Social Insecurity

[Deleted]

US Gov't debt has never NOT been paid off. It is always paid off. That's what makes it the safest investment in existence. That's why during the recession, people thought gov't debt was even safer than cash, briefly causing interest rates on short-term US gov't debt to drop BELOW ZERO.

[Savoir Faire-Demogague in NJ]

Jan 2, 2013 7:47:43 GMT -5 @investorbob said:

US Gov't debt has never NOT been paid off. It is always paid off. That's what makes it the safest investment in existence. That's why during the recession, people thought gov't debt was even safer than cash, briefly causing interest rates on short-term US gov't debt to drop BELOW ZERO.

You are a funny guy I-Bob....

[djAdvocate]

Dec 31, 2012 18:43:30 GMT -5 @investorbob said:

"Social Security is already out of money."

It's not out of money, it's spending more than it takes in. Big difference. But we did it to ourselves.

this is way more true of the government as a whole than it has EVER been for SSI.

[Deleted]

"You are a funny guy I-Bob.... "

What's wrong with what I said? The negative interest rate meant that markets (people) felt that US debt was a safer asset than cash under the mattress or cash in the bank. What stronger vote of confidence could there be?

[Savoir Faire-Demogague in NJ]

Jan 2, 2013 13:19:58 GMT -5 @investorbob said:

"You are a funny guy I-Bob.... "

What's wrong with what I said? The negative interest rate meant that markets (people) felt that US debt was a safer asset than cash under the mattress or cash in the bank. What stronger vote of confidence could there be?

Yeah, what you wrote, technically is accurate. Existing debt is never really paid off, maturing treasuries are merely replaced by new debt, most of which is bought by the Fed and the Social Security Trust funds(the top 2 btw)

[fairlycrazy23]

Jan 2, 2013 13:49:33 GMT -5 Savoir Faire-Demogague in NJ said:

Jan 2, 2013 13:19:58 GMT -5 @investorbob said:

"You are a funny guy I-Bob.... "

What's wrong with what I said? The negative interest rate meant that markets (people) felt that US debt was a safer asset than cash under the mattress or cash in the bank. What stronger vote of confidence could there be?

Yeah, what you wrote, technically is accurate. Existing debt is never really paid off, maturing treasuries are merely replaced by new debt, most of which is bought by the Fed and the Social Security Trust funds(the top 2 btw)

Now or soon SS will be running in the red, so the Trust fund will have to stop acquiring Treasuries and instead redeem them.

[Driftr]

The one-eyed man truly is king in the land of the blind. Right up until someone with two eyes shows up. Wonder when that'll happen???

[Deleted]

OK, true. But the trust fund can choose to take the cash and not re-invest, right? Then the gov't has to issue the debt to someone else. And if a big buyer has disappeared, the interest rates will probably go up, too.

[Savoir Faire-Demogague in NJ]

Jan 2, 2013 15:04:42 GMT -5 @investorbob said:

OK, true. But the trust fund can choose to take the cash and not re-invest, right? Then the gov't has to issue the debt to someone else. And if a big buyer has disappeared, the interest rates will probably go up, too.

Yeah... if the "surplus SS funds" were not put into treasuries, the govt would have to borrow in the open market, or the Fed would buy up an auction issue, thus creating inflation pressure.

This raiding of the SS trust fund is back-door way of doing off-balance sheet financing. Kind of like "hiding" it from the general public.

Interest rates have been fairly stable, 5 year bond hovering around .70 to .75% for quite some time. The 10 year around 1.70 to 1.80 for a long time also.

The weighted interest rate on total US debt is around 2.4%. The norm is 2 to 2.5 times that. Once interest rates revert to the norm that is when the real fun starts. The fiscal cliff theatrics is child's play compared to when annual interest will be well over $1 trillion.

[Deleted]

"This raiding of the SS trust fund is back-door way of doing off-balance sheet financing."

I don't see where you get this from. Borrowing from the trust fund doesn't have any impact on the budget deficit or the amout of debt outstanding. If they put the money into the general fund, then it definitely would. I think they're doing it right to keep it segregated.

An example of the other way would be Medicare. Where people actually think their benefits are paid by their Medicare taxes, when in reality only 50% of their benefit comes from Med tax and the rest from the general fund. Maybe people wouldn't say "don't touch my Medicare" if they knew how over-budget it is. Then again, maybe they wouldn't.

[dumdeedoe]

I have tried to wrap my head over this entitlement war that is going on and haven't been able to take the Republican side on it..

