest war in our history. The debt argument is a feint to cover the real objective and that is to reduce the size of government. The one remaining entity, I might add, the others have been taken away, who ostensibly acts for the benefit of its citizens. If you think business looks out for citizens, you're smoking something. A Ponzi scheme -federal treasury securities? The investment vehicle that the world still loves because they are safer than stocks? That Ponzi scheme? If its a Ponzi scheme, then there are a lot of people, in addition to Social security beneficiaries who will be screwed. Maybe, the real Ponzi scheme is the stock market. A crush of new taxes for the SS Ponzi Scheme will accompany a crush of new taxes to fund the national debt along with a crush of new taxes to fund Obamacare (which is structurally underfunded). Add to that how new taxes will systemically retard economic growth an I'm sure you might think the tax burden will all be as light as a feather. For you perhaps, but not for the young family trying to get ahead, etc. doomed to be forever on the Fed's treadmill. Yes, Federal taxes are paid with the threat of jail looming. So in one sense, the SS Ponzi Scheme is more stable than the Stock Market. Profound... |
|
|
|
Post by waztec on Jul 31, 2010 9:47:21 GMT -8
". . .a crush of new taxes"Just what is that? How do you know it will be a crush? If you consider it something like raising the income limitation, gradually or means testing, the adjustments are relatively small, for the benefit we all receive. At the very worst the current contributions will cover most of the expense. I do not buy the deficit at all. It can be managed. Clinton had us in a surplus. Old "belt buckle" "P'd" it away to people who were already inordinately benefiting from societies move away from mutual support and with the dumbest war in our history. The debt argument is a feint to cover the real objective and that is to reduce the size of government. The one remaining entity, I might add, the others have been taken away, who ostensibly acts for the benefit of its citizens. If you think business looks out for citizens, you're smoking something. A Ponzi scheme -federal treasury securities? The investment vehicle that the world still loves because they are safer than stocks? That Ponzi scheme? If its a Ponzi scheme, then there are a lot of people, in addition to Social security beneficiaries who will be screwed. Maybe, the real Ponzi scheme is the stock market. A crush of new taxes for the SS Ponzi Scheme will accompany a crush of new taxes to fund the national debt along with a crush of new taxes to fund Obamacare (which is structurally underfunded). Add to that how new taxes will systemically retard economic growth an I'm sure you might think the tax burden will all be as light as a feather. For you perhaps, but not for the young family trying to get ahead, etc. doomed to be forever on the Fed's treadmill. Yes, Federal taxes are paid with the threat of jail looming. So in one sense, the SS Ponzi Scheme is more stable than the Stock Market. Profound... As I said, my government securities are up three percent or so and safe, while my stock investments are down 26% and they are unsafe. The proof, is in the numbers. So, yes, my distrust of business leaders is profound as is my distrust for the real motives hidden within conservative thought. I have not been served well by either. |
|
|
|
Post by aztecwin on Jul 31, 2010 10:17:25 GMT -8
This issue can not be fully fleshed out in this kind of forum. You have to consider the return of bonds vs inflation. You have to look at well managed accounts vs the SP500. Very few managers can beat the SP500 in the long run, but they can take Conservative positions that smooth out dips at the expense of long term returns. One size and one answer does not fit all. I am glad that Waztec is happy with his approach. It is just that it would not be adequate for me. Win, I invest conservatively, because I do not trust business. I do not trust the people who run business. I do not trust the stock market. I am at a disadvantage in the stock market, because people I distrust control it. I invest holding my nose (and bowels), because I have no choice. I live with the urge to get out completely as a constant mental companion. I realize that business and profits are good, after all that is what I have been taught. But in a room full of those geniuses, I keep my hand on my wallet. In my opinion, investment is analogous to war. If more people viewed the stock market that way they would lose less money. There are winners and losers. And, with astonishing frequency, the same people always win and the same people always lose. When in a pool with sharks it is best to have some protection. I understand that thinking. If what you pay most attention to is what happens on Wall Street, you would just bail out. I tend to be a little bolder than what you describe. I like conservative dividend paying stocks, some of which are Canadian Master Limited Partnerships and convertable issues. I would never advise someone to change what they are comfortable doing unless I wanted them to never talk to me again if something went wrong.  |
|
|
|
Post by aztecwin on Jul 31, 2010 10:21:15 GMT -8
A crush of new taxes for the SS Ponzi Scheme will accompany a crush of new taxes to fund the national debt along with a crush of new taxes to fund Obamacare (which is structurally underfunded). Add to that how new taxes will systemically retard economic growth an I'm sure you might think the tax burden will all be as light as a feather. For you perhaps, but not for the young family trying to get ahead, etc. doomed to be forever on the Fed's treadmill. Yes, Federal taxes are paid with the threat of jail looming. So in one sense, the SS Ponzi Scheme is more stable than the Stock Market. Profound... As I said, my government securities are up three percent or so and safe, while my stock investments are down 26% and they are unsafe. The proof, is in the numbers. So, yes, my distrust of business leaders is profound as is my distrust for the real motives hidden within conservative thought. I have not been served well by either. Where do you do your research for stock investment? I hope that 26% is a short term blip and not a reflection on how you do your research or get your advice. |
