USA's Future - UK budget cuts of £81bn announced

[Pie Floater]

On a related note: why are French high school students rioting over the decision to raise the retirement age from 60 to 62?

Reactions To Austerity: Passivity In The UK, Strikes And Riots In France | NEWS JUNKIE POST

Because they don't want their parents retired and at home during the day to discover what a "student" actually does: skip school and have parties at home with sex and drugs. They're angry because they want the age moved to 70.

I'd riot also.

 

[haha]

I didn't know the right to vote was determined by whether you paid any federal income tax.

And that is the biggest part of the problem.

 

[Pie Floater]

In the UK, elected officials have almost no power because the real power is the civil service heads. In case you have never watched "Yes, Minister" then I'd recommend it highly, evidently even Obama watches it, heh heh.

Taxation

Obama, yes, minister too funny.

 

[Pie Floater]

Social Security running out of money!

"She imagines a new kind of guaranteed account, where the government would guarantee that beneficiaries receive a certain rate of return on their investments."

Well, I'm just a step ahead I guess, way to go Pie Floater.

 

[Hobo]

It really doesn't matter if they were comingled or not... the only difference is the reported defecit...


If you comingled, and you say you have a $100 defecit... with $20 of excess SS... the total spending was $120... with an IOU to SS...

Now, do not comingle... you have a $120 defecit... but that $20 has to be invested somewhere... which will be Treasuries... sooo, total spending is $120 with an IOU to SS...

Talking about putting money aside etc. is meaningless unless we have an option to invest that money where we want.... any other way is the same in the end...

That is an important point and I hope people understood it.

Social Security is NOT part of the Federal Budget. Technically, SS is a separate fund and is NOT co-mingled with the Federal Budget. Right now, Social Security more than pays for itself and runs a surplus every year.

So what happens when SS has extra money in its pockets? They obviously don't want to keep it in cash. Instead, they buy interest bearing Treasury Notes, so the money can get a little interest income.

Now that's where the creative accounting comes in. Suddenly Congress has some extra revenue from the Treasury notes that SS has purchased. Congress can use this money just like it was any other form of income, but the debt doesn't show up on the Federal Deficit. It is free money to spend with a IOU to SS. But anyway you cut the cake, future tax payers are still must pay the money that Congress has borrowed from the SS fund. So call it co-mingle or call it separate fund, the same future tax payer must come up with the money to pay the debt when the time comes for SS to pay out future benefits.

SS would be better off buying casinos in Las Vegas as an investment so Congress can't get its hands on it. But the law prohibits that.

 

[Pie Floater]

{SNIP}

Suddenly Congress has some extra revenue from the Treasury notes that SS has purchased. Congress can use this money just like it was any other form of income, but the debt doesn't show up on the Federal Deficit. It is free money to spend with a IOU to SS. But anyway you cut the cake, future tax payers are still must pay the money that Congress has borrowed from the SS fund. So call it co-mingle or call it separate fund, the same future tax payer must come up with the money to pay the debt when the time comes for SS to pay out future benefits.

SS would be better off buying casinos in Las Vegas as an investment so Congress can't get its hands on it. But the law prohibits that.

So why not pass a law that all SS funds and interest earned thereon are property of the SS paying public, not a pig trough for politicians.

Simple solution, then SS becomes solvent forever and maybe even lowers the amount taxpayers are required to pay in, OR increase their payouts.

Simple. Safe. Effective.

 

[ziggy29]

Right now, Social Security more than pays for itself and runs a surplus every year.

I believe I've read that in this recession, that is no longer the case. Between fewer workers paying in and laid-off folks in their 60s applying for benefits because they've given up on finding a job, I believe we just recently started paying out more than we're taking into the program. That may temporarily reverse itself for a few short years if the job market improves, but then again, maybe not.

 

[FIREd]

On a related note: why are French high school students rioting over the decision to raise the retirement age from 60 to 62?

Once again, the vast majority of students is not rioting over the reform. Most rioters, many of whom are probably not even students, are fringe elements with ulterior motives who infiltrate the demonstrations to create chaos under cover from the crowd.

Still, high school students have no legal right to strike in France. So why are they on the street? That's what happens when you put highly unionized workers (teachers) in charge of your kid's education. I know from experience. I demonstrated in the 1980's as a high school student. I don't remember what it was all about. I just remember I didn't want to be there. But the teachers said our future (and particularly theirs I'm sure) was on the line, and all my friends were going, so I went. French TV was interviewing some of those kids yesterday and it was clear to me that they only had a vague idea what they were demonstrating against. They are obviously being manipulated. After all, the students didn't join the demonstrations until the irresponsible leaders of the socialist party (the puppet master of the teachers' unions) urged them to do so. That's right. A political "leader" told them it was OK to skip class.

 

[Gone4Good]

So why not pass a law that all SS funds and interest earned thereon are property of the SS paying public, not a pig trough for politicians.

Simple solution, then SS becomes solvent forever and maybe even lowers the amount taxpayers are required to pay in, OR increase their payouts.

Simple. Safe. Effective.

Good solution. But seeing as how the current fund has zero assets other than IOUs to ourselves, we'd have to reset everyone's benefit accordingly.

 

[Pie Floater]

Good solution. But seeing as how the current fund has zero assets other than IOUs to ourselves, we'd have to reset everyone's benefit accordingly.

Part of the solution would be "immediate" payback of all IOUs from the General Fund.

Why should SS be penalized for being robbed?

 

[Gone4Good]

Part of the solution would be "immediate" payback of all IOUs from the General Fund.

Why should SS be penalized for being robbed?

OK. Where's that money going to come from?

 

[ziggy29]

OK. Where's that money going to come from?

