That’s not true either. If by “System” you mean just that the Trust Fund will be exhausted by 2042, that is true (based on SSA’s conservative predictions about the growth of the economy). But the system is not just the Trust Fund , it’s the combination of the Trust Fund and FICA taxes. What will SSA have to do at that point? they will have to scale back benefits to 75% of their current level, to accomodate the revenue available at that point (based on projections of course). When Bush says the system will be bankrupt, he knows damn well the impression it will leave on people is that the government is going to turn out its pockets and go “Sorry folks. No retirement for you.” . And again, that’s based on assumption we do absolutely no changes to the system for the next 38 odd some years, which ** No one is suggesting **. The real problem I have with the Bush proposal is that its a gamble. He’s betting that over 40 years, private accounts would be able to out-perform the SSA trust fund (and by extenstion, the safe investments it currently makes), not only to make up this 25% difference in benefits , but whatever effect withdrawing contributions to the system is going to have (and rememeber, the SS Trust fund could do better by making modest adjustments instead of sweeping overhauls). Unfortunately, the possible outcome is not just that beneficiaries after 2042 might gain, but that beneficiaries might lose before then. If Bush were more forethright about that, people could make an honest apprasisal. Instead, he’s selling a sure thing. I ask you, would you will be willing to make that gamble? And, rememeber, it’s not just “your money” you’re gambling with (as Bush likes to suggest), it’s other people’s promised benefits.
It hasn’t been invested. It has been spent. It wil be necessary to repay the securities for more than they were sold for.
There is no fucking trust fund. All the money has been spent. None of it remains. The government borrowed all the money, and spent it. They will have to repay by raising taxes, or borrowing from somewhere else. This is going to be the case no matter whether we partially privatize the system or not.
Is any of this getting thru? Do you honestly not understand the difference between debtors and credits?
The President has not said that we can’t pay that back. Those who claim he has are lying.
Lack of faith? How moronic.
I have posted (as has manhattan) that neither I nor Bush have expressed even the mildest suggestion that the government should not honor its debts. For you to imply that I have, or for RTFirefly to allege that Bush has, is both stupid and dishonest.
Further, to characterize the simple statement “There is no such thing as a Social Security surplus fund - it has all been spent and consists of government IOUs” as “anti-government” and “anti-tax” is as dishonest as it is dumb.
Save your assholery for the Pit.
Yup, funny how the Administration didn’t seem too concerened about that when they enacted huge tax cuts thus sending the national debt skyrocketing. THat’s truly when “we today have guaranteed that taxpayers in the future will pay it”, when we borrowed it, not when SS agreed to lend it (Oh wait! I forgot! Tax cuts pay for themselves!)
Some home truths from the biggest bond house in the world, who knows a thing or two about debt and asset prices:
You might want to inform the Social Security Administration about that. It’ll be news to them.
Yes they will. And if you had a T-Bill in your possesion you’d want the USG to honor it to , no? I know the Japanese are counting on the USG honoring theirs. ANd you know what? Georgie-boy plans on selling a lot more T-Bills to fund his crappy scheme.
Yes. Do you? You do know that the SS Trust fund (and by extension SS beneficiaries) is the creditor and the USG is the debtor not the other way around?
Ok I concede that the * President * never said that. But when you call Treasury Bills “IOUs” I get the impression you think there is not going to be an ability to pay them when you say things like:
And you may be right about that here also. But again, remember who’s the creditor and whose the debtor around here. Just who ran up all the debt? Also remember, that it’s not just SS we have to pay back. So this isn’t a Social Security crisis is it? It’s a national debt crisis.
Also, it’s not as though SSA wouldn’t invest in *something * , even if the USG wasn’t running deficits. They are not just going to have $1 Trillion sitting in an interest bearing savings account, but they are going to make the safest investment they can so they can be sure they can pay their future beneficiaries, but no matter what they invest in, there’s going to be some risk that those they extent credit to are going to repay it. THe SSA figures that USG Treasuries are the safest bet around. I ask you: do you think the Stock Market will be safer then that?
Again, who’s has the obligation ? Social Security?
No and again I concede that. But you are saying that (or at least heavily implying) that the government won’t be able to honor its debts, there fore the note held by SSA is worthless, therefore “There is no Social Security Trust Fund”. Now, is that Social Securities fault? Or again, isn’t this a national debt crisis. Put it this way. Don’t you think the USG could pay back the T-Bills (“with interest!”) held by SS if its overall debt was lower?
