(04-11-2013 12:03 PM)GeorgeBorkFan Wrote:  

(04-11-2013 11:41 AM)BobL Wrote:  there is a trust Fund with the monies "invested in Special Issue Bonds". These bonds have maturity dates and earn interest. To say the money is loaned out or is in IOU's is misleading at best.

http://www.ssa.gov/cgi-bin/investheld.cgi

It absolutely is correct and not misleading.

Who is obligated to repay those bonds? Who received the cash payments?

When those bonds were "purchased," where did the cash go? Into the general fund, where it was spent.

When those bonds are paid back, and when the interest is paid, where do those funds come from? Back out of the general fund.

Those bonds were not sold by the City of Schaumburg who then used the money to build a sewer plant. The City would then pay the funds back to the bondholder with interest.

Those bonds, instead, were sold to the federal government, by the federal government. The cash was put into the general fund and spent. It is gone. To pay back a bond, today, would require today's other tax revenue to be used. The money was simply shifted from the left hand to the right hand.

There is no account with any "surplus" payroll taxes. It is rolled into the general fund and spent.

The below is cut and pasted from the SSA page. Notice the quote "because the government spends this borrowed cash."

As stated above, money flowing into the trust funds is invested in U. S. Government securities. Because the government spends this borrowed cash, some people see 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.

Many options are being considered to restore long-range trust fund solvency. These options are being considered now, over 20 years in advance of the year the funds are likely to be exhausted. It is thus likely that legislation will be enacted to restore long-term solvency, making it unlikely that the trust funds' securities will need to be redeemed on a large scale prior to maturity.

In your original post you said the IOUs were worthless...I dont consider US bonds worthless or "IOU's."

It seems to me that earning interest on the principal via the bonds is better than no interest and US bonds are safe as opposed to investing in stocks.

But will working americans be better off in the end?

(04-11-2013 11:11 AM)GeorgeBorkFan Wrote:  

(04-11-2013 11:00 AM)BobL Wrote:  

(04-11-2013 09:23 AM)GeorgeBorkFan Wrote:  

(04-11-2013 12:10 AM)RobertN Wrote:  Well, it slows the amount of money those on SS get so the Repubs should be happy- firt step to elimination or privatization.

Or leave it as-is and it eliminates itself by going broke.

and/or means test. Keep in mind...any means testing must assure that everyone gets back what they contributed.

That is reasonable. With interest? What if revenues don't cover that though? I don't know.

I do believe that ss needs to be essentially eliminated/dramatically restructured. However, that must be a planned/long term transition. My point was that doing nothing now, not making a decision, is really actually making a decision to let it die on the vine. I think a planned transition is a much better idea.

Ideally there would be interest.

SS is a very good program IMO. I do agree that it has to be restructured though I am not sure how dramatically.

My thoughts:

Cut the SS tax rate in half and apply to all earned income.
Earned income ought to include capital gains not reinvested within 1 year.
Means test with the stipulation that minimum payment is determined by money contributed.

(04-11-2013 01:16 PM)BobL Wrote:  In your original post you said the IOUs were worthless...I dont consider US bonds worthless or "IOU's."

It seems to me that earning interest on the principal via the bonds is better than no interest and US bonds are safe as opposed to investing in stocks.

As we are screaming towards $20 trillion in debt, and very little intent, at least by the President, to even come close to balancing the budget, those IOU's and bonds will likely be worthless. Our $20 trillion in debt does not include SS obligations and borrowing. We will be at the point where we can't pay it back.

Right now, Washington has no desire to balance the budget. And, the deficit looks less than it really is because we are spending that SS revenue too. What happens when that SS revenue is no longer coming in, PLUS we have to start paying back those bonds? How do we afford that?

We aren't earning interest. We are paying the interest to ourselves.

(04-11-2013 03:05 PM)GeorgeBorkFan Wrote:  

(04-11-2013 01:16 PM)BobL Wrote:  In your original post you said the IOUs were worthless...I dont consider US bonds worthless or "IOU's."

It seems to me that earning interest on the principal via the bonds is better than no interest and US bonds are safe as opposed to investing in stocks.

As we are screaming towards $20 trillion in debt, and very little intent, at least by the President, to even come close to balancing the budget, those IOU's and bonds will likely be worthless. Our $20 trillion in debt does not include SS obligations and borrowing. We will be at the point where we can't pay it back.

