Social Security To Go Bust By 2030: CBO

Lord of Planar said:

Two years isn't much. I was thinking it would be more.


This may be true. My understanding of such systems proposed is that those opting out could take their share of the SS and put in in the private account. Not the employer share.

The law can be changed, and the feds can bail out SS just like anything else.

Should the elderly get bailed out over banks?

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I figured that it would be higher was well.

There is no money in Social Security to take out. The system has 26 trillion in promises for which the only cash that exists is in the Trust Fund. If you let anyone opt-out, everyone would. The Trust Fund would cover about 3 1/2 years of benefits. If people were allowed to reduce their SS payments to 1/2 of what it is today, the system is broke I 8 years rather than 16.

I am not a fan of the bank bail-outs. It is very unwise policy that none of these idiots went to jail.

Retirees will have a very difficult sell in the future for a bail-out. They voted for all of these goodies from government like Social Security, and then they voted for people who didn't pay for the goodies. Today, our revenue does not even cover the entitlement programs plus interest. The rest of the government is put on the credit card. I will not be surprised if future voters say that we will pay off the debt but will not bail-out those who were responsible for it.

JoeTheEconomist said:

The public votes for Congress every two years. In the future, the discussion of Social Security will hinge around the people voted into Congress. My guess is that people will take the issue more seriously as the costs of it come home.

Social Security is not a social program. It is a contributory benefits system. The reason that the system hasn't had a major reform is because people have contributed to the system, and believe that they are owed money by the system. This isn't a system which protects people from poverty. Once it is welfare as you describe, the system is toast. Social Security does not pay a penny of benefit based on need. It is a formula that weights past contributions.

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I'm not sure numbers like your 8:1 are correct, but I'm not going to bother with those details. I agree with what you are saying in general. I suspect it will become among the social programs and use future tax dollars.

Lord of Planar said:

I'm not sure numbers like your 8:1 are correct, but I'm not going to bother with those details. I agree with what you are saying in general. I suspect it will become among the social programs and use future tax dollars.

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The numbers aren't mine. They come from Urban Institute, and they aren't terribly different from the numbers produced by SSA.

"I suspect it will become among the social programs and use future tax dollars."

That is the 23 trillion dollar question. I think that we will postpone the problem until it isn't an option, but you never know.

Born Free said:

Thank you for not answering the question. Now you say the present system did not get rid of deflation, yet before you were bitching about inflation. I give up.

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my answer should have been obvious I thought.

I said:
a balanced economic system.

the present system did not get rid of deflation.

it did help to maintain liquidity but in the worst possibly way for "the people" meanwhile the banking cartels make huge profits in either direction.

one is as bad as the other.

one has no liquidity the other severely reduces the value of present past and future earnings and things.

The point is, this crap is sold to the public as reducing the peaks and dips and that is completely BS, the proof is that we are in the midst of a depression as I type, dont think so? look around at all the stores closed up and the doubling of prices over the last 10 years alone. Ok nuff on that.

So the only thing that this system has brought us to our benefit is that is does maintain liquidity but at the extreme cost of inflation and the devaluation of our labor and property.

Meanwhile it put the control of our money in the hands of foreign agents when we could print and manage it ourselves, which is rico extortion since the debt burden falls upon us in the end anyway.

See the above^^^^

anything associated with the old money banking cartel is broke and getting broker.

Basicaly the monetary system we have is designed to extract all the wealth from any nation who engages in it and redistribute it to the top of the pyramid.

I hope that helps better explain and answer your question.





this is how slaves are created in the modern world. they are called bond slaves. the creators of the system own you!

JoeTheEconomist said:

By the same logic then, private pensions do not exist because they lent money to the government, which the US government spent.

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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.

The analogy itself is more flawed when it adds "promising to pay it back next month but never doing so" If the government wasn't repaying its debts, SS would have cut its payable benefit levels

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Obviously that is a reference to the fact that we continued to drain the extra FICA monies for non-SS purposes.

But the government has actually repaid every scheduled penny plus scheduled interest thus far. The people who complain about the government repaying the money borrowed from SS aren't much different than those who run-up their credit card and want to blame the bank for lending them the money.

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:shrug: 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.

cpwill said:

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.

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"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.

cpwill said:

Obviously that is a reference to the fact that we continued to drain the extra FICA monies for non-SS purposes.

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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.

cpwill said:

:shrug: 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.

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I think you should look at the CC that the government holds in your name. It is anything but zero.

JoeTheEconomist said:

The statistical likelihood of a 21 female year old dying is .... 0.0431% about 4 in 10,000

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And?

I know 6 people who had this very experience.

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.

TheNextEra said:

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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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.

cpwill said:

That is not directly analogous.

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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.

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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.

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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".

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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.

cpwill said:

Even the Left-Leaning Politifact rates this branch of logic Mostly False

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Your link had absolutely nothing to do with what I said or what we were talking about.

Slyfox696 said:

It was intended to educate, not provide direct comparison.

And the US Government is one of the safest investments in the world.

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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.

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:lol: 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.

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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.

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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.

JoeTheEconomist said:

"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.

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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.

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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.

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Agreed. Winter Is Coming. But you were still inaccurate in your characterization of those who disagreed with you.

cpwill said:

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.

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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.

JoeTheEconomist said:

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?

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Because then they would have actual value, rather than being an internal note-keeping scheme.

cpwill said:

yes, but you cannot invest in your own debt no matter how "safe" you are.



:lol: 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.

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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.

I find it amazing that you guys think America is infallible - we went off the gold standard to begin with b/c we were creating more currency and debt than we had gold reserves.

