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We need to cap and flatten social security payouts

JoeTheEconomist said:
The trust is just an accounting gimmick, it is not a separate pile of cash. It is factually wrong. The Trust is not 'an accounting gimmick'. It has legal implication which will reduce benefits once the Trust Fund is depleted. That is not a gimmick, it is a firewall. The Trust Fund is legally separate. I would suggest that you look at pages 256 and 257 of the current Trustees Report in which they defend the trust fund accounting rather effectively.
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If you are trolling for a fight, look elsewhere. If you are having trouble with reading comprehension, I'll see if I can help you out.

The SSA trust fund is indeed factually a gimmick. There is no such thing as a SSA lock box. It only exist on paper. And yes, the paper is a legally binding document, but it does not imply or create a separate pile of cash from the general fund. Since you took the time to use the term "legally separate", we know that you know the cash is indistinguishable from any other cash in the general fund. This means that you do understand the facts, but can't fight the urge to place an empty argument.

I'll type my example slower since it went over your head the first time. If you deposit funds into a bank, the funds go into the bank's general funds and you get a ledger entry. That ledger entry limits what you can draw out. The SSA trust is no different. Through the budget process, they draw their operational cash from the general fund just like every other government agency. And when they reach their limit, they have to cut back, just like every other government agency. Right now, the SSA has a surplus on it's ledger. That means the receipts are more than the expenditures. Somewhere between 2022 and 2034, that surplus will run out, and SSA will have to live within their means.


When I say name-calling I am talking about the Special Debt Obligations to which you said "These Special Issues are what most politicians refer to as IOU's" Why would you introduce the IOU term into your discussion? You want to make these securities seem different from standard government issues. They are different. They have a put option that makes them superior to standard govt securities.
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Wow!!! Now you are just trying to be petty. Pointing out how some Politicians refer to the Special Issues is name calling... How far into the bottom of the barrel did you have to reach to scrape that up?

I introduced the term IOU because "These Special Issues are what most politicians refer to as IOU's". Seems pretty self explanatory to me. I simply pointed out that politicians rarely use the term Special Issue. Here, read your statement again and get ready for a laugh: "You want to make these securities seem different from standard government issues. They are different." That's hilarious. Granted, I make mistakes like that too because English is not my first language, but it is still funny. It is still the straw man fallacy you seem to adore, but you are playing it on yourself. I like it.
 
natsb said:
If you are trolling for a fight, look elsewhere. If you are having trouble with reading comprehension, I'll see if I can help you out.

The SSA trust fund is indeed factually a gimmick. .
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This is an opinion, and the Trustees of the system disagree.

If you have some evidence that the securities in the Trust Fund have a different position within the capital structure of the borrower, they are identical. Until then, you are here to espouse ideology as fact.
 
cpwill said:
Oh. Well why don't they sell them to raise cash, then, and save the General Fund ? :)
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How would selling the bonds held by the SSTF help the general fund? Someone else would own them, and the GF would be in the exact same position.
 
JoeTheEconomist said:
This is not true. The receipts of SS are collected by the Treasury and used to pay benefits. So no the funds cannot be 'spent on anything'. In the past when there was excess cash, it was used to buy government securities. When the govt borrows money, yes it spends it whether the money is borrowed from China, you, or SS. Typically, you will see the line "they have already spent the money" employed in arguments that the securities held by the SSTF are really just an accounting gimmick. The debt held by the SSTF is no different from any publically traded debt from a position in the capital structure of the borrower.
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It is true, and you acknowledge it in your second sentence. You claim to be an economist, so ask yourself a question. Where does the money that the IRS collects go? Ding, Ding, Ding!!! Yes, it all goes into the Treasury General Fund. Then, it goes out to the respective agencies. The money collected for SSA is completely indistinguishable from any other receipts while sitting in the general fund. It does not go into a special lock box to keep it separate from other money. Thus, the actual money can be spent anywhere.

In a previous post, you implied that you had read the trustee's report. If so, why would you say "In the past when there was excess cash"? There is still excess cash and SSA is still buying Special Issues. Your last sentence is almost correct. As you pointed out in a previous post, the Special Issues are special, and not just like any other. SSA is at the front of the line when it comes to having their debts owed to them settled.
 
JoeTheEconomist said:
This is an opinion, and the Trustees of the system disagree.

If you have some evidence that the securities in the Trust Fund have a different position within the capital structure of the borrower, they are identical. Until then, you are here to espouse ideology as fact.
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You bring up a point I forgot to address. You claim a position from the trustees and give a page number, but no link. The most recent 2015 Trustees Report has on pages 256 and 257 the "STATEMENT OF ACTUARIAL OPINION". I can find nothin there to support your position, but I can find plenty to support mine. The Actuaries perfectly describe how the funds go into the general fund and are withdrawn as needed.

Your projection about inserting ideology as fact is noted with amusement.
 
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