Right now, Washington has no desire to balance the budget. And, the deficit looks less than it really is because we are spending that SS revenue too. What happens when that SS revenue is no longer coming in, PLUS we have to start paying back those bonds? How do we afford that?

We aren't earning interest. We are paying the interest to ourselves.

SS needs to be restructured, no question.

Bob, I'm with you on this one buddy.

(04-12-2013 07:19 AM)BobL Wrote:  

(04-11-2013 03:05 PM)GeorgeBorkFan Wrote:  

(04-11-2013 01:16 PM)BobL Wrote:  In your original post you said the IOUs were worthless...I dont consider US bonds worthless or "IOU's."

It seems to me that earning interest on the principal via the bonds is better than no interest and US bonds are safe as opposed to investing in stocks.

As we are screaming towards $20 trillion in debt, and very little intent, at least by the President, to even come close to balancing the budget, those IOU's and bonds will likely be worthless. Our $20 trillion in debt does not include SS obligations and borrowing. We will be at the point where we can't pay it back.

Right now, Washington has no desire to balance the budget. And, the deficit looks less than it really is because we are spending that SS revenue too. What happens when that SS revenue is no longer coming in, PLUS we have to start paying back those bonds? How do we afford that?

We aren't earning interest. We are paying the interest to ourselves.

SS needs to be restructured, no question.

That's funny. I do not seem to remember you backing George W. Bush when he tried to do that.

(04-12-2013 09:07 AM)Huskie_Jon Wrote:  

(04-12-2013 07:19 AM)BobL Wrote:  

(04-11-2013 03:05 PM)GeorgeBorkFan Wrote:  

(04-11-2013 01:16 PM)BobL Wrote:  In your original post you said the IOUs were worthless...I dont consider US bonds worthless or "IOU's."

It seems to me that earning interest on the principal via the bonds is better than no interest and US bonds are safe as opposed to investing in stocks.

As we are screaming towards $20 trillion in debt, and very little intent, at least by the President, to even come close to balancing the budget, those IOU's and bonds will likely be worthless. Our $20 trillion in debt does not include SS obligations and borrowing. We will be at the point where we can't pay it back.

Right now, Washington has no desire to balance the budget. And, the deficit looks less than it really is because we are spending that SS revenue too. What happens when that SS revenue is no longer coming in, PLUS we have to start paying back those bonds? How do we afford that?

We aren't earning interest. We are paying the interest to ourselves.

SS needs to be restructured, no question.

That's funny. I do not seem to remember you backing George W. Bush when he tried to do that.

There is a big difference between restructuring and privatizing.

(04-12-2013 09:21 AM)RobertN Wrote:  

(04-12-2013 09:07 AM)Huskie_Jon Wrote:  

(04-12-2013 07:19 AM)BobL Wrote:  

(04-11-2013 03:05 PM)GeorgeBorkFan Wrote:  

(04-11-2013 01:16 PM)BobL Wrote:  In your original post you said the IOUs were worthless...I dont consider US bonds worthless or "IOU's."

It seems to me that earning interest on the principal via the bonds is better than no interest and US bonds are safe as opposed to investing in stocks.

As we are screaming towards $20 trillion in debt, and very little intent, at least by the President, to even come close to balancing the budget, those IOU's and bonds will likely be worthless. Our $20 trillion in debt does not include SS obligations and borrowing. We will be at the point where we can't pay it back.

Right now, Washington has no desire to balance the budget. And, the deficit looks less than it really is because we are spending that SS revenue too. What happens when that SS revenue is no longer coming in, PLUS we have to start paying back those bonds? How do we afford that?

We aren't earning interest. We are paying the interest to ourselves.

SS needs to be restructured, no question.

That's funny. I do not seem to remember you backing George W. Bush when he tried to do that.

There is a big difference between restructuring and privatizing.

BAM!

