Bush's plan to forfeit your SS account profits - Page 3 - Tilted Forum Project Discussion Community

KMA-628 · 02-05-2005, 06:23 PM

Quote:

Originally Posted by smooth

KMA, this is your fucking government, dude. They went out and tested a bunch of words that could be embedded into a political message to convince you of their position.

Right or wrong, your own government is using head techniques to convince you to support its programs! What the fuck is that? They need to implement what the people want--not convince the people to do what they want!

I'm gonna take this one in itty-bitty pieces.

First, as to the wording: That kind of behavior is common in almost all circles of life. You can't get your message across if the people listening don't understand what you are saying. I read the playbook and it is not some underground conspiracy, it is merely recommending how to deliver the message without alienting your audience. Ask anybody in advertising or sales; this is commonplace. Hell, I even took an NLP course in order to help me make more sales.

Here is an example: I consider myself a pretty smart guy, but my head hurts when I have to read roach's posts. While the concept he is talking about is not beyond me, his manner of writing puts me off. I just prefer more straightforward, simple language. End result: roach loses me as an audience because his message has no chance of connecting to me because of the wording and the style,

Like I said, I read some (not all, but some) of the playbook and it didn't bother me. It actually made sense.

As to the second paragraph I quoted from you....

You and I are from complete opposite spectrums in regards to idealogical thought. That doesn't make you right nor does it make me wrong. As foreign as my beliefs are to you, I assure you yours are to me as well.

But it appears as if you fail to understand that people like me are not all sheep. It just boils down to a difference in how we all view the world and events around us.

As to the topic at hand, you should remember that I have talked about it long before it became the conversation du Jour. It just so happens that many of the key talking points that are listed in that memo are very similar to concerns that I personally held based on my own research.

No one told me how to think and nobody suggested that I take this issue up as a cause. I was actually studying something completely different and kept coming across information that helped formulate the opinion that I have today.

Lastly....

I know our goverment sucks. I know that there are many things that happen that shouldn't. I am not so blind as to not see that.

I just look at it differently. Compared to most other gov'ts and cultures, I find this particular one suits me the best. It isn't perfect, but I feel it is the best one going.

I also know that some things are not attainable. World peace will never happen, regardless of what any of us want. Hunger will never end. Poverty will always be a blemish on every acre of land on this big ol' ball we call home. All of these things will always battle an opposing force that is much more powerful: human nature.

So, rather than try and change something I can't, I focus on things that I can have an effect on. While I do not condemn someone for choosing the more altruistic route, it is not for me.

My concern is that we are spiralling down an even worse path because we cannot get past our own differences. Both of our sides seem to have this worst-case scenario vision of each other. It is not hard to find some deep underworld conspiracy if you look for one. It's like some of these studies that get released. You give me what you want a study to prove, and I can prove it, regardless of how assinine the outcome you desire. When you came to the table already ladened with pre-conceived notions, you are going to leave with the same ideals because that is all you will see.

As with this case. I have many friends, co-workers, etc. that believe a lot of the same things I do, and.....

I can assure you that we are not evil. We are not pathological liars. We don't want more poverty. We don't want more hungry. We are not blind, short-sighted robots of the far-right regime. We are just people, just like you, and we want many of the same things you want. We just see a different way of getting there.

flstf · 02-05-2005, 07:04 PM

Quote:

Originally Posted by smooth

Usually it helps to cite the page when you quote a document. Are you referring to this (which is an 'example speech' for politicians to make to the public, not an initial proposal):

(page 74) (clipped)

I wonder what all those mights and coulds portend. Regardless, I think that document supports what I said, despite your attempt to rewrap it.

Good to see the republicans are finally on board with the government protecting us with safe, limited choice

The three funds they listed make sense to me so I assume something like them will be in the final plan. The government bond fund (low risk/low return), the corporate bond fund (medium risk/medium return) and the stock fund (high risk/high return). That way younger workers can put their SS money into the stock fund and re-balance into the other funds as they grow older. This is how many of us handle our personal accounts now.

If we don't like the makeup of the funds that will be offered as I understand it, we can choose to not participate and put all our FICA taxes into the SS plan.

KMA-628 · 02-05-2005, 11:12 PM

I'm gonna put myself back on topic:

First, regarding the comments made about personal accounts (that was for you smooth) and the risk of having the money in the stock market.

As I was reading the analysis of the Clinton's 2000 budget (yeah, Saturday night and I am spending it reading presidential budget reports), a paragraph jumped out at me:

Quote:

As a third element of its framework, the Administration proposes that one-fifth of the general revenues credited to Social Security, or $280 billion over the 2000-2009 period, be used to purchase corporate equities or other private financial instruments. The dividends earned on the stock would also be reinvested in equities. CBO estimates that by 2009, Social Security's holdings of stocks would be valued at more than $400 billion.

LINK

This was one of Clinton's proposals regarding SS. If a major problem that some people have with privatization is the riskiness of the stock market, where was the uproar about this? I never heard a peep about it.

The only difference with Clinton's proposal and privatization (in regards to the stock market) is who owns the program; me or the government. The obvious next question: Who do you trust more; yourself or the government?

Why do I get the feeling that a lot of the fervor here relates more to the person making the proposal and has little to do with the proposal itself?

Now, there is another little tidbit of information in Clinton's 2000 budget (as referenced above):

Quote:

[Social Security trust fund balances] are available to finance future benefit payments and other Trust Fund expenditures--but only in a bookkeeping sense.... They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes

In short, there isn't any money there. Right now SS is paying for itself in that it brings in more than it puts out. Where does the extra money go? It gets spent. Not just by Bush, but by everybody in Washington going back many, many years.

The guesstimates are that outlays will exceed revenues for Social Security somewhere around 2015/2016.

Then what happens? There isn't any money in the trust fund.

That leaves us with three options:

1) Pay back the IOU's in the trust fund (where is the money going to come from)
2) Increase the tax rate for SS (which would also include raising the cap)
3) Decrease benefits

and a possible fourth: all of the above (depending on who you talk to).

What about all of the "experts" saying there isn't a crisis and that SS is solvent until 2042 or 2055?

They are counting in the ghost balances of the trust fund. The trust fund has a balance, just like any other ledger, but there isn't anything there. The zero balance is offset by the IOU's. Plus, as I understand it, the design of the trust fund isn't such that it would ever hold a balance.

So, unless I am analyzing this information wrong, I am left with the following question:

Why shouldn't we be looking at reforming SS now? Realistically, this should have been done a long time ago. If we wait until the "No Crisis" people tell us it is o.k. to work on the problem, it will probably be too late.

More Info

/please note that I chose my references wisely, no links to Cato, Heritage or whatever.

sob · 02-06-2005, 07:49 PM

Quote:

Originally Posted by smooth

Just to break even you need to achieve a 3.3 rate of return. You're going to suddently strike it rich because you get to put money into a special fund yourself? hmm, right. Well, here's something for you: how much to employers contribute according to this plan? That's something I haven't been seeing. Do they still match their employees' contributions?