Public polls have shown that people are generally ok with the tax rates, and that in most people's minds medicare and social security shouldn't be touched.
online.wsj.com/article/SB10001424052748704728004576176741120691736.html

It kinda rubs me as the same thing that Obama did with the ACA, there were negative polls that shown a majority didn't support it, but he went with it anyway.
Each party has a agenda of what they think is best for the American people and they are instituting that agenda regardless .

[Sum Dum Gai]

Now or soon SS will be running in the red, so the Trust fund will have to stop acquiring Treasuries and instead redeem them.

It's been doing that for a couple years already. I believe 2010 was the first year SS paid out more than it took in.

[djAdvocate]

Jan 2, 2013 19:16:11 GMT -5 dumdeedoe said:

I have tried to wrap my head over this entitlement war that is going on and haven't been able to take the Republican side on it..

Public polls have shown that people are generally ok with the tax rates, and that in most people's minds medicare and social security shouldn't be touched.
online.wsj.com/article/SB10001424052748704728004576176741120691736.html

It kinda rubs me as the same thing that Obama did with the ACA, there were negative polls that shown a majority didn't support it, but he went with it anyway.
Each party has a agenda of what they think is best for the American people and they are instituting that agenda regardless .

again, most Americans didn't support the COMPROMISE, however, if you go provision by provision, most Americans DO support them, with a few glaring exceptions.

[djAdvocate]

Jan 2, 2013 19:20:28 GMT -5 Sum Dum Gai said:

Now or soon SS will be running in the red, so the Trust fund will have to stop acquiring Treasuries and instead redeem them.

It's been doing that for a couple years already. I believe 2010 was the first year SS paid out more than it took in.

the first time since it was reformed in the 80's, at least.

(see "largest tax increase in history" +reagan)

[dumdeedoe]

Reagan made it that SS and medicare is not part of the general budget for a reason. He knew that the funds would be raided and dispersed.
It is a huge amount of money and I am sure there are a lot of politicians on both sides that want their hands on it.
Using the doom and gloom charts the projected deficits are less than 30 billion per year, that is a triffling amount that can be fixed with a slight tax increase, that i'm sure the public would support. That is the open and honest way of handling the problem.
But the American way seems to be make a crises;either entitlement, or health care, then make a law, against public will, to redistribute the moneys to support their agendas...


Have you ever noticed on all the charts that the historical portion goes up and down. but when they chart out the future part it goes straight up or straight down?

[djAdvocate]

Jan 2, 2013 19:51:49 GMT -5 dumdeedoe said:

Have you ever noticed on all the charts that the historical portion goes up and down. but when they chart out the future part it goes straight up or straight down?

that is because they are failing to recognize that these systems are pay-as-you-go, and because they are making unrealistic assumptions about growth.

for example, the graph that SF routinely posts assumes that Medicare becomes something approaching 100% of GDP in (40) years. does that make any sense to you?

me neither.

something has got to give, and what will probably give is cost.

[formerexpat]

if we MEANS TEST social security (something i have advocated for years), it will make it TRULY a welfare system. right now, it isn't.

And what if I were to tell you that we DO MEANS TEST Social Security benefits already?

MFJ with income over $42k gets 85% of their benefits taxed. To have >$42k per year in income, a couple must have approximately $1m or more in invested assets yielding 4% per year.

Means tested welfare program.

Not to mention the welfare built in on the front end of the benefits calculation.

These proposals just make the ponzi scheme worse.

[djAdvocate]

Jan 2, 2013 22:36:43 GMT -5 formerexpat said:

if we MEANS TEST social security (something i have advocated for years), it will make it TRULY a welfare system. right now, it isn't.

And what if I were to tell you that we DO MEANS TEST Social Security benefits already?

MFJ with income over $42k gets 85% of their benefits taxed. To have >$42k per year in income, a couple must have approximately $1m or more in invested assets yielding 4% per year.

Means tested welfare program.

Not to mention the welfare built in on the front end of the benefits calculation.

These proposals just make the ponzi scheme worse.

no, that is not what i mean by means testing. what i mean is that if you are above a certain income level you get ZIP. as in you are not "eligible". capice?

currently, everyone who pays into the system will get something out of it on retirement. also, early contributors to the system were not the largest beneficiaries. also, the system is legal. none of these traits are in common with a ponzi scheme. however, if it is means tested, you have a much better case for using that term.

[formerexpat]

also, the system is legal.

So a system created by the Federal Government and forced upon its citizens was deemed legal by that same Federal Government. Okay, got it.

The same government that also allowed people to own others and counted blacks as 3/5 a person?

The same government that confiscated all of the gold of its citizens?

This is the government you want to defend?

also, early contributors to the system were not the largest beneficiaries.

Their contributions were negligible, so their return was significant.