(04-12-2013 09:44 AM)niuguy Wrote:  

(04-12-2013 09:21 AM)RobertN Wrote:  

(04-12-2013 09:07 AM)Huskie_Jon Wrote:  

(04-12-2013 07:19 AM)BobL Wrote:  

(04-11-2013 03:05 PM)GeorgeBorkFan Wrote:  As we are screaming towards $20 trillion in debt, and very little intent, at least by the President, to even come close to balancing the budget, those IOU's and bonds will likely be worthless. Our $20 trillion in debt does not include SS obligations and borrowing. We will be at the point where we can't pay it back.

Right now, Washington has no desire to balance the budget. And, the deficit looks less than it really is because we are spending that SS revenue too. What happens when that SS revenue is no longer coming in, PLUS we have to start paying back those bonds? How do we afford that?

We aren't earning interest. We are paying the interest to ourselves.

SS needs to be restructured, no question.

That's funny. I do not seem to remember you backing George W. Bush when he tried to do that.

There is a big difference between restructuring and privatizing.

BAM!

CONTROL. If we privatize parts of Social Security, then the government doesn't control the purse strings. social security is taking money I work for and my company contributes and then spending it on things that help them get re-elected. They (republicans and democrats) have pissed the money away.

(04-12-2013 09:49 AM)klake87 Wrote:  

(04-12-2013 09:44 AM)niuguy Wrote:  

(04-12-2013 09:21 AM)RobertN Wrote:  

(04-12-2013 09:07 AM)Huskie_Jon Wrote:  

(04-12-2013 07:19 AM)BobL Wrote:  SS needs to be restructured, no question.

That's funny. I do not seem to remember you backing George W. Bush when he tried to do that.

There is a big difference between restructuring and privatizing.

BAM!

CONTROL. If we privatize parts of Social Security, then the government doesn't control the purse strings. social security is taking money I work for and my company contributes and then spending it on things that help them get re-elected. They (republicans and democrats) have pissed the money away.

There is an old cliche about rearranging the deck chairs on the Titanic. As long as Government holds the purse strings, or the key to the lockbox, they will continue to find new ways to waste the money.

Meet the new boss.
Same as the old boss.

(04-12-2013 09:49 AM)klake87 Wrote:  

(04-12-2013 09:44 AM)niuguy Wrote:  

(04-12-2013 09:21 AM)RobertN Wrote:  

(04-12-2013 09:07 AM)Huskie_Jon Wrote:  

(04-12-2013 07:19 AM)BobL Wrote:  SS needs to be restructured, no question.

That's funny. I do not seem to remember you backing George W. Bush when he tried to do that.

There is a big difference between restructuring and privatizing.

BAM!

CONTROL. If we privatize parts of Social Security, then the government doesn't control the purse strings. social security is taking money I work for and my company contributes and then spending it on things that help them get re-elected. They (republicans and democrats) have pissed the money away.

Here is the problem with privatization...the money we contribute now is used to pay the benefits of those now collecting SS. Up until very recently there was always more money going in then coming out...that surplus was used to build the SS trust fund.

Now, with more money going out then coming in, the difference is drawn from the trust fund. If you put less money in the SS system(i.e privatization in a way you suggest) the difference is greater and the trust fund gets depleted faster. It seems to me that privatization is a first step in elimination. That would not be good for anyone!

(04-16-2013 11:49 AM)BobL Wrote:  

(04-12-2013 09:49 AM)klake87 Wrote:  

(04-12-2013 09:44 AM)niuguy Wrote:  

(04-12-2013 09:21 AM)RobertN Wrote:  

(04-12-2013 09:07 AM)Huskie_Jon Wrote:  That's funny. I do not seem to remember you backing George W. Bush when he tried to do that.

There is a big difference between restructuring and privatizing.

BAM!

CONTROL. If we privatize parts of Social Security, then the government doesn't control the purse strings. social security is taking money I work for and my company contributes and then spending it on things that help them get re-elected. They (republicans and democrats) have pissed the money away.

Here is the problem with privatization...the money we contribute now is used to pay the benefits of those now collecting SS. Up until very recently there was always more money going in then coming out...that surplus was used to build the SS trust fund.

Now, with more money going out then coming in, the difference is drawn from the trust fund. If you put less money in the SS system(i.e privatization in a way you suggest) the difference is greater and the trust fund gets depleted faster. It seems to me that privatization is a first step in elimination. That would not be good for anyone!

I understand that. Social Security is Ponzi scheme. It was not set up that way but our elected officials got their grubby fingers into it and now it is not sustainable. I realize I will never see social security as promised now but to continue down this path is asinine.