I haven't seen that either, but I'll make you a little wager that the employers' contribution is never reduced or eliminated.

sob · 02-06-2005, 07:55 PM

Quote:

Originally Posted by smooth

BTW, your last statement isn't accurate anymore. That's what the pundits were telling people all through the last decade. The panacea of mutual funds has now been skunked.

Not quite sure what you mean by that. Admittedly, I don't believe the mutual fund abuses are going to improve, but that can be addressed by selecting an index fund, as flstf suggests.

Quote:

I'm not saying that you won't get more. I'm saying you need to weigh the risks before deciding if that more is worth it. If you are only going to obtain 25K to 35K more over the course of your lifetime, is that worth risking your entire retirement fund?

Depends on whether or not you anticipate the government being broke, and telling you, "You don't get ANY Social Security. You saved for your retirement all along, so we're going to give all of your Social Security payments to someone who didn't save a nickel."

sob · 02-06-2005, 08:10 PM

Quote:

Originally Posted by KMA-628

I'm gonna put myself back on topic:

First, regarding the comments made about personal accounts (that was for you smooth) and the risk of having the money in the stock market.

As I was reading the analysis of the Clinton's 2000 budget (yeah, Saturday night and I am spending it reading presidential budget reports), a paragraph jumped out at me:

LINK

This was one of Clinton's proposals regarding SS. If a major problem that some people have with privatization is the riskiness of the stock market, where was the uproar about this? I never heard a peep about it.

The only difference with Clinton's proposal and privatization (in regards to the stock market) is who owns the program; me or the government. The obvious next question: Who do you trust more; yourself or the government?

Why do I get the feeling that a lot of the fervor here relates more to the person making the proposal and has little to do with the proposal itself?

Yes, there does seem to be a little adrenaline in some of the posts here.

I still haven't seen an answer to your repeated question of what happens when the payor/payee ration hits 1:1, as is predicted to happen soon.

Here's another perspective:

Link

Quote:

The C-Word: Say It (Social Security scam's crisis 2009)
National Review Online ^ | Jan. 11, 2005 | Donald Luskin

The C-Word: Say It

The Social Security crisis begins in just 5 years.

The leftist opponents of Social Security reform want you to believe there’s no “crisis,” and that whatever problems the system may have won’t materialize for more than 35 years. Funny how such equanimity and patience seems to elude them when the subject is global warming.

It’s even funnier when you realize the objective fact is this: The Social Security crisis actually starts a lot sooner than advocates of reform are saying. The Social Security crisis begins to materialize in just 5 years.

Here are the facts. You decide whether they amount to a “crisis.”

Right now the Social Security program collects more in taxes — both FICA taxes from current workers and income taxes on benefits from current retirees — than it pays out in benefits to retirees. That surplus goes into Social Security trust funds, where it is used to buy Treasury bonds that are held as an investment toward the payment of future benefits. The purchase by the trust funds of those Treasury bonds is no different than if you or I bought them. The Treasury issues the bonds in exchange for cash, which is used to finance the current expenditures of the federal government.

According to the latest annual report of the Trustees of the Social Security Trust Funds, the surplus in 2004 was $64.4 billion dollars. It will be higher this year — at $87.7 billion. The surplus will keep getting bigger and bigger through 2008, when it will reach $108 billion. Each year, that’s more and more money that the federal government won’t have to raise from the world capital markets. It’s a captive audience of bond buyers — and a growing one.

But in 2009, just 5 years from now, the surplus will start to shrink. In 2009 it will fall to $103.7 billion, and in that year the federal government will have to go to the capital markets to raise $4.3 billion that it didn’t have to raise the year before. That’s not a lot of money in the grand governmental scheme of things. But it’s an important turning point for Social Security — it’s the year the crisis begins.

Every year after that the crisis will deepen. Each year the government will get several billion dollars less from the Social Security surplus than it did the year before, and it will have to make up that difference by tapping the capital markets, or by raising taxes or trimming spending.

Most observers point to 2018 as the earliest year for the Social Security crisis to begin. But that’s only the year the crisis will pass an especially attention-grabbing milestone. That’s the year, according to the trustees, that the Social Security surplus will disappear entirely and become a deficit. In other words, for the first time tax revenues will be less than the benefits paid out that year. From the standpoint of public finance, though, it will just be another painful year in which the federal government had to raise more money from capital markets — or raise taxes more or trim more spending — than it did the year before. By 2018, the Treasury will have already received $359 billion less cash each year, cumulatively, than it received in the peak year of 2008.

Starting in 2018, as soon as Social Security tax revenues are insufficient to cover benefit payments, the gap will be made up as the trust funds redeem the Treasury bills they have been hoarding. Not only will the Social Security system no longer give cash to the federal government in exchange for Treasury bonds. Starting in 2018 the situation will be just the opposite: The Social Security system will give back the Treasury bonds held in the trust funds — and the interest on those bonds, which is held in the form of more bonds — and demand cash for them.

According to the Social Security actuary, in 2018 the trust funds will demand $23.4 billion in cash from the federal government. The trust funds will redeem the last of their bonds in 2041 — demanding from the government $1.003 trillion that year. From 2018 through 2041, the trust funds will redeem bonds worth, cumulatively, $11.9 trillion. Once again, just to be perfectly clear, let me emphasize that the federal government will have to come up with this $11.9 trillion somehow — either by tapping the capital markets, raising taxes, or trimming spending.

This should illuminate the debate on whether the trust funds are “real” or not. They are perfectly “real” in the sense that the Treasury bonds they hold are valid legal claims on the government. But they are not “real” in the sense that they, as a June, 2004, Congressional Budget Office report put it, “contain no financial resources” in and of themselves. For their value to be realized, the Treasury bills they hold must be redeemed for cash by the government — and that cash has to come from somewhere.

From the standpoint of public finance, the crisis ends in 2042 when the trust funds’ hoard of bonds is completely exhausted. Under current law, Social Security benefits will then be trimmed such that they will be payable out of current tax revenues. According to the trustees, benefits will have to be cut 27 percent from their present scheduled levels, with the situation only getting worse as time goes by. So, yes, the drain on the Treasury will end in 2042 — but at that point the crisis will simply be inherited by retirees in the form of lower benefits.

Those are all simple facts. Yes, they are estimates. They might be off a little bit one way or the other. But the general pattern is clear. Social Security will start to become a drag on the budget of the federal government in 2009. The state of affairs will get progressively worse through 2042, by which time Social Security will have consumed $11.9 trillion from the federal budget. And after that, Social Security benefits will be automatically cut. If that isn’t a “crisis,” I don’t know what is.

The opponents of reform claim that the Social Security crisis is, in fact, a crisis of general public finance — not one of the Social Security system itself. They see Social Security as an entity separate from the federal government, and maintain that its own dedicated stream of tax revenues and trust-fund assets will keep it going for more than a third of a century.

That’s a fair point of view, as far as it goes. At the same time, it is dangerously myopic to treat Social Security in isolation from the overall finances of government. That would be like finding nothing troubling about a factory that dumps pollutants into a river. That may be no problem for the factory itself, but it can be a major problem for everyone downriver. And when it comes to Social Security, we’re all downriver.

