Social Security and Shenanigans

Ignore the fearmongering swirling around the Social Security Trust fund. FACT: The Social Security Trust fund owns United States Treasury bonds. No financial professional with a lick of sense would dismiss a TBond as a mere I.O.U. like Stuart Varney of Fox News. The truth is financial markets view it as almost inconceivable that the U.S. government will not honor its bonds. Investors gladly own Treasury bonds and receive record low interest coupons because of minuscule default risk.



Buz, if you truly believe this you are living in fantasyland. 14 Trillion and counting is the national debt. Calculate what a rise in interest rates would do to the amount of interest payments the federal government would owe. Or calculate what the debt will be in 10 years unless someone in Washington grows some cajones and gets serious about cutting spending. Then calculate the interest payouts on those amounts. We are approaching a point where SS, Medicare, Medicaid and interest payments equal the total income of the government. So EVERYTHING else is financed by deficit spending.
The course the federal government has been on the last century is unsustainable. I agree with your solutions though ( raise the retirement age and index benefits) and hope they will be implemented sooner rather than later.

Ever heard of Penn Central? Just because professionals do not think something can fail does not mean it is impossible.

You are conflating two issues which do not directly affect each other:

The federal deficit and Social Security.

If in twenty five year the SS trust fund is exhausted then beneficiaries receive lower payments. SS has been a pay-as-you-go system.

Social Security, in 2011, contributes zero to our current deficit.

Rather than repeat conservative talking points do some research.

Please NEVER accuse me of living in fantasyland, I study retirement issues in greater detail, in higher frequency and with an academic's eye far more than anyone else who posts here.

You are conflating two issues which do not directly affect each other:

The federal deficit and Social Security.

If in twenty five year the SS trust fund is exhausted then beneficiaries receive lower payments. SS has been a pay-as-you-go system.

Social Security, in 2011, contributes zero to our current deficit.

Rather than repeat conservative talking points do some research.

Please NEVER accuse me of living in fantasyland, I study retirement issues in greater detail, in higher frequency and with an academic's eye far more than anyone else who posts here.

Two of every five dollars goes to Social Security, Medicare or Medicaid, all of which provide some form of insurance. A bit more than a buck goes to the military. Then there?s a $1.50 or so for assorted other programs -- education, infrastructure, environmental protection, farm subsidies, etc. Some of that, like unemployment checks and food stamps, is also best understood insurance spending. And then there?s another 40 cents of debt repayment. Calvin Coolidge once said that the business of America is business. Well, the business of the American government is insurance. Literally. If you look at how the federal government spends our money, it?s an insurance conglomerate protected by a large, standing army.

But you wouldn?t know it to listen to the debate over the budget. When House Republicans talk about cutting spending and the Obama administration talks about freezing spending, neither group is talking about the vast expanse of the government?s commitments. They?re looking at a small corner of the budget, the 12.3 percent known as non-defense discretionary spending. The stuff that?s not Medicare, not Medicaid, not Social Security or the military. It?s the odds-and-ends, so to speak.

And it?s a bad place to focus cuts. Politicians don?t take the axe to non-defense discretionary spending because they think Teach for America or the food safety infrastructure -- both of which the Republicans are proposing to cut dramatically -- is more wasteful than the Pentagon or the health-care system. They do it because Teach for America and the food safety system is less politically powerful than the Pentagon or Medicare beneficiaries. The budget ends up like the yard of a man who owns only a lawnmower: The grass is trim, but the trees are overgrown and the ivy is everywhere and the gazebo is falling apart. Yet we keep mowing, because that?s what we feel able to do.

And what are you willing to give up?

Everyone says rein in the spending and balance the budget .............. until they actually have to make a sacrifice.

You've seen the numbers - there is no way to fix the problem without changes to programs like Social Security, Medicare, Medicaid, and tax increases.

, I agree with your solutions but we differ when you say nothing is wrong. Something is definitely wrong and will get worse if not fixed yesterday.[/QUOTE

Let me quote a liberal poitician, "Let me make one thing perfectly clear": There is a pending Social Security shortfall.

We need to make some changes-either benefits go down or taxes go up.

If we don't make changes and we don't raise taxes then benefits go down.

I did not mean to imply there were no problems with SS.

If I look at the amount of money that has been paid in my name into social security, add to it what I expect will be paid based on how long I expect to work full time, and then take benefits at 62, I see one of the worst investments I have ever made in my life.

On the flip side, looking at what I've paid into Medicare and calculate out what premiums would cost me post turning 65, and I see one of the most underfunded insurance system ever designed.

So I would be willing to give up social security. Lets just abolish it. Cut me a percentage of the total money I've invested and I'll walk away. Then reroute some of the taxes into Medicare. However, the only way I would be willing to accept that is if the money flows into some sort of an account I have control over.

I thought ObamaCare was supposed to fix a big part of this?

The healthcare bill signed by President Obama has nothing to do with Social Security.

But since you brought it up.

Without Medicare (aka Obamacare for old folks) benefits being cut immediately OR Medicare taxes rising, the federal budget deficit will continue to soar.

There is no negotiation.

Either Andy's Medicare benefit goes up or Shopper's Medicare taxes go up, unless we do one or the other the federal deficit rises.

Oh yeah, we could cut health benefits....:shock:.

Ignore the fearmongering swirling around the Social Security Trust fund. FACT: The Social Security Trust fund owns United States Treasury bonds. No financial professional with a lick of sense would dismiss a TBond as a mere I.O.U. like Stuart Varney of Fox News. The truth is financial markets view it as almost inconceivable that the U.S. government will not honor its bonds. Investors gladly own Treasury bonds and receive record low interest coupons because of minuscule default risk.



Buz, if you truly believe this you are living in fantasyland. 14 Trillion and counting is the national debt. Calculate what a rise in interest rates would do to the amount of interest payments the federal government would owe. Or calculate what the debt will be in 10 years unless someone in Washington grows some cajones and gets serious about cutting spending. Then calculate the interest payouts on those amounts. We are approaching a point where SS, Medicare, Medicaid and interest payments equal the total income of the government. So EVERYTHING else is financed by deficit spending.
The course the federal government has been on the last century is unsustainable. I agree with your solutions though ( raise the retirement age and index benefits) and hope they will be implemented sooner rather than later.

Ever heard of Penn Central? Just because professionals do not think something can fail does not mean it is impossible.

The healthcare bill signed by President Obama has nothing to do with Social Security.

But since you brought it up.

Without Medicare (aka Obamacare for old folks) benefits being cut immediately OR Medicare taxes rising, the federal budget deficit will continue to soar.

There is no negotiation.

Either Andy's Medicare benefit goes up or Shopper's Medicare taxes go up, unless we do one or the other the federal deficit rises.

Oh yeah, we could cut health benefits....:shock:.

Me,me,me,me...I get sick of it.

Social Security is a type of social insurance.

Some folks get way more than they paid in and some folks get a lot less.

My step-mom will draw thousands and thousands of dollars more than she paid in.

My wife's maternal grandmama probably got a 50% spousal benefit so the money she paid in went for naught.

I doubt I will ever get the money I paid into it.

I have been self-employed since 1978 and paid both employer and employee contribution.

Plus I paid the employers match for scores of employees.

I still think SS is good deal for the country.

It ain't all about yourself.

Besides your solution would cause the deficit to skyrocket immediately because there would be no money to pay benefits (or benefits would be cut drastically take your pick).