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Old 05-17-2019, 03:34 AM
Wrenching Spanners is offline
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Join Date: Jun 2011
Location: London
Posts: 520
Quote:
Originally Posted by Ravenman View Post
Are you sure you're an accountant? Like, really really sure?

Swapping $1 trillion for a different flavor of debt doesn't increase the national debt. Stopping collections on $1 trillion in revenue DOES increase the national debt.

I say this all the time about my car and homeowners insurance. I keep cutting those checks to Farmer's, but I never see a cent of it back. I must be a total sucker, amirite?
l0k1ís principle idea is fine, but his timing is off. A corporate analogy would be a company in a mature market thatís been making a profit for years, and has accumulated a large cash balance. In other words, a cash cow. A company in that position should pay a dividend to shareholders rather than just sitting on the cash.

What this analogy leaves out is that the retirement and disability insurance company weíve been discussing has millions of contracts with future obligations that it will have to fulfil or it will go out of business. My opinion is that l0ki, to use accounting terms, is inadequately accruing for those future liabilities. Under current projections, the reserve is going to go down. It doesnít need to be maintained at its current levels, and a reserve at something like 50% of annual payout should be fine. However, the trust fundís trusteesí forecast is that the reserve is going to hit that level in around 10-12 years. The social security trust fund may have a huge cash balance, but thatís offset by huge liabilities. Given that, a dividend, aka a social security tax break, seems like a poor idea.

Having said that, l0k1ís basic idea is still less hare-brained than the idea proposed in the OP.