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Old 06-30-2010, 11:01 AM   #81
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The amount of money that SS has in bonds is not enough to pay all current or future liabilities that have already accrued.... in the private sector... they are supposed to have that amount invested.. most private pensions could pay 80ish % of their benefits if the plan stopped... SS (and this is a big guess) could probably pay 5 to 10%... maybe less....

That is what I mean by funded...
OFGS Corporate stock is just a right to a future stream of income. If you want to compare SS to a private fund SS taxes are an "asset" "owned" by SS. That is a right to a future income stream which even under the worst assumptions is over 70 % of future obligations.
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Old 06-30-2010, 11:01 AM   #82
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Originally Posted by samclem View Post
Yes and no. The government has spent the money, but SS got government bonds in exchange. What did people expect to be done with the money in the "lock box"--piled up as currency in a big vault? Used to buy equities (making the government a stakeholder in American businesses--even more than they already are?). But, yes, now the taxpayers need to pay back those bonds, and that will mean more taxes.

Noo.. what I expected is that they do NOT count the 'profit' from SS to offset the 'loss' on the rest of the budget to make it look like the rest of the gvmt deficit was not as big as it really was.... we MIGHT have asked our gvmt officials to spend LESS so when it was time to pay off all those bonds we would not be in a pickle where going to the market for an additional $3 trillion would be laughed at...
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Old 06-30-2010, 11:12 AM   #83
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Noo.. what I expected is that they do NOT count the 'profit' from SS to offset the 'loss' on the rest of the budget to make it look like the rest of the gvmt deficit was not as big as it really was.... we MIGHT have asked our gvmt officials to spend LESS so when it was time to pay off all those bonds we would not be in a pickle where going to the market for an additional $3 trillion would be laughed at...
I'm guessing you're also not a supporter of the magic accounting whereby the huge increase in government spending on health care will somehow reduce the deficit (partly by counting inflows as "increased revenues" but by ignoring the later indebtedness the system countenances)?

The recent health care fight and funny math provide a close-at-hand example of the same tricks and gymnastics that let us get into trouble with SS. In comparison to Medicare and the new health care legislation, SS is a model of prudent, sober government financial stewardship. Which is scary.
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Old 06-30-2010, 11:16 AM   #84
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Noo.. what I expected is that they do NOT count the 'profit' from SS to offset the 'loss' on the rest of the budget to make it look like the rest of the gvmt deficit was not as big as it really was.... we MIGHT have asked our gvmt officials to spend LESS so when it was time to pay off all those bonds we would not be in a pickle where going to the market for an additional $3 trillion would be laughed at...
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.
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Old 06-30-2010, 12:08 PM   #85
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Isn't it nice that most of us are close enough to SS age that the government is afraid of changing anything that will affect us?
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Old 06-30-2010, 12:09 PM   #86
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Isn't it nice that most of us are close enough to SS age that the government is afraid of changing anything that will affect us?
True of anyone older than me. I suspect I'd get screwed while those only slightly older don't. That's what happens when I'm a few months too young to be a Boomer...
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Old 06-30-2010, 12:29 PM   #87
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Isn't it nice that most of us are close enough to SS age that the government is afraid of changing anything that will affect us?
At 62, I'd be really furious if they changed anything having to do with my SS (which I haven't yet claimed). I don't imagine they will change much, though I suppose they could lower the COL increases. Oh wait, they are 0.0% this year.

I'd worry if I was younger than 55, though.
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Old 06-30-2010, 12:42 PM   #88
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At 62, I'd be really furious if they changed anything having to do with my SS (which I haven't yet claimed). I don't imagine they will change much, though I suppose they could lower the COL increases. Oh wait, they are 0.0% this year.

I'd worry if I was younger than 55, though.
None of the suggested changes will happen any time soon. If you "means test" social security you have to eliminate the caps on earnings, the focus on earned rather than total income and the benefits for non working spouses. None of these is relevant to a means tested welfare program for the elderly. Taxing all income at the SS rate and eliminating "unearned" spousal benefits would solve all the SS system problems without any other change.

What GOP type is going to tax the "rich" i.e. those receiving unearned income and income over the cap to support the means tested elderly?

Not to mention this proposal would be a "kick in the teeth" to all LBYM savers.
It's a non starter


This is why IMHO its all political hot air.
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Old 06-30-2010, 02:21 PM   #89
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The SSA has a report with more than you ever wanted to know about funding here:
2009 Trustees Report: Section II.D, Projection
Some charts from it

Trust fund to expenditure ratio


Income and cost as percent of taxable payroll


and the one I was looking for, income less cost


this one is a goody, workers per beneficiary


And projected dates for running out of money
SS.gif
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Old 06-30-2010, 03:29 PM   #90
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Isn't it nice that most of us are close enough to SS age that the government is afraid of changing anything that will affect us?
Enjoy your champaign. Hopefully there will be half a glass of water left in the system when I am old enough to sign up.
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Old 06-30-2010, 03:30 PM   #91
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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.
Yes, and I have never forgiven him for it. It is the old Guns and butter problem. Johnson wanted the Great Society and the Vietnam war and resorted to accounting chicanery to get it done. We have been suffering the consequences ever since.
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Old 06-30-2010, 03:30 PM   #92
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SOOO,

Looking at the report... if we said 'lets stop this NOW'... the heck with everybody...

