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Old 06-04-2022, 04:21 PM   #41
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Originally Posted by USGrant1962 View Post
The 1983 amendments didn't fix SS for all time, and didn't claim to*. At the time, they fixed it into the 21st Century.

I found a the legislative history written in 1983 and it includes a projection table with Trust Fund drawdown starting just after 2020 - pretty darn accurate for a 39-year-old forecast. Look at page 45 (pg 43 in the pdf) https://www.ssa.gov/policy/docs/ssb/v46n7/v46n7p3.pdf

*EDIT - not to say a politician or two didn't say that - just that the legislation was clear that it was a ~40-year fix and I remember that from the day.
If I am reading this correctly, way back then they predicted the suplus would end right about now.

Amazing.
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Old 06-04-2022, 04:43 PM   #42
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If I am reading this correctly, way back then they predicted the suplus would end right about now.

Amazing.
Yup, it is almost like Congress and SSA use professional actuaries and financial analysts instead of SGOTI's opinion. Who knew?
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Old 06-04-2022, 04:55 PM   #43
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Yup, it is almost like Congress and SSA use professional actuaries and financial analysts instead of SGOTI's opinion. Who knew?
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Old 06-04-2022, 05:31 PM   #44
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No, they aren't good enough - too much single issuer risk. The funds should be invested in manner similar to other defined benefit plans (i.e. pension plans), across a variety of asset classes.

Would you suggest that a company that has its entire pension fund invested in debt instruments of that company would be doing its fiduciary duty? And yes, I *do* understand that government debt is different in that they have the power of taxation. The risk is still there - if the US $ at some point is no longer the reserve currency, then paying back $ to the trust fund might become meaningless if the currency has a severe devaluation (i.e. hyper-inflation).

But Koolau (and now others) has dared to say something about the emperors new clothes....so carry on talking about how great they look.
"too much single issuer risk"? That has to be the all-time silliest post of any that I have seen since joining in 2010... and I have seen some doozies. These are full faith and credit securities.... NO credit risk. Besides, do you really want the SSA investing in corporate bonds and stocks... with their decisions impacting supply and demand for corporate bonds and stocks... I just don't think that is a very bright idea at all.

I highly doubt that any judge would render a verdict that a pension plan manager was breaching its fiduciary duty if it invested all pension fund assets in U.S. Treasury securities. They don't because they are willing to take a little risk, get better returns which in turn reduce the amount of required pension plan contributions by the sponsor... the SSA doesn't have that incentive.

If you're really concerned on the USD as a reserve currency, how much of your total portfolio is in other than USD denominated assets?
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Old 06-04-2022, 05:39 PM   #45
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Yup, it is almost like Congress and SSA use professional actuaries and financial analysts instead of SGOTI's opinion. Who knew?
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But where is the fun in that!
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Old 06-04-2022, 05:46 PM   #46
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...Social Security was never supposed to be taxed. ...
Do you have any evidence to support that statement?

Social security was enacted in 1935. The taxability of benefits wasn't decided by Congress but by a pair of 1938 Treasury Department Tax Rulings and another in 1941. So while it is true that the Treasury initially decided not to tax social security, it is patently false to claim that Social Security was "never supposed to be taxed" since Congress didn't address taxation when it enacted social security in 1935.


I found this document from when Congress first considered taxing Social Security in 1979:

Quote:
... The present tax treatment of social security was established at a time when both social security benefits and income tax rates were low. In 1941 the Bureau of Internal Revenue ruled that social security benefits were not taxable, most probably because they were viewed as a form of income similar to a gift or gratuity.

The council* believes that this ruling was wrong when made and is wrong today. The right to social security benefits is derived from earnings in covered employment just as is the case with private pensions.

The council believes that the current tax treatment of private pensions is a more appropriate model for the tax treatment of social security, Pension benefits from contributory private pension plans (including those for government employees) are now taxed to the extent that the benefits exceed the employee's accumulated contributions to the plan. Cumulative retirement benefits up to the employee's own total contributions are not taxed because the income from which the contributions were paid was taxable. That part of the benefit representing the employer's contribution and interest income on both the employee's and the employer's contributions is taxed when received.

Estimates by the Office of the Actuary of the Social Security Administration indicate that workers now entering covered employment in aggregate will make payroll tax payments totaling no more than 17 percent of the benefits that they can expect to receive. The self-employed will pay no more than 26 percent on average. Therefore, if social security benefits were accorded the same tax treatment as private pensions, only 17 percent of the benefit would be exempt from tax when received, and 83 percent would be taxable. . .
* The 1979 Advisory Council and the Greenspan Commission

And that is where the 85% comes from.. to in a very broad brushed way put the taxation of social security benefits on the same playing field as other contributory pension benefits from contributory pension plans, non-deductible IRAs, life annuities, etc where only the participant's contributions are not taxed... while at the same time giving a tax break to lower income recipients.
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Old 06-04-2022, 07:37 PM   #47
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"too much single issuer risk"? That has to be the all-time silliest post of any that I have seen since joining in 2010... and I have seen some doozies. These are full faith and credit securities.... NO credit risk. Besides, do you really want the SSA investing in corporate bonds and stocks... with their decisions impacting supply and demand for corporate bonds and stocks... I just don't think that is a very bright idea at all.

