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Social Security Trust Fund Real Or Not

jaeger19 said:
Old people made the law. Its the baby boomers that made SS into what it is. The baby boomers have had the political reigns of power for quite some time. Its why every proposal to "fix" social security starts with " a promise made is a promise kept".. translation.. if you are a baby boomer.. you will get paid. If you are younger.. you will do the paying and get less benefit
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old people don't make law, government officials do so if the system is screwed blame the government.

isn't this the message, that said for many years.
 
ernst barkmann said:
old people don't make law, government officials do so if the system is screwed blame the government.

isn't this the message, that said for many years.
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Old people voted for the politicians that make that laws. so if the system is screwed up.. blame the folks that voted for those politicians. We have the government that we deserve.
 
OrphanSlug said:
I am no longer convinced that solutions are going to work within the confines of applying more cost to today's workers in some regard, at some point more pressure is going to end up applied to those who are beneficiaries of the system. And it will get very ugly very quickly once that happens.
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The government will redefine the purpose of the program, but keep the name for nostalgic voters who will still be able to talk about the greatest accomplishment of govt. Conservatives are pushing a flat benefit level, ie basic income, because it is cheaper. They don't care what the program does so long as we keep the name and spend less on it.

OrphanSlug said:
It is one of the reasons why the ratio of those paying in to those paid out means something to the debate.
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I am not convinced that the ratio has any meaning. The number of workers does not tell you about the economies ability to support retirees, and the number of beneficiaries does not tell you about the total need of retirees. Here are two examples,

The number of workers excludes the Trust Fund which generates today about the equivalent of .5 workers. Instead of 2.9 workers per bene, the figure is closer to 3.5. The number of retirees is not an indicative figure either. You have more spouses working today. The ones that collect as spouses get 50% of what worker retiree collects. It is not a random number but the ratio provides no meaningful use as a planning tool.
 
OrphanSlug said:
As of December 2015, both the Social Security Trust Fund and Federal Disability Insurance Trust Fund hold roughly $2.786 trillion in special issued Intergovernmental Debt.

That number is not quite as important as the system was designed to function that way, at no time is there a mass quantity of cash held by the Trust itself. All the checks being issued to Social Security beneficiaries end up right out of the General Fund, and all of the taxation dollars end up right into the General Fund.

Because we are talking about special issued Intergovernmental Debt we are also talking about special rules. One, when issued it is down to the penny for the day's income in Social Security tax and it happens every single day regardless of who is President, what the disposition of Congress is, or the condition of the budget. Two, the Social Security Trust Fund and Federal Disability Insurance Trust Fund cash out using existing held Intergovernmental Debt every single day what is needed to cover the costs of check issuance to beneficiaries down to the penny. It is just an accounting mechanism in a ledger somewhere held at the Social Security Administration.

The reason I am going through this is we have no evidence that there will be a default on this special issued debt, and that debt for these government ran trust funds is not quite marketable in the same sense as other government issued debt sold by auction or private issued debt by a corporation.

Our focus should always be back on the mechanics of generational debt shifting. Or said another way, we should be focusing on the numbers paying in to those paid out (and everything that implies.)
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You will have to explain to me the concern about marketability. The special bonds are special because they have a redemption right embedded in them. Why would you want them to be marketable. If you want to sell them, call the Treasury and tell them to issue more marketable securities because SS needs the cash.
 
274ina said:
Sure.

Average job in AZ pays crap of say $9. so $800 to 1400 a month.
with most people having only PT work.
"On average, Arizona retirees receive about. $1,273 a month from Social Security. "

We now pay 17% SS taxes, (including hidden employer portion)

So the old, who only paid say 2% SS taxes, get MORE than working people of today. AND they get HC at government expense. THe working people get no HC. (except Obamacare last 2 years, and that is going away soon)

Looks like extortion to me.
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Your theory is right, whether your adjective is or not is a readers decision.

The SS tax rate is 12.4%. I think you are talking about what it would take if SS were going to be kept solvent. SSA says that it is (15.08% up to CBO which says 16.8%). The 2% tax rate was kept low between 1937 and 1950. Yes today's workers contributed significantly less. Keep in mind that SS taxes were raised to 12.4% in 1990, so someone retiring today paid the full amount for more than half of their working career.
 
ludin said:
your numbers are wrong.

the average median income in AZ is about 46k dollars a year.
not 9-10.

in 2014 it was 50k.

so evidently there are plenty of people making money in the state of AZ.
the SS tax rate is 12.4%. 6.2% split between employee and employer.
medicare is 2.9%.

list of tax rates for SS

https://www.ssa.gov/oact/progdata/taxRates.html

so unless these people retired in 1956 they were paying more than 2%.
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The numbers depend upon whether you want SS to work or not. The person who makes $9/hr earns about $18,000 per year. The Starbucks barista probably is in that ballpark. He pays 12.4% of his wages in taxes, 16% or so if he wants to collect full SS benefits. He serves coffee to the senior who collect benefits based on his contribution. So it is a mora and shark symmetry.
 