But the case of Social Security is even worse than that. By 2042 the pollution will back up into the factory itself. Unless the opponents of reform don’t think it’s a problem to automatically cut benefits by 27 percent all at once in 2042, then Social Security itself has a “crisis” — maybe not right now, but surely by then.

Don’t be too hard on the advocates of reform when they throw the C-word around. It’s fully justified. In fact, I’d even dare to use that most dangerous of all political words to describe the crisis. Yes, the I-word: imminent.

— Donald Luskin is chief investment officer of Trend Macrolytics LLC, an independent economics and investment-research firm. He welcomes your comments at don@trendmacro.com.

guy44 · 02-06-2005, 11:31 PM

sob asked what will happen when the revenue-payment ratio for Social Security reaches 1:1, and provides a Luskin artical proclaiming disaster. Let us deconstruct Mr. Luskin's piece, shall we?

Quote:

According to the latest annual report of the Trustees of the Social Security Trust Funds, the surplus in 2004 was $64.4 billion dollars. It will be higher this year — at $87.7 billion. The surplus will keep getting bigger and bigger through 2008, when it will reach $108 billion. Each year, that’s more and more money that the federal government won’t have to raise from the world capital markets. It’s a captive audience of bond buyers — and a growing one.

This is true. The surplus for SS is the amount of extra money - say, equivelant to an individual person's savings account - used to pay whatever amount of the benefits can't be paid in a given year by the money SS recieved that year. Say SS has to pay $100 a year in benefits, but only receives $90 a year in 2009. This means that $10 has to be removed from the Trust Fund. About that time, in real life, the Trust Fund will have over a billion dollars. But then Luskin says:

Quote:

But in 2009, just 5 years from now, the surplus will start to shrink. In 2009 it will fall to $103.7 billion, and in that year the federal government will have to go to the capital markets to raise $4.3 billion that it didn’t have to raise the year before. That’s not a lot of money in the grand governmental scheme of things. But it’s an important turning point for Social Security — it’s the year the crisis begins.

Every year after that the crisis will deepen. Each year the government will get several billion dollars less from the Social Security surplus than it did the year before, and it will have to make up that difference by tapping the capital markets, or by raising taxes or trimming spending.

This is spin - and it is just silly. What Luskin is trying to make you think is that, as SS takes money out of the Trust Fund, beginning in 2009, and it shrinks as a result, SS will be forced to get money from somewhere else. What he doesn't say is that such a scenario is only true if SS were to have a goal of maintaining the Trust Fund at its peak, or the level it is at the day before SS begins dipping into it. To further my example from above, if the Trust Fund had $50 on December 31, 2008, it would have only $40 dollars by December 31, 2009. Luskin is saying that SS will have to begin finding other sources of funding in order to maintain a total amount of available SS money - including Trust Fund money - equal to what existed on December 31, 2008. He calls this situation a crisis.

Back on planet Earth, the Social Security Administration will do no such thing. It is silly to think that the Trust Fund should always remain filled with as much money as humanly possible. The Trust Fund is actually there in order to ensure benefits for many years after SS begins paying out more in benefits than it takes in. It is not meant to be a minimally acceptable level of available money. When the Trust Fund was established in its current form - in 1983, by Reagan - it was designed to simply cover SS benefits for a while and, in doing so, eventually dwindle. To use my example again, the Trust Fund will dwindle over the years - from $50 on the last day of 2008 to $0 at some future point - as it is spent by SS to ensure 100% payment of benefits. This "crisis" Luskin is referring to is the Trust Fund doing EXACTLY what it was designed to do.

Quote:

Most observers point to 2018 as the earliest year for the Social Security crisis to begin. But that’s only the year the crisis will pass an especially attention-grabbing milestone. That’s the year, according to the trustees, that the Social Security surplus will disappear entirely and become a deficit. In other words, for the first time tax revenues will be less than the benefits paid out that year. From the standpoint of public finance, though, it will just be another painful year in which the federal government had to raise more money from capital markets — or raise taxes more or trim more spending — than it did the year before. By 2018, the Treasury will have already received $359 billion less cash each year, cumulatively, than it received in the peak year of 2008.

OK, so in 2018 the Trust Fund will have run out of money and Social Security will be taking in less in taxes than it pays in benefits. Well, there wasn't really a crisis in 2009, no matter how much latitute you grant Luskin on the semantics of the word. But, I mean, this time, Luskin can't be wrong, can he? Well, yes. See, as Luskin points out, SS has a large amount of bonds that it can dip into in order to pay out 100% of benefits:

Quote:

Starting in 2018, as soon as Social Security tax revenues are insufficient to cover benefit payments, the gap will be made up as the trust funds redeem the Treasury bills they have been hoarding. Not only will the Social Security system no longer give cash to the federal government in exchange for Treasury bonds. Starting in 2018 the situation will be just the opposite: The Social Security system will give back the Treasury bonds held in the trust funds — and the interest on those bonds, which is held in the form of more bonds — and demand cash for them.

According to the Social Security actuary, in 2018 the trust funds will demand $23.4 billion in cash from the federal government. The trust funds will redeem the last of their bonds in 2041 — demanding from the government $1.003 trillion that year. From 2018 through 2041, the trust funds will redeem bonds worth, cumulatively, $11.9 trillion. Once again, just to be perfectly clear, let me emphasize that the federal government will have to come up with this $11.9 trillion somehow — either by tapping the capital markets, raising taxes, or trimming spending.

So SS has been paying the federal government money for years in the form of bonds in order to have - excuse me, hoard - Treasury bills. Think of these as IOUs with a bullet: SS has been giving money for a long time to the federal government so that one day, when they need money, they can receive what they originally gave back with interest. In 2018, as Luskin has correctly shown, SS will need to dip into their hoard of Treasury bills and receive their investment back with interest. So if they gave the feds $50 dollars originally, with interest they may be expected to get back, say $55 (this doesn't correspond to reality, I'm just creating an example). What is wrong with this? I mean, if you put your money in the bank and withdraw it a few years later, you expect to get it back with interest, right? Shouldn't SS too?

Well, he says that this puts the government $11.9 trillion dollars (the amount they will owe SS) further in debt. Is the real SS crisis that the government will have to pay back to SS the money it owes them? Perhaps - I mean, $11.9 trillion is a lot of money. So what are the possible solutions to this problem?

Luskin has no answers. Instead, he points out the obvious - that the government has to get the money to repay that $11.9 from somewhere:

Quote:

This should illuminate the debate on whether the trust funds are “real” or not. They are perfectly “real” in the sense that the Treasury bonds they hold are valid legal claims on the government. But they are not “real” in the sense that they, as a June, 2004, Congressional Budget Office report put it, “contain no financial resources” in and of themselves. For their value to be realized, the Treasury bills they hold must be redeemed for cash by the government — and that cash has to come from somewhere.