I highly doubt that any judge would render a verdict that a pension plan manager was breaching its fiduciary duty if it invested all pension fund assets in U.S. Treasury securities. They don't because they are willing to take a little risk, get better returns which in turn reduce the amount of required pension plan contributions by the sponsor... the SSA doesn't have that incentive.

If you're really concerned on the USD as a reserve currency, how much of your total portfolio is in other than USD denominated assets?
Glad I could make your day and that I get the award (in your mind) of the silliest post you've ever seen.

The US Federal debt is now $245K per taxpayer, and the debt to GDP ratio now 129%. US Unfunded liabilities is approaching $170 trillion dollars. The trend is NOT our friend when it comes to the ability of the US Government to continue these programs. It is all resting on our unique ability to magically buy goods from other countries just by (virtually) printing money.

While my allocations and investments are my concern, I will say that I've moved my slowly but surely tried to hedge. I never rush these decisions, because I can be wrong:
1) Almost all of my fixed is either short term or inflation adjusted.
2) I've moved my commodities and precious metals allocation up from almost nothing a half dozen years ago to 7% or so today.
3) My equities are approximately 85% US and 15% international, but many of my US domiciled companies derive more than half of their revenues overseas.

But you do you, keep believing that Social Security is sound, Medicare is sound, the 30 trillion and expanding debt isn't a problem, 9+ trillion on the Federal Reserve balance sheet is A-OK, our lack of industrial might is perfectly fine, and so on.

I will be silly me, thinking that things aren't getting better and that I need to prepare for bad times....including the eventual impact to Social Security.
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Old 06-04-2022, 07:49 PM   #48
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Do you have any evidence to support that statement?
Close enough for me.

Since a pair of 1938 Treasury Department Tax Rulings, and another in 1941, Social Security benefits have been explicitly excluded from federal income taxation.
(A revision was issued in 1970, but it made no changes in the existing policy.)

ex·plic·it·ly
in a clear & detailed manner, leaving no room for confusion or doubt.

https://www.ssa.gov/history/taxationofbenefits.html

I still don't agree with it, but here's an interesting article which repeats much of what you posted.

https://www.socialsecurityintelligen...cial-security/
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Old 06-04-2022, 08:00 PM   #49
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Glad I could make your day and that I get the award (in your mind) of the silliest post you've ever seen.

The US Federal debt is now $245K per taxpayer, and the debt to GDP ratio now 129%. US Unfunded liabilities is approaching $170 trillion dollars. The trend is NOT our friend when it comes to the ability of the US Government to continue these programs. It is all resting on our unique ability to magically buy goods from other countries just by (virtually) printing money.

While my allocations and investments are my concern, I will say that I've moved my slowly but surely tried to hedge. I never rush these decisions, because I can be wrong:
1) Almost all of my fixed is either short term or inflation adjusted.
2) I've moved my commodities and precious metals allocation up from almost nothing a half dozen years ago to 7% or so today.
3) My equities are approximately 85% US and 15% international, but many of my US domiciled companies derive more than half of their revenues overseas.

But you do you, keep believing that Social Security is sound, Medicare is sound, the 30 trillion and expanding debt isn't a problem, 9+ trillion on the Federal Reserve balance sheet is A-OK, our lack of industrial might is perfectly fine, and so on.

I will be silly me, thinking that things aren't getting better and that I need to prepare for bad times....including the eventual impact to Social Security.
I'm with you, but for future generations sake, I sincerely hope we're wrong.
I'm guessing you've heard of MMT modern monetary theory ?
Not going to name any individual politicians/policymakers, but I can't help but cringe a little bit when I hear them touting this.............

What Is Modern Monetary Theory (MMT)?
Modern Monetary Theory (MMT) is a heterodox macroeconomic framework that says monetarily sovereign countries like the U.S., U.K., Japan, and Canada, which spend, tax, and borrow in a fiat currency that they fully control, are not operationally constrained by revenues when it comes to federal government spending.

