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Social Security reserves forecast to run dry in 2022

muciti said:
LOL not going to happen. Our politicians have the people of this country far too divided. Democrats and Republicans are working together to keep the American people fighting with the bipartisan bs they spew.
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People are indeed divided over many political and social issues. That cannot be denied. However, we should all unite together behind the concept that we the people have honored our end of the bargain on Social Security and we will demand that the government honor their end of the bargain.
 
from jmac

I have my pocket Constitution in front of me, could you tell me where SS is in it? Thanks.
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That would be in the opening lines right after the words WE THE PEOPLE where it explains the purpose of creating a government.

Paying our debts IS honoring our SS obligations in a way.
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And the debt to pay Social Security will be one of those to be honored and paid in full.

regarding the investment of SS funds into treasury notes, jmac said this about their security

Like what? Solyndra?
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Never heard of it. Whatever that is it is NOT safe and secure US Treasury bonds.

There are three key questions for those who seem to oppose Social Security

Either one believes in the full faith and credit of the United States or one does not. Which are you?
Either one believes in honoring the promises made to the citizens of the nation who fulfill their end of the bargain or one does not. Which are you?
Either one believes that money and revenues should first go to existing and long standing obligations before new ones are taken on or one does not. Which are you?

Those need to be asked every single time this subject comes up.
 
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better give up on it. the CBO is also predicting that - on our current path of spending - the economy shuts down in 2027.

Whatever that is it is NOT safe and secure US Treasury bonds
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yeah. you know what else isn't safe and secure US Treasury bonds? the promissory notes in the Social Security Trust Fund :).
 
haymarket said:
And the debt to pay Social Security will be one of those to be honored and paid in full.
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doubtful. as the SCOTUS has already noted, you don't rate a single dime of Social Security, and it can be taken from you at any time.

There are three key questions for those who seem to oppose Social Security

Either one believes in the full faith and credit of the United States or one does not. Which are you?
Either one believes in honoring the promises made to the citizens of the nation who fulfill their end of the bargain or one does not. Which are you?
Either one believes that money and revenues should first go to existing and long standing obligations before new ones are taken on or one does not. Which are you?
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a good set of intentions, right there. unfortunately, reality seems to indicate that we will not be able to succeed at them as much as we'd hoped. so I guess I'll answer your question with a question:

Either one believes we should put our "entitlement" programs on a path towards long-term stability and dramatically reduce outlays in order to avoid a fiscal collapse, or one believes in fully funding these programs until they destroy the economy. In the 2020's. At which point we become Greece, only much worse because no one can bail us out, and so we are throwing our elderly off the programs all of a sudden and rapidly, to include those who probably lack the means to support themselves without. Which are you?
 
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cpwill said:
better give up on it. the CBO is also predicting that - on our current path of spending - the economy shuts down in 2027.
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Didn't they also predict that we'd be running trillion-dollar surplusses by 2010?
 
haymarket said:
That would be in the opening lines right after the words WE THE PEOPLE where it explains the purpose of creating a government.
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Well, I don't recall the words Social Security being anywhere in the pre-amble....Let's look...

US Constitution said:
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

THE UNITED STATES CONSTITUTION - We the People
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I still don't see it in there...Could you please show us where it is?

And the debt to pay Social Security will be one of those to be honored and paid in full.
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Yeah, how you going to do that when there is nothing left?

Never heard of it. Whatever that is it is NOT safe and secure US Treasury bonds.
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Really? You've never heard of Solyndra? I find that hard to believe...

Solyndra: Politics infused Obama energy programs - The Washington Post

Either one believes in the full faith and credit of the United States or one does not. Which are you?
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With games like this one that has been going on since 2009 when Obama got in, you tell me....

Sunday, August 2, 2009
Executive Summary
The Federal Reserve and the federal government are attempting to "plug the gap" caused by a slowdown of private credit/debt creation.
Non-US demand for the dollar must remain high, or the dollar will fall.
Demand for US assets is in negative territory for 2009
The TIC report and Federal Reserve Custody Account are reviewed and compared
The Federal Reserve has effectively been monetizing US government debt by cleverly enabling foreign central banks to swap their Agency debt for Treasury debt.
The shell game that the Fed is currently playing obscures the fact that money is being printed out of thin air and used to buy US government debt.
The Federal Reserve is monetizing US Treasury debt and is doing so openly, both through its $300 billion commitment to buy Treasuries and by engaging in a sleight of hand maneuver that would make a street hustler from Brooklyn blush.