(04-16-2013 07:11 PM)klake87 Wrote:  

(04-16-2013 11:49 AM)BobL Wrote:  

(04-12-2013 09:49 AM)klake87 Wrote:  

(04-12-2013 09:44 AM)niuguy Wrote:  

(04-12-2013 09:21 AM)RobertN Wrote:  There is a big difference between restructuring and privatizing.

BAM!

CONTROL. If we privatize parts of Social Security, then the government doesn't control the purse strings. social security is taking money I work for and my company contributes and then spending it on things that help them get re-elected. They (republicans and democrats) have pissed the money away.

Here is the problem with privatization...the money we contribute now is used to pay the benefits of those now collecting SS. Up until very recently there was always more money going in then coming out...that surplus was used to build the SS trust fund.

Now, with more money going out then coming in, the difference is drawn from the trust fund. If you put less money in the SS system(i.e privatization in a way you suggest) the difference is greater and the trust fund gets depleted faster. It seems to me that privatization is a first step in elimination. That would not be good for anyone!

I understand that. Social Security is Ponzi scheme. It was not set up that way but our elected officials got their grubby fingers into it and now it is not sustainable. I realize I will never see social security as promised now but to continue down this path is asinine.

It WAS set up that way. The first recipient paid $44 into it but received $20,993. That was no accident.

(04-17-2013 10:12 AM)Huskie_Jon Wrote:  

(04-16-2013 07:11 PM)klake87 Wrote:  

(04-16-2013 11:49 AM)BobL Wrote:  

(04-12-2013 09:49 AM)klake87 Wrote:  

(04-12-2013 09:44 AM)niuguy Wrote:  BAM!

CONTROL. If we privatize parts of Social Security, then the government doesn't control the purse strings. social security is taking money I work for and my company contributes and then spending it on things that help them get re-elected. They (republicans and democrats) have pissed the money away.

Here is the problem with privatization...the money we contribute now is used to pay the benefits of those now collecting SS. Up until very recently there was always more money going in then coming out...that surplus was used to build the SS trust fund.

Now, with more money going out then coming in, the difference is drawn from the trust fund. If you put less money in the SS system(i.e privatization in a way you suggest) the difference is greater and the trust fund gets depleted faster. It seems to me that privatization is a first step in elimination. That would not be good for anyone!

I understand that. Social Security is Ponzi scheme. It was not set up that way but our elected officials got their grubby fingers into it and now it is not sustainable. I realize I will never see social security as promised now but to continue down this path is asinine.

It WAS set up that way. The first recipient paid $44 into it but received $20,993. That was no accident.

but the money collected was used as general fund revenues. This money should have been held in trust not "lent" to the general fund and get a useless IOU

(04-17-2013 11:32 AM)klake87 Wrote:  

(04-17-2013 10:12 AM)Huskie_Jon Wrote:  

(04-16-2013 07:11 PM)klake87 Wrote:  

(04-16-2013 11:49 AM)BobL Wrote:  

(04-12-2013 09:49 AM)klake87 Wrote:  CONTROL. If we privatize parts of Social Security, then the government doesn't control the purse strings. social security is taking money I work for and my company contributes and then spending it on things that help them get re-elected. They (republicans and democrats) have pissed the money away.

Here is the problem with privatization...the money we contribute now is used to pay the benefits of those now collecting SS. Up until very recently there was always more money going in then coming out...that surplus was used to build the SS trust fund.

Now, with more money going out then coming in, the difference is drawn from the trust fund. If you put less money in the SS system(i.e privatization in a way you suggest) the difference is greater and the trust fund gets depleted faster. It seems to me that privatization is a first step in elimination. That would not be good for anyone!

I understand that. Social Security is Ponzi scheme. It was not set up that way but our elected officials got their grubby fingers into it and now it is not sustainable. I realize I will never see social security as promised now but to continue down this path is asinine.

It WAS set up that way. The first recipient paid $44 into it but received $20,993. That was no accident.

but the money collected was used as general fund revenues. This money should have been held in trust not "lent" to the general fund and get a useless IOU

So how long do you think you can get a dog to balance a Milkbone on it's nose before it just decides to eat it?