In this post, RTFirefly questioned whether Bush set himself up to violate his oath vis a vis the constitution in his State of the Union speech. Several posters ridiculed the idea.
Today, Bush said it again, this time more clearly:
Bullshit, motherfucker! There is a goddamn trust fund, and it is in the form of bonds. Just because you spent it on tax cuts, which you propose to keep goddamn doing, doesn’t mean that it is not there. In 2018, money will be going in, because the government must pay the fund back.
The surplus was built on the backs of the middle class, which includes me, motherfucker. My money is in the trust fund and you will not take it away.
Defenders of Bush! What does it mean when he says “There is no trust” ? Help me out, because I will be ready to drink hot blood if this little cocksucker of a president continues EXPRESSLY SAYING that there is no trust fund.
IIRC, about 4 trillion of our current national debt is owed to the trust fund. Every year the government spends all the money that is deducted from citizens paychecks for Social Security, and puts another IOU on the pile. Then they spend more.
Clinton’s ‘surplus’ was actually just a smaller IOU on the pile. The shrub puts bigger IOU’s in the pile, and gives the money to the rich.
IMHO, the real reason for ‘Social Security Reform’ is to default on, or at least re-structure, the pile of IOU’s. The re-structure is going to cost around an extra trillion or two, but avoids the alternative: default.
Defaulting on the 4 trillion is the most likely scenario – probably within the next 20 years. It’s all a big house of cards. Gonna be interesting when it crashes.
Someone pointed the following out to me earlier today, and I think it clarifies the issue greatly.
If I write an IOU to you, you now have an asset. However, I can’t write an IOU to myself and call it an asset. All it would be is a sort of reminder.
What the government has done is write IOU’s from one part of it (the general fund, the Treasury) to another (the misnamed Social Security trust fund.)
Ask yourself what will happen when Social Security “cashes” those bonds in. The Treasury will have to find the money to do this somewhere. The choices available to it will be borrowing, spending cuts in other programs, or higher taxes - the same outcome if there were no trust fund at all.
So I’m calling bullshit on your little rant. If you want to fix the problem, you first have to own up to reality.
Someone did you a disservice, Mr. Moto. Please educate yourself by using resources better than “someone.” I’m calling bullshit on your bullshit.
The treasury bonds in the trust fund are not simply IOU’s. The taxes deducted from paychecks up to $87,000 to build the trust fund are not simply exchangeable with other revenue streams within the government. They were expressly generated for the purposes of the Social Security system, and cannot be defaulted on.
I’m surprised at your ignorance on the issue, and I suggest that “someone” is a dumbass motherfucker.
It’s money given to the government to spend now, and a promise that they’ll pay it off later. And that money has been spent, believe you me.
The money became interchangeable with other revenue streams, for the purposes of the general fund, when it was spent on a bond. The assets in the “trust fund” can’t be spent, strictly speaking. Can you spend a savings bond directly? McDonalds won’t take them.
You can redeem a bond, at which time the government will take money out of the treasury to pay you off. When the government has to do this to itself, it becomes clear that all this was an accounting fiction all of the time.
You folks wanted heads to roll when Enron did this. Why you accept it from the government is beyond me.
My long reply got eaten by the Hamsters. Here’s the short version:
6.2% of your paycheck is sent to the government up to a maximum. This money goes into the government’s General Fund and is spent. At the same moment an entry is made into the journals of the four Social Security Trust Funds. Since the actual current dollars have been spent these are hypothetical dollars.
These hypothetical dollars are then invested in hypothetical treasury instruments specially designed for SS. These dollars than earn hypothetical interest.
From time to time the trustees report on how much money there would be in the hypothetical accounts if they actually existed.
When money is paid out in terms of benefits another entry is made into the appropriate trust fund ledger and the hypothetical balance is reduced by that amount. The actual dollars are paid from the General Fund.
To give you an example of what is occuring, consider the following:
Each week you give me $50 to invest. I take the money, buy beer and drink it. However, I note down how much you gave me. I also invent some imaginary investments and imagine how much interest they would give you if they actually existed and I invested your money in them instead of buying beer.
I note down this number as well.
My plan is as follows. At some point down the road you will wonder how your investments are doing. I will show you the piece of paper and you will go away and not bother me.
Even further down the road, you may want some or all of your money as well as the imaginary interest you earned. Fortunately for me, I plan on getting a lot of other people to give me money, too. I can only buy so much beer, so there will be enough extra to pay you off.
