If You're For Big Gov't-- How Long Do You Need?

[formerexpat]

WOW, that's too bizarre to even respond to!

Most people don't understand how insurance actually works. It's fine.

[formerexpat]

This message has been deleted.

[burnsattornincan]

On the other thread everyone seems to think the US will default on the interest payments to their bonds. What do you think these SS bonds will be worth if that were to be the case? Saying that the SS fund is solvent because it is fully backed by treasury bonds means that the real cash was/is used immediately and replaced with government IOU's. If you think the US can keep up with interest payments on 14 trillion then no problem but... you know.

[formerexpat]

On the other thread everyone seems to think the US will default on the interest payments to their bonds. What do you think these SS bonds will be worth if that were to be the case?

Total gross interest paid was $206 bn last year; or less than 10% of income. Most people pay more than 10% of their income in interest on their mortgage but aren't anywhere near defaulting on their mortgage.

Unfunded liabilities are more of an issue then interest on debt. Total unfunded liabilities on social programs is nearly $115 trillion. Even over a 60 year horizon, that is nearly $2 trillion a year; or about 90% of total revenues right now.

[AgeOfEnlightenmentSCP]

Jun 5, 2011 21:11:10 GMT -5 hello fromWarsaw said:

The Car Allowance Rebate System (CARS) commonly referred to as "Cash for Clunkers" went broke after 80% of the cars purchased turned out to have been produced by foreign countries.

Total horse patoot. ;D

This is pretty well documented.

[hello fromWarsaw]

Wrong, and it just ran out.. How ya doin"

[lakhota]

Most people don't understand how insurance actually works. It's fine.

I understand how private insurance works. It requires bending over a lot...

Are you smarter than Wendell Potter? I learned a lot from him:



Wendell Potter (born July 16, 1951) is former Vice President of corporate communications at CIGNA, one of the United States' largest health insurance companies. In June 2009, he testified against the HMO industry in the U.S. Senate as a whistleblower.

en.wikipedia.org/wiki/Wendell_Potter

[AgeOfEnlightenmentSCP]

Jun 5, 2011 21:43:53 GMT -5 @lakhota said:

In this 1960 Supreme Court decision Nestor's denial of benefits was upheld even though he had contributed to the program for 19 years and was already receiving benefits. Under a 1954 law, Social Security benefits were denied to persons deported for, among other things, having been a member of the Communist party. Accordingly, Mr. Nestor's benefits were terminated. He appealed the termination arguing, among other claims, that promised Social Security benefits were a contract and that Congress could not renege on that contract. In its ruling, the Court rejected this argument and established the principle that entitlement to Social Security benefits is not contractual right.

What's your point? No one ever said Charles Manson had the right to his Social Security benefits.

Nothing is secure! Wages can even be attached/garnished, etc.

This is about as straight forward a legal decision as ever there was. No assets or income was attached. The government's entire case depended on the argument, which the SCOTUS upheld, that there's no contractual right to Social Security.

You do not have to commit a crime, or do anything wrong- there's no contractual right.

They will amend or end the program at some point.

[burnsattornincan]

Total gross interest paid was $206 bn last year

Really. Since total debt is 14 trillion that would turn out to be an interest rate of something like .14%. Some creative accounting must be taking place. I guess all the debt they owe to themselves from monetizing isn't included in the 206b figure.

[lakhota]

The Rights of Older Americans

Can my Social Security benefits be reduced or terminated?

Yes. Benefits may be terminated if you leave the United States for more than six months; you are deported; you remarry; or you are convicted of certain crimes, such as treason and espionage. Convicted felons cannot receive benefits while in prison. Disability benefits can be terminated when the recipient recovers, or if the recipient refuses to accept rehabilitation efforts.

In any case, you should receive a letter notifying you of the reduction or termination before SSA takes any action.

public.findlaw.com/abaflg/flg-16-3b-2.html

[AgeOfEnlightenmentSCP]

The "HMO Industry" is so named because in 1973 Congress got together and passed the "Health Maintenance Organization (HMO) Act of 1973".

The Health Maintenance Organization Act of 1973 (Public Law 93-222), also known as the HMO Act of 1973, 42 U.S.C. § 300e, is a law passed by the Congress of the United States that resulted from discussions Paul Ellwood had with what is today the Department of Health and Human Services. It provided grants and loans to provide, start, or expand a Health Maintenance Organization (HMO); removed certain state restrictions for federally qualified HMOs; andrequired employers with 25 or more employees to offer federally certified HMO options IF they offered traditional health insurance to employees. It did not require employers to offer health insurance. "HMOs" were defined simply, as plans that: specified list of benefits to all members, charged all members the same monthly premium, and were structured as a nonprofit organization.

