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Thread: Social Security To Go Bust By 2030: CBO

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by cpwill View Post
    Wrong. The Private Pensions purchased US Treasury Bonds which they can now resell. They have an actual asset.

    If the "Trust Fund" had purchased US Treasuries which they could sell on the open market, then they would have actual assets, and we would be sitting a good bit prettier. Not as pretty as if they had purchased non-US-Federal-Debt, mind you, but better than we are now.
    "Wrong" says that you have strayed out of your depth. There is nothing in the capital structure of the government that puts the securities held by Social Security lower in the capital order of the government. Negotiability has nothing to do with being 'better'. The debt held by the SSTF has a put option in them. There is no point to making redeemable debt negotiable, well unless you are an investment banker seeking to mug the issuer.

    Some people point to Obama's statement a couple of years back that Social Security checks might not go out as evidence that the debt is not secure. To which you can only reply... If the president was telling the truth. SSTF debt is better than debt held by the private pensions in that it can be redeemed without affecting the level of debt for the country. So the Trust Fund can tell the government to refinance the debt without respect to the debt ceiling.

    The issue of negotiability is brought up by people who seek to deceptively discredit the assets held by the Trust Fund in the minds of people who do not understand how capital markets work. At worst, you can depict the debt as a private placement. That doesn't change the comparison to other obligations from the same issuer.

    Quote Originally Posted by cpwill View Post
    Obviously that is a reference to the fact that we continued to drain the extra FICA monies for non-SS purposes.
    There haven't been any 'extra FICA monies' to drain since 2009. Mind you it is projected that there never will be any extra FICA monies in the future.

    Quote Originally Posted by cpwill View Post
    my CC balance is zero, and I've been pretty consistently derisive of the idea of predatory lending. So yes, those folks are, in fact, different.
    I think you should look at the CC that the government holds in your name. It is anything but zero.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by JoeTheEconomist View Post
    The statistical likelihood of a 21 female year old dying is .... 0.0431% about 4 in 10,000
    And?

    I know 6 people who had this very experience.

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    Re: Social Security To Go Bust By 2030: CBO

    The best way to deal with SS is to do a gradual phase out period. From this age group, you get so much a percentage, and on and on to where eventually SS is phased out altogether. They are sort of doing it this way now by raising the age group and lowering the amount you get paid, only it needs to be more transparant and people need to realize that it won't last forever. Along with the phase out period, start lowering the amount of SS that is taken out of paychecks.

    SS wasn't meant to be forever and it isn't meant to be a sole source of income nowadays anyway.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by TheNextEra View Post
    The best way to deal with SS is to do a gradual phase out period. From this age group, you get so much a percentage, and on and on to where eventually SS is phased out altogether. They are sort of doing it this way now by raising the age group and lowering the amount you get paid, only it needs to be more transparant and people need to realize that it won't last forever. Along with the phase out period, start lowering the amount of SS that is taken out of paychecks.

    SS wasn't meant to be forever and it isn't meant to be a sole source of income nowadays anyway.
    Why phase it out. You are justifying paying some, solely because they contributed in the past. You are taking from those who are contributing and offering them nothing for the same contribution. If you are going to end-it just end it. SS was meant to be forever. That is why FDR structured it the way that he did. He wanted to make sure that no damn politician could ever scrap his program. (His words not mine). If you are telling one generation that their contribution deserves no return, let's say it to every generation.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by cpwill View Post
    That is not directly analogous.
    It was intended to educate, not provide direct comparison.

    The bank loans that money to other people, and often some collateral is involved (a car, a house, the persons' goods) if the debt goes bad. The US Government loaned that money to itself and then spent it.
    And the US Government is one of the safest investments in the world.

    So a better example would be you taking money out of savings, putting it into checking, spending it, promising to pay it back next month, but then never doing so.
    The money is paid back every month. I'm sorry if you don't understand this.

    Now the big expense you've been saving for is here, and it's no good saying "oh, don't worry, my checking account owes my savings all this money".
    Except that's not what happens. The government pays SS every month and has done so for decades.

    I know it's easier to spread FUD than to know what you're talking about, but it truly is annoying when you choose the former.
    Your link had absolutely nothing to do with what I said or what we were talking about.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by Slyfox696 View Post
    It was intended to educate, not provide direct comparison.

    And the US Government is one of the safest investments in the world.
    yes, but you cannot invest in your own debt no matter how "safe" you are.

    The money is paid back every month. I'm sorry if you don't understand this.
    yeah, and I try to put money from my checking into my savings every month, too. I don't increase my net worth when I make the shift, I only change the account.

    Except that's not what happens. The government pays SS every month and has done so for decades.
    Yes. And for decades we took the excess FICA collection, and spent it on non SS expenditures. So it is, in fact, what happens.