Put simply, such governments do not rely on taxes or borrowing for spending since they can print as much as they need and are the monopoly issuers of the currency. Since their budgets aren’t like a regular household’s, their policies should not be shaped by fears of a rising national debt.


https://www.investopedia.com/modern-...ry-mmt-4588060
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Old 06-04-2022, 10:31 PM   #50
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... But you do you, keep believing that Social Security is sound, Medicare is sound, the 30 trillion and expanding debt isn't a problem, 9+ trillion on the Federal Reserve balance sheet is A-OK, our lack of industrial might is perfectly fine, and so on. ...
Find a single post that I have made where I have claimed that Social Security is sound or that Medicare is sound or that the amount of federal debt isn't a problem or that the Fed balance sheet is A-OK and you might have a valid point. So please, put up or shut up and stop lying. You're being ridiculous now.
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Old 06-04-2022, 10:39 PM   #51
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Close enough for me. ..
Close only counts in horseshoes (and hand grenades)... we have a little higher standards here.
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Old 06-04-2022, 10:55 PM   #52
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Close only counts in horseshoes (and hand grenades)... we have a little higher standards here.
Apparently not when it comes to civility.





Oh, and, by the by, you forgot hydrogen bombs. But I'll offer a bit of grace on that omission.
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Old 06-05-2022, 03:20 AM   #53
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I personally think when the time comes to start cutting SS, it may not be the least of our problems, but it will be only one of many others.
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Old 06-05-2022, 06:32 AM   #54
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Find a single post that I have made where I have claimed that Social Security is sound or that Medicare is sound or that the amount of federal debt isn't a problem or that the Fed balance sheet is A-OK and you might have a valid point. So please, put up or shut up and stop lying. You're being ridiculous now.
Looking back through this thread, you have made it a point to be sarcastic and nasty - not just to me but also to others. If you want to have a civil conversation, even if it is opposite of my thinking, then I am willing to participate. If you aren't, I'm not. This isn't twitter.
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Old 06-05-2022, 07:00 AM   #55
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<mod note> Disagreement without being disagreeable is an essential quality of ER Forum and it sets us apart, in a positive way. The moderator team invites all those who believe we embrace higher standards to show it by demonstrating civility and respect in their posts.
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Old 06-05-2022, 07:05 AM   #56
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<mod note> Disagreement without being disagreeable is an essential quality of ER Forum and it sets us apart, in a positive way. The moderator team invites all those who believe we embrace higher standards to show it by demonstrating civility and respect in their posts.
A bit of whiteout might go a long way in some of our posts occasionally.






Sorry 'bout that.

(Doncha just hate the darn spelling corrector?)
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Old 06-05-2022, 07:09 AM   #57
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Spellcheck, now corrected.
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Old 06-05-2022, 07:11 AM   #58
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I'm guessing you've heard of MMT modern monetary theory ?
...
.....

What Is Modern Monetary Theory (MMT)?
Modern Monetary Theory (MMT) is a heterodox macroeconomic framework that says monetarily sovereign countries like the U.S., U.K., Japan, and Canada, which spend, tax, and borrow in a fiat currency that they fully control, are not operationally constrained by revenues when it comes to federal government spending.

Put simply, such governments do not rely on taxes or borrowing for spending since they can print as much as they need and are the monopoly issuers of the currency. Since their budgets aren’t like a regular household’s, their policies should not be shaped by fears of a rising national debt.


https://www.investopedia.com/modern-...ry-mmt-4588060
Yes, I am aware of MMT.

Money has several functions:

It is a medium of exchange - it allows people to exchange goods or services without bartering. This is more efficient than barter. Finding someone who wants to exchange something of equal "value" to your cow is not efficient. (This is one of the reasons forms of commodity money (e.g. pelts, salt, gold, ... ) arose.

It represents a way of accounting for value (i.e. a unit of accounting). It allows us to mark other goods and services against each other.

It is a store of value - it has "worth" in that people trust that they can use it to represent deferred spending (wealth).

Fiat currencies today are not backed by physical commodities, but only from the state's "full faith and credit'. In the end, it is our trust in the system and/or the states ability to enforce its will.

Even MMT's original proponents admit that there are limits to what Government can spend (i.e. money creation w/o debt). That limit is real resources, for example people to work, natural resources, etc. If spending is above that limit, inflation will result. In the case of a country, most countries (including ours now) is not self-sufficient. Our "supply line problems" have made that quite apparent, and it means that the United States cannot just ignore surplus money creation - regardless of what the MMT proponents think.

We, the post Brenton Woods III children, have had the benefits of being the worlds reserve currency. My fear is that those days are coming to an end - and are coming to an end because we've abused the position in a variety of ways - from economic to political - some of which can't be discussed here.

But hey, it's just silly and ridiculous me talking, so everyone should probably ignore.
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Old 06-05-2022, 06:45 PM   #59
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But hey, it's just silly and ridiculous me talking, so everyone should probably ignore.
I realize that's mostly sarcasm, but don't ever apologize for posting something that 'the herd' doesn't care for.

Politicians/policymakers telling citizens not to worry about SS, reminds me of the following quote.

“When you want to help people, you tell them the truth. When you want to help yourself, you tell them what they want to hear”
Thomas Sowell
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Old 06-05-2022, 08:52 PM   #60
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I was interested in this thread when it started.

Please, can we talk about the topic without sniping, sarcasm & anti-government rants?
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