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How bad is the social security shortfall?

Discussion in 'Economics, Business, and Taxes' started by American Patriot, Aug 12, 2012.

  1. American Patriot

    American Patriot Mayor

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    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.
     
  2. Days

    Days Governor

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    what's a shortfall?
     
  3. American Patriot

    American Patriot Mayor

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

    Days Governor

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

    American Patriot Mayor

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    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.
     
  6. Days

    Days Governor

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    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.
     
  7. American Patriot

    American Patriot Mayor

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    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.
     
  8. GordonGecko

    GordonGecko President

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    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? :)
     
  9. Woolleybugger

    Woolleybugger Mayor

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    The SS bonds are due and payable. Pay up.
     
  10. degsme

    degsme Council Member

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    Assuming NO CHANGES ARE MADE. Yes and?

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

    Your point is?

     
  11. Woolleybugger

    Woolleybugger Mayor

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    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.
     
  12. degsme

    degsme Council Member

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    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.
     
  13. Days

    Days Governor

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    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.
     
  14. Woolleybugger

    Woolleybugger Mayor

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    exactly. They must be paid.
     
  15. trapdoor

    trapdoor Governor

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    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.
     
  16. OldGaffer

    OldGaffer Governor

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    Why are easy solutions so hard for Wingers to comprehend?
     
  17. trapdoor

    trapdoor Governor

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    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.

    But with no revenue stream that can pay them.

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

    degsme Council Member

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    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.

    sure there is taxation is taxation.

    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.
     
  19. degsme

    degsme Council Member

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    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.

    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.
     
  20. trapdoor

    trapdoor Governor

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