OrphanSlug said:
"All the money left"... does not exist. The Social Security Trust fund is just a ledger of special issued Intergovernmental Debt transactions.

Everything else in your post including the gifts means immediate expenditure right out of the existing budget as it stands today, which means exploding the deficit in short order.
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I come here to get feedback on my articles. I want to strengthen them. You are making distinctions about the Trust Fund such that it 'does not exist'. Tell me how the article fails to explain that the government securities (whether you call it IOUs, Intergovernmental debt, or bobby socks) held by the SSTF is any different from bonds held by private pensions. Before you say that it isn't marketable, tell me why that is meaningful to bonds that has a put option.
 
jaeger19 said:
Old people made the law. Its the baby boomers that made SS into what it is. The baby boomers have had the political reigns of power for quite some time. Its why every proposal to "fix" social security starts with " a promise made is a promise kept".. translation.. if you are a baby boomer.. you will get paid. If you are younger.. you will do the paying and get less benefit
Click to expand...

While I might agree in theory you will have to explain the " Its the baby boomers that made SS into what it is. " Boomers are the first generation to in theory pay for the benefits that they expect to get. And while every proposal starts with that
phrase, the translation is that the "if you are part of the greatest generation... you will get paid." Even the leading edge of the Boomers expect to be alive in 2030.

This is off-topic, but you might like an article that I published on the generational impacts. The third rail of politics only works when you have a large part of your voting base that is immune to the consequences of its voting.
Blog: Demographics and the third rail of politics
 
JoeTheEconomist said:
While I might agree in theory you will have to explain the " Its the baby boomers that made SS into what it is. " Boomers are the first generation to in theory pay for the benefits that they expect to get. And while every proposal starts with that
phrase, the translation is that the "if you are part of the greatest generation... you will get paid." Even the leading edge of the Boomers expect to be alive in 2030.

This is off-topic, but you might like an article that I published on the generational impacts. The third rail of politics only works when you have a large part of your voting base that is immune to the consequences of its voting.
Blog: Demographics and the third rail of politics
Click to expand...

i like that website
 
JoeTheEconomist said:
The numbers depend upon whether you want SS to work or not. The person who makes $9/hr earns about $18,000 per year. The Starbucks barista probably is in that ballpark. He pays 12.4% of his wages in taxes, 16% or so if he wants to collect full SS benefits. He serves coffee to the senior who collect benefits based on his contribution. So it is a mora and shark symmetry.
Click to expand...

I think I will go buy the official numbers that I posted. the median income in AZ is somewhere between 46-50k
no 9 or 10 dollars an hour as was stated.

the SS tax is 6.2% for the employee and 6.2% for the employer. whether the employer penalizes the employee with lower wages to make up the difference
is debatable. however that is withheld from his check is 6.2%.

please read the links and educate yourself. I didn't post the official links for you to sit there and deny that they exist.
they do exist and they exist for a reason. you don't get to just make up numbers like you did in your post.

The SS system is screwed up because it is more or less a Ponzi scheme.
which is why it is starting to collapse on it's head.
 
JoeTheEconomist said:
The government will redefine the purpose of the program, but keep the name for nostalgic voters who will still be able to talk about the greatest accomplishment of govt. Conservatives are pushing a flat benefit level, ie basic income, because it is cheaper. They don't care what the program does so long as we keep the name and spend less on it.

I am not convinced that the ratio has any meaning. The number of workers does not tell you about the economies ability to support retirees, and the number of beneficiaries does not tell you about the total need of retirees. Here are two examples,

The number of workers excludes the Trust Fund which generates today about the equivalent of .5 workers. Instead of 2.9 workers per bene, the figure is closer to 3.5. The number of retirees is not an indicative figure either. You have more spouses working today. The ones that collect as spouses get 50% of what worker retiree collects. It is not a random number but the ratio provides no meaningful use as a planning tool.
Click to expand...

You mentioned yourself why the reason is important... generational shifting. If the beneficiary generations are living longer thus being within the system longer then it makes every bit of sense to consider the ratio of those paying in to those paid out. The stress is on the beneficiary column, as even today how Social Security functions is much different than conditions at inception of the program.

This is damn near a non-debatable element to the subject here, as to ignore the ratio means to ignore the fundamentals of generational shifting of government ran Trust Funds.
 
JoeTheEconomist said:
You will have to explain to me the concern about marketability. The special bonds are special because they have a redemption right embedded in them. Why would you want them to be marketable. If you want to sell them, call the Treasury and tell them to issue more marketable securities because SS needs the cash.
Click to expand...

It is not a "concern about marketability," I was illustrating the difference between what Intergovernmental Debt the Social Security Trust Fund holds vs. other forms of debt both issued by the public or by the private sector. Nor was my post even a hint at wanting them to be marketable.
 
JoeTheEconomist said:
I come here to get feedback on my articles. I want to strengthen them. You are making distinctions about the Trust Fund such that it 'does not exist'. Tell me how the article fails to explain that the government securities (whether you call it IOUs, Intergovernmental debt, or bobby socks) held by the SSTF is any different from bonds held by private pensions. Before you say that it isn't marketable, tell me why that is meaningful to bonds that has a put option.
Click to expand...