This kind of financial structure is called a pyramid scheme or a ponzi scheme. It is highly illegal and unethical if you or I were to do it. They are illegal and unethical bebause they must eventually become top heavy and fail. Their assets are imaginary.
There is however, a rationale that explains why the government can and should do this and why it is totally normal.
The first part is… Well… because they are the government and they are doing it for our own good.
The second part sounds flaky but actually makes sense. ALL US dollars and US dollar obligations are fiat money. In other words, all moneys are imaginary. A tick in an accounting book of a hypothetical account is every bit as good as an actual dollar in your hand, or an actual treasury. A government’s IOU to itself is every bit as a good as an IOU to a third party, cash on the barrelhead, or that sum’s value in goods or services.
While this makes sense, it is not, strictly speaking, true. If it were true, than there would be no reason why the government could not be spending these hypothetical dollars it needs and putting the actual dollars in an actual fund, in actual securities, earning actual interest.
Instead, the government is spending the actual dollars.
The reason for this is inflation. If the government just prints and spends money without regard to the actual circulation of goods and services, than there are relatively too many dollars chasing too few goods and services and we have significant inflation.
If the government just prints money, than it becomes worthless. The amount in circulation must be actively managed to reflect marketable goods and services and provide a fungible currency.
What the Government hopes to do is one or more of several things:
A. They hope that government receipts will increase to help them pay the SS obligation out of the general fund as it becomes due and payable.
B. They hope to convert this money into actual securities at favorable rates in a manageable fashion
C. They will print more money that will be worth less due to inflation and fulfill the letter of the obligation
D. Somewhere down the road the government will tighten it’s belt.
E. In one form or another they hope to just keep floating this thing forever.
Many people do not have faith in these tactics. It has become an issue because we are rapidly approaching the point in time when the outlays from the current fund as regards Social Security will be larger than what is taken in. This is the real crisis. The idea of the trust funds hypothetically hitting zero is a moot point. When outlays exceed intake that it when the actual debt is being realized.
Bush’s suggestion is to begin realizing it now in the form of putting real current dollars in real investments and allowing people to diversify into the real world instead of the hypothetical one.
Whether you think this is a good idea or not, hopefully you now see why Bush was quite correct in his comments about their being no actual trust fund and that the money was being spent.
After reading this thread, I agree, There is no trust.
There is no trust which any reasonable person can put in the liar in the White House.
And there is no trust which any reasonable person can put in the people on this board who think that they can magically wave away comments made by their own party regarding the inviolability of the supposed “Social Security lockbox” a few years back, by supposing that “it is all in the same revenue stream.”
Ask Bricker or Dewey or Hamlet what happens when someone being paid a salary and given money to hold as a fiduciary decides to start conmingling them and spending them as if they were all his money to spend.
Converted from a personal to a government metaphor, that’s precisely what the Liar and Thief in Chief is doing.
And by standing up to him, you’re establishing yourselves in the eyes of all decent citizens as accomplices in his deceit and theft, too.
Several of you, I had respect for before this thread and the GD one.
You’re crooks in spirit, supporting a crook in public office.
You and your “someone” have ab-so-lutely no fuckin’ idea about trust law. None. You are missing the basic fundamental point about them. No clue. Nada. Butt out till you’ve educated yourself. Trust me, this advice is for your own good unless you like looking a damn fool.
What it means, I suspect, Lib is that the US public have been sold a bill of goods.
The govt have appropriated the language of a trust, but have not actually set one up in any meaningful sense.
With an ordinary trust, I could be trustee and you could be the beneficiary of a fund of $100. That is, I would have that money, but for you. I could (assuming the trust powers are wide enough) loan that money to me (as me, not as trustee) and give (as me) myself (as trustee) an IOU.
I would then have a legally enforceable right to get that $100 back off me (as me) and re-appropriate it to me (as trustee).
This sort of split personality means that with trusts it is entirely possible to write an IOU (as you) to yourself (as trustee) and call it a trust asset.
Further, a meaningful trust would usually have protections in place to ensure that the trustee had a duty only to invest in things that would further the interests of the trust.
In this case, the government has used the language of a trust but really, there isn’t one worth a damn. Going by your cite, the government (as “trustee”) can (I assume legally) loan money without any restrictions to ensure that it is making a good investment, and without any enforceable ability to get the money back.
One might be cynical and suspect that the government uses the language of trusts to give a reassuring impression (ie that it is taking social security money and putting it somewhere safe), while ensuring that it can in fact spend the money like there’s no tomorrow, which of course (for your average politician) there is not.