I can propose a solution or, more accurately, describe what other, smarter people have written. As Matthew Yglesias wrote, "The White House has repeatedly defined Social Security's move into cash flow imbalance starting in 2019 as the problem. One can dispute whether or not this is, in fact, problematic. It is clear, however, that it only is problematic if you think there's something problematic about paying the money back." Why does the White House think it is problematic to pay back the money it owes? I propose that it is because the White House wishes to make Bush's tax cuts permanent. As this report from the non-partisan Congressional Budget Office shows, "If the 2001 and 2003 tax cuts are made permanent as the Administration has proposed, their cost over the next 75 years will be more than five times the Social Security shortfall over this period." Don't believe the CBO? How about John Kerry: "And all you need to do to move Social Security into safety, well into the 22nd century, into the next century, is to roll back part of George Bush's tax cut today. His tax cut takes three times the deficit of what is contained in Social Security." In fact, "rolling back Bush's tax cuts just for those Americans who earn more than $350,000 a year would come close to covering the shortfall! If the tax cuts were NOT made permanent, in other words, the government could easily cover all of its Social Security expenses. When Luskin asks where this money will come from, everyone should answer, "from revenue generated if Bush's taxcuts are allowed to sunset (expire)."

OK, replies Luskin, what if the federal government does repay its debt to SS? Even then, SS will only be able to ensure everyone receives 100% of benefits until 2042, and surely THAT is the crisis [although I question the imminent adjective he likes to use]:

Quote:

From the standpoint of public finance, the crisis ends in 2042 when the trust funds’ hoard of bonds is completely exhausted. Under current law, Social Security benefits will then be trimmed such that they will be payable out of current tax revenues. According to the trustees, benefits will have to be cut 27 percent from their present scheduled levels, with the situation only getting worse as time goes by. So, yes, the drain on the Treasury will end in 2042 — but at that point the crisis will simply be inherited by retirees in the form of lower benefits.

Those are all simple facts. Yes, they are estimates. They might be off a little bit one way or the other. But the general pattern is clear. Social Security will start to become a drag on the budget of the federal government in 2009. The state of affairs will get progressively worse through 2042, by which time Social Security will have consumed $11.9 trillion from the federal budget. And after that, Social Security benefits will be automatically cut. If that isn’t a “crisis,” I don’t know what is.

Well, what would happen if, as Luskin claimed, eligable Americans were only recieving about 80% of their SS benefits beginning in 2042? I mean, surely chaos would reign, milk will curdle, and retirees will all live in poverty? Well, there is a lot Luskin is leaving out.

Remember when I told you that allowing Bush's tax cuts to expire would more than pay for whatever amount of money the government needs to raise in order to pay its debt to SS? Well, that would easily cover the last 20% or so of benefits that SS needs to make up beginning in 2042 - and keep SS providing full benefits until somewhere around 2080. Even if it didn't, those 80% of benefits are, according to this article, actually worth more in real money than retirees get in full benefits currently (thanks to wage-indexing). Think of it this way: retiree A gets, say, $20 a month from Social Security in 2005. In 2042, retirees may only be receiving 70-80% of what they should be getting, but even so, the amount that retiree B - who lives in 2042 - gets is equivelant to $25 for retiree A. So nobody will be in that much trouble, really, even if the system pays out less than it should in 2042.

Which leaves Luskin in trouble. Social Security doesn't face a crisis in 2009, because it has its Trust Fund specifically set up to ensure that retirees get their checks. There is no crisis in 2018, because the government can easily get the cash it needs to pay back Social Security everything it owes in Treasury bills. Even if Social Security doesn't provide 100% of benefits in 2042 - it easily could, but just for the sake of argument - if it gives out only 70-80%, everyone receiving that money would actually betting getting more in real money than people getting all of their benefits in 2005. The earliest time that Social Security faces a real crisis, therefore, is around 2080. That sure as hell isn't imminent and, despite all of Luskin's pretty rhetoric, misdirection, and half-truths, is no crisis.

KMA-628 · 02-06-2005, 11:42 PM

FYI -

I spoke with Donald Luskin this evening (prior to reading the above).

I will forward your rebuttal to him tomorrow to get his take on your deconstruction of his article.

I cannot guarantee that he will respond, but if he does, I will post his response here (with his permission, of course).

KMA-628 · 02-06-2005, 11:57 PM

Also, Donald Luskin gave me a research paper from the U. of Pennsylvania on the trust fund topic.

It is too large to post here (41 pages), but a good read if you want the "scholarly" take on the situation. PM if you would like a copy and I will forward it on.

Here is the abstract

Quote:

Abstract
With over $1 trillion in assets, the U.S. Social Security trust fund is the largest pension
reserve in the world, and potentially a model for other developed countries facing future
financing problems. But are those assets actually “worth anything?” This question has
generated a heated debate in the U.S. as policymakers debate options for Social Security reform,
with the understanding that the characterization of the trust fund influences these decisions.
Some observers claim that the trust fund is not worth anything while others argue that it is
valuable. However, different reasons are given for the same position.
This paper provides a unified conceptual framework for thinking rigorously about the
assets accumulated in the trust fund. Multiple perspectives of the trust fund are identified and
are summarized under two categories: (I) storage technology arguments and (II) ownership
arguments. Storage technology arguments focuses on whether the trust fund surpluses actually
reduce the level of debt held by the public or, alternatively, are used to “hide” smaller on-budget
surpluses. Ownership arguments focus on property rights, i.e., how trust fund credits should be
allocated regardless of whether they reduce the debt held by the public.
Only the storage technology argument can be empirically tested, as we do herein. We
find that there is no empirical evidence supporting the claim that trust fund assets have reduced
the level of debt held by the public. In fact, the evidence suggests just the opposite: trust fund
assets have probably increased the level of debt held by the public. Moreover, the adoption of a
“unified budget” framework in the late 1960s appears to play a statistically significant role in this
result. We show how this counterintuitive result can be explained by a simple “split the dollar
game” where competition between two political parties exploits the ignorance of voters who
don’t understand that the government’s reported budget surplus actually includes the “offbudget”
Social Security surplus. To be sure, this evidence is based on a limited annual time
series (1949 – 2002) and so the results should be interpreted with caution. But the empirical tests
are, if anything, biased toward finding a reduction in the level of debt held by the public, and not
the increase that we find.
The Wharton School
University of Pennsylvania
Philadelphia, PA 19104-6218

KMA-628 · 02-07-2005, 10:27 AM

I received a response from Don this morning regarding guy44's post.

While I agree with Don's assesment, I do not think it would further the discussion here, so I have decided not to post it. Plus, I do not have permission to post it.

Since it occured in private conversation, I will keep it that way....private.

I just wanted to let you know that he did respond and not too favorably.

Kadath · 02-07-2005, 01:25 PM

Quote:

Originally Posted by KMA-628

I received a response from Don this morning regarding guy44's post.

While I agree with Don's assesment, I do not think it would further the discussion here, so I have decided not to post it. Plus, I do not have permission to post it.

Since it occured in private conversation, I will keep it that way....private.

