Hands off!

[73ss454]

I thought you guys might like to read this.


hands-off-that-lock-box: Personal Finance News from Yahoo! Finance

[donheff]

Summary: (in recognition of the concurrent links thread): Yahoo Finance is reminding the NY Times (which complained about lawmakers promissing to protect SS benefits) that the law places SS funds in a lock box - they can't be used for anything else.

You don't remember the 90s discussion correctly unless you pronounce it "lawk bawx." The reality is the trust fund will technically never be used for anything other than SS. The fund consists of IOUs from the Treasury. Even with any of the proposed reductions in benefits the ultimate costs will eventually burn up all those IOUs so no SS funds will have been diverted elsewhere. Besides laws can be changed as lots of folks around here are quick to remind us old age government pensioners

[travelover]

And by cleverly borrowing those funds from SS, we have had lower income taxes for years.

[pedorrero]

This is always an amusing concept...that there really are any assets in the so-called "trust fund." It's just an IOU. No asset, just the promise to provide benefits (and to tax, borrow, or print as necessary.) The problem is not just that the seed corn has been eaten, but that the U.S. Government has sold our production forward on the futures markets

[Independent]

Since Congress can change the law any time it wants to, saying that some future change would be "against the law" is kind of meaningless.

We know that the SS tax hikes in the 1980s resulted in SS taxes exceeding benefits. We know that this excess would accumulate to more than $2 trillion today if we accumulate the numbers at the federal borrowing rate. We also know that money was spent, and/or used to fund FIT cuts, and/or used to reduce borrowing from the public. There is no "lock box" as most of us would use that term.

[travelover]

Quote:

Originally Posted by Independent Since Congress can change the law any time it wants to, saying that some future change would be "against the law" is kind of meaningless. We know that the SS tax hikes in the 1980s resulted in SS taxes exceeding benefits. We know that this excess would accumulate to more than $2 trillion today if we accumulate the numbers at the federal borrowing rate. We also know that money was spent, and/or used to fund FIT cuts, and/or used to reduce borrowing from the public. There is no "lock box" as most of us would use that term.

Correct. We also knew full well that a huge bunch of baby boomers would be along shortly to want to collect on both SS and Medicare and any "surplus" was in fact necessary to take care of that swelling need. My question is, Did government act responsibly? My take on it is that they did not.

[winger]

Let's say revenues were put in a lock-box in 1980. If we assume inflation of 3% a year, isn't today's value of those funds down 90% (or so)?

[BUM]

ss benefits are important to me since those and medicare are all I'll likely get.


59 and worried

[youbet]

Quote:

Originally Posted by travelover Did government act responsibly? My take on it is that they did not.

Here in Illinois, the general consensus is that the gov't has never acted responsibly. If you're on the right team, Da Machine Team, you like that. If not, you hate it. But regardless of how you feel, those gov't folks are always irresponsible if not criminal. Why should the feds be different?

[yakers]

Quote:

Originally Posted by youbet Here in Illinois, the general consensus is that the gov't has never acted responsibly. If you're on the right team, Da Machine Team, you like that. If not, you hate it. But regardless of how you feel, those gov't folks are always irresponsible if not criminal. Why should the feds be different?

Feds are a bit different, in the early 80s went to a 401k type retirement W/SS Vs defined benefit. Probably was a good idea in the long run. I wonder why state & local govts didn't do the same, would probably not have cost any more at the time.