The Shell Game - How the Federal Reserve is Monetizing Debt - Blogs at Chris Martenson
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Either one believes in honoring the promises made to the citizens of the nation who fulfill their end of the bargain or one does not. Which are you?
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I am a man of my word, I don't know if Government is.

Either one believes that money and revenues should first go to existing and long standing obligations before new ones are taken on or one does not. Which are you?
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With Obama putting forth a fourth consecutive year of Trillion dollar deficit, you are asking this question? give me a break.

Those need to be asked every single time this subject comes up.
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Why? do you feel the need to have disingenuous answers to foolish questions? I prefer to follow actions, and determine for myself what their record is.


j-mac
 
For those like the author of this thread who are uninformed about the SS trust funds:

SS Trust Fund FAQs:

What are the SS Trust Funds?

"The Social Security Trust Funds are the Old-Age and Survivors Insurance (OASI) and the Disability Insurance (DI) Trust Funds. These funds are accounts managed by the Department of the Treasury. They serve two purposes: (1) they provide an accounting mechanism for tracking all income to and disbursements from the trust funds, and (2) they hold the accumulated assets. These accumulated assets provide automatic spending authority to pay benefits. The Social Security Act limits trust fund expenditures to benefits and administrative costs.

Benefits to retired workers and their families, and to families of deceased workers, are paid from the OASI Trust Fund. Benefits to disabled workers and their families are paid from the DI Trust Fund. More than 98 percent of total disbursements in 2010 were for benefit payments."

How are the trust funds invested?

"By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are "special issues" of the United States Treasury. Such securities are available only to the trust funds.

In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. Marketable securities are subject to the forces of the open market and may suffer a loss, or enjoy a gain, if sold before maturity. Investment in special issues gives the trust funds the same flexibility as holding cash."

If all the income is invested, how do benefits get paid each month?

"Money to cover expenditures (mainly benefit payments) from the trust funds comes from the redemption or sale of securities held by the trust funds. When "special-issue" securities are redeemed, interest is paid. In fact, the principal amount of special issues redeemed, plus the corresponding interest, is just enough to cover an expenditure."

Why do some people describe the "special issue" securities held by the trust funds as worthless IOUs?

"What is SSA's reaction to this criticism? 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."

Can the Social Security Trust Funds remain solvent without making changes to the program?

"In the annual Trustees Report, projections are made under three alternative sets of economic and demographic assumptions. Under one of these sets (labeled "Low Cost") the trust funds remain solvent for the next 75 years. Under the other two sets (the "Intermediate" and "High Cost"), the trust funds become depleted within the next 25 years. The intermediate assumptions reflect the Trustees' best estimate of future experience."


Trust Fund FAQs
 
Thank you for that Catawaba, and now how does this show that SS isn't about to go dry by 2022 would be interesting.
 
Social Security will never ever go bankrupt. People need to understand that the government could make payments for this without even collecting revenue to pay for it.
 
MrVicchio said:
Thank you for that Catawaba, and now how does this show that SS isn't about to go dry by 2022 would be interesting.
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You are welcome MrVicohio! From above:

"In the annual Trustees Report, projections are made under three alternative sets of economic and demographic assumptions. Under one of these sets (labeled "Low Cost") the trust funds remain solvent for the next 75 years. Under the other two sets (the "Intermediate" and "High Cost"), the trust funds become depleted within the next 25 years. The intermediate assumptions reflect the Trustees' best estimate of future experience."
 
Catawba said:
You are welcome MrVicohio! From above:

"In the annual Trustees Report, projections are made under three alternative sets of economic and demographic assumptions. Under one of these sets (labeled "Low Cost") the trust funds remain solvent for the next 75 years. Under the other two sets (the "Intermediate" and "High Cost"), the trust funds become depleted within the next 25 years. The intermediate assumptions reflect the Trustees' best estimate of future experience."
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That isn't what the original article is indicating. Its stating that in 2022, for the first time, they will actually have to redeem more trust fund bonds than they purchase, which translates into a reduction of the total trust fund balance( 2.7 trillion and change ).

As the trust fund starts to decrease in value, the most obvious correlation in publicly known data sets will be the decrease in intra-government holdings and an increase, of the same amount, in public debt.

