YOWZERS (The Fraud that is the SSN "trust fund")

[GRAY]

http://voxday.blogspot.com/2010/08/yowzers.html

"Social Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund."

That so-called "trust fund" is a fraud. It does not exist.

Here's what actually happens (and Krugman knows this, which makes him a damned liar besides):

1. Your tax dollars go to Treasury
2. Treasury keeps them and issues "special" Treasury bonds to the Social Security "trust fund."
3. Treasury counts these tax receipts against the federal deficit, making it look (much, until the last year) smaller than it really is.


Note the slight-of-hand here. Social Security gets an alleged "bond" but they can't sell it to anyone but the Treasury. That is, legally it is an IOU, not a bond. A bond can be marketed in the open market to anyone who is willing to buy, for whatever they're willing to pay. These are unmarketable (intentionally) and thus can only be redeemed in one place - at Treasury.

The money in the so-called "lock box" isn't there because the box doesn't exist either. The money is nothing more than yet another government debt as it was all spent years ago.

[Jeremy Roenick]

Thanks to the economic collapse, high unemployment, and reduced tax revenues as a result, SSN is going up in flames.  I laugh when I read that they "project" that it will swing back into the black in a couple years.     These are the same government idiots that told us for 12 months we weren't entering a recession in 2007-08.

SSN is broke, State and Union pensions are broke.  Better squirrel away some personal savings in a mason jar before they come seize our 401k's and IRA's and hand us a bag full of IOU's...  Laugh now, but it's coming.

[NCVol]

I'm not sure what the point is of pointing that out.  If we can't pay the legal obligations of SS, we're insolvent and have defaulted on our national debt.  It's as much an obligation as the Treasury notes we owe to the Bush family and Buffett, for example.  Pretending the obligation is just a piece of paper, a fiction, is just as "telling" an observation that a bond is just a very FANCY piece of paper with big numbers written on it. 

The interesting thing to me is SS is absolutely the least of our big problems.  You can cut benefits for future retirees by about 20%, what they call "increase the retirement age" or you can eliminate the FICA cap.  Problem solved.  Lots of easy solutions in between that doesn't ask a day laborer to work when he's 69 so he can afford food and a shiatty apt. in her old age. 

There is some unknown reason why it's always first on the chopping block.  Must be some good deal for Wall Street...  Who benefits from destitute old people working in a menial job when they're 69? 

[Jeremy Roenick]

Who benefits from destitute old people working in a menial job when they're 69?

Wal-mart.   

[GRAY]

NC you've been beating the trust fund drum for months. It's a lie.

[NCVol]

It is no more a lie than a treasury bond is a lie.  It's an obligation of the U.S. government.  We can vote to strip it, just like we CAN vote to default on our national debt, but the result is the same, a default on an obligation.  The money was collected for a particular purpose, the amount was far in excess of what was needed to pay current benefits by 2.5 trillion, the law says that excess is to be held in trust - and of course there's no real "box" with cash sitting in it - for the benefit of future retirees. When that runs out, we have enough to pay out about 80% of current level benefits. 

The only difference in default on Warren Buffett's TBill and Grandma's benefits, is grandma is disposable, and can't give a couple hundred million to buy a stable of Congressfolks. 

And SS is EASY to fix.  Medicare is hard, and will take a lot of pain.  So is paying for the military and those obligations.  We collect a dedicated tax of 12.4% per dollar of earnings for SS.  It's simple to adjust. 

[GRAY]

just raise the tax...got it. ahh to be a leftist...swishing around in the land of IOU's and tax increases..

[NCVol]

Let's see, I said you could
1) raise taxes,
2) slash benefits by 20%, aka raise the retirement age to 70

You could also,
3) means test benefits,

BTW, as you seem to want to ignore, we have between 6 and $14 trillion in debt or so depending on the count, which will also require a tax increase or spending cuts.  The problem with SS is 2.5T till 2037.  Which is larger.  Debt evidenced by Tbills and notes etc. or the SS obligations. 

Or we could look at problems this way.  Which number is greater, the SS shortfall ,$2.5T through 2037, OR projected 10 year military expentitures, about $10 Trillion, we'll say.

2.5 through 2037
or
10 through 2020

Larger number?  Bigger current issue? 

See what I mean.  This fake concern about SS is just mind boggling.  I suppose they just want old people to boost the profits of the cat food makers. 

[GRAY]

let's see, the government took my money for 50 years, sqaundered it, and is now taking current taxpayer $ and giving it back to me interest free...and that is a "benefit"

got it.

[GRAY]

what's mind-boggling is how poorly this program turned out to be for the country. 70 years ago it would have been easy to predict failure, but this is vandy football style.

your hysterical invoking of old people eating dog food on the other hand, was entirely predictable

[NCVol]

what's mind-boggling is how poorly this program turned out to be for the country. 70 years ago it would have been easy to predict failure, but this is vandy football style.

your hysterical invoking of old people eating dog food on the other hand, was entirely predictable

How can you say it worked out badly for the country.  It's a program that has done wonders to eliminate poverty in old age.  It's not a "retirement" plan, it wasn't designed as such.  What it was supposed to do, and still does remarkably well, is provide an income floor for our seniors that allows them some measure of dignity in old age.  Those of us lucky enough to save for retirement will see SS as a nice little bonus check each month.  For many, many people, that's IT.  And turning that over to the markets changes the entire nature of the program, from 'insurance' to investment.  I'm capable of my own investments, and I'll gladly pay insurance for those who came before us.  Seems like a fair deal to me. 

Second, there was and is no unexpected shortfall.  That's another of the great myths they peddle to make us skeered so we'll agree to benefit cuts.  The actuaries have been pretty accurate about lifespan changes, much to the contrary of the reporting on this issue.  A favorite technique is to spout misleading stats about how much longer we're living - we're not in old age, about four years, predicted - and how there's this crisis - there isn't - and unless something is done right away, why, we'll be about 1/4 the amount in the hole (over the next 27 years!) that we spend per decade on the military!!! OOHHHH NOOOOOO!!!! 

The cat food reference was a joke.  But the serious point is why they alarm us every couple decades about SS when there really is NOT a crisis, certainly not the type of crisis that demands immediate attention.  That belongs to our military expenditures and health care.  Those are the programs unsustainable and in trouble.  Look it up if you don't believe me. 

[Just Win]

SS is without question the biggest fraud ever perpatered on the American people by their government. Some will make the case that it has provided wealth for some and served as a safety net. Tihis is true but what it has paid out in benefits to Americans is a mere fraction of what was forcibly paid in the system. If a private corporatoin had performed in such a way in their rate of return to investors the officers of that corporation would be put in jaiil for life. These are the types that will be running our health care system.