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View Diary: The President Agreed With Mitt Romney on Social Security in the Debate (264 comments)

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  •  There is no way to "strengthen" it now (16+ / 0-)

    Because SS does not save assets in a giant bank account or real assets or commodities. It saves it in the form of treasury bonds. For these to "strengthen" SS, they would have to be redeemed at some point.

    But the fact that SS will begin redeeming the assets it has is the truth behind the fake crisis. The whole reason politicians across the political spectrum lie through their teeth about SS is because they refuse to ever let SS redeem its assets.

    Nothing needs to be done to SS until the trust fund is down to 1 year operating costs. Nothing should be done until then, because Washington's primary agenda is to effectively confiscate SS' assets by forcing it to never redeem them.

    Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

    by Robobagpiper on Thu Oct 04, 2012 at 05:59:28 PM PDT

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    •  Right now benefits are paid by current Social (0+ / 0-)

      Security taxes and interest on the bonds. Like Medicare Part A, when benefits have to be paid by using the principal, it will go broke within a relatively few number of years. That should be avoided so the system is viable for the indefinite future. That is why the terminology that either will be bankrupt in 2016 or 2024 or2035 is not correct, but bankruptcy will follow if something is not done.

      And no, we do not need to wait until the year before when a huge tax increase would be required. If you think that is the case, I suppose you are waiting until the year before you retire to start saving for retirement. Not a good plan.

      You can't scare me, I'm sticking to the Union - Woody Guthrie

      by sewaneepat on Thu Oct 04, 2012 at 06:11:29 PM PDT

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      •  I'm calling bs (1+ / 0-)
        Recommended by:
        aliasalias

        If you pay a dollar in the dollar is yours unless someone uses your dollar to play/spend it/steal it. It's arithmetic

        There are no sacred cows.

        by LaEscapee on Thu Oct 04, 2012 at 08:20:44 PM PDT

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        •  If you are saying that the dollar you pay in has (0+ / 0-)

          your name on it somewhere and you get that dollar back in benefits, you are just wrong. It is insurance. You pay "premiums" (FICA taxes) and you get a specified benefit when you reach eligibility. It is not at all like putting it in a bank account or a 401k. That would be essentially privatization.

          You can call my statements bs all you want but that is the way Social Security is paid - through current receipts and the interest on the bonds.

          You can't scare me, I'm sticking to the Union - Woody Guthrie

          by sewaneepat on Fri Oct 05, 2012 at 04:47:56 AM PDT

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          •  No (0+ / 0-)

            It is my dollar that was deposited I never asked them to play with it, I am willing to pay for my roads and bridges but don't lie and tell me that any part "deposited" in my account is also yours

            There are no sacred cows.

            by LaEscapee on Fri Oct 05, 2012 at 11:42:42 AM PDT

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            •  No, once again, it is insurance. (0+ / 0-)

              Note that if you die, your survivors do not get your benefits, only a small survivor's benefit. If you die before you reach 62, you don't get anything. That is unlike a bank deposit which is yours, which you own. The social security money you put in today pays current retirees. When you retire, other worker's taxes will pay your benefits. If you owned that money, it would be a specific amount, it is not; and you would be able to leave it to your heirs, you cannot.

              I think this thread is what you were referring to when you talked about explaining it simply with the bank analogy. Your money that is in the bank does not just sit there; ideally it is used for loans for homes or cars or businesses. Then when you want it, the bank pays you but the money has been "working" for other purposes during that time and the bank has collected interest from those people so that you get your money and they are supposed to pay their business expenses out of the interest they made.

              Similarly, (but not exactly the same because you do not have a specified amount in there, it depends on how long you live for one thing as to how much you collect), the FICA money is put in government bonds which are used for other things and the interest on those bonds pays part of current SS benefits. If you had rather it just sit there and not collect interest, then that seems short sighted to me. The government has not defaulted on bonds and I don't think they ever will.

              But the ownership is quite different from a savings account. Social security will pay you your benefit til you die, no matter how much you put in. Your bank account will pay you only til your specific amount in the account is gone.

              You can't scare me, I'm sticking to the Union - Woody Guthrie

              by sewaneepat on Fri Oct 05, 2012 at 12:03:31 PM PDT

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              •  Youjust made my argument for me (0+ / 0-)
                The social security money you put in today pays current retirees. When you retire, other worker's taxes will pay your benefits.
                Why is that? I put mine in and it was used to do whatever, why should someone else compensate me? I already paid for all stuff with the rest, I was sticking this little bit back. It's an investment in me not thee

                There are no sacred cows.

                by LaEscapee on Fri Oct 05, 2012 at 12:59:40 PM PDT

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      •  Where would you store the "savings" of "fixing" (0+ / 0-)

        SS now that doesn't involve loaning more to a government that has already indicated it will tell any lie to avoid paying that money back?

        Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

        by Robobagpiper on Fri Oct 05, 2012 at 04:54:01 AM PDT

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        •  I disagree with your premise. (0+ / 0-)

          I think the government bonds are secure.

          You can't scare me, I'm sticking to the Union - Woody Guthrie

          by sewaneepat on Fri Oct 05, 2012 at 05:30:07 AM PDT

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          •  You have misunderstood the premise. (1+ / 0-)
            Recommended by:
            Kombema

            The political crisis is that the political class doesn't want to pay back the bonds; and are willing to lie about SS's solvency to justify reducing benefits and other tactics to keep SS permanently in surplus, so that the bonds never need be redeemed.

            Giving general government more money through the FICA mechanism merely gives it more incentive to cut SS benefits rather than redeem the extant bonds, to keep the gravy train coming. Only if the trust fund is allowed to deplete back to a 1-year reserve, as it was always supposed to do, before returning to a pay-as-you-go model, will force government's hand.

            Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

            by Robobagpiper on Fri Oct 05, 2012 at 08:41:11 AM PDT

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            •  When SS was enacted, it was intended as a pay as (0+ / 0-)

              you go, I agree. But that was before the baby boomers after WWII. Situations change. But I appreciate your response. BTW, in 1983 it was down to less than a year so it did not work very well then in that no one did anything about it until months before insolvency.

              You can't scare me, I'm sticking to the Union - Woody Guthrie

              by sewaneepat on Fri Oct 05, 2012 at 09:25:30 AM PDT

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              •  You only state half the story. In 1983, the (1+ / 0-)
                Recommended by:
                Kombema

                Greenspan reforms were to create a temporary bump in the trust fund. And this was a response to two factors: a poor economy, and economic models that were too rosy.

                We face a different problem now. The economy is poor, but the models being used to predict "insolvency" are artificially dismal. SS will never be insolvent. The models project that in 2040 or so, SS' receipts, under current FICA rates, would only be able to meet 75% of currently promised benefits, which, incidentally, is more, inflation-adjusted, than recipients receive now. You heard me right, on the day SS becomes "insolvent", should that scenario play out, and if no FICA rate adjustment is made then, SS beneficiaries will still get more generous benefits than they're getting now. And all that you'd have to do  to continue promised benefits  is increase the FICA rate by 4.5 points on employer and employee alike, or a smaller increase while raising the cap to capture 90% of wages.

                In a scenario of more healthy economic growth, there is never a time where SS is unable to provide promised benefits, even under the current funding scheme.

                At the same time, you keep ignoring the fact that you are responding to the fake crisis as if it were the real one. Social Security is not in crisis when it goes into the red for the next 2 decades. That was supposed to happen.

                What's in crisis is general government. For 30 years, general government has seen a net influx of funds from the bonds purchased by SS; this has allowed the political culture to prioritize lowering corporate and individual income taxes. For the next three decades, the treasury will have to pay that money back. The crisis is that this will require some combination of major spending cuts in defense, increased taxes on the rich, or inflation. So all else being equal, they'd rather keep the FICA gravy train going.

                So they come up with schemes to "save" Social Security that do nothing of the sort. Either they cut benefits, which reduces SS's outlays (keeping money flowing from FICA into general government), or they talk about raising caps or rates now, again, flowing money SS doesn't need permanently into general government. It's all a fraud, a dishonest dance to keep from having to cut defense of raise taxes.

                But SS doesn't need a dime more from anyone for 30 more years than its currently raising through FICA or held in its treasury bonds. Anyone who tells you differently is trying to rob you.

                Non enim propter gloriam, diuicias aut honores pugnamus set propter libertatem solummodo quam Nemo bonus nisi simul cum vita amittit. -Declaration of Arbroath

                by Robobagpiper on Fri Oct 05, 2012 at 10:27:35 AM PDT

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                •  I do not understand how 75% inflation adjusted (0+ / 0-)

                  can be more than full benefits now. It would seem that it would be equivalent to 75% of benefits now inflation adjusted. Obviously, in dollar amount it would be larger but would have only 75% of buying power. What am I missing?

                  I am not responding to a "crisis". I  have said constantly that there is no crisis in SS. It would seem to me that charging the FICA tax on high incomes while maintaining the present cap would do two things, make it less regressive than now and keep from having a 4.5% raise on everyone in the future.

                  I do see your connection with the trust fund and the low income tax rates and that is interesting.

                  You can't scare me, I'm sticking to the Union - Woody Guthrie

                  by sewaneepat on Fri Oct 05, 2012 at 11:35:55 AM PDT

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