NPR says what I’ve said for years
The trust fund isn’t a fund. And you shouldn’t trust it.
If I loan myself one hundred gazillion dollars with the obligation to pay myself back, anyone who believes I’m the richest man on earth is a fool.
Trouble with Ponzi schemes is that eventually you run out of suckers and the bill comes due.
November 23rd, 2010 at 11:30 am
No kidding… Trust and government should never be in the same sentence….
November 23rd, 2010 at 11:39 am
and it only took them years and years to repeat something correct.
November 23rd, 2010 at 12:22 pm
I would like to see the age for entry into Medicare raised, coupled with an easy incentives to encourage the elderly to work longer
1) eliminate all income taxes on people that choose to work past the minimum age.
2) eliminate employer-paid taxes on the working elderly, as an incentive to hire/retain them, and from paying for their worker’s compensation insurance.
3) exempt employers from the mandate to provide reasonable accommodation. Many will anyway, but they’ll be less afraid to hire somebody frail.
3) exempt the working elderly from mandatory union dues.
The other easy fix would be to allow physicians to enter an indemnity pool, in return for accepting lower Medicare/Medicaid fees. The doctors get to cancel or scale back their insurance premiums and in return they can’t be sued for anything less than intentional malice that “shocks the conscience” (the legal standard for suing judges and DAs). Negligence lawsuits are a huge drain that could be easily plugged.
November 23rd, 2010 at 1:41 pm
You can make the argument that investing in treasury bonds might be a bad long term investment (although the rate of return is set and it has been the most stable form of investment for almost the entirety of the existence of the United States), but the money had to be set aside into something other than cash or else inflation would’ve given the Social Security Trust Fund a negative rate of return over the years.
If not T-bills, what else? If the Government can’t pay back the bonds then holding it in cash would be as pointless because our monetary system would collapse…as would the stock market. I suppose they could invest in the gold bubble, but that carries its own set of risks.
November 23rd, 2010 at 1:44 pm
There is no money. It is gone and spent.
November 23rd, 2010 at 3:02 pm
I bet that if Social Security would have never been made mandatory we wouldn’t need to worry about treasury bonds or cash losing thier value, because people would have been able to direct thier own lives and futures. But instead we are forced to surrender money into a ponzi scheme. Imagine how much money Madoff would have made if he had guys in black pajamas ready to kill people that didn’t want to participate. I be he would have made…oh I don’t know…at least 2.5 trillion.
November 23rd, 2010 at 5:46 pm
“There is no money. It is gone and spent.”
No, its not gone, its in the form of Treasury Bonds. Which is the functional equivalent of fiat money but unlike fiat money, Treasury bonds increase their value over time. If the Federal Government can’t pay back the bonds on time, than money is also worthless, in which case either way the trust fund would not exist.
November 23rd, 2010 at 5:51 pm
yes, it is gone. it’s simple math. I spend $100 from my bank account. I then write a note to myself saying “self, I owe you $100”. I have a note saying I will pay myself $100. I don’t have $100. And neither does the government.
November 23rd, 2010 at 6:21 pm
But Unc, it’s not on fancy paper. make the note on fancy paper with water marks and then put a date to be repaid, then it’s worth something.
November 23rd, 2010 at 6:38 pm
What Unc is saying is true…but in a rather trivial sense. The govt spends more than it takes in. This isn’t new, controversial, or even dangerous.
That the govt is generally agreed upon to be able to pay back that $100 it spent is essentially the foundation of not only our economy, but really the entire planet’s…which I gather is the point Sean’s making. The govt borrows money and spends more than it has; this isn’t as awful a thing as it’s made out to be.
SocSec collects more per dollar that it spends than just about anything else the federal govt does. If it’s in crisis, then Medicare is about to redline into a wall.
November 23rd, 2010 at 6:41 pm
@Sean
“No, its not gone, its in the form of Treasury Bonds. Which is the functional equivalent of fiat money but unlike fiat money, Treasury bonds increase their value over time. If the Federal Government can’t pay back the bonds on time, than money is also worthless, in which case either way the trust fund would not exist”
Not quite. You cannot make debt to yourself and then say that it has any net value. It is bad accounting.
November 23rd, 2010 at 7:55 pm
Certainly, if that “SS Trust Fund” debt is monetized, it would be like a super version of the Fed’s recent QE2 program and would result in severe devaluation of the US currency.
November 23rd, 2010 at 9:14 pm
Just one more thing to thank lbj and his butt-f***ing democrap party for. Not saying the repubs didn’t climb on the bus later, just saying him and his put the gas in the tank and the key in the ignition.
November 24th, 2010 at 12:32 pm
>No, its not gone, its in the form of Treasury Bonds. Which is the functional equivalent of fiat money but unlike fiat money..
First off, it’s not in regular T-bills, it’s in special non-negotiable T-bills that the SS admin can’t sell on the open market.
It’s essentially an accounting trick, and people like you fell for it. The money has been spent to reduce the deficit and Uncle Sam gave the SS admin a personal non-negotiable IOU that says “we promise”.
However, if you look at actual history, (Carter era, and then Reagan sped things up a bit), you will see that whenever expenses exceed the current income, instead of cashing all those IOUs, benefits get decrease and existing people who are forced to pay into the system end up paying more.
Some people claim with just a few more tweaks, SS will continue to ponzi along until after the current crop of retirees are dead, but that’s just transferring the debt onto the unborn and the children. Where do you stand on “taxation without representation” anyway?
November 25th, 2010 at 12:41 am
I read through all 10 pages of comments over there, and I keep seeing the same guy hammer away at the “fact” that excess SS funds were used “to pay for tax cuts for the rich”.
I’m trying to wrap my head around the concept of tax cuts having to be paid for, but I just can’t do it.