I just wanted to let you know that he did respond and not too favorably.

<--- Stunned.

You mean, a guy who makes his living on his opinions didn't respond favorably to someone disagreeing with him? Total fucking shock!

Yakk · 02-07-2005, 01:27 PM

Quote:

Originally Posted by KMA-628

In short, there isn't any money there. Right now SS is paying for itself in that it brings in more than it puts out. Where does the extra money go? It gets spent. Not just by Bush, but by everybody in Washington going back many, many years.

The guesstimates are that outlays will exceed revenues for Social Security somewhere around 2015/2016.

Then what happens? There isn't any money in the trust fund.

That leaves us with three options:

1) Pay back the IOU's in the trust fund (where is the money going to come from)
2) Increase the tax rate for SS (which would also include raising the cap)
3) Decrease benefits

and a possible fourth: all of the above (depending on who you talk to).

What about all of the "experts" saying there isn't a crisis and that SS is solvent until 2042 or 2055?

They are counting in the ghost balances of the trust fund. The trust fund has a balance, just like any other ledger, but there isn't anything there. The zero balance is offset by the IOU's. Plus, as I understand it, the design of the trust fund isn't such that it would ever hold a balance.

I have a question for you.

Are "social security taxes" general revenue, or not?

A> If social security taxes are general revenue, then social security costs are also general revenue. In which case, 2015/2016 is not a special year at all. One random general revenue tax fell below the cost of one general revenue program.

B> If social security taxes are not general revenue, then the US government owes social security billions of dollars. In which case, in 2015/2016, social security can start calling in those IOUs.

So which is it? From what I can tell, the above arguement wants the revenue to be general revenue when it is in surplus, and the sole source of funding SS when it isn't.

It's a cake. You can eat it, or you can have it. You really can't do both. Please select one, or show why I'm on crack, and the cake has a dual nature.

guy44 · 02-07-2005, 01:49 PM

I believe that it is general revenue, but in the next few years as less people are paying taxes for more Social Security recipients (the Baby Boomers) the size of the Trust Fund decreases as more and more is used to cover whatever taxes themselves don't. However, the Trust Fund also has about $11 trillion dollars in IOUs from the federal government that, when the general revenue dwindles down around 2018, will need to be called in.

You are right that it is misleading to call actual funds the sole source of funding when there are still IOUs laying around. The only way that is the case is if we were to know, definitively, that the federal government had no intention of honoring those IOUs (i.e. Treasury bills).

guy44 · 02-07-2005, 01:59 PM

You know, all this detail and nuance regarding Social Security can be very confusing. It is sometimes hard to accurately describe what it is we are talking about. We may get muddled in our meaning, misunderstand difficult economic concepts, or just in general not know what the hell we're talking about.

I know who could sort these things out for us! Why, President George W. Bush can surely break this complicated matter down for the benefit of the American people:

Quote:

Because the -- all which is on the table begins to address the big cost drivers. For example, how benefits are calculate, for example, is on the table; whether or not benefits rise based upon wage increases or price increases. There's a series of parts of the formula that are being considered. And when you couple that, those different cost drivers, affecting those -- changing those with personal accounts, the idea is to get what has been promised more likely to be -- or closer delivered to what has been promised.

Does that make any sense to you? It's kind of muddled. Look, there's a series of things that cause the -- like, for example, benefits are calculated based upon the increase of wages, as opposed to the increase of prices. Some have suggested that we calculate -- the benefits will rise based upon inflation, as opposed to wage increases. There is a reform that would help solve the red if that were put into effect. In other words, how fast benefits grow, how fast the promised benefits grow, if those -- if that growth is affected, it will help on the red.

Okay, better? I'll keep working on it.

Wow. Just - goddam. Don't be too grandiloquent there, Bush. I'm not sure I can handle words with up to three - count 'em, three - syllables. Now, I actually think I know what he's talking about, which is adjusting benefits according to inflation rather than wage-indexing, but I somehow doubt he does.

Here's the whole thing.

Yakk · 02-10-2005, 10:22 AM

Bush's view on the debt incurred to pay for social security:

Quote:

Originally Posted by GWB

Some in our country think that Social Security is a trust fund -- in other words, there's a pile of money being accumulated. That's just simply not true. The money -- payroll taxes going into the Social Security are spent. They're spent on benefits and they're spent on government programs. There is no trust. We're on the ultimate pay-as-you-go system -- what goes in comes out. And so, starting in 2018, what's going in -- what's coming out is greater than what's going in. It says we've got a problem. And we'd better start dealing with it now. The longer we wait, the harder it is to fix the problem.

Quote:

Originally Posted by 14th Amendment

Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

squirrelyburt · 02-10-2005, 11:07 AM

We know the system will take a dump without change, but so many people are against any change. Why?? look at the Chilean system, they went to privatization years ago and it has done nothing but promoted national growth. It is very possible.

host · 02-10-2005, 11:28 AM

Bush should be impeached now on the grounds of utter incompetence
and duplicity.

Here is a link to the SSA Trust Fund Portfolio. It contains "special issue" and
treasury bonds, totalling $1,703,395,104 .

Quote:

<a href="http://www.ssa.gov/OACT/ProgData/investheld.html">http://www.ssa.gov/OACT/ProgData/investheld.html</a>
(Change the year from 2004 to 2005, click on "submit request", and the page
will display the SSA Trust fund portfolio details as of Jan. 31, 2005.)
"The average interest rate, weighted by the amount invested at each rate, is 5.478 percent at the end of January 2005. Similarly, the average number of years to maturity, weighted by the amounts maturing, is 7.087 years.

Maturity dates for special issues are June 30 of the years shown in the above table. When short-term certificates of indebtedness mature, they are reinvested in special-issue bonds having maturities generally ranging from 1 to 15 years. Thus, for each interest rate shown for special-issue bonds, there is usually a range of maturity years."

Bush must spew his talking points propaganda, require loyalty oaths and background checks from citizens who appear before him in public, plant
shills with fake names (as in Jeff Gannon) in his press conferences, payoff
mouthpieces posing as commentators (Armstrong Williams) and enlist the
Fox News/Limbaugh/Hannity/Coulter apparatus to fool the sheeple into
consenting to his policies. Policies that are not in the sheeple's best interest,
judging by the lack of truth in the way they must be presented and shilled.

Bush doesn't want the sheeple to know that the SSA trust fund does exist,
with publicly available details. Bush knows that it will take an act of Congress to dismantle and default on payment of SSA's bomd portfolio.
He doesn't want you to know that this is what he plans to do. It is a much
easier way out than taxing and budgeting responsibly and competently to
meet government's obligations.

KMA-628 · 02-10-2005, 11:49 AM

host -

The facts are not on your side here.

The trust funs has zero economic assets. It has a ton of money owed to it, but it has zero real dollars in it.

As I have said before, if you were given a check for $10 from the trust fund, without transferring any money into the trust fund, the check would bounce.

No one is arguing that the trust fund has zero dollars in it (at least no one that has looked at the facts), the argument is how to we pay back the money.