I guess under your theory, as long as the US government continues to inflates the fuck out of our currency, then each subsequent generation will be a greater beneficiary.

[djAdvocate]

Jan 2, 2013 23:25:17 GMT -5 formerexpat said:

also, the system is legal.

So a system created by the Federal Government and forced upon its citizens was deemed legal by that same Federal Government. Okay, got it.

you missed two important parts.

first off, this is a republic. therefore, anything that they decide to do that is deemed constitutional is okay, by definition.

secondly, it has been tested by the courts, and it has stood up.

so, yes. it is legal. if you disagree, go ahead and pull an Orly Taitz.

[djAdvocate]

Jan 2, 2013 23:25:17 GMT -5 formerexpat said:

also, the system is legal.

The same government that also allowed people to own others and counted blacks as 3/5 a person?

yes, but that was overturned in the courts.

The same government that confiscated all of the gold of its citizens?

when did that happen?

This is the government you want to defend?

no, not really. i despise the government. but i also recognize that it is MINE.

also, early contributors to the system were not the largest beneficiaries.

Their contributions were negligible, so their return was significant.

note that i didn't say return. social programs always work this way. the earliest entrants have the highest yield. but that doesn't make their BENEFIT larger than later participants. in fact, it hasn't been. this is wildly different than a ponzi scheme.

I guess under your theory, as long as the US government continues to inflates the fuck out of our currency, then each subsequent generation will be a greater beneficiary.

no, i adjusted for inflation. this is in real terms. i ALWAYS speak in real terms.

[Value Buy]

"I ALWAYS speak in real terms."

Somehow when you post, "California Dreamin" always comes to mind for me

[Value Buy]

Well, I got one of my requests in on the social security issue.

The 2% cut was re-instated.

[djAdvocate]

Jan 2, 2013 23:49:24 GMT -5 Value Buy said:

"I ALWAYS speak in real terms."

Somehow when you post, "California Dreamin" always comes to mind for me

VB, my stats are usually good, right? you should know that by now.

[djAdvocate]

Jan 2, 2013 23:50:54 GMT -5 Value Buy said:

Well, I got one of my requests in on the social security issue.

The 2% cut was re-instated.

for the record? i NEVER liked that idea. NEVER. hated it when he first did it, hated it until 2 days ago.

[Value Buy]

Jan 3, 2013 0:02:12 GMT -5 djAdvocate said:

Jan 2, 2013 23:50:54 GMT -5 Value Buy said:

Well, I got one of my requests in on the social security issue.

The 2% cut was re-instated.

for the record? i NEVER liked that idea. NEVER. hated it when he first did it, hated it until 2 days ago.

We both disagreed with the original 2% cut. It was the wrong tax to decrease.
You hated until two days ago? Does that mean you were against it before you were for it?

[Deleted]

"Using the doom and gloom charts the projected deficits are less than 30 billion per year, that is a triffling amount that can be fixed with a slight tax increase"

Dumdeedoe, a significant portion of the Medicare program is already funded by the general fund. In other words, the program already runs huge deficits.

[Deleted]

"for the record? i NEVER liked that idea. NEVER. hated it when he first did it, hated it until 2 days ago."

Me, either. They could have at least passed a corresponding reduction in benefits for people receiving the tax break. And now that the tax break is going away, everyone is acting like this is some new tax that we've never had to pay before.

[Value Buy]

Jan 3, 2013 0:01:28 GMT -5 djAdvocate said:

Jan 2, 2013 23:49:24 GMT -5 Value Buy said:

"I ALWAYS speak in real terms."

Somehow when you post, "California Dreamin" always comes to mind for me

VB, my stats are usually good, right? you should know that by now.

I acknowledge your stats are usually good.
I also acknowledge your heart is "chasing windmills" in some of your political ideals, imo.
You are a little too far left in your ideals concerning people who absolutly refuse to help theirselves on their own, and you expect American Government to take care of them.

Maybe I should have chosen a different recording, such as "Hotel California" or one of my all time favorites, "I want to take you higher" by Sly and the Family Stone, but the Mamas and the Papas pretty much come to my mind

Anyway, it's all good with you and me.
I think....

[djAdvocate]

Jan 3, 2013 7:58:23 GMT -5 Value Buy said:

Jan 3, 2013 0:02:12 GMT -5 djAdvocate said:

for the record? i NEVER liked that idea. NEVER. hated it when he first did it, hated it until 2 days ago.

We both disagreed with the original 2% cut. It was the wrong tax to decrease.
You hated until two days ago? Does that mean you were against it before you were for it?

no. it means that there is nothing to hate anymore. ;D