A letter from my Congressman on Medicare and SS!

[MaryAnne]

Just listening to a discussion from Ron Wyden,who is one of the group trying to solve problems.
He mentioned the fact of Medicare not paying for so many tests after you reach a ripe,old age and also home care costong so much less.

I have always thought there are just too many tests and have refused some.A woman over the age of 65 lives as long with breast cancer and no treatment as one who suffers chemo and radiation for years
.
That is why I have a Living Will. Having yearly mamograms is simply a waste of money and they almost always discover something they cannot quite make out,so you have to take a second,then,surprise! Nothing there!

I have seen numerous friends and family have repeated tests over and over again,even while everyone knows they are on the way out, Doctors included.

 

[Citizen]

I agree, it totally piss's me off when they call my earned bebefit programe an entitlement. Totally piss's me off.

 

[Dawg]

Cit, don't sweat it, ya might not live long enough to worry about SS, many don't, so GOV gets 100% profit from those taxpayers.......

rumor is SS is a box full of IOU's.......

 

[gabriel]

greece didnt collect enough income as well

 

[trapdoor]

All this weenie-whining around Social Security, is pathetic, diversionary bullshit. Social Security's "issues" are so marginal and so nominal, that they could be fixed in one afternoon's worth of Congressional work, without anyone hardly noticing. BUT...Congress (both sides, for their own seperate reasons) doesn't WANT to "fix" Social Security. They'd rather leave it hanging out there to employ as one big-assed, scare-mongering wedgie, to use at their convenience.

As just ONE example (and there are many) of the nominal/marginal nature of Social Security's "issues", lets look to the claim that Social security will grow from 4.85% of GDP to 6.22% of GDP by 2035. Well gimme an "f-ing" break. I've never been one to shout that we should "Slash defense now!". But good God...don't tell me that over the next 23 years, we can't shift that 1.35%.....1.35%!!!, over from the defense side to the Social Security side.

Sure we could -- but Defense doesn't have it. The Defense budget, and all of the General Fund budget, cost more to operate than they receive in tax dollars. They way this has been resolved in the past is to go to a fund that had excess money coming in, and spend from that fund. The fund in question was Social Security receipts. That well has run dry, and we can't "borrow" from anywhere else in the budget, because the rest of the budget has been propped up by Social Security.

This is not because conservatives have "gutted" Social Security or Medicare. Conservatives always warned that both programs would become so expensive as to be nonviable. Unsurprisingly, this is true.

 

[OldGaffer]

Which candidate got jeered in 2000 by the GOP for wanting to put SS in a lockbox?

 

[trapdoor]

Which candidate got jeered in 2000 by the GOP for wanting to put SS in a lockbox?

That would be Al Gore Jr., who should have been jeered at because he was lying. The government has no method for taking and storing money.

If the same revenues went to a private institution, they could store the money in a number of hard investments. When they go to the government, the sole option is to put the money into treasury bonds -- this has been done, and the result is known as the Social Security Trust Fund. The trouble lies, of course, in what a bond really is.

If you buy a government bond, say a $50 one, you've lent the government $50 and the government promises to pay you back $50 plus the interest on the bond. If the government buys a treasury bond, however, all that has happened is the government has created a legal fiction. It has borrowed $X from itself with the promise to pay itself back (with interest) at some future date when the funds become available. There is no "iron box" for Gore to put the money in -- the most secure thing he could do with it was a promissary note, essentially an IOU, saying the government was going to use the money now, and pay it back later.

The funds have not become available, however, at any time in the last 40 years, and current demographics indicate that there never will be. It's a sucky time to be 50, as I am, and hoping to retire at some point.

 

[fairsheet]

Sure we could -- but Defense doesn't have it. The Defense budget, and all of the General Fund budget, cost more to operate than they receive in tax dollars. They way this has been resolved in the past is to go to a fund that had excess money coming in, and spend from that fund. The fund in question was Social Security receipts. That well has run dry, and we can't "borrow" from anywhere else in the budget, because the rest of the budget has been propped up by Social Security.

This is not because conservatives have "gutted" Social Security or Medicare. Conservatives always warned that both programs would become so expensive as to be nonviable. Unsurprisingly, this is true.