The money was borrowed from the trust fund and spent without any plan of paying it back.

Now, in 15-20 years, when SS needs to pull from the trust fund, how do we pay the trust fund back to keep SS benefits up.

host · 02-10-2005, 12:31 PM

KMA-628, isn't the real dilemna that the Bushco didn't "purge" the SSA web
page containing the trust fund asset information before Bush declared that
it doesn't exist?

If the SSA trust fund's bond portfolio has no value, what does that tell the
Japanese or the Chinese, who probably don't regard their combined $1 trillion
Treasury Bill holdings as "valueless".

The POTUS is obligated to advocate responsible tax and budgetary policies.
Past presidents, and even Bush, until it no longer suited his new message,
reassured workers and retires as to the viability of SSA. Bush is taking the
wronf approach, and attempting to take the easy way out. Why the sudden
shift to a tax policy that favors the wealthiest? Why should what remains of
the middle class endorse the president's continuing agenda of shifting wealth
and tax burden from the lower 80 percent of American's to the wealthiest
20 percent? There are other alternatives. Let the sunset provisions of
Bush's tax cuts expire, leave inheritance taxes in place.....the wealthy simply
purchase affordable instruments, for example, "second to die" life insurance
policies on wealthy parents mitigate much of the impact of the "death tax".

Remove the $90,000 and above earned income cap on SSA payments. The
wealthy paid for Bush and his agenda, and they are in the process of getting
what they paid for, while some of us watch in frustration, and others willingly
co-operate in Bush's wealth shifts away from themselves and their children.

You are saying the same thing that Bush said. SSA's site contradicts both of you.

Quote:

Tax income is deposited on a daily basis. That part not immediately needed to pay benefits or administrative expenses is invested by purchasing "special issue" securities. The cash exchanged for the securities goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.

Money to cover expenditures (mainly benefit payments) from the trust funds comes from the redemption or sale of securities held by the trust funds. When "special issue" securities are redeemed, interest is paid. In fact, the amount of special issues redeemed is just enough so that this amount plus the corresponding interest covers the expenditure.

As stated in the answer to "What happens to the taxes that go into the trust funds?", most of the money flowing into the trust funds is invested in U. S. Government securities. Because the government spends this borrowed cash, some people see the current increase in the trust fund assets as an accumulation of securities that the government will be unable to make good on in the future. Without legislation to restore long-range solvency of the trust funds, redemption of long-term securities prior to maturity would be necessary.

Far from being "worthless IOUs," the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government.

SSA claims that they constantly buy and sell "securities" in order to pay
benefits. Bush and apparently, you, want to separate the government's
obligation to redeem outstanding securities "on demand". Why is this bond
portfolio your target? Are American workers more gullible or less worthy
than Asian treasury bond holders? Why doesn't Bush tell them that their
U.S. treasury holdings are "worthless IOU's" ? Can't you recognize that
Bush is acting in a dangerous, desperate, and duplicitous manner? He is
hoping to talk down the value and risk of just one class of government
bond. By doing this, he doesn't pass the test of representing the best interests of all Americans. He should be impeached.

KMA-628 · 02-10-2005, 12:34 PM

Quote:

Originally Posted by host

KMA-628, isn't the real dilemna that the Bushco didn't "purge" the SSA web
page containing the trust fund asset information before Bush declared that
it doesn't exist?

Well, I read this far and stopped.

Even for you, this is a little wacko.

I do not wish to participate in discussions that require me to don ye old tin foil cap.

Read the posts in this thread. The trust fund has been discussed thoroughly, with plenty of factual evidence to back up the assertions.

Yakk · 02-10-2005, 12:48 PM

Quote:

Originally Posted by KMA-628

The trust funs has zero economic assets. It has a ton of money owed to it, but it has zero real dollars in it.

US government debt is an economic asset.

Quote:

Originally Posted by KMA-628

No one is arguing that the trust fund has zero dollars in it (at least no one that has looked at the facts), the argument is how to we pay back the money.

I will argue with this. It has money. Does it have physical cash? Hell, your chequing account doesn't have cash in it.

Quote:

Originally Posted by KMA-628

The money was borrowed from the trust fund and spent without any plan of paying it back.

Insofar as the US government borrows money for every single purpose under the sun, without any plan of paying it back, this is true.

This isn't a crisis of social security. This is a crisis of general government finantial mismanagement. The US congress is in massive deficit financing mode -- they are spending money hand over fist which they don't have.

The social security debt only makes the existing finanicial imprudence of the federal government even worse -- it is just one of many debts.

What GWB is describing is defaulting on trillions of dollars of US government debt. He's describing stealing from the social security fund, by zeroing it's assets, and using that to prop up a horribly leaking government finantial situation.

Quote:

Originally Posted by KMA-628

Read the posts in this thread. The trust fund has been discussed thoroughly, with plenty of factual evidence to back up the assertions.

I have read them. They consist of people disagreeing with you, and some agreeing with you. There has been no consensus reached. The issue sure looks open to me.

And calling your opponents "wacko" isn't polite.

host · 02-10-2005, 12:53 PM

Quote:

Originally Posted by KMA-628

Well, I read this far and stopped.

Even for you, this is a little wacko.

I do not wish to participate in discussions that require me to don ye old tin foil cap.

Read the posts in this thread. The trust fund has been discussed thoroughly, with plenty of factual evidence to back up the assertions.

Yeah.....it's me....I'm the one who is misleading the thread by referring to the
Bushco policy of "scrubbing" government web pages !

Quote:

<a href="http://www.2600.com/news/view/article/1803">http://www.2600.com/news/view/article/1803</a>
WHITE HOUSE'S SEARCH ENGINE PRACTICES CAUSE CONCERN
Posted 28 Oct 2003 04:59:54 UTC

Quote:

4.30.2004
National :: Info On Women's Issues Removed From Government Websites

WASHINGTON (Reuters) - The Bush administration has stripped information on a range of women's issues from government Web sites, apparently in pursuit of a political agenda, researchers reported on Wednesday.

"Vital information is being deleted, buried, distorted and has otherwise gone missing from government Web sites and publications," Linda Basch, president of the National Council for Research on Women, said in a telephone interview.

Quote:

Democratic Lawmakers Accuse Bush Administration of Political Bias in Deleting Information From New CDC Condom Fact Sheet
[Dec 19, 2002] A group of 14 Democratic lawmakers yesterday sent a letter to HHS Secretary Tommy Thompson accusing the Bush administration of "playing politics" by eliminating "key information" on condom use in a new fact sheet recently posted on the CDC Web site, the Los Angeles Times reports.

Led by Rep. Henry Waxman (D-Calif.), the lawmakers criticized the administration for eliminating from the fact sheet instructions on how to properly use a condom and information from studies indicating that educating young people about condom use does not foster earlier sexual activity. Both topics were covered in the original fact sheet created in 1996 during the Clinton administration (Ornstein, Los Angeles Times, 12/19). The lawmakers wrote, "The apparent purpose of these alterations and deletions is to remove information that conflicts with the administration's preference for 'abstinence-only' programs" (Letter text, 12/18).

