Ideal Budget

ludin · Sep 9, 2016

Gaea said:
The government isn't paying back its debts? :shock:

Nobody told me the US government had defaulted!

When Will Social Security Get Back the $2.8 Trillion It's Owed? -- The Motley Fool

this sums it up pretty well.

the only way to pay back those bonds is either money from the general revenue fund or borrow it or print it.

Gaea · Sep 9, 2016

ludin said:
Not that I am ready to retire, but if something is not done before 2035 the fund will only start to pay out 78% of your benefit.
Not only that there is no guarantee that you will get more than what you pay in. the way the fund is setup now it is not possible to do that and keep it going hence the problem they are running into.

78% of benefits is STILL more than you put in.

If you make $40,000 for 35 years and then retire, you will get $1,100 per month when you retire.
You only pay 7.65% of that $40,000 income into SS each year. That's equal to $107,000 over the course of your lifetime. If you collect $1100 per month, that means you get all of your money back after 8 years. If you collect 78% of that ($858), then you will get your entire $107,000 back in a little over 10 years instead of 8 years.

There's no Ponzi scheme, and there's no theft of your money. As long as you live long enough to collect social security, you'll get your money back.

Only on the excess. my money is not earning interest it is being used to pay someone else.

That is irrelevant. If your money was put into new bonds instead of being used to pay other people's SS earnings, it would REDUCE the amount of interest the SSA could earn on its trust fund.

The money will be there and will be invested safely as I get older. less interest earned but better safety.

That contradicts this:

I exited a fund that was losing me money

In 2013 the SS fund earned 3.8% interest. I can do better than that.

See above.

Actually you are wrong it is mine. At any time I can call fidelity or whoever else and move my money into something else.

But you cannot take money out of your 401k until you retire. If you cannot liquidate money credited to your name, you cannot call it yours.

again the money is mine and I can tell who is holding it what to do with it. interesting how that works.

As you stated, that doesn't guarantee your retirement account will appreciated. SS guarantees you get all of your money back and more.

That is why the fund is going broke and the government is running out of other peoples money to spend.

The SS trust fund increased in value last year. That's the opposite of going broke.

when SS was first started there were 49 people paying in for every 1 person pulling out.

How Many Workers Support One Social Security Retiree? | Mercatus

this lists 2010 as 2.9. 6 years later it is down to about 2 from what I have seen.

Not really relevant to anything because you're still getting all of your FICA taxes paid back to you when you retire.

Gaea · Sep 9, 2016

ludin said:
When Will Social Security Get Back the $2.8 Trillion It's Owed? -- The Motley Fool

this sums it up pretty well.

the only way to pay back those bonds is either money from the general revenue fund or borrow it or print it.

The article you linked contradicts the statement that "they aren't paying it back". Either you didn't read it or you didn't understand what it said.

Moderate Right · Sep 9, 2016

JohnfrmClevelan said:
Deficits aren't the question at hand. The question is, what is the functional difference between the government "borrowing" money from SS and "borrowing" money from the private sector? Where is the trickery? Where is the shell game? Please, unravel this amazing enigma for us.

I knew you would be unable to answer the question.

Moderate Right · Sep 9, 2016

JohnfrmClevelan said:
The problem isn't with the way the SS fund holds its assets. To the government, bonds and dollars are the same thing - liabilities. If the SS fund has $100 billion worth of bonds and zero cash, they can write $100 billion worth of checks. They are not broke.

The possible decline in payouts and "running out" of funds is a legal thing, not a should-have-held-cash thing. The danger isn't in the government not being willing and able to redeem those SS bonds, the danger is only in the legal strings put on the SS system. SS will only run out of money when they run out of bonds, and that's ONLY because of the way it is legally set up. At least with bonds they are earning interest.

Again - governments cannot "sock away" their own currency for future use. Sovereign governments are not limited in their ability to crank out as much of their own currency as they please, so there is zero danger in holding bonds, whether you are in the private sector or the government sector.

I'll try again. Why does the government have to borrow SS funds if they can just increase the deficit instead, or print more money? Who cares if the shell game is legal or not. What is the purpose in doing it when you can just deficit spend?

Gaea · Sep 9, 2016

Moderate Right said:
I'll try again. Why does the government have to borrow SS funds if they can just increase the deficit instead, or print more money? Who cares if the shell game is legal or not. What is the purpose in doing it when you can just deficit spend?

The government DOESN'T have to borrow SS funds.

The government doesn't care who it borrows from, as long as it can borrow from someone.

JohnfrmClevelan · Sep 9, 2016

Moderate Right said:
I'll try again. Why does the government have to borrow SS funds if they can just increase the deficit instead, or print more money? Who cares if the shell game is legal or not. What is the purpose in doing it when you can just deficit spend?