Yes but...per my gist, those "conservatives" who were shouting that Social Security would become so expensive as to be nonviable, were baldfaced liars. Well...they were EITHER liars or morons. And..that begs us some questions as to what sort of attention we should pay to them. If they're morons, we should probably just ignore them. BUT...if they're liars, it's incumbent upon us to figure out what they're up to.

 

[fairsheet]

Which candidate got jeered in 2000 by the GOP for wanting to put SS in a lockbox?

The "lockbox" meme was silly. Per its charter, Social Security is REQUIRED to invest its surplus in U.S. Treasuries and by extension, the "guvmint" is REQUIRED to borrow from Social Security's surplus.

Much as we may dream otherwise, there was and is no practical alternative. We can't stuff those dollars in the proverbial mattress, since inflation would shrink them out of sight. And, we can't invest them in private securities, without engendering the sorts of political corruption and untowardness that would render fascism "tame".

Nevertheless, all is not lost. Unlike trapdoor's curious allusion to U.S. Treasuries being "fictional", there remains NO investment on earth, as solid, reliable, and tangible as U.S. Treasuries. Shoot...a the height of the "Great Li'l Georgiean Depression", the world was snapping up U.S. Treasuries at NEGATIVE interest rates!

The feelings expressed by trapdoor, seem to dream of some fictional future scenario under which the United States will default on its obligations, while private wealth and securities magically retain their value. But...the practical truth is that by the time the U.S. theoretically defaults on its obligations, that would be the least of our worries, for by that time all our private wealth will have evaporated.

 

[trapdoor]

Nevertheless, all is not lost. Unlike trapdoor's curious allusion to U.S. Treasuries being "fictional", there remains NO investment on earth, as solid, reliable, and tangible as U.S. Treasuries. Shoot...a the height of the "Great Li'l Georgiean Depression", the world was snapping up U.S. Treasuries at NEGATIVE interest rates!

The idea that a treasury bond has any meaning when it is "purchased" by the federal government is indeed a fiction. No bond has been purchased, the federal government has simply written an IOU to itself. If you take $500 out of your savings account, buy new tires for your car, and then write yourself a post-dated check for $510 to be put back into your account when you have the money, you've just established your own private version of the Social Security Trust Fund -- with the bonus that you may actually someday have the revenue you just promised yourself. According to the current demographics, at the current level of benefits and taxation, that will never be true for the SSTF.

The feelings expressed by trapdoor, seem to dream of some fictional future scenario under which the United States will default on its obligations, while private wealth and securities magically retain their value. But...the practical truth is that by the time the U.S. theoretically defaults on its obligations, that would be the least of our worries, for by that time all our private wealth will have evaporated.

I don't think that will happen, but I think the first part of it could happen and it would lead to a general economic collapse as you describe. I still think some form of guaranteed private accounts is a better approach to providing a retirement safety net, especially if the accounts were owned and can be passed on to the next generation via inheritance. This would have to be a gradual process, but that would gradually get the government most of the way out of the retirement insurance business (where it was never supposed to be in the first place).

 

[trapdoor]

Yes but...per my gist, those "conservatives" who were shouting that Social Security would become so expensive as to be nonviable, were baldfaced liars. Well...they were EITHER liars or morons. And..that begs us some questions as to what sort of attention we should pay to them. If they're morons, we should probably just ignore them. BUT...if they're liars, it's incumbent upon us to figure out what they're up to.

Exactly what were they lying about? We have now reached the time when Social Security is too expensive to be viable -- at least if you define viability as most people do in regard to the program; ie I paid in like my parents did and I get the same benefits they did at the same time of my life that they did. We, as a nation, cannot afford to do that today -- the program is too expensive without a delay in benefits to some, and cuts in benefits to others.

 

[lilly]

Well, don't know about you Gaf, but the silent majority might rise up on this one! Know I would....

Those on SS and Medicare have great voting power since there are so in that group but there will be changes no matter what. IMO.

