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Old 07-16-2022, 06:03 PM   #261
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Originally Posted by pb4uski View Post
To be fair, I have little doubt that if Congresscritters do nothing that the SS Trust Fund surplus will be gone in somewhere around 2034 (+/- a few years) and that tax receipts will necessitate an across-the-board reduction in benefits of 25% (+/- 5%, so 20%-30% haircut).

What I object to is GenXGuy's speculation on what will happen. In post #250 he wrote:



From everything that I have read if cuts are needed they will be across-the-board... specific actions that GenXGuy suggests/advocates such as cutting SS benefits for people with higher income or eliminating spousal benefits would require Congressional action and can't be enacted unilaterally by the SSA. While we will benefit from spousal benefit because DW was a SAHM and I was a high earner, I can see the logic to eliminating spousal benefits (but not survivor benefits). To cut benefits for higher income people would be rewarding spenders and penalizing savers and IMO would seriously erode the public support for SS so I would object to that sort of a cut.

But I am glad for GenXGuy's epiphany:


I agree with this... and unless Congress comes up with some specific reforms, then from everything that I read it will be across-the-board because the law doesn't provide for anything different.
While my crystal ball is foggy, seems like a more likely scenario would be, given the last 15 years of congressional gridlock and assuming that projects into the future:

- Congress will not be able to agree to a “fix” prior to the trust fund running out
- at the point of running out, a 25% cut in benefits across the board would be politically unpalatable for either party
- they will be unable to agree on a formula of tax hikes or benefit cuts to balance it out.

That leaves the only alternative: Fund the 25% SS deficit out of the general fund higher deficits. That would amount to an annual deficit increase of about 1.5% GDP, which is not a dramatic burden in the short term. The social security shortfalls get funded every year , after much hoopla, by punting it for another year. This isn’t ideal, and may not be sustainable over many years but seems like the path of least resistance.
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Old 07-16-2022, 08:46 PM   #262
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While my crystal ball is foggy, seems like a more likely scenario would be, given the last 15 years of congressional gridlock and assuming that projects into the future:

- Congress will not be able to agree to a “fix” prior to the trust fund running out
- at the point of running out, a 25% cut in benefits across the board would be politically unpalatable for either party
- they will be unable to agree on a formula of tax hikes or benefit cuts to balance it out.

That leaves the only alternative: Fund the 25% SS deficit out of the general fund higher deficits. That would amount to an annual deficit increase of about 1.5% GDP, which is not a dramatic burden in the short term. The social security shortfalls get funded every year , after much hoopla, by punting it for another year. This isn’t ideal, and may not be sustainable over many years but seems like the path of least resistance.


They passed out trillions from Covid and didnt blink an eye and added to deficit. They will just run a deficit until they reach a solution if one hasnt been found before trust fund runs “dry”. Its just accounting games since the fund is in treasuries anyways. Maybe some high incomers get shaved. Of course this is coming from a guy who will get $125 a month in 4 years. A 25% cut isnt going to hit me too bad.
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Old 07-16-2022, 09:44 PM   #263
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They passed out trillions from Covid and didnt blink an eye and added to deficit. They will just run a deficit until they reach a solution if one hasnt been found before trust fund runs “dry”. Its just accounting games since the fund is in treasuries anyways. Maybe some high incomers get shaved. Of course this is coming from a guy who will get $125 a month in 4 years. A 25% cut isnt going to hit me too bad.
There is nothing stopping the general fund supplementing the SS fund, as far as I know.
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Old 07-16-2022, 10:02 PM   #264
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Yeah, it was. In 1975, it was predicted to run out in 1980. In 1980, it was predicted to run out in 1982. In 1990, it was predicted to run out in 2025. In 1995, it was predicted to have a huge surplus. Seems the SSA is as good at predicting things as the talking heads on CNBC.