Because this is what they prefer to do at this point in time. It eases the minds of simpleminded people who worry about such things.

Now - stop deflecting and answer my question: what is the functional difference between borrowing from SS and borrowing from private entities? Where is this big shell game you keep yapping on about?

Moderate Right · Sep 10, 2016

Gaea said:
The government DOESN'T have to borrow SS funds.

The government doesn't care who it borrows from, as long as it can borrow from someone.

That does not answer the question. Why does the government borrow SS funds when it doesn't have to and can just deficit spend instead?

Moderate Right · Sep 10, 2016

JohnfrmClevelan said:
Because this is what they prefer to do at this point in time. It eases the minds of simpleminded people who worry about such things.

Now - stop deflecting and answer my question: what is the functional difference between borrowing from SS and borrowing from private entities? Where is this big shell game you keep yapping on about?

So, you admit that the government borrows from SS so that the public can find the lower deficits and debt more palatable instead of running even higher deficits and debt than we do now. This IS the shell game. Instead of a 20 trillion dollar debt we would have a 22 trillion dollar debt and close to trillion dollar deficits. It's an easier sell to the public by playing this shell game and most don't even know it is going on. They are being played for fools, not realizing that the government's deficits and debt are even worse than they are being led to believe. FICA taxes collected are earmarked for SS and Medicare and that's the way it should stay. As Al Gore would even say, we should keep the money in a lock box.

ludin · Sep 10, 2016

Moderate Right said:
So, you admit that the government borrows from SS so that the public can find the lower deficits and debt more palatable instead of running even higher deficits and debt than we do now. This IS the shell game. Instead of a 20 trillion dollar debt we would have a 22 trillion dollar debt and close to trillion dollar deficits. It's an easier sell to the public by playing this shell game and most don't even know it is going on. They are being played for fools, not realizing that the government's deficits and debt are even worse than they are being led to believe. FICA taxes collected are earmarked for SS and Medicare and that's the way it should stay. As Al Gore would even say, we should keep the money in a lock box.

It use to be until LBJ changes it and allowed it to be part of the general fund.

ludin · Sep 10, 2016

Gaea said:
The article you linked contradicts the statement that "they aren't paying it back". Either you didn't read it or you didn't understand what it said.

No I read it but in order to pay it back the government has to get the money from somewhere.
Unlike what John thinks money doesn't grow on tree's.

ludin · Sep 10, 2016

JohnfrmClevelan said:
Because this is what they prefer to do at this point in time. It eases the minds of simpleminded people who worry about such things.

Why do they prefer todo this when according to you they can just deficit spend and print money.
Please stop deflecting.

What is the economic consequences of just printing money?

jonny5 · Sep 10, 2016

ludin said:
The program isn't terrible how it was implemented is the terrible part and what is horrible.
it should be restructured in a different way to actually make it viable and cheaper for the government to operate.

First it should be approved via the constitutional amendment process. Govt by consent.

Gaea · Sep 10, 2016

ludin said:
No I read it but in order to pay it back the government has to get the money from somewhere.
Unlike what John thinks money doesn't grow on tree's.

And that's different from other government debt how?

Gaea · Sep 10, 2016

Moderate Right said:
That does not answer the question. Why does the government borrow SS funds when it doesn't have to and can just deficit spend instead?

Your question doesn't make sense.

In pedestrian terms, you're asking: "Why does he have to borrow money from a bank when he doesn't have to and can just spend money he doesn't have instead?"

Gaea · Sep 10, 2016

jonny5 said:
First it should be approved via the constitutional amendment process. Govt by consent.

You provide consent by electing politicians who continue to support social security.

mmi · Sep 10, 2016

Moderate Right said:
Why does the government borrow SS funds when it doesn't have to and can just deficit spend instead?

The money is in the trust funds. Are we better off borrowing it from that pile or from somewhere else? What else would you have us do with the money in the trust funds?

Moderate Right said:
So, you admit

That magic RW word. As is almost always the case, anything you say we "admit" is a lie that yer inventing.

>>the government borrows from SS so that the public can find the lower deficits and debt more palatable instead of running even higher deficits and debt than we do now.

No, the gubmint borrows the money from the trust funds for two reasons: first, the shortfall in receipts exists and needs to be covered somehow. You should try admitting what caused the very large deficits 1982-93, 2003-04, and 2009-13. Secondly, the simple fact is that we need to do something with the money in the trust funds.

>>Instead of a 20 trillion dollar debt we would have a 22 trillion dollar debt and close to trillion dollar deficits.

That is incorrect. The national debt includes the borrowing from the trust funds. The borrowing is not included in the deficits because it's money we're borrowing from ourselves that we collect interest on.