Granted, with JP's magical mystery tour(MMT) system, the government can print money on demand to satisfy its obligations. While the idea of MMT works on paper in a closed society, it doesn't play well with the reality of a global exchange.
 
Samhain said:
That isn't what the original article is indicating. Its stating that in 2022, for the first time, they will actually have to redeem more trust fund bonds than they purchase, which translates into a reduction of the total trust fund balance( 2.7 trillion and change ).

As the trust fund starts to decrease in value, the most obvious correlation in publicly known data sets will be the decrease in intra-government holdings and an increase, of the same amount, in public debt.

Granted, with JP's magical mystery tour(MMT) system, the government can print money on demand to satisfy its obligations. While the idea of MMT works on paper in a closed society, it doesn't play well with the reality of a global exchange.
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That is a good point, and what I wonder is how much of these so called bonds that were the iou's placed in SS are absolute junk due to the US monetizing its own debt.


j-mac
 
j-mac said:
That is a good point, and what I wonder is how much of these so called bonds that were the iou's placed in SS are absolute junk due to the US monetizing its own debt.


j-mac
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Far from being junk, they are in fact the safest investments in the world.
 
cpwill said:
doubtful. as the SCOTUS has already noted, you don't rate a single dime of Social Security, and it can be taken from you at any time.



a good set of intentions, right there. unfortunately, reality seems to indicate that we will not be able to succeed at them as much as we'd hoped. so I guess I'll answer your question with a question:

Either one believes we should put our "entitlement" programs on a path towards long-term stability and dramatically reduce outlays in order to avoid a fiscal collapse, or one believes in fully funding these programs until they destroy the economy. In the 2020's. At which point we become Greece, only much worse because no one can bail us out, and so we are throwing our elderly off the programs all of a sudden and rapidly, to include those who probably lack the means to support themselves without. Which are you?
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Right wingers here badly need to go out and buy an atlas of the world. Turn to the page with the map of the USA... tear it out.... nail it to the wall above your computer..... write on it UNITED STATES OF AMERICA. Then do the same for the nation of Greece and put that side by side on the wall. And then do the most important thing : learn the difference.

I favor a simple solution: right now today, 93% of Americans pay FICA tax on 100% of their earnings. Those who make above $106K per year only pay the FICA tax on a portion of their earnings. In fact, somebody who makes just over a million dollars pays proportionately 1/10 on total earnings that the tax that a person does making $100K.

Solve this situation by popping the cap while freezing current benefit levels and you go quite a long way to a safe and solvent system for many decades to come.

That is the one I am CP.
 
J-mac

The Constitution clearly authorizes the government to undertake programs like Social Security. I gave you the language, you read the language, you quoted the language but you stand there pretending that a blueberry is not blue even though your eyes tell you it is. So it seems rather pointless for me to tell you what the Constitution means and you to deny it and tell me what you think it means. We get nowhere that way. It just becomes your opinion versus my opinion.

What we need is some independent body who is schooled on the Constitution and can make that judgment independent of what you and I believe.

That would be the United States Supreme Court. This will help educate you

http://www.ssa.gov/history/court.html

So lets forget about your opinion as well as my opinion. We have the opinion of the actual independent body whose opinion has the weight of law behind it.

If you want to argue, they are located in Washington DC. There is a very good restaurant a few blocks from their building and I would be happy to recommend it to you while to go and cross verbal swords with the nine justices.

http://www.jaleo.com/

They specialize in small plates of Spanish food. Its wonderful.

When I asked you my questions about the government honoring its Social security obligations , you said this

I am a man of my word, I don't know if Government is.
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I do not know you and will not pass judgment upon your own evaluation of your own character. For now, I take you at your word. Regarding the government and Social Security, I know this: not one person in the last 75 years has been denied Social Security benefits in full when they completed their obligations in the program. Not one person has come up short. The US Government has honored and paid each and every one of their obligations. They have never defaulted on their Social Security obligations.

That is a record of excellence.
 
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j-mac said:
How'd that work out for Weimar?


j-mac
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The Weimar republic happened under very special circumstances.

1) their production was effected by a World War
2) they purposely devalued their currency to avoid paying reparations
3) against advice from their own economists Germany also borrowed all of its war spending by borrowing from foreign countries, thus making them non sovereign.