No, but saying things like
is. Again, since you obviously don’t want to raise taxes, that won’t be the solution to fill any shotrfall in SS (in fact you want to increase it when you say you can’t understandy why Democrats want to retain the FICA tax, no?), and it won’t be the solution to repaying the national debt (which as you say there is NO QUESTION the President is determined to honor), what is your solution?
That was out of line and I apologize.
Please read my post #38
So pantom and others
Are you saying that SS will not be there when you reach retirement because the ss surplus is not there because George Bush ,in order to keep his 2000 campaign promise not to raise taxes, has taken money from SS?
Is it your further contention that in order to keep that promise he will not pay back that money?
Am I to understand that you think this is OK?
Oops make that 39
“Bankrupt” is something of a term of art when it comes to governments. When Argentina says they can only repay 75% of their bonds, they might not be legally “bankrupt” but no one will get criticized for using that word, particularly if they’re one of the bondholders.
That said, I was merely pointing out that you misrepresented what the President said. And you did.
Look, there’s lots of wrong stuff being said in this thread by both sides (hint to Shodan: you’re not helping) and even more things that are “true” but not helpful to understanding the issues. But this abortion of a thread isn’t the place to address them, as most people with any stake in arguing about it who have a whit of intelligence abandoned the thread immdeiately after reading the stupid original post.
Lemme see if I can put together a Social Security FAQ this weekend to foster debate.
I’ts never been my contention that Social Security as is “won’t be there” period, ly when I retire, (which for me, to quality for SS benefits would be around 2035). No one has “taken money” from SS. SS has given credit the USG and it expects it back . THe USG has no choice, it’s the law. And , as far as I know, no one has suggested changing the law to “write of that debt”. As the original OP maybe only tangentialy points out, doing so would be unconstitutional. But now that we agree all that the USG will honor its debt, the real question is how do you pay of the service on the debtt Again, this is not a Social Security crisis it’s a national debt crisis. This is the point that I think raises confusion (and which I think the politicians exploit): THE DEBT WOULD EXIST WHETHER SOCIAL SECURITY EXISTED AT ALL OR NOT. In otherwords, THe Debt doesn’t exist because Social Security exists. Now some have said, well, in order to service the debt, you’re probably going to have to raise (general) taxes. The fact that Social Security is a large receiver (creditor) somehow gets translated to “we’re going to have to raise taxes to pay for Social Security”. It just as easily been paid to someone else, but no one say “We’re going to have to raise taxes to pay for Japan’s expenses”.
It is my contention that he (Bush) is a hypocrit because he invented this crisis (by mounting the debt), and that he can safely say that he won’t raise taxes because he knows future generations will have to. This is REGARDLESS of what is done with Social Security. Does that mean that SS is not fully funded because he won’t raise taxes? No, it means the problem of repaying the National Debt is shifted for future generations to deal with it and its worsened by (a) Large Tax Cuts (regardless of who gets the cuts) (b) as proposed, taking money out of the SS system for private accounts, and making up the difference for those 55 and older by borrowing . Again, different problem.
Absolutely not, but this whole “crisis” is a shell game,so the question is moot in my mind :
“Social Security is in imminent danger of collapse!”.
No it’s not, its fully funded.
“But the money is only on paper ! It’s not real!”
So you (the governent) doesn’t intend to pay it?!?
“We never said that! The crisis is how were going to pay that debt!”
I agree . But what’s that got to do with Social Security?
** manhattan, **, I agree there’s been enough stupidity around here (perhaps on my part, I don’t claim to be a government finance expert). But part of it is because the Administration is being deliberately misleading when it talks about its plan. When the President says the system is going to be “Bankrupt” in 2018, 2042 or whenever, and it’s clearly not, by any reasonable definition of the word, you got people like Shodan saying “no, what he’s talking about is…”. I don’t think the president cares what he means or has any such clear definition in mind. He just wants the political results. On the right, he gets, "Ah! He’s talking about bringing fiscal responsibility to the government ", on the left, he gets “Oh shit! My Social Security benefits are going out the window unless we do something fast!”.
Everything that Mike H said.
Like they say at the end of a psalm, selah.