|
|
|
Post by waztec on Jul 31, 2010 12:32:23 GMT -8
As I said, my government securities are up three percent or so and safe, while my stock investments are down 26% and they are unsafe. The proof, is in the numbers. So, yes, my distrust of business leaders is profound as is my distrust for the real motives hidden within conservative thought. I have not been served well by either. Where do you do your research for stock investment? I hope that 26% is a short term blip and not a reflection on how you do your research or get your advice. The 26 percent loss is from the high in 2008 (?). My investments are pure SP500 and government securities. Like computer programming, I would rather rot in hell than manipulate stocks on my own. God, that would bore me to suicide. My 401 k does not offer that option, though, anyway. |
|
|
|
Post by aztecwin on Jul 31, 2010 15:07:18 GMT -8
Where do you do your research for stock investment? I hope that 26% is a short term blip and not a reflection on how you do your research or get your advice. The 26 percent loss is from the high in 2008 (?). My investments are pure SP500 and government securities. Like computer programming, I would rather rot in hell than manipulate stocks on my own. God, that would bore me to suicide. My 401 k does not offer that option, though, anyway. That would be an ultra conservative mix for me, but if you have a heavy enough weight in the S/P, it will work out for you I am sure. One way to look at your 401K and being in stocks is if your company match is enough to make that paltry return look good when you only consider your own money. Does that make sense? Your return on your own money becomes 6% rather than 3%. |
|
|
|
Post by tuff on Aug 6, 2010 6:49:23 GMT -8
The people that manage Social Security say that it is in the RED. More is going out than coming in. (Per AOL today).
|
|
|
|
Post by aztecwin on Aug 6, 2010 11:19:13 GMT -8
The people that manage Social Security say that it is in the RED. More is going out than coming in. (Per AOL today). The system must be changed soon. Raise retirement age and remove the cap on earnings. Someone has got to see that it should be taken out of the hands of government in the long run. First, get it on a solid base by making the retirement age go up farther and quicker than anyone would feel good about. |
|
|
|
Post by Yoda on Aug 6, 2010 19:23:52 GMT -8
Joe, you know all those rotton things that I say about the right wing nutcases? Well they apply equally well to you left wing nutcases.
Social Security is bankrupt and it isn't just Republicans who say so. Pretty much everybody says so. Check out the Concord Coalition website. That organization was started by Sen. Paul Tsongas and Sen. Warren Rudman -- a Democrat and a Republican respectively. When he ran for Presidents, Tsongas was replaced by Sen. Bob Kerrey. Always bi-partisan (technically non-partisan).
The Congressional Budget Office, also non-partisan, has been saying pretty much the same thing for 20 years.
Sorry, but it's real. In fact our unfunded federal liabilities dwarf our official national debt by a factor of five to seven, as I recall -- which is a way of saying that I don't recall but it's something in that range.
Yoda out...
|
|
|
|
Post by aztecwin on Aug 7, 2010 6:45:55 GMT -8
Joe, you know all those rotton things that I say about the right wing nutcases? Well they apply equally well to you left wing nutcases. Social Security is bankrupt and it isn't just Republicans who say so. Pretty much everybody says so. Check out the Concord Coalition website. That organization was started by Sen. Paul Tsongas and Sen. Warren Rudman -- a Democrat and a Republican respectively. When he ran for Presidents, Tsongas was replaced by Sen. Bob Kerrey. Always bi-partisan (technically non-partisan). The Congressional Budget Office, also non-partisan, has been saying pretty much the same thing for 20 years. Sorry, but it's real. In fact our unfunded federal liabilities dwarf our official national debt by a factor of five to seven, as I recall -- which is a way of saying that I don't recall but it's something in that range. Yoda out... Joe knows that! What we need is someone with the guts to make us face the issue. Another way of looking at what you are saying is that we need to face the reality of the unfunded future liability on an accrual basis to show that we really need to fund on a cash basis. |
|
|
|
Post by The Great Aztec Joe on Aug 8, 2010 17:11:33 GMT -8
The people that manage Social Security say that it is in the RED. More is going out than coming in. (Per AOL today). The system must be changed soon. Raise retirement age and remove the cap on earnings. Someone has got to see that it should be taken out of the hands of government in the long run. First, get it on a solid base by making the retirement age go up farther and quicker than anyone would feel good about. Total nonsense! Social Security is the proud holder of government bonds and notes. It is totally solvent and well financed including expected future borrowing. Remember the borrowed money is all free from the FED, the greatest invention since sliced onions and German brown mustard on a hamburger. |
|
|
|
Post by AztecBill on Aug 11, 2010 14:44:55 GMT -8
Rather than using SS to tax the rich some more, we could simply means test a portion of the benefits. Increase the retirement age of folks who fall into certain categories of income over their lifetimes. They are in position to bridge the gap between retirement and SS beginning. I would fall into the category of one who would have his SS retirement pushed back a few years and I have no problem with that being the solution.
