Alright, I see that now.
You’re simply not getting it. You’re focused on the mechanism for saving for retirement, and I’m talking about how the government publishes its numbers to make itself look better.
I agree that you can’t save a mountain of debt somewhere. Well, you could if other countries were willing - the U.S. is certainly holding a lot of Chinese money. However, this is irrelevant. What you CAN do is not incur more liabilities in terms of debt built up through deficit financing of general revenues. Knowing that there’s a large swath of people retiring soon, you can prepare for it by making sure you’re not carrying a whole lot of other debt as well. The government not only spent the money taken in for Social Security, but it borrowed trillions more and spent THAT as well. At the very least, it could have limited deficit spending to the Social Security surplus, so that when the surplus turns into a deficit at least it would be the only debt to deal with.
Regardless of how social security is financed, the fact remains that the government took the money collected for the SS ‘trust fund’ and blew it on current programs, then borrowed a whole lot more and blew THAT too. Then it deducted the amount borrow from Social Security to make it look like the deficit was smaller than it was, while still telling SS recipients that their money was waiting for them in a ‘trust fund’.
You would never get away with that as a private fund manager. You’d go to jail.
With respect, I am not confusing things; I am continuing the policy of pointing out practical problems with accounting practices and with using personal analogies to discuss institutional financial issues.
Businesses and governments have much different responsibilities and goals than individuals; to compare the fiscal policies of one with either of the others is unproductive at least and frequently deceptive.
But you were factually wrong, and making things even less clear, when you said “you don’t have a surplus.” That’s all.
Where did it ever say that?
Show us where the government said there was cash stashed in a trust fund.
I agree that using the term “trust fund” is misleading. It makes people think that a promise like that is being made. But it’s not.
(Then show us what’s in your retirement fund. I’ll bet it’s not cash. It’s investments, like, you know, government bonds.)
I disagree; the individual who borrowed from Charles the Legbreaker does not have surplus; that is not a personal budgeting term. Governments have surpluses, businesses have assets, and people have savings.
Terminology is not just a quibble here; the exact meanings of ‘debt’, ‘public debt’, and ‘surplus’ is the basis of the thread.
Conflating private, public for profit, and not for profit policies is always a bad idea; it is confusing.
I’m not sure what point we’re arguing anymore. My original point was that debt that you owe to yourself isn’t really debt. It follows that the true debt of the US is the debt owed to the public, and that Clinton had the surpluses he claims he had.
It also follows that the trust fund is not a true asset. It’s just an accounting gimmick created - I suppose - as a way to sell the program. Maybe people feel better about it if they see it as a savings account they get to draw on when they get old, rather than as a welfare program for old people.
But the truth is there is no way save on the scale of the social security program. Money is extremely valuable at a personal level, but at a macro level it’s just a way to decide who gets what. Saving up piles of money might be useful on a personal level, but it’s pointless for the nation as a whole.
Consider that government is actually the source of money, and you can see that it really has no need to set money aside because it’s afraid of running ou of money in the future. The real problem is not running out of money, but running out of stuff.
Intragovernmental debt is money that is to be spent for a specific purpose. Taxes were levied for those specific purposes, and the conditions under which the taxes were raised require them to be spent for those purposes.
Intragovernmental debt is counted as real debt by the treasury and all the major rating agencies.
Oh, come on. This is an math analogy. It’s not about the meaning of words.
Not when making analogies.
Nobody is conflating. We’re simply saying that 100 - 95 > 0.
So what happens if the government doesn’t pay it back? Is that a default? Does a creditor come banging on the door demanding his money?
It’s not quite the same thing as debt held by the public. It’s similar, but not the same. It should not be confused.
I don’t think either is true.
As someone with over 30 years experience in public-sector accounting, I have to say that the wilful ignorance of standard accounting practices displayed by some posters in this thread is beyond painful.
At the **departmental **level, intra-governmental debt is recorded in the books - it has to be, or the books don’t balance. So the Treasury records the bonds bought by the SSA as an intra-governmental debt, and the SSA records the same bonds as an intra-governmental asset. At the **government-wide **level, the lower-level accounts are consolidated and all the intra-governmental entries balance out to zero and are ignored - they have to be, or you are double-counting entries and skewing your financial position.
One of the main reasons why the accounts are consolidated and the intra-governmental entries are zeroed out is because the financial market and rating agencies DON’T want to see that shit - it just distorts the actual financial position. Every private sector company with separate books for their various divisions and subsidiary companies does exactly the same thing for their consolidated accounts and for the same reason. GM does it, Bain Capital does it, Koch Industries does it, everybody does it.
ButI don’t think that was ever an issue - at least since we moved from “cooking the books” to “gimmick”.
The issue is now, is “100 - 95” or “100 - 95 - 10” a more accurate reflection of the actual situation?
Or maybe that issue is a hijack, and we should still be discussing the minutiae of Clinton’s speech?
I consider myself vindicated.
I was referring to a comment that said that 100 - 90 was a surplus, but then somehow it wasn’t because money was borrowed somewhere else.
Exactly.
And, unfortunately, the “National Debt” figure, which includes intra-governmental holdings, does NOT record the asset side.
I know; I have been following the discussion pretty closely, because I did not understand one issue. (I am so glad I am clear on that.)
I don’t think anyone is arguing that Clinton did not have a surplus. I think people are concerned about the social security obligation.
You don’t? Let me introduce you to the OP:
This comes up here over and over and over. Because it serves a dual purpose: denigrates Clinton (by making him look a braggart and not as fiscally responsible as he was) and makes SS look worse off (by implying that the assets in the Trust Fund are somehow worse less than if it were cash in a vault).
That was post #1. Over the course of the thread, moonshot has back-peddled significantly. From Fraud, to Gimmick, to But It Was Clinton, to Actually, It Was Johnson.
True enough.
Yet here we’ll all be 6 months from now going another round about how the government of the wealthiest nation on earth doesn’t keep it’s budget just like Joe Sixpack. Fortunately we have a good number of smart posters willing to take up the fight, because lots and lots of people out there believe exactly what the OP wrote in post #1.