There appears to be $2 trillion at the end of 2008... they are paying out over $0.5 trillion... so in 4 years there would not be any more money for ANYBODY...

Now.. the unfunded liability is "However, given a proper understanding of Social Security’s current unfunded liabilities—variously estimated at from$4
trillion to $11 trillion"

This is why I call it a Ponzi scheme....
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Old 06-30-2010, 03:35 PM   #93
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I'm guessing you're also not a supporter of the magic accounting whereby the huge increase in government spending on health care will somehow reduce the deficit (partly by counting inflows as "increased revenues" but by ignoring the later indebtedness the system countenances)?

The recent health care fight and funny math provide a close-at-hand example of the same tricks and gymnastics that let us get into trouble with SS. In comparison to Medicare and the new health care legislation, SS is a model of prudent, sober government financial stewardship. Which is scary.

IMO, the new heath care plan is different than SS... for a good while now, SS has been running a true surplus... the gvmt was taking in more than it was spending... the problem is that the rest of the gvmt was spending that surplus and giving SS an IOU... but that IOU was not counted toward the deficiet or the debt.. so when they said 'we will have a balanced budget'.... that was only because they ran a surplus on SS...

In the coming years... SS wants their money back... so what agency is going to reduce their spending so we can have a balance budget again NONE... they will go out and borrow the money... and maybe even split the accounting again so the deficiet does not look as bad....



As for health care... they could have raised taxes without paying out so much and paid off the debt... saying otherwise is just lying...
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Old 06-30-2010, 03:41 PM   #94
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I believe this is true
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so when they said 'we will have a balanced budget'.... that was only because they ran a surplus on SS...
but is it true that the Treasuries held by the SSA do not count toward the commonly reported total debt?
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the problem is that the rest of the gvmt was spending that surplus and giving SS an IOU... but that IOU was not counted toward the deficiet or the debt..
It may well be another bit of trickery. I hope not.
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Old 06-30-2010, 03:42 PM   #95
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Isn't it nice that most of us are close enough to SS age that the government is afraid of changing anything that will affect us?
....and we get senior citizen's discounts......

Who knew it could be so much fun being closer to death?
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Old 06-30-2010, 03:43 PM   #96
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Income and cost as percent of taxable payroll

and the one I was looking for, income less cost


These charts assume that there is indeed a trust fund of which to draw money from. Conclusions drawn from that are unrealistic.

A more realistic chart would show that the unified US budget is in big trouble as the boomers retire. SS does not and will not operate in it's own little universe outside normal budget and debt service issues.

What is the verticle axis of the second graph - Is that trillions of dollars ? Notice the big negative slope starting around 2017. If my eyeball is calibrated correctly it looks like they are short around $500 billion a year forever just for SS starting then.

But that is just SS. Medicare/medicaid are the real issues going foreward. The are an order of magnitude harder to support than SS. Do you have the charts from them ?

cleraly these obligations are not sustainable - at any level of taxation. Big cuts and big tax increases are inevitable.
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Old 06-30-2010, 03:46 PM   #97
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....and we get senior citizen's discounts......

Who knew it could be so much fun being closer to death?
I couldn't resist

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Old 06-30-2010, 03:57 PM   #98
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IMO, the new heath care plan is different than SS... for a good while now, SS has been running a true surplus... the gvmt was taking in more than it was spending...
Take a look at the Long Term Care component of the new health care law. It's optional (so only those who are most likely to need it, and the ones most likely to pay in less than they take out. will sign up). The money taken in as premiums gets counted to reduce the annual budget deficit, even as it creates a tremendous unfunded "owed entitlement" years down the road. Just like SS.

That's part of the budget trickery by which the ten-year cost of health "reform" was driven down.

Link
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The Congressional Budget Office projected that for the program to be self-sufficient, average annual premiums would have to be $1,477, although the legislation provides for substantial price breaks -- with premiums as low as $5 a month -- for students and the poor. Actual premium levels will depend on factors in including your age at enrollment.
What will you get in return?
After paying in for at least five years and working at least three of those years, you'll get at least $50 per day if you need help with your daily care, and possibly more if your care needs are greater. That comes to $18,250 in annual benefits. If the average benefit was $75, as projected by the program's architects, that would come to $27,365 annually.
Does this sound sustainable? Private estimates say it won't be.

We haven't learned anything from the SS accounting mess.
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Old 06-30-2010, 03:59 PM   #99
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Ahhh...yes indeed Pink Floyd....

Brought back memories of sittin' around with a group of friends smokin' contemplating life....

...I just wish I could remember what we discovered...
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Old 06-30-2010, 04:39 PM   #100
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These charts assume that there is indeed a trust fund of which to draw money from. Conclusions drawn from that are unrealistic.
I do seem to remember that the Treasuries issued to the SSA are "special", but I don't know how special, and haven't researched it. They might be tricky.

However, I'm beginning to feel like I'm playing whackamole. Why are medicare, medicade, and health care reform suddenly popping up?

Back to the original subject...

Raising the retirement age may well indeed be a good long-term plan. However, based on the stuff I have read (referenced in an earlier post) on the SSA site, it doesn't seem like we will even start getting into trouble with SSA (other budget problems are aside) until 2020 or so.
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