There will be a lot of talk about SS bein a contract with our seniors. That is bull. It is not a contract because workers had no choice. It may have been a promise but it was a rather nebulous promise to begin with. Laws about 401K and IRA distribution can be changed to allow a bump early to help bridge the gap.
The reason I would rather "tax" the rich on the end rather than on going is the economic effect taxing has on the wealthy. When you are taxed sufficiently on success, it reduces the reward of risk. Money decisions are weighed using a risk/reward calculation (even if it is only intuited). When taxes are high, rewards are reduced and therefore risk is avoided more. Accepting risk is a very big driver of the economy. So high taxes reduces economic gain. Not having extra money ('cause it was taxed away) is also a part of that scenario, but one that is too emphasized at the expense of the major effect.
|
|
|
|
Post by AztecBill on Aug 11, 2010 14:52:41 GMT -8
The system must be changed soon. Raise retirement age and remove the cap on earnings. Someone has got to see that it should be taken out of the hands of government in the long run. First, get it on a solid base by making the retirement age go up farther and quicker than anyone would feel good about. Total nonsense! Social Security is the proud holder of government bonds and notes. It is totally solvent and well financed including expected future borrowing. Remember the borrowed money is all free from the FED, the greatest invention since sliced onions and German brown mustard on a hamburger. But to pay the bonds the government must tax or print. So it is exactly like having no bonds at all since the government is responsible for both. The government took the extra money and spent it on other stuff. The government has no method of recovering that money other than taking it (one way or another) from the same people who in-trusted them with the first big pot of money. If the government never over-taxed SS payers, we would be in exactly the same situation in SS. When we start to owe more money than is taxed, the government must make up the difference. Having or not having Bonds makes no difference at all. Over taxing SS payers simply gave the government a new source of funds to spend - and they did. |
|
|
|
Post by Yoda on Aug 11, 2010 15:41:28 GMT -8
If the government never over-taxed SS payers, we would be in exactly the same situation in SS. When we start to owe more money than is taxed, the government must make up the difference. Having or not having Bonds makes no difference at all. Over taxing SS payers simply gave the government a new source of funds to spend - and they did. I'm not sure I follow but it gives me an excuse to say something that may or may not be in conflict with your point (which I will re-read later). One of the problems with Social Security is that the Government has historically been much better about giving benefits than it has been about increasing "premiums" to pay for those benefits. The total benefits received are not anywhere near being actuarially justified by the amounts collected. It may well have been until the mid-60's when benefits were indexed to inflation -- but premiums were not. But especially early recipients received benefits that were several multiples of what was actuarially justifiable. Yoda out... |
|
|
|
Post by The Great Aztec Joe on Aug 12, 2010 6:52:31 GMT -8
Total nonsense! Social Security is the proud holder of government bonds and notes. It is totally solvent and well financed including expected future borrowing. Remember the borrowed money is all free from the FED, the greatest invention since sliced onions and German brown mustard on a hamburger. But to pay the bonds the government must tax or print. So it is exactly like having no bonds at all since the government is responsible for both. Remember, the FED can and will dismiss all of the US debt that they hold if I am elected President. I can easily see Seven Trillion Dollars of debt dismissed overnight. It is a wonderful system we have created. Conservatives do not understand it, but Born Again Liberals like me can see it perfectly clear. |
|
|
|
Post by aztecwin on Aug 12, 2010 10:38:20 GMT -8
If the government never over-taxed SS payers, we would be in exactly the same situation in SS. When we start to owe more money than is taxed, the government must make up the difference. Having or not having Bonds makes no difference at all. Over taxing SS payers simply gave the government a new source of funds to spend - and they did. I'm not sure I follow but it gives me an excuse to say something that may or may not be in conflict with your point (which I will re-read later). One of the problems with Social Security is that the Government has historically been much better about giving benefits than it has been about increasing "premiums" to pay for those benefits. The total benefits received are not anywhere near being actuarially justified by the amounts collected. It may well have been until the mid-60's when benefits were indexed to inflation -- but premiums were not. But especially early recipients received benefits that were several multiples of what was actuarially justifiable. Yoda out... I am not sure what you are refering to, but you are absolutely right! |
|
) or one that says while taxes can fund current SS commitments for now, but when the demand really kicks in, the treasury (read that - the tax payer) will have to cough up trillions that are not currently in the tax equation?