    Your link had absolutely nothing to do with what I said or what we were talking about.
    On the contrary, my link refutes the logic you presented, that Congress has not spent the SS monies, and that therefore SS is not now contributing to the National Debt.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by JoeTheEconomist View Post
    "Wrong" says that you have strayed out of your depth. There is nothing in the capital structure of the government that puts the securities held by Social Security lower in the capital order of the government. Negotiability has nothing to do with being 'better'. The debt held by the SSTF has a put option in them. There is no point to making redeemable debt negotiable, well unless you are an investment banker seeking to mug the issuer.

    Some people point to Obama's statement a couple of years back that Social Security checks might not go out as evidence that the debt is not secure. To which you can only reply... If the president was telling the truth. SSTF debt is better than debt held by the private pensions in that it can be redeemed without affecting the level of debt for the country. So the Trust Fund can tell the government to refinance the debt without respect to the debt ceiling.

    The issue of negotiability is brought up by people who seek to deceptively discredit the assets held by the Trust Fund in the minds of people who do not understand how capital markets work. At worst, you can depict the debt as a private placement. That doesn't change the comparison to other obligations from the same issuer.
    No - you are confusing whether or not Social Security is non-discretionary spending with whether or not the Trust Fund holds actual assets with marketable value.

    There haven't been any 'extra FICA monies' to drain since 2009. Mind you it is projected that there never will be any extra FICA monies in the future.
    Which doesn't mean that there weren't any in the past.

    I think you should look at the CC that the government holds in your name. It is anything but zero.
    Agreed. Winter Is Coming. But you were still inaccurate in your characterization of those who disagreed with you.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by cpwill View Post
    No - you are confusing whether or not Social Security is non-discretionary spending with whether or not the Trust Fund holds actual assets with marketable value.



    Which doesn't mean that there weren't any in the past.



    Agreed. Winter Is Coming. But you were still inaccurate in your characterization of those who disagreed with you.
    The merits of the assets have nothing to do with spending discretionary or not. These assets are like private placements which are non-negotiable. These assets are claims against future payments, whether the asset is negotiable or not is immaterial. In the case of the Trust Fund it would be redundant. The assets have a put on demand option, so why would anyone want them to be negotiable? Private placements are valued even though there is no market for them. Municipal bonds have a market value even when the market for them is very illiquid.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by JoeTheEconomist View Post
    The merits of the assets have nothing to do with spending discretionary or not. These assets are like private placements which are non-negotiable. These assets are claims against future payments, whether the asset is negotiable or not is immaterial. In the case of the Trust Fund it would be redundant. The assets have a put on demand option, so why would anyone want them to be negotiable?
    Because then they would have actual value, rather than being an internal note-keeping scheme.

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    Re: Social Security To Go Bust By 2030: CBO

    Quote Originally Posted by cpwill View Post
    yes, but you cannot invest in your own debt no matter how "safe" you are.



    yeah, and I try to put money from my checking into my savings every month, too. I don't increase my net worth when I make the shift, I only change the account.



    Yes. And for decades we took the excess FICA collection, and spent it on non SS expenditures. So it is, in fact, what happens.



    On the contrary, my link refutes the logic you presented, that Congress has not spent the SS monies, and that therefore SS is not now contributing to the National Debt.
    The link does not say what you think it does. These articles simply show that Politifact does not understand the meaning of words. They conflate the words deficit and debt. If you read what the politician said it is correct. Social Security is not COUNTED in the budget process. Look at what he said "Social Security didn't cause our deficit. Not one dime gets added to the deficit because of Social Security. It's not allowed to, by law." This is not much different than saying undocumented immigration is against the law so we don't have any illegal immigrants. It isn't a terribly bright statement.

    Unfortunately neither is : "Since 2010, Social Security has been paying more in benefits than it has collected in payroll taxes. To meet its payments, Social Security began redeeming the bonds, plus interest, from the federal government." This is no different than saying "Since 2010, China has been using dollars for toilet paper. To meet it's needs, China began redeeming the bonds, plus interest, from the federal government." Likewise it may be true, but it isn't a meaningful statement.

    Oddly enough, Social Security hasn't been redeeming bonds. It has been refinancing them. It has been cashing interest to cover the shortfalls. So the articles position is simply factually wrong.

    Social Security's Trust Fund earns interest. China earns interest. Private pensions earn interest. All of these are the same thing. You are blaming the banker for lending you money. The man said that Social Security did not cause the deficit. If you hadn't borrowed the money from SS. You would have borrowed it from someone else. So SS is not the cause of the deficit. The cause is idiot politicians who spend more than they collect.

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