The Act solidified the term HMO and gave HMOs greater access to the employer-based market. The dual choice provision expired in 1995.

So, we have grants and loans of taxpayer's money to start an HMO-- the flawed notion of which was that they are supposed to "take the profit out of" the provision of health insurance, and we have government using force to MAKE employers offer the government created HMO option[/b] of course it's another government failure. This is not a surprise. But thanks for reminding me.

Everyone seems to HATE the HMO, but stunningly few people remember that they are the brainchild of politicians in Washington, D.C. and did NOT spring up in the free market-- in fact, they didn't even have to compete as employers were FORCED to offer them. They didn't even have to compete in the private market for the money to start up-- government gave grants and loans of taxpayer money it took from people.

[lakhota]

Supreme Court Case: Flemming vs. Nestor

Background to the Case:

The fact that workers contribute to the Social Security program's funding through a dedicated payroll tax establishes a unique connection between those tax payments and future benefits. More so than general federal income taxes can be said to establish "rights" to certain government services. This is often expressed in the idea that Social Security benefits are "an earned right." This is true enough in a moral and political sense. But like all federal entitlement programs, Congress can change the rules regarding eligibility--and it has done so many times over the years. The rules can be made more generous, or they can be made more restrictive. Benefits which are granted at one time can be withdrawn, as for example with student benefits, which were substantially scaled-back in the 1983 Amendments.

There has been a temptation throughout the program's history for some people to suppose that their FICA payroll taxes entitle them to a benefit in a legal, contractual sense. That is to say, if a person makes FICA contributions over a number of years, Congress cannot, according to this reasoning, change the rules in such a way that deprives a contributor of a promised future benefit. Under this reasoning, benefits under Social Security could probably only be increased, never decreased, if the Act could be amended at all. Congress clearly had no such limitation in mind when crafting the law. Section 1104 of the 1935 Act, entitled "RESERVATION OF POWER," specifically said: "The right to alter, amend, or repeal any provision of this Act is hereby reserved to the Congress." Even so, some have thought that this reservation was in some way unconstitutional. This is the issue finally settled by Flemming v. Nestor.

In this 1960 Supreme Court decision Nestor's denial of benefits was upheld even though he had contributed to the program for 19 years and was already receiving benefits. Under a 1954 law, Social Security benefits were denied to persons deported for, among other things, having been a member of the Communist party. Accordingly, Mr. Nestor's benefits were terminated. He appealed the termination arguing, among other claims, that promised Social Security benefits were a contract and that Congress could not renege on that contract. In its ruling, the Court rejected this argument and established the principle that entitlement to Social Security benefits is not contractual right.

More: www.ssa.gov/history/nestor.html

[formerexpat]

Are you smarter than Wendell Potter? I learned a lot from him:

In the arena of annuities [our topic of discussion] and life insurance, absolutely. Wendell's knowledge was in health insurance, specifically HMO's. His knowledge on spread based insurance products was limited as it's not a business that Cigna specializes in.

And in regards to the financial composition and both internal and external workings of insurance products, hands down I know more than Wendell, who while was a VP at Cigna, was the VP of corporate communications. That's kind of like the VP of HR. They're there but what does it really require to get there?

His specialties include:

Writing and public speaking. Expertise in health care policy, strategic communications, branding and identity, executive coaching and counseling, crisis communications, media relations (traditional and social media), government affairs.

I've worked with many of these people. Their knowledge of the financial workings of insurance is limited. They're great at external communication and a good person in this post good for business, but they're understanding of the business itself is often lacking.

ETA - Paul reminded me about those big, bad HMO's that Wendell despises...the ones that the federal government shoved down the citizens throat without their consent in the early 70's to control out of control health care costs caused by medicare.

Sound familiar??

[formerexpat]

Total gross interest paid was $206 bn last year

Really. Since total debt is 14 trillion that would turn out to be an interest rate of something like .14%. Some creative accounting must be taking place. I guess all the debt they owe to themselves from monetizing isn't included in the 206b figure.

Sorry burns, I meant net interest, not gross. Gross interest was $430 bn

I get spending and revenue information from this site - www.usgovernmentspending.com/spend.php?span=usgs302&year=2011&view=1&expand=&expandC=908_903_902&units=b&fy=fy12&local=undefined&state=US#usgs30290

Pretty interesting and useful.

[burnsattornincan]

Great. Thanks Mr. formerexpat.

[AgeOfEnlightenmentSCP]

Jun 5, 2011 22:14:12 GMT -5 hello fromWarsaw said:

Wrong, and it just ran out.. How ya doin"

Was this in response to something? Can you clarify what on Earth you were trying to say? Fine, thank you.