How bad is the social security shortfall?

[American Patriot]

New estimates just out indicate social security has an 8.6 trillion dollar shortfall, that estimate is in 2012 real dollars. Social security has been raided by the feds repeatedly to cover some of Obama's misguided and wasteful spending episodes that he is so very fond of. Yep, great job there Mr. Obama just another example of ineptitude and unwise policies that are leading our country to economic doom.

 

[Days]

what's a shortfall?

 

[American Patriot]

what's a shortfall?

DUH, They are a little short of cash, there speedy.

 

[Days]

The Social Security Trust Fund is not short of cash, it has over four trillion in Treasury bonds.

 

[American Patriot]

The Social Security Trust Fund is not short of cash, it has over four trillion in Treasury bonds.

Better quit drinking all that Obama Kool-Aid there, scooter. Here have a look at the facts.


San Francisco Chronicle
Chart shows projected Social Security shortfall(Credit: AP)
Salon‎ - 32 minutes ago
Social Security Commissioner Michael J. Astrue said he is frustrated that little has been done to solve a problem that is only going to get harder ...


www.usatoday.com/money/.../2011-01-27-social-security_N.htmJan 27, 2011 – Congressional projections show Social Security running deficits ... The program first went into deficit last year — the first deficit since

www.washingtonpost.com/...social-securitys...shortfall...deficit.../586.


Social Security in Cash Flow Deficit | Mercatus
mercatus.org/publication/social-security-cash-flow-deficit
F]
Shortfalls in the Long Run: Predictions about the Social Security ...
timothytaylor.net/articles/hines_taylor_jep.pdf


www.ssa.gov › ... › Social Security Bulletin, Vol. 70 No. 3


www.dailyfinance.com/.../social-security-far-worse-shape-than-you-t...


Please don't pee on my shoes and tell me it is raining, I was born at night but not last night, there scooter.

 

[Days]

I didn't pee on your shoes, sir, I just stated a fact; The Social Security Trust Fund is not short of cash, it has over four trillion in Treasury bonds.... which it does. Learn the money.

 

[American Patriot]

I didn't pee on your shoes, sir, I just stated a fact; The Social Security Trust Fund is not short of cash, it has over four trillion in Treasury bonds.... which it does. Learn the money.

AH, the old deny the facts routine. You folks on the far far left are experts at denial. Denial is not a river in Egypt there, scooter. Did you even read the references I posted? Fat chance, learn the money? You better count the money. Treasury Bonds are worthless if your currency has no value.

 

[GordonGecko]

AH, the old deny the facts routine. You folks on the far far left are experts at denial. Denial is not a river in Egypt there, scooter. Did you even read the references I posted? Fat chance, learn the money? You better count the money. Treasury Bonds are worthless if your currency has no value.

So you're ADMITTING that SS has $4 Trillion in Treasury bonds, NOW, you just want to argue that the bonds are "worthless"?

In other words, you're admitting Days is right?

 

[Woolleybugger]

The SS bonds are due and payable. Pay up.

 

[degsme]

New estimates just out indicate social security has an 8.6 trillion dollar shortfall, that estimate is in 2012 real dollars.

Assuming NO CHANGES ARE MADE. Yes and?

We can solve it in one easy swoop: http://www.thiscantbehappening.net/node/170

Your point is?

According to a recent study conducted by the Congressional Budget Office for the Senate Special Committee on Aging, if this income cap for the Social Security tax was eliminated, so that all earned income was taxed, the dreaded wall when current workers’ tax payments ceases to be enough to pay for current retiree benefits, instead of arriving in 2037, would be pushed back to at least 2075, a date almost as distant in the future as today is from the founding of the Social Security program.

 

[Woolleybugger]

The unfunded mandate argument projecting into the future is pure fantasy. As it stands today, every child born has an unfunded mandate for the rest of their lives unless you are one of Romney's kids.

 

[degsme]

The unfunded mandate argument projecting into the future is pure fantasy. As it stands today, every child born has an unfunded mandate for the rest of their lives unless you are one of Romney's kids.

Exactly. Its an actuarial gimmick. No different than saying that Google has an unfunded liability to its shareholders of $180 Billion since it has a Market Capitalization of $215 Billion and annual revenues of $45 Billion.

 

[Days]

The Trust Fund is not a part of the Treasury. If the Treasury owes a trust fund money, it is due and since the Treasury is capable of printing money, it is certainly payable.

so yeah, there's over $4 Trillion in the Social Security Trust Fund, and just to make sure that wasn't lost on the executive branch (as it seems to be on AP) Congress passed a bill that bought a file cabinet and printed those bonds on hard copy and has been keeping those bonds in that file cabinet for years.

Due and payable.

I bought into the argument that the Bonds were worthless because I figured it was money the government owes itself... until I realized that the Social Security Trust Fund is not the government, it is a Trust Fund. So, those bonds are indeed, due and payable.

 

[Woolleybugger]

exactly. They must be paid.

 

[trapdoor]

OK -- the trust fund consists of bonds (Debt belonging to the Federal Government) that must be paid, with interest, by the Federal Government. The Trust Fund's treasury bonds are promissary notes on a debt by the government to be paid to the government.

But the ability to pay that debt rests on incoming revenues, whether those revenues come from FICA or import/export duties or federal income tax.