The national debt is $19.5T — $14.1T held by the public and $5.4T in intragovernmental holdings. (source)

>>It's an easier sell to the public by playing this shell game

How? You and yer allies who are responsible for the debt can still go around screaming "twenty trillion!!"

>>most don't even know it is going on.

Ironically, yer in that group.

>>They are being played for fools

You and yer allies are the ones being played. Policies supported by the Right created the debt.

>>FICA taxes collected are earmarked for SS and Medicare and that's the way it should stay. As Al Gore would even say, we should keep the money in a lock box.

The concept of a lockbox is in a sense campaign shampagne. The issue is fiscal responsibility. We're better off in the short term using the trust fund assets to help us finance current budgets. If we want to avoid having to raise taxes and/or cut SS/Medicare benefits down the road, we need to adopt sound fiscal policies … like the ones we had under Clinton and have had under the Negro.

jonny5 said:
First it should be approved via the constitutional amendment process.

SS has been declared constitutional by SCOTUS, so no need for any amendment.

JohnfrmClevelan · Sep 10, 2016

Moderate Right said:
So, you admit that the government borrows from SS so that the public can find the lower deficits and debt more palatable instead of running even higher deficits and debt than we do now. This IS the shell game. Instead of a 20 trillion dollar debt we would have a 22 trillion dollar debt and close to trillion dollar deficits. It's an easier sell to the public by playing this shell game and most don't even know it is going on. They are being played for fools, not realizing that the government's deficits and debt are even worse than they are being led to believe. FICA taxes collected are earmarked for SS and Medicare and that's the way it should stay. As Al Gore would even say, we should keep the money in a lock box.

I admit that you are clueless when it comes to accounting. If you would admit the same thing, you might be able to make some progress.

Let's say that you had a credit account, a checking account, and a savings account. You earn $20,000/year, and you spend $22,000/year.

Scenario 1: You add nothing to your checking or savings accounts, and you put $2000 on your credit card.

Scenario 2: You add $1000 to your savings account, and you put $3000 on your credit card.

#1 is what the government does. #2 is what you are suggesting. In both scenarios, your net worth went down by $2000.

In real life, if you ran up your credit card balance just so you could put money into your savings account, you would be widely regarded as an economic idiot.

jonny5 · Sep 10, 2016

Gaea said:
You provide consent by electing politicians who continue to support social security.

Thats exactly the type of thinking that made the states demand a bill of rights.

Amendment X

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

mmi · Sep 10, 2016

jonny5 said:
Thats exactly the type of thinking that made the states demand a bill of rights.

It wasn't "the states" who demanded it, it was the anti-Federalists.

Moderate Right · Sep 10, 2016

Gaea said:
Your question doesn't make sense.

In pedestrian terms, you're asking: "Why does he have to borrow money from a bank when he doesn't have to and can just spend money he doesn't have instead?"

I expect much more from you as you are a rare breed in being a sensible liberal. But, here you are just rubber stamping the party line in avoiding the real answer - both parties want to make the deficit and debt look smaller than it actually is.

Gaea · Sep 11, 2016

Moderate Right said:
I expect much more from you as you are a rare breed in being a sensible liberal. But, here you are just rubber stamping the party line in avoiding the real answer - both parties want to make the deficit and debt look smaller than it actually is.

Ask your question in a more clear way and I'll answer it.

The US government cannot deficit spend unless somebody buys its bonds.

If SS buys its bonds, then the interest payments do not leave the system. If a foreign government buys its bonds, the interest payments go to another country.

Moderate Right · Sep 11, 2016

Gaea said:
Ask your question in a more clear way and I'll answer it.

The US government cannot deficit spend unless somebody buys its bonds.

If SS buys its bonds, then the interest payments do not leave the system. If a foreign government buys its bonds, the interest payments go to another country.

You are stuck in a feedback loop on talking points. Just like James, 1+1=2 and you can't get past that. There are actually other possibilities that add up to two, it doesn't have to be just 1+1.

mmi · Sep 11, 2016

Moderate Right said:
You are stuck in a feedback loop on talking points.

This is indeed the problem, but it's not Gaea's

>>1+1=2 … There are actually other possibilities

Yes, if you change the base system.

What do you want done with the money in the trust funds?

JohnfrmClevelan · Sep 11, 2016

Moderate Right said:
You are stuck in a feedback loop on talking points. Just like James, 1+1=2 and you can't get past that. There are actually other possibilities that add up to two, it doesn't have to be just 1+1.

No, you can get to 2 in any number of ways. Did you understand my last post on the accounting? Since you didn't respond, I'm assuming that you understood it and accept that I am right. Which is a good thing - correct your mistakes, and move forward.