The condom fact sheet previously said that abstaining from sex was the best way to prevent transmission of HIV and other sexually transmitted diseases, but it also stated that "for those who have sexual intercourse, latex condoms are highly effective when used consistently and correctly." The new version of the fact sheet, which was posted on Dec. 2, includes in its introduction that condoms "can reduce the risk of STD transmission. However, no protective method is 100% effective, and condom use cannot guarantee absolute protection against any STD" (AP/Baltimore Sun, 12/19). The lawmakers also criticized the administration for altering a fact sheet concerning the alleged link between abortion and breast cancer. The previous version said that women who have an abortion were at "the same risk as other women for developing breast cancer." The new fact sheet says that "studies are inconsistent" on the association between abortion and breast cancer, according to the Times.

Waxman in late October wrote Thompson "chid[ing]" the Bush administration for removing the condom fact sheet from the CDC Web site altogether for more than a year and a half while officials updated it, according to the Times. "I think this is an Orwellian trend at HHS. Information that used to be based on science is being systematically removed from the public," Waxman said (Los Angeles Times, 12/19). Thompson responded to Waxman in a letter sent in late November that included responses to six requests made by Waxman. Thompson wrote that HHS "has a long tradition of employing the best scientific information for internal decision making" (Letter text, 11/27). The Times reports that Waxman and colleagues have "not been satisfied" with Thompson's responses (Los Angeles Times, 12/19). Dr. David Fleming, CDC's deputy director for science, defended the actions of the Bush administration, saying that the CDC chose a "more neutral" introduction for the condom fact sheet because of the "mixed evidence" on the issue. "This fact sheet is designed to be as scientifically accurate as possible. We specifically tried not to nuance it in the direction of either encouraging or discouraging use of condoms," Fleming said (AP/Baltimore Sun,12/19).
Reprinted from the Daily HIV/AIDS Report (Kaiser) www.kaisernetwork.org Friday, December 13, 2002 thru Thursday, December 19, 2002

<a href="http://www.thememoryhole.org/pol/iraq-combat/">White House Alters Webpages About Iraq Combat</a>

I'd be happy to post 20 more examples when time permits.

The "tin foil cap" cliche is getting a bit long in the tooth, dontcha think?
Any excuse to avoid actually countering my points with references to
verifiable.....or contested sources !

KMA-628 · 02-10-2005, 02:06 PM

Quote:

Originally Posted by Yakk

I have read them. They consist of people disagreeing with you, and some agreeing with you. There has been no consensus reached. The issue sure looks open to me.

And calling your opponents "wacko" isn't polite.

Actually, it seems everybody agrees that there is a trust fund and that it holds no real assets, it holds liabilities. If I go to my bank right now, I can withdraw cash. If I went to the trust fund for cash, I would have to wait, because there isn't anything available. In order for the trust fund to fulfill my request, it would have to cash in on it's bonds.

The problem is how the trust fund becomes liquid again. SS and the trust fund have been used as a cash cow for years, but I have yet to see a tangible way of transferring the liabilities to liquid assets.

Bottom line (as I have said numerous times): The money was borrowed and spent without our approval and in order to replace that money, we, the American taxpayers, are going to have to foot the bill. Our government isn't going to foot the bill, they will pass it on to us. Which means that we will pay for it twice.

Anyway, as to the "wacko" thing. I called the assertion wacko, not the person. Did you not read the comment? That kind of stuff belongs in Paranoia, not here. And the assertion is made by someone that devotes an entire thread to questioning the mental health of people like me. I learned my lesson, Mr. Ignore button is now implemented so as to avoid this kinda of thing in the future.

fibber · 02-10-2005, 02:46 PM

"Yeah.....it's me....I'm the one who is misleading the thread by referring to the
Bushco"

No it's you misleading the thread, that was really getting pretty interesting, by stopping-down discussion of the actual problem at hand to slam the administration again.

(If it makes you feel better, I generally agree that they're wankers. Just like Clinton's group, and Bush Sr.'s earlier.)

-fibber

Yakk · 02-10-2005, 02:57 PM

Quote:

Originally Posted by KMA-628

Actually, it seems everybody agrees that there is a trust fund and that it holds no real assets, it holds liabilities. If I go to my bank right now, I can withdraw cash. If I went to the trust fund for cash, I would have to wait, because there isn't anything available. In order for the trust fund to fulfill my request, it would have to cash in on it's bonds.

Everyone does not agree. The trust fund holds real assets, as real as your ownership of stock in some company.

It holds bonds which represent debt of the US government, which it purchased in large quantities since the 80s, as planned.

If I go to my investment advisor, and ask for cash, I can't get it. I'd have to cash in my investments first. This does not mean there is are no real assets in my investment account.

US government bonds are pretty damn liquid. They could sell them on short notice, or at worst get an overnight loan while the sale goes through, and produce cash (or, lower-M money) as required.

Quote:

Originally Posted by KMA-628

The problem is how the trust fund becomes liquid again. SS and the trust fund have been used as a cash cow for years, but I have yet to see a tangible way of transferring the liabilities to liquid assets.

It holds US government bonds (or was it some other debt asset?). You sell those bonds on the open market, or let then mateur and cash them in.

Quote:

Originally Posted by KMA-628

Bottom line (as I have said numerous times): The money was borrowed and spent without our approval and in order to replace that money, we, the American taxpayers, are going to have to foot the bill. Our government isn't going to foot the bill, they will pass it on to us. Which means that we will pay for it twice.

No, you, the American people, approved of your government's spending habits. You elected representatives who spent that money.

Collectively, you are liable. It's called responsibility. And don't pretend they decieved the people of America with election promises -- look at the reelection rate in the senate and the US house.

Possibly the American people where negligent in their responsibilities, and didn't pay attention to what their representatives did, but you can't claim it was without their approval.

It isn't the SSA who is screwing up. It is the US congress, US senate and the US president, who collectively are spending the USA into debt. A debt which they are lieing about.

Quote:

Originally Posted by KMA-628

Anyway, as to the "wacko" thing. I called the assertion wacko, not the person. Did you not read the comment? That kind of stuff belongs in Paranoia, not here. And the assertion is made by someone that devotes an entire thread to questioning the mental health of people like me. I learned my lesson, Mr. Ignore button is now implemented so as to avoid this kinda of thing in the future.

/shrug, the current administration has been known to change or delete US government published data that disagrees with their policies. That isn't tinfoil hat stuff. I can come up with citations if you request.

There is a pig-in-the-python demographic problem. There is a US-government financial mismanagement problem. Claiming that those problems are a problem of SS is both useless and disenginuous.

The US government taking the SSA trust fund, and zeroing it, is the same as a company taking a pension fund (possibly invested in company stock) and folding it into general revenue. It's accounting fraud, theft from the people with a stake in the fund, and immoral.