Right now, the amount coming in from all sources is less than the amount the federal government is paying for all expenditures. It is not analogous to Google's stock amortization because Google has a revenue stream that can pay today's debt without going into additional debt. Currently this is not true for the federal government.

The solutions are obvious.

We can raise taxes for Social Security while cutting benefits, which is politically impossible.

We can raise taxes for Social Security without cutting benefits, which is politically impossible.

We can cut benefits without raising taxes, which is politically impossible.

We can raise non-FICA taxation to pay off the trust fund debt, which is politically impossible.

I merely hope our currency survives another 50 years. I'm trying to handle my own retirement with private savings, a pair of directed-benefit retirement plans and investing about 11 percent of my income in a 401K.

 

[OldGaffer]

Why are easy solutions so hard for Wingers to comprehend?

 

[trapdoor]

]The Trust Fund is not a part of the Treasury. If the Treasury owes a trust fund money, it is due and since the Treasury is capable of printing money, it is certainly payable.

OK -- so what you're suggesting is that we inflate our way out of debt? That won't be any better for the country today than it was in the 1970s.

so yeah, there's over $4 Trillion in the Social Security Trust Fund, and just to make sure that wasn't lost on the executive branch (as it seems to be on AP) Congress passed a bill that bought a file cabinet and printed those bonds on hard copy and has been keeping those bonds in that file cabinet for years.

Due and payable.

But with no revenue stream that can pay them.

I bought into the argument that the Bonds were worthless because I figured it was money the government owes itself... until I realized that the Social Security Trust Fund is not the government, it is a Trust Fund. So, those bonds are indeed, due and payable.

The "trust fund" is a legal fiction -- it is as you apparently believed earlier, a debt the government owes itself. The bonds are worthless.

 

[degsme]

OK -- so what you're suggesting is that we inflate our way out of debt? That won't be any better for the country today than it was in the 1970s.

We weren't "inflating our way out of debt" in the 1970s. And actually we have ALWAYS inflated our way out of part of our debt, without any adverse consequences. And given that our inflation rate today is under 2%, increasing inflation by 1% would not harm the economy, and it would put the $$ yield on the debt into the NEGATIVE territory. So it very much would work quite well.

But with no revenue stream that can pay them.

sure there is taxation is taxation.

The "trust fund" is a legal fiction -- it is as you apparently believed earlier, a debt the government owes itself. The bonds are worthless.

Um no. Government bonds are not worthless. What makes the "trust fund" a "legal fiction" is that there is no Constitutional limit on the fungibility of those funds.

But that does not mean that government debt is worthless. That paper can easily be sold on world markets (and it is in fact - that's how the "trust fund" pays for itself) for "real" currency.

FACTS MATTER - yes they are a bit complicated and confusing, but they do exist.

 

[degsme]

OK -- the trust fund consists of bonds (Debt belonging to the Federal Government) that must be paid, with interest, by the Federal Government. The Trust Fund's treasury bonds are promissary notes on a debt by the government to be paid to the government.

But the ability to pay that debt rests on incoming revenues, whether those revenues come from FICA or import/export duties or federal income tax.

Right now, the amount coming in from all sources is less than the amount the federal government is paying for all expenditures. It is not analogous to Google's stock amortization because Google has a revenue stream that can pay today's debt without going into additional debt. Currently this is not true for the federal government.

Completely analagous to Google. Google for years had a negative revenue stream and no-one of any significance whined. Because they expected a FUTURE POSITIVE REVENuE STREAM.

And nothing prevents the government from doing that as well.

The solutions are obvious.

We can raise taxes for Social Security while cutting benefits, which is politically impossible.

Nope - completely feasible.

Uncap FICA - that's politically POPULAR

Move to a "years worked" model for eligibility rather than "age" eligibility. That's easily explained politically. And that raises the MEDIAN eligibility age enough simply because of demographics.

 

[trapdoor]

We weren't "inflating our way out of debt" in the 1970s. And actually we have ALWAYS inflated our way out of part of our debt, without any adverse consequences. And given that our inflation rate today is under 2%, increasing inflation by 1% would not harm the economy, and it would put the $$ yield on the debt into the NEGATIVE territory. So it very much would work quite well.

Nonetheless, we had inflation in the 1970s, and the upshot was a stalled economy. A 2 percent annual inflation rate is low, but it still means your currency is totally devalued after enough time, and that is an adverse consequence of running any level of inflation. Most people don't worry about debt yield -- they merely notice that the same amount of money buys fewer groceries.

sure there is taxation is taxation.

Someone here once told me that you've lost if you're arguing a tautology. "Taxation" is not providing sufficient revenue, which has led to the current problems. More taxation is politically impossible so the statement remains -- there is no revenue stream with which to redeem the bonds in the so-called Social Security Trust Fund.

Um no. Government bonds are not worthless. What makes the "trust fund" a "legal fiction" is that there is no Constitutional limit on the fungibility of those funds.

The bonds can't be sold to you or me. The trust fund doesn't exist -- it's a box full of IOUs from the government, to the government. IOUs that we do not currently have the means to pay or we wouldn't be having this discussion.

FACTS MATTER - yes they are a bit complicated and confusing, but they do exist.

Facts matter, and you're ignoring too many of them.