Obviously, I'm talking about the current system, since the major changes made back in the early 80's, so the 1982 and earlier data in your chart is not relevant to any forecast of the trust fund running out since those changes went into effect about 4 decades ago!
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Old 07-16-2022, 10:17 PM   #265
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Looking around it sounds like currently the social security fund is not allowed to borrow, but Congress could theoretically change that. The trust fund accounting and overall deficits are two different things. Budget deficits include the impact of social security inflows and outflows, regardless of what the SS has. So before the trust fund runs out, barring changes to the program, social security would already be running a cash deficit of between 1 to 1.5% of GDP, adding to the overall deficit. Once the trust fund ran out, if no laws were changed, the deficit would actually decrease by 1.5% of gdp since social security isn’t allowed to operate in cumulative deficit. So it would seemingly make sense that Congress changes the law that would allow the trust fund to borrow the 1.5% of gdp, making it no different than the year before the trust fund ran out.

Whether running a permanent 1-1.5% of gdp social security deficit is good policy or sustainable over the long term is a different debate. But with total debt to gdp over 100% and growing, and Covid year deficits exceeding 10% of gdp1.5% seems comparatively trivial.
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Old 07-16-2022, 10:24 PM   #266
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There is nothing stopping the general fund supplementing the SS fund, as far as I know.
I think there is a requirment that SS benefits only be paid from the SS Trust Fund and not from the general fund... that doesn't mean that they couldn't change that requirement.

Quote:
...When the Social Security trust funds operate with annual cash flow deficits, the U.S. Treasury can continue to pay benefits scheduled under current law as long as the accumulated balance in the trust funds is sufficient to cover the costs. This is because the Social Security program has budget authority to pay benefits in full and on time as long as there is an adequate balance in the Social Security trust funds (the designated accounts). ...

Social Security does not have authority to borrow from the General Fund. Social Security cannot draw upon general revenues to make up for any current funding shortfall. ...

Title II of the Social Security Act, which governs the program, does not specify what would happen to the payment of benefits in the event that the trust funds’ asset reserves are depleted and incoming receipts to the trust funds are not sufficient to pay scheduled benefits in full and on time. Two possible scenarios are (1) the payment of full monthly benefits on a delayed basis or (2) the payment of partial monthly benefits on time.
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Old 07-20-2022, 01:20 PM   #267
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Besides, clothes are optional in Hawaii.
Well, in my apartment, anyway.

Every once in a while I see someone changing on the beach or showering while removing a sandy suit. But, officially, too much skin showing is still kapu. YMMV
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Old 07-20-2022, 02:19 PM   #268
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Yesterday I went to Walmart to pick up my prescriptions and there’s clothes everywhere marked down to super cheap prices and the store is a mess with racks of clothes everywhere. I have never seen that many clothes in a store so cheap.
Yep, here too! Went today and DW found some tops for $1 each. Also found some sandals that were originally marked $12.98 for a buck each. I had her get 2 pair!
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Old 08-05-2022, 08:21 AM   #269
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Some interesting comments from Musk during Tesla shareholders meeting yesterday. He thinks inflation has peaked, because they are starting to see prices come down in their supply chain. https://www.cnbc.com/2022/08/04/elon...-buybacks.html

Also today I notice that oil is $89.35 a barrel. That’s down quite a bit from the peak.
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Old 08-05-2022, 08:29 AM   #270
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Also today I notice that oil is $89.35 a barrel. That’s down quite a bit from the peak.
The average price of gasoline has declined for 50 straight days. Not getting as much mention, though, as when it increased.
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Old 08-05-2022, 08:37 AM   #271
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This article might be behind a paywall. Updated 16 minutes ago.

https://www.nytimes.com/live/2022/08...t-july-economy

"U.S. employers added 528,000 jobs in July, the Labor Department said on Friday, an unexpectedly strong gain that shows the labor market is withstanding the economic impact of higher interest rates, at least so far.

The impressive performance — which brings total employment back to its level of February 2020, just before the pandemic lockdowns — provides new evidence that the United States has not entered a recession.

Bleak readings on consumer sentiment in recent months, along with fears that a recession lay ahead or had even begun, were “completely at odds with the reality of what the underlying data was telling us,” said Justin Wolfers, a University of Michigan economist. “I’ve never seen a disjunction between the data and the general vibe quite as large as I saw.”

