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Thread: Social Security To Go Bust By 2030: CBO

  1. #171
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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by JoeTheEconomist View Post
    Both of these are true, and there is no credible person who believes that the money will not be repaid with interest. If it isn't, the date of insolvency is pushed forward to the day on which the Trust Fund stops functioning. If the government doesn't repay bonds today with interest... Benefits are immediately cut.



    You need to explain your point. The government has to repay debt 2.8 trillion to Social Security just like it has to repay debt to China. The govt will have to issue MORE debt to pay back the bonds held by China. So I do not understand your point.
    The point is that the government is creating more debt, to pay off previous debt in a devolving spiral. There has to come a day of reckoning at some point. This is the 800 lbs gorilla in the corner that you guys refuse to acknowledge.

    Eventually people and other countries will stop buying our debt - then what?? Interest rates will have to rise - then what?? Raising taxes can't be the answer, b/c that will kill the economy and diminish returns, making the problem worse. In the short term, the FedRes will be the only purchaser of debt, but that is the equivalent of printing resulting in inflation.

    The whole thing is a house of cards. You guys think it's 'all good' b/c you believe in the "full faith and credit" of the United States; but nations collapse and empires crumble - it is the way of the world, it is history over and over again. Most of those empires collapsed by travelling the same road we are on now.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by wist43 View Post
    The point is that the government is creating more debt, to pay off previous debt in a devolving spiral. There has to come a day of reckoning at some point. This is the 800 lbs gorilla in the corner that you guys refuse to acknowledge.

    Eventually people and other countries will stop buying our debt - then what?? Interest rates will have to rise - then what?? Raising taxes can't be the answer, b/c that will kill the economy and diminish returns, making the problem worse. In the short term, the FedRes will be the only purchaser of debt, but that is the equivalent of printing resulting in inflation.

    The whole thing is a house of cards. You guys think it's 'all good' b/c you believe in the "full faith and credit" of the United States; but nations collapse and empires crumble - it is the way of the world, it is history over and over again. Most of those empires collapsed by travelling the same road we are on now.
    I am not sure where I said that the government's actions will not have a consequence, but this thread is about Social Security not about the future of the dollar. In terms of the government's debt position, there is no difference between Social Security and China. They are just the banker. The voter who complains about the debt is not much different than the person who complains that the bank gave their 17 year-old a credit card. The voter is the co-signer, and should have voted more wisely.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by JoeTheEconomist View Post
    Where did it get the money that the govt used to pay China interest on the bonds that it held? It borrowed it. What is your point?

    Let me fill it in for you. You are worried about the money lent by SS to the government because a default would affect you. You aren't worried about the money lent by China to the government because a default wouldn't affect you. Is that about right? This all goes back to blaming the bank for giving you a credit card.
    there is NO money in the trust fund. if you listen to the democrats and the media, they will tell you there is 2.8 trillions dollars in the trust fund. they are lying to us.
    Go Vols

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    Re: Social Security To Go Bust By 2030: CBO

    So you're saying Ponzi schemes don't last forever.

    Color me shocked.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by JoeTheEconomist View Post
    I am not sure where I said that the government's actions will not have a consequence, but this thread is about Social Security not about the future of the dollar. In terms of the government's debt position, there is no difference between Social Security and China. They are just the banker. The voter who complains about the debt is not much different than the person who complains that the bank gave their 17 year-old a credit card. The voter is the co-signer, and should have voted more wisely.
    The value of the dollar is directly tied to SS b/c, as you guys like to point out, SS coffers are full of nothing Treasury IOU's.

    If those IOU's are either no good, or severely devalued, then SS is bust - which is exactly the situation.

    The perfect storm is coming, and many of us saw it decades ago... it isn't a matter of "I told ya so...", it's a matter of getting people to read the writing on the wall - but alas, they are illiterate.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by mtm1963 View Post
    where did it get that money?

    it borrowed it.
    I think Joe is an "economist" for the government... making money is akin to being the banker in a game of monopoly, with a color printer sitting behind you

    A guy in the other thread said we could never default b/c the government can tax, borrow, and print... makes you wonder what these people were taught in the government indoctrination center they attended

    Amazing.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by mtm1963 View Post
    there is NO money in the trust fund. if you listen to the democrats and the media, they will tell you there is 2.8 trillions dollars in the trust fund. they are lying to us.
    No CASH. The cash was invested in the Treasury. There are INVESTMENTS in the Trust Fund. Of course, SS invested in an entity which is also in the red, which congress required by law.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by mtm1963 View Post
    there is NO money in the trust fund. if you listen to the democrats and the media, they will tell you there is 2.8 trillions dollars in the trust fund. they are lying to us.
    Technically, the Republicans and every investment manager in existence are lying to us as well. If there is no money in the Trust Fund, then there is government securities in the private pensions are not money either. That will come as a surprise to the money managers who are legally required to protect the investments of the fund.

    That is what you are suggesting.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by wist43 View Post
    The value of the dollar is directly tied to SS b/c, as you guys like to point out, SS coffers are full of nothing Treasury IOU's.

    If those IOU's are either no good, or severely devalued, then SS is bust - which is exactly the situation.

    The perfect storm is coming, and many of us saw it decades ago... it isn't a matter of "I told ya so...", it's a matter of getting people to read the writing on the wall - but alas, they are illiterate.
    Your views may be right albeit completely unrelated to the thread. Have you thought about opening a new thread on which the comment is relevant?

    The point of the OP is that Social Security is insolvent today regardless of what the Trust Funds are invested in. So it really makes no difference whether the IOUs are good or not. If the IOUs which have been good for the past 70 years fail to be good, the only difference is the amount of failure in Social Security. If the Trust Fund was worth zero, it would add about a dime to the dollar of failure. The Trust Fund could be invested in gold bullion and it would still be economic parsley.

    The people who whine about what the Trust Fund invests in really do not understand how the system works and the meaning of a paygo-system. The problems of Social Security have nothing to do with how the Trust Fund invests its money. The vast majority of the problem can be traced to the systemic underfunding of the system by the first 70 years of retirees. Is it really such a surprise to anyone that we can't give away dimes for nickels forever?

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by Erod View Post
    So you're saying Ponzi schemes don't last forever.

    Color me shocked.
    Quote Originally Posted by JoeTheEconomist View Post
    Your views may be right albeit completely unrelated to the thread. Have you thought about opening a new thread on which the comment is relevant?

    The point of the OP is that Social Security is insolvent today regardless of what the Trust Funds are invested in. So it really makes no difference whether the IOUs are good or not. If the IOUs which have been good for the past 70 years fail to be good, the only difference is the amount of failure in Social Security. If the Trust Fund was worth zero, it would add about a dime to the dollar of failure. The Trust Fund could be invested in gold bullion and it would still be economic parsley.

    The people who whine about what the Trust Fund invests in really do not understand how the system works and the meaning of a paygo-system. The problems of Social Security have nothing to do with how the Trust Fund invests its money. The vast majority of the problem can be traced to the systemic underfunding of the system by the first 70 years of retirees. Is it really such a surprise to anyone that we can't give away dimes for nickels forever?
    As Erod said...

    To that I would add, I've been arguing since the time I understood these things many decades ago that SS was designed to fail for very logical reasons. Yet Americans keep voting to ensure that the train barrels off the cliff under full power.

    I agree that SS is bust. So is Medicare and the prescription drug program. They are all bust b/c the government is bust... few Americans understand anything about what is happening, and the media certainly isn't going to tell them - and even if the media did tell them, they're too busy watching Dancing With the Stars.

    Americans deserve their comeuppance - it's gonna be ugly and painful.

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