 

[fairsheet]

The idea that a treasury bond has any meaning when it is "purchased" by the federal government is indeed a fiction. No bond has been purchased, the federal government has simply written an IOU to itself. If you take $500 out of your savings account, buy new tires for your car, and then write yourself a post-dated check for $510 to be put back into your account when you have the money, you've just established your own private version of the Social Security Trust Fund -- with the bonus that you may actually someday have the revenue you just promised yourself. According to the current demographics, at the current level of benefits and taxation, that will never be true for the SSTF.



I don't think that will happen, but I think the first part of it could happen and it would lead to a general economic collapse as you describe. I still think some form of guaranteed private accounts is a better approach to providing a retirement safety net, especially if the accounts were owned and can be passed on to the next generation via inheritance. This would have to be a gradual process, but that would gradually get the government most of the way out of the retirement insurance business (where it was never supposed to be in the first place).

I've heard your particular wordgame before. It's a meaningless wordgame. In order for your wordgame to rise to the level of "worthy of consideration", you'd at LEAST have to suggest some plausible scenario under which the United States would default on its obligations. Your wordgame doesn't even make that little effort. It simply relies on the idea that the U.S. could -if it chose to - default. But then, the same applies to ANY debt.

Since ALL debts have that one thing in common - that they CAN be defaulted upon - we must go back to the adult's table and consider the comparative likelihood of one debt's versus another's, being defaulted upon.

 

[fairsheet]

Exactly what were they lying about? We have now reached the time when Social Security is too expensive to be viable -- at least if you define viability as most people do in regard to the program; ie I paid in like my parents did and I get the same benefits they did at the same time of my life that they did. We, as a nation, cannot afford to do that today -- the program is too expensive without a delay in benefits to some, and cuts in benefits to others.

Again....if as all OBJECTIVE considerations of Social Security's "math" suggest, the tweaks required for putting it back into balance are nominal, your suggestion that "it's so expensive as to be nonviable" is either a lie or moronity. I'll take your word for it, that you're not a liar.

 

[trapdoor]

I've heard your particular wordgame before. It's a meaningless wordgame. In order for your wordgame to rise to the level of "worthy of consideration", you'd at LEAST have to suggest some plausible scenario under which the United States would default on its obligations. Your wordgame doesn't even make that little effort. It simply relies on the idea that the U.S. could -if it chose to - default. But then, the same applies to ANY debt.

I'm not playing a word game -- I'm describing exactly how the Social Security Trust Fund works -- the government takes the money received from Social Security revenues, puts it into the general fund to pay for day-to-day operations, and puts a bond into the trust fund. The bond is a promise that the government, which "owns" the money in the trust fund, will replace the money in the trust fund at some future date. At this point in time -- right now today -- the U.S. government has no money to redeem those bonds. It is using the money designated to redeem them for day-to-day operations. That's fact, not a word game. The U.S. is already on the edge of losing its triple-A credit rating. What evidence do you have that operations can continue this way indefinitely?

Since ALL debts have that one thing in common - that they CAN be defaulted upon - we must go back to the adult's table and consider the comparative likelihood of one debt's versus another's, being defaulted upon.

And no one appears to be doing that. What we're seeing from Democrats is a business-as-usual attempt to extend benefits and entitlements. What we're seeing from Republican is sideshow budget cuts that don't really address the greater issue -- if put in place they'd look good but accomplish little.

And what both sides are ignoring when it comes to Social Security is that the public doesn't want the program cut, doesn't want higher taxes, and doesn't want to receive the entitlement later in life. About 80 years ago, they decided to put the saddle on a tiger -- trying to get it to "whoa" on command is a distinctly more difficult operation.

 

[trapdoor]

Again....if as all OBJECTIVE considerations of Social Security's "math" suggest, the tweaks required for putting it back into balance are nominal, your suggestion that "it's so expensive as to be nonviable" is either a lie or moronity. I'll take your word for it, that you're not a liar.

Except that the tweak you offered -- pulling the money out of Defense -- can't work if the Defense budget is run as a major part of the deficit, as it is. There is no money there to pull away -- the money currently funding those operations comes in part from the Social Security Trust Fund. No matter how "nominal" the expense, there's no actual money without going deeper into debt.