But with the Federal Reserve pursuing an aggressive policy of interest rate increases to bring inflation under control, most forecasters expect the labor market’s momentum to slow markedly later in the year, as companies cut payrolls to match lower demand.

“At this stage, things are OK,” said James Knightley, the chief international economist at the bank ING. “Say, December or the early part of next year, that’s where we could see much softer numbers.”"
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Old 08-05-2022, 08:56 AM   #272
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The average price of gasoline has declined for 50 straight days. Not getting as much mention, though, as when it increased.
Heh, heh, not going down as fast as it went up. That could be part of it. Prices are still quite a bit higher than at the start of the climb, so there's that. Oh, and bad news is always more interesting than good news - or at least it's more emphasized in the media. YMMV
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Old 08-05-2022, 08:57 AM   #273
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The average price of gasoline has declined for 50 straight days. Not getting as much mention, though, as when it increased.
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Hey, hey, not going down as fast as it went up. That could be part of it. Prices are still quite a bit higher than at the start of the climb, so there's that. Oh, and bad news is always more interesting than good news - or at least it's more emphasized in the media. YMMV
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Old 08-05-2022, 09:47 AM   #274
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Heh, heh, not going down as fast as it went up. That could be part of it. Prices are still quite a bit higher than at the start of the climb, so there's that. Oh, and bad news is always more interesting than good news - or at least it's more emphasized in the media. YMMV
I've heard it mentioned in the news quite a bit that gas prices have gone down, but like you said, they're really still quite high. About $4.40/gal here.
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Old 08-05-2022, 09:49 AM   #275
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Bleak readings on consumer sentiment in recent months, along with fears that a recession lay ahead or had even begun, were “completely at odds with the reality of what the underlying data was telling us,” said Justin Wolfers, a University of Michigan economist. “I’ve never seen a disjunction between the data and the general vibe quite as large as I saw.”
Hmmm, searching the internet for all of Justin Wolfers' statements/quotes from the past 6 months telling us all how things are fine and we shouldn't worry. Surprisingly I can't seem to find anything.
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Old 08-05-2022, 10:31 AM   #276
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I've heard it mentioned in the news quite a bit that gas prices have gone down, but like you said, they're really still quite high. About $4.40/gal here.
Surprising, even in my HCOL area it is $3.99 right now, and that is NY.
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Old 08-05-2022, 12:37 PM   #277
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Surprising, even in my HCOL area it is $3.99 right now, and that is NY.

Unfortunately, Illinois has some high gas taxes, and after another big hike, they updated the tax so that it automatically increases further with inflation, so the tax is going to continue skyrocketing. Gas is always lower cost across the state line.
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Old 08-05-2022, 12:51 PM   #278
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The average price of gasoline has declined for 50 straight days. Not getting as much mention, though, as when it increased.
Have they finished replenishing the Strategic Petroleum Reserves after taking out so much in recent months? With the China/Russia situation getting so tense, I'll feel more at ease if/when that is completely done.
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Old 08-05-2022, 01:35 PM   #279
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Have they finished replenishing the Strategic Petroleum Reserves after taking out so much in recent months? With the China/Russia situation getting so tense, I'll feel more at ease if/when that is completely done.


I don’t think that will start until the fall of 2022 from what I read.
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Old 08-05-2022, 02:12 PM   #280
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Have they finished replenishing the Strategic Petroleum Reserves after taking out so much in recent months? With the China/Russia situation getting so tense, I'll feel more at ease if/when that is completely done.
It is still being drawn down. As of August 1, the previous week drawdown was 4.6 million barrels and the SPR is at the lowest level since May 1985. Last September the reserve held 618 million barrels, as of last week it is under 470 million barrels.

Article: https://www.reuters.com/business/ene...rs-2022-08-01/

In addition, most of the oil released has been "medium-sour" which is supposedly is what many USA refineries prefer. This has left the reserve with more "light-sweet" vs. "medium-sour" (which I would have thought would be good but supposedly is not in terms of our existing refineries).
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