Shopsmith Forums

I saw this image and thought about this thread...





Granted, that is Federal government on the left, and State government on the right, but it still underscores a point.

Sorry, I misread. I thought House as part of Congress, but after rereading several times realized that the House in this case in the Colorado House. Out of here.

paulmcohen wrote:I agree with all of them except 3, there is no money in the Social Security Trust Fund, the only money is what is paid by current workers. This is what most Americans don't understand. If current workers stop paying today the fund is bankrupt almost immediately. SS and Medicare are both Ponzi schemes.

There are other solutions to solve the problem but none of them are painless. Some of the simplest are to index both programs to life expectancy or allow people to control their money and spend Medicare funds like it is their own money (Medical Savings Accounts).

I know this is going to tick a lot of you off, but this is why social security is considered "social welfare" and not a "pension fund." And that is all it was ever intended to be, but like everything the govt does it ballooned among waste, pandering, and buying votes. A pension fund would have assets greater than or equal to the present value of the future liabilities and you couldn't be phased out due to income. It doesn't, its simply a redistribution that can run a surplus or deficit, and the SS Trust Fund is just accumulated surpluses with nobody's name in particular attached to those dollars.

Let the angry insults commence.

frank81 wrote:I know this is going to tick a lot of you off, but this is why social security is considered "social welfare" and not a "pension fund." And that is all it was ever intended to be, but like everything the govt does it ballooned among waste, pandering, and buying votes. A pension fund would have assets greater than or equal to the present value of the future liabilities and you couldn't be phased out due to income. It doesn't, its simply a redistribution that can run a surplus or deficit, and the SS Trust Fund is just accumulated surpluses with nobody's name in particular attached to those dollars.

Let the angry insults commence.

Aaaah, that explains it all. I was wondering why there was such a large and ever growing number of recipients declining their checks. They won't accept welfare. Hmmm, I guess I am a taker after all. I accept mine. They go directly into my bank account.

swampgator wrote:
Use the Post Office. NO Body else can compete on any level. Cheaper, more efficient and reliable and absolutely just as fast. If you like paying more than $10 for sending a letter or other documentation, go FedEx or UPS. I'll send mine for a mere 46 cents and get there about the same time.
End of my rant.

The post office is quasi private, except the government gives them billions to operate, if FedEx/UPS.. was given billions of $ of subsidy they could do a much better job than the post office. You pay $.46 plus $$$ in Federal subsidy that adds to the Federal deficit. I send less than 5 letters a month and would be happy to pay $10 is I could eliminate to the $320 and growing per year my family subsidizes the Post office through taxes and Federal debt.

At least here if someone parks in front of the mailbox no one on the block gets mail that day. If someone complains to the postal inspector, you might not get mail for weeks, if at all. I don't worry much about the post office they will be gone within the decade, replaced by email (which they want to tax to pay for the post office) and private package delivery.

Just to be clear, there is no money in the so-called Trust Fund. Any surpluses that have been generated in the past have already been spent by the government