You can't compare the two and attempt to keep a straight face.
 
j-mac said:
How'd that work out for Weimar?
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Weimar explicitly printed money for the purpose of repatriating debt owed from war reparations. The U.S. central bank--on the other hand--creates high powered money by purchasing bonds from banks. The Fed does not purchase U.S. government debt directly from the Treasury; if it did..., you would have a valid point.
 
cpwill said:
doubtful. as the SCOTUS has already noted, you don't rate a single dime of Social Security, and it can be taken from you at any time.



a good set of intentions, right there. unfortunately, reality seems to indicate that we will not be able to succeed at them as much as we'd hoped. so I guess I'll answer your question with a question:

Either one believes we should put our "entitlement" programs on a path towards long-term stability and dramatically reduce outlays in order to avoid a fiscal collapse, or one believes in fully funding these programs until they destroy the economy. In the 2020's. At which point we become Greece, only much worse because no one can bail us out, and so we are throwing our elderly off the programs all of a sudden and rapidly, to include those who probably lack the means to support themselves without. Which are you?
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If Social Security is an entitlement program then FICA must be another kind of income tax. Of course, unlike Dragnet, the names have been changed to protect the guilty. Be sure to add 7.65% to all those undervalued income tax percentages of the middle class the next time you compare them to the income tax percentages of upper-class and rich. In that light I'm pretty sure a very large chuck of the middle class has been outstripping Romney & Co since ~2003.


Ed:
In fact, you've have to go extremely far down in the tax tables to get the rate down to 14% once you've added 7.65% to it.
 
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sawyerloggingon said:
I wonder what the bank will say when I take my 1st ss payment to them and it is nothing but an IOU from the gov. Will they give me cash for it?
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Essentially, every Treasury Bond is a government IOU. As long as all those financial wizards who believe US Treasuries are one of the safest investments on the planet get turned down as well then I'm good with that.

And you thought the last financial crisis was a doozy! Wait until the World finds out US Treasuries are junk ... :devil:
 
Blue_State said:
I am sorry that you have paid for 5 decdes. You will probably see SS. For me, the chances are I won't, as mentioned in the article.

Your first question was, "Either one believes in the full faith and credit of the United States or one does not. Which are you?" Not do I believe in enforcing the constitution. You are twisting my words. I don't believe that our credit will be maintained if we continue to dilute our finances. We have been downgraded in our debt. We have come very close in the last 2 years to not meeting our obligations. We are very thin. I don't believe we can maintain our current position and maintain our credit. Good for you that you are retired or retiring soon, but this will not be here for me.

Your second question is, "Either one believes in honoring the promises made to the citizens of the nation who fulfill their end of the bargain or one does not. Which are you?" We aren't. I am not going to see the same social security benefits as my parents or you. So the promise is not honored. There won't be money there. As I mentioned, you paid in, and that is great. I am paying as well, and the government will not keep their promise. I know they are in over their heads with this program. I have said for a long time, take what we have left, figure out how many generations it can support. Make the cut off there. For the rest of us, Social Security is a just another tax.

Question 3, "Either one believes that money and revenues should first go to existing and long standing obligations before new ones are taken on or one does not. Which are you?" They should...but do they? Our government is still expanding and they know that this program doesn't have the financial support to maintain.

The SS program needs a major overhaul, people are going to have to sacrafice. C'est la gare.
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I agree with Haymarket. You are too pessimistic. The program will be there for you -- for everyone. And it may even be better for later generations than it is for Boomers. Most certainly it will be restructured from its current unsustainable model, but it's still something that people can count on. It's not going anywhere.

haymarket said:
this is interesting

Will the Payroll Tax Cut Hurt Social Security? - NYTimes.com
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Thanks for this. I admit I find it of absolutely no comfort...just more smoke and mirrors.

For one thing, both Democrats and Republicans agree that the proposed cut to the payroll tax (which funds Social Security) must be paid for, so its effect on the budget would be neutral. [Here's the smoke!!] The Democrats want to pay for it with a tax surcharge on millionaires; Republicans want to freeze the pay of federal workers and reduce the federal workforce by 10 percent. [Here's the smoke.]

But even if the tax cut were not paid for — and the one currently in effect was not — it would still not affect Social Security. Federal law requires the treasury to reimburse any shortfall in the account used to pay retirement benefits. [The mirrors are here.] So while an unpaid-for payroll tax cut would raise the general deficit and lead to more borrowing, just like any other tax cut, it would not change Social Security benefits or damage the program’s future.
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I think the only way ss will go away is if WE let it go away.
 
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