You have to realize, accounting is real -- "it is just accounting" is about as ignorant a financial statement you can make. Your bank account is just numbers. Debt is just numbers. Ownership of a company is just numbers. Everything you own, everything you owe, the lubrication of the entire world economy -- it is numbers in some computer somewhere. Those numbers all represent real obligations. Failure to live up to these obligations is theft.

host · 02-10-2005, 11:01 PM

Quote:

Originally Posted by KMA-628

Anyway, as to the "wacko" thing. I called the assertion wacko, not the person. Did you not read the comment? That kind of stuff belongs in Paranoia, not here. And the assertion is made by someone that devotes an entire thread to questioning the mental health of people like me. I learned my lesson, Mr. Ignore button is now implemented so as to avoid this kinda of thing in the future.

I like to think that I'm in good company, as far as "devoting an entire thread to questioning the mental health of people" who support and/or work for
Bush and his administration, but either refuse or are incapable of mounting
an argument that is well founded in verifiable facts that make a case that it
it is in their own best interest, and that of the country's, to do it. I did not single you out as someone who fits that description.

Here's a well respected journalist and commentator who seems to be making
similar observations and comments about delusional politicians and their
supporters as I did in my "mental health" thread. Go figure......

Quote:

<a href="http://www.zpenergy.com/modules.php?name=News&file=article&sid=1149">Bill Moyers: There is no tomorrow</a>
Bill Moyers
January 30, 2005 MOYERS

Editor's note: please note correction link <a href="http://www.mediainfo.com/eandp/news/article_display.jsp?vnu_content_id=1000797041">here</a>

One of the biggest changes in politics in my lifetime is that the delusional is no longer marginal. It has come in from the fringe, to sit in the seat of power in the Oval Office and in Congress. For the first time in our history, ideology and theology hold a monopoly of power in Washington.

Theology asserts propositions that cannot be proven true; ideologues hold stoutly to a worldview despite being contradicted by what is generally accepted as reality. When ideology and theology couple, their offspring are not always bad but they are always blind. And there is the danger: voters and politicians alike, oblivious to the facts....................

host · 02-10-2005, 11:19 PM

Quote:

Originally Posted by fibber

"Yeah.....it's me....I'm the one who is misleading the thread by referring to the
Bushco"

No it's you misleading the thread, that was really getting pretty interesting, by stopping-down discussion of the actual problem at hand to slam the administration again.

(If it makes you feel better, I generally agree that they're wankers. Just like Clinton's group, and Bush Sr.'s earlier.)

-fibber

fibber, thank you for "defusing" the tone of your post at the end.....
Please consider that I got involved because I posted a "reasonable" reaction
to this, displayed in Post #95..... , and I'd do it again, if Bush persists in
deliberately misleading the citizenry as to the SSA trust fund's assets !

Quote:

Originally Posted by GWB
Some in our country think that Social Security is a trust fund -- in other words, there's a pile of money being accumulated. That's just simply not true. The money -- payroll taxes going into the Social Security are spent. They're spent on benefits and they're spent on government programs. There is no trust. We're on the ultimate pay-as-you-go system -- what goes in comes out. And so, starting in 2018, what's going in -- what's coming out is greater than what's going in. It says we've got a problem. And we'd better start dealing with it now. The longer we wait, the harder it is to fix the problem.

fibber · 02-11-2005, 01:00 PM

It's cool, I usually have no problems with your arguments, just their delivery sometimes.

On topic, I read some article earlier this morning on how the bond idea resembles one McGovern proposed before the '78 election. I really dig McGovern as I always felt he was a bit above the ultra-partisan mentality, and it struck me as odd seeing a similar proposal from someone who was labled as "too left" by many to even get the big D. nomination in '78.

I'll try and find it again.

-fibber

02-07-2005, 01:49 PM	#93 (permalink)
guy44 Somnabulist Location: corner of No and Where	I believe that it is general revenue, but in the next few years as less people are paying taxes for more Social Security recipients (the Baby Boomers) the size of the Trust Fund decreases as more and more is used to cover whatever taxes themselves don't. However, the Trust Fund also has about $11 trillion dollars in IOUs from the federal government that, when the general revenue dwindles down around 2018, will need to be called in. You are right that it is misleading to call actual funds the sole source of funding when there are still IOUs laying around. The only way that is the case is if we were to know, definitively, that the federal government had no intention of honoring those IOUs (i.e. Treasury bills). __________________ "You have reached Ritual Sacrifice. For goats press one, or say 'goats.'"

02-10-2005, 11:07 AM	#96 (permalink)
squirrelyburt Crazy Location: Central Wisconsin	We know the system will take a dump without change, but so many people are against any change. Why?? look at the Chilean system, they went to privatization years ago and it has done nothing but promoted national growth. It is very possible. __________________ If you've ever felt there was a reason to be afraid of the dark, you were right.

02-06-2005, 11:42 PM	#88 (permalink)
KMA-628 ....is off his meds...you were warned. Location: The Wild Wild West	FYI - I spoke with Donald Luskin this evening (prior to reading the above). I will forward your rebuttal to him tomorrow to get his take on your deconstruction of his article. I cannot guarantee that he will respond, but if he does, I will post his response here (with his permission, of course).

02-07-2005, 10:27 AM	#90 (permalink)
KMA-628 ....is off his meds...you were warned. Location: The Wild Wild West	I received a response from Don this morning regarding guy44's post. While I agree with Don's assesment, I do not think it would further the discussion here, so I have decided not to post it. Plus, I do not have permission to post it. Since it occured in private conversation, I will keep it that way....private. I just wanted to let you know that he did respond and not too favorably.

02-10-2005, 11:49 AM	#98 (permalink)
KMA-628 ....is off his meds...you were warned. Location: The Wild Wild West	host - The facts are not on your side here. The trust funs has zero economic assets. It has a ton of money owed to it, but it has zero real dollars in it. As I have said before, if you were given a check for $10 from the trust fund, without transferring any money into the trust fund, the check would bounce. No one is arguing that the trust fund has zero dollars in it (at least no one that has looked at the facts), the argument is how to we pay back the money. The money was borrowed from the trust fund and spent without any plan of paying it back. Now, in 15-20 years, when SS needs to pull from the trust fund, how do we pay the trust fund back to keep SS benefits up.

02-10-2005, 02:46 PM	#104 (permalink)
fibber Tilted	"Yeah.....it's me....I'm the one who is misleading the thread by referring to the Bushco" No it's you misleading the thread, that was really getting pretty interesting, by stopping-down discussion of the actual problem at hand to slam the administration again. (If it makes you feel better, I generally agree that they're wankers. Just like Clinton's group, and Bush Sr.'s earlier.) -fibber

02-11-2005, 01:00 PM	#108 (permalink)
fibber Tilted	It's cool, I usually have no problems with your arguments, just their delivery sometimes. On topic, I read some article earlier this morning on how the bond idea resembles one McGovern proposed before the '78 election. I really dig McGovern as I always felt he was a bit above the ultra-partisan mentality, and it struck me as odd seeing a similar proposal from someone who was labled as "too left" by many to even get the big D. nomination in '78. I'll try and find it again. -fibber