You guys do realize that some of the credit ratings agencies had lowered the U.S.'s credit rating, and that Holder threatened to sue them back into line?? The U.S. has spent and printed its way on to quicksand - yet most of you seem to think everything America does is golden (except the currency - that, of course, is paper, ink, and digits in a computer).

Instead of getting your house in order, you all want hair of the dog - akin to drug addiction. It's mind boggling.

Don't forget Medicare will be broke also in the near future yet we continue to feed house and give medical care to millions that are illegally. If I were forty years old today I would be very scared of my future financially.

cpwill said:

Because then they would have actual value, rather than being an internal note-keeping scheme.

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Having done this work professionally, all of these assets have a value. Like private placements, like assets traded in thin-markets, like the vast majority of the derivative market, all of these assets can be valued. In the private sector, it is done by comparing the asset to like assets. In the case of the assets of the Trust Fund, they would be compared to the value of publically traded government securities. But your issue isn't really with 'actual value'. Your concern here is ideological. You want to portray the SSTF as an internal note-keeping scheme. Negotiability is irrelevant - at least in the private sector by people who do this professionally.

rhinefire said:

Don't forget Medicare will be broke also in the near future yet we continue to feed house and give medical care to millions that are illegally. If I were forty years old today I would be very scared of my future financially.

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Given these programs serve the elderly... It makes much more sense to say if I were 65 today, I would be very scared of my future period. This is the disconnect with reality. The elderly think that they are somehow immune from the mess that they create as voters.

JoeTheEconomist said:

Given these programs serve the elderly... It makes much more sense to say if I were 65 today, I would be very scared of my future period. This is the disconnect with reality. The elderly think that they are somehow immune from the mess that they create as voters.

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Indeed. Seems that this specific aspect is always given short shrift in the vast majority of the conversations.
These voters made a bed with their votes, and now object to sleeping in it.

wist43 said:

I find it amazing that you guys think America is infallible - we went off the gold standard to begin with b/c we were creating more currency and debt than we had gold reserves.

You guys do realize that some of the credit ratings agencies had lowered the U.S.'s credit rating, and that Holder threatened to sue them back into line?? The U.S. has spent and printed its way on to quicksand - yet most of you seem to think everything America does is golden (except the currency - that, of course, is paper, ink, and digits in a computer).

Instead of getting your house in order, you all want hair of the dog - akin to drug addiction. It's mind boggling.

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I think whats keeping the US afloat right now is that the Dollar is a reserve currency of the world, that gives the US a huge advantage since we still control the world's banking industry. I dont think that will change for at least another 20 years, beyond that, who knows.

PoS said:

I think whats keeping the US afloat right now is that the Dollar is a reserve currency of the world, that gives the US a huge advantage since we still control the world's banking industry. I dont think that will change for at least another 20 years, beyond that, who knows.

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"We" don't control anything, b/c "we" don't control the dollar - the Federal Reserve controls the dollar; and since the FedRes is a private bank controlled by the international bankers - our fate is in their hands, not ours. That has been the case since the FedRes Act was passed in 1913.

They don't care about the U.S. anymore than they care about Bolivia - when it suits them, they will switch reserve currencies as it is expedient, just as they took us off the gold standard in 1971 - b/c it was expedient.

The international bankers are just that, international, i.e. globalist in their thinking. They've been working to destroy national sovereignty around the world for decades, hence their push behind such things as the UN, EU, NAFTA, GATT, IMF, World Bank, ICC, etc.

Just b/c the people sitting on the Fed board are American, doesn't mean they are Americanists or loyal to America in any way - on the contrary, they are decidedly anti-American in their beliefs.

wist43 said:

I find it amazing that you guys think America is infallible - we went off the gold standard to begin with b/c we were creating more currency and debt than we had gold reserves.

You guys do realize that some of the credit ratings agencies had lowered the U.S.'s credit rating, and that Holder threatened to sue them back into line?? The U.S. has spent and printed its way on to quicksand - yet most of you seem to think everything America does is golden (except the currency - that, of course, is paper, ink, and digits in a computer).

Instead of getting your house in order, you all want hair of the dog - akin to drug addiction. It's mind boggling.

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The gold standard is horrible anyway. Only the Rothbard/Mises cult from the Austrian economics school push it.

RAMOSS said:

The gold standard is horrible anyway. Only the Rothbard/Mises cult from the Austrian economics school push it.

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It forces discipline on the government - of course, you Keynesians don't want to be constrained by the value of something, and you don't want to be constrained by the rule of law.

You've had your way for a few decades now, and all you've managed to do is bankrupt the country, debauch the currency, and expand government power and control over our society to the point where liberty is near dead.

If you think those things are preferrable to limited government, a valued currency, and liberty - all that can be concluded is that you are completely brainwashed and delusional.

cpwill said:

yes, but you cannot invest in your own debt no matter how "safe" you are.

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Why do you still not understand the difference between the government and a person? It's really not hard.

:lol: 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.

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And, if you have any intelligence at all, the money in the savings account draws interest, right? So by putting more money from your checking to your savings, you earn more interest each month, which DOES increase your overall net worth, at least partly keeping your savings account up with inflation.

God, you can't even make your own arguments work. :roll:

Yes. And for decades we took the excess FICA collection, and spent it on non SS expenditures.

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So the money wouldn't fall victim to inflation. Seriously, what is so hard to understand about this?

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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What the hell are you talking about? I never said Congress didn't spend the money, nor did I say it didn't contribute to the debt. What I said is that it's not harmful debt, as it is simply debt owed to ourselves, debt which we are capable of paying back each month when it comes due.

Why do you talk when you clearly have no idea what you are talking about? God, it's annoying.