And again -- I attempted to desribe what I think most people consider the viability of the program: I get the same level of benefits at the same time in my life that my parents did. The Social Security Administration says that is currently impossible.

 

[Woolleybugger]

It's a matter of priorities. Personally, I cannot see a threat to America that requires us to borrow 700 billion a year to fund the defense budget. As for SS, it is fully funded for a long time and then our guesstimates is that it needs more dough to keep up with demographics. So get more dough. It's not that hard to figure out really. Get the money.

The alternative is what exactly? Self-funding through the stock market? Please. I don't know anyone who has realized the gains promised us back in the late 70s when IRAs and 401ks were created. Rather, most of us are barely breaking even and lucky to make a nickel after all the fees over the years, the losses, the collapses, etc. I asked my co-worker if he really hated SS and Medicare then why not let his 80 year old mom move in and take care of her himself...no way he said, no way.

And there you have it.

 

[Woolleybugger]

And of course you are trying to tell us that the bonds being held by the fund are somehow different than the bonds held by the market ie, tbills. They are one and the same, there is no preferred bond that supercedes those in the trust fund, they both must be paid back in full or the government's credit rating will go into the toilet. This meme is something Republicans love to talk about as if those debts are not fully reimburseable because its "just family, you know, between us and we both know I don't have to pay mom and dad back...wink wink". If it was a handshake agreement, maybe you could get out of it but the SS fund is funded by real securities...In fact, SS bonds are actually like preferred stocks, they get their dough immediately and are superior to other bonds apparently...

here is the data.

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.

Data on trust fund investments provide a breakdown by interest rate and trust fund for any month after 1989.

http://www.ssa.gov/OACT/ProgData/fundFAQ.html

You just don't want to pay them back because it will mean that you have to raise taxes in order to pay for the massive deficits run up over the years by administrations who could not tax the nation for the government they demanded...

 

[trapdoor]

And of course you are trying to tell us that the bonds being held by the fund are somehow different than the bonds held by the market ie, tbills. They are one and the same, there is no preferred bond that supercedes those in the trust fund, they both must be paid back in full or the government's credit rating will go into the toilet.

And that's the threat we faced just nine months ago -- that the government's credit rating would fall. And there is a vast difference between owing another, separate entity, a given amount, and owing that same amount back to yourself. How do you pay yourself back if you lack the funds?

This meme is something Republicans love to talk about as if those debts are not fully reimburseable because its "just family, you know, between us and we both know I don't have to pay mom and dad back...wink wink". If it was a handshake agreement, maybe you could get out of it but the SS fund is funded by real securities...In fact, SS bonds are actually like preferred stocks, they get their dough immediately and are superior to other bonds apparently...

You just don't want to pay them back because it will mean that you have to raise taxes in order to pay for the massive deficits run up over the years by administrations who could not tax the nation for the government they demanded...

Quite the contrary -- I want them paid back in full. I don't know how we can do that while we're still using the money designated for their reimbursement to fund everything from jet fighters to food stamps.

 

[Woolleybugger]

Are we finally getting around to working on possible solutions after all the philosophy? I agree very much with what you wrote here. As I see it, the possible solutions are limited to something like the following:

1. Increase GNP, everything stays the same.
2. Increase GNP, make drastic changes

Right now, we are following the first option because there is no will to actually confront fiscal reality. On the left, we expect government to solve big problems and demand that the citizens participate fairly and according to their abilities. On the right, government is viewed as the enemy and no one is expected to modify their behavior but the poor.

This type of decision making environment leads to possible options never being brought forth because they are thrown out before even being proposed. This is human behavior as seen by historians when the pressure is gone. It is very easy to look back and say Versailles was a huge mistake. Another thing to be there when they did it and deal with the victors demands. The key for any good decision is for rationality to rule over emotion and ideology. Perhaps the best way to look at this is brainstorming. Forget your prejudices, list everything you think could be a solution without judgement. Then, create some decision making model that is objective and sort through them one by one.

What you would have as a result of this is a grasp of the options, the costs and the probability of success of whatever options you put through this model. Then, someone has to make the call. I am reminded of this whenever I think of Ike making the call to go on that day to Normandy. He did the best he could and then made the call.