Frankly, to the extent possible I'd rather go on a one-time debt binge to convert future unfunded liabilities into pay-as-you-go programs, and then pay that down moving forward. And then -- stop creating programs that establish new future unfunded liabilities.

 

[MasterBlaster]

That Social Security is NOT part of the Federal Budget. Technically, SS is a separate fund and is NOT co-mingled with the Federal Budget.

That just isn't true, we have a unified budget where everything gets lumped together.

You can thank Lyndon Johnson for that. In 1968 they put SS and the regular budget accounting together into a "Unified" budget. Before that SS was accounted for separately.

 

[Emeritus]

but the debt doesn't show up on the Federal Deficit. .

Debt never shows up on the deficit, which is a statement of income and expenses. Interest on the debt shows up in the deficit.

You balance debt against assets

 

[Pie Floater]

Frankly, to the extent possible I'd rather go on a one-time debt binge to convert future unfunded liabilities into pay-as-you-go programs, and then pay that down moving forward. And then -- stop creating programs that establish new future unfunded liabilities.

This response to Gone4Good's question on "Where is the money going to come from.", is exactly how I feel also. If we can come up with $680 BILLION to fund bailouts for private industry, let's cut that crap and put that money where it is owed, and that is Social Security IOUs.

 

[TromboneAl]

I know from experience. I demonstrated in the 1980's as a high school student. I don't remember what it was all about.

I demonstrated in the '60s as a high school student. I remember what it was about, i just I can't remember her name.

 

[Hobo]

That just isn't true, we have a unified budget where everything gets lumped together.

You can thank Lyndon Johnson for that. In 1968 they put SS and the regular budget accounting together into a "Unified" budget. Before that SS was accounted for separately.

Sorry, I misstated that. The money paid into SS is being held in the Social Security Trust Fund. All the benefits and administrative costs are paid out of the Trust Fund. Over the years more money has been paid into the Trust Fund than has been paid out. That mean the Trust Fund has a nice extra bunch of money, right?

Wrong! By law, all of the extra money must be used to buy Treasury securities. From the Trust Fund's point of view, "Investment in [Treasury securities] gives the trust funds the same flexibility as holding cash." Trust Fund FAQs

That extra money poured from the SS Trust Fund does show up in the Federal Budget as a revenue - and Congress feels free to spend it. But, at some point Congress must pay the money back to the Trust Fund. Given the size of our Federal Deficit, paying back that money is going to be very difficult.

 

[MasterBlaster]

But, at some point Congress must pay the money back to the Trust Fund.

I (and nearly everyone else watching) suspect that congress will renege on the trust fund promises. In the big scheme of things Social Security will have to scramble for resources just like every other federal program. It doesn't make sense to fully fund one program while other needs go wanting.

Social Security doesn't live in a bubble.

 

[Pie Floater]

I (and nearly everyone else watching) suspect that congress will renege on the trust fund promises. In the big scheme of things Social Security will have to scramble for resources just like every other federal program. It doesn't make sense to fully fund one program while other needs go wanting.

Social Security doesn't live in a bubble.

Not sure if living in a bubble is what I support for Social Security but it is one pot of money that was contributed as tax by taxpayers (no matter how naive) who expected the money to be used for their future benefits.

Money contributed to the General Tax Fund via income tax was paid with no expectation other than to be used to support providing for the common good of the country. That "common good" should have been commensurate with funds available and it's own budget adhered to and used responsibly, it was not. It went to every whim of pork barrel, vote pandering, and saber rattling program that benefited politicians.

I want my Social Security.

 

[MasterBlaster]

Not sure if living in a bubble is what I support for Social Security but it is one pot of money that was contributed as tax by taxpayers (no matter how naive) who expected the money to be used for their future benefits.

Money contributed to the General Tax Fund via income tax was paid with no expectation other than to be used to support providing for the common good of the country. That "common good" should have been commensurate with funds available and it's own budget adhered to and used responsibly, it was not. It went to every whim of pork barrel, vote pandering, and saber rattling program that benefited politicians.

What you say is true. No argument from me

Still we have to live in the real world.

 

[Pie Floater]

What you say is true. No argument from me

Still we have to live in the real world.

I don't mind living in the real world but I'm hoping to help change it to be more responsible with respect to obligations and promises to the taxpayer.

Wish me luck, and since my Congress-person is not up for reelection this year, I am simply sending him a note saying, "I am hoping to see action on your part to address the problems of Social Security." And since I give a nice check to his office yearly, I hope he wont expect that in 2012 if he does nothing.

 

[Texas Proud]

I don't mind living in the real world but I'm hoping to help change it to be more responsible with respect to obligations and promises to the taxpayer.

Wish me luck, and since my Congress-person is not up for reelection this year, I am simply sending him a note saying, "I am hoping to see action on your part to address the problems of Social Security." And since I give a nice check to his office yearly, I hope he wont expect that in 2012 if he does nothing.

All House seats are up for election... you can vote for them....

 

[travelover]

.............. And since I give a nice check to his office yearly, I hope he wont expect that in 2012 if he does nothing.

I'd be interested in what you consider a "nice check". Since corporations (and foreign governments through corporations), labor unions, the Chamber of Commerce, etc can give unlimited cash to fund campaigns now, unless your check has 6 zeros or more your congressman is laughing at you and your check.

 

[HFWR]

I'd be interested in what you consider a "nice check". Since corporations (and foreign governments through corporations), labor unions, the Chamber of Commerce, etc can give unlimited cash to fund campaigns now, unless your check has 6 zeros or more your congressman is laughing at you and your check.

Or, more likely, some low-level staff flunky...

 

[Pie Floater]

All House seats are up for election... you can vote for them....

Hmmmm, did you check Puerto Rico?