The post you are responding to was my attempt to deal with some other poster who clearly has no idea how the Social Security functions day to day. That post had nothing to do with your article, or our discussion... so it becomes a real concern on why you are taking this post and trying to make it mean something else.

You have done this twice now, why?
 
ludin said:
I think I will go buy the official numbers that I posted. the median income in AZ is somewhere between 46-50k
no 9 or 10 dollars an hour as was stated.
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Actually the original poster started the discussion about the low wage worker. You changed it to a new subject. And I am sure that median income somewhere is 46-50K. It has nothing to do with the statement which you said was wrong.

ludin said:
the SS tax is 6.2% for the employee and 6.2% for the employer. whether the employer penalizes the employee with lower wages to make up the difference
is debatable. however that is withheld from his check is 6.2%.
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Yes it is debatable and most mainstream economists agree that the employee carries the cost of payroll taxes. CBO explicitly states it. SSA implicitly states it by making the assumptions in its studies. You are free to disagree with them.

ludin said:
please read the links and educate yourself. I didn't post the official links for you to sit there and deny that they exist. they do exist and they exist for a reason. you don't get to just make up numbers like you did in your post.

The SS system is screwed up because it is more or less a Ponzi scheme.
which is why it is starting to collapse on it's head.
Click to expand...

Interesting quote for someone who is calling the conclusions of CBO and SSA debatable.
 
OrphanSlug said:
You mentioned yourself why the reason is important... generational shifting. If the beneficiary generations are living longer thus being within the system longer then it makes every bit of sense to consider the ratio of those paying in to those paid out. The stress is on the beneficiary column, as even today how Social Security functions is much different than conditions at inception of the program.

This is damn near a non-debatable element to the subject here, as to ignore the ratio means to ignore the fundamentals of generational shifting of government ran Trust Funds.
Click to expand...

The ratio itself has no meaning. I have given you two examples of how it is off by 20 or 30%. It is a number that hasn't been questioned since the 1970s. Longevity is also a misconception. I don't know that people are living longer. More of us are living average. These are very different problems. When people say that life expectancy has grown from 62 to 80, it sound impressive. The problem is that most of the increase is connected to fewer people dying under the age of 5. I think that SS doesn't lose money on average until someone is north of 85 or so. That means that lower infant mortality actually makes the system more solvent.

I have no idea what the changes in life expectancy actually mean to SS. As long as we frame it in life expectancy of a baby, no one will ever know.
 
OrphanSlug said:
It is not a "concern about marketability," I was illustrating the difference between what Intergovernmental Debt the Social Security Trust Fund holds vs. other forms of debt both issued by the public or by the private sector. Nor was my post even a hint at wanting them to be marketable.
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My point is that there is no difference.
 
lb_on_teh_cb said:
sure, and who are they legislating on behalf of? (in this case)

it doesnt happen by accident
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the people that elected them, however the people that do the electing, very few of them even know that legislation is being presented or even voted on.

When many of the ideas presented by FDR, most people had no idea what they meant, and as we have seem today most of the people and stateS themselves did not even want obamacare, yet we got it anyway.
 
ernst barkmann said:
the people that elected them, however the people that do the electing, very few of them even know that legislation is being presented or even voted on.

When many of the ideas presented by FDR, most people had no idea what they meant, and as we have seem today most of the people and stateS themselves did not even want obamacare, yet we got it anyway.
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yeah this is true
 
JoeTheEconomist said:
My point is that there is no difference.
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Of course there is, it would be a misrepresentation to suggest otherwise. The terms of the debt issuance for the Intergovernmental Debt that the Social Security Trust fund holds are unique and in some ways more advantageous that other government issued debt.
 
JoeTheEconomist said:
Actually the original poster started the discussion about the low wage worker. You changed it to a new subject. And I am sure that median income somewhere is 46-50K. It has nothing to do with the statement which you said was wrong.
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Then you need to go back and read what they wrote because you are not correct.


Yes it is debatable and most mainstream economists agree that the employee carries the cost of payroll taxes. CBO explicitly states it. SSA implicitly states it by making the assumptions in its studies. You are free to disagree with them.
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strawman argument I never agreed or disagreed. I am simply quoting numbers as is stated by the government not made
up numbers pulled from thin air.

Interesting quote for someone who is calling the conclusions of CBO and SSA debatable.
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not at all again a strawman argument.
you can either address what is being said or you can't.

if you can't then that is understandable. please don't strawman people's arguments
because you have a hard time addressing the argument itself.

I said it was debatable whether or not employer's pass those costs one. I am sure some do and I am sure others don't.
I am also sure a lot of it is built into the price of the product.

however that in and of itself doesn't negate the point that the tax to employees for SS is 6.2% not 12%.

the next chart I posted shows the historical amount of tax that was taken out.
of peoples checks.

which means in order to only have paid a 3% tax to SS for working you would have had to retire in like 1957 or something.
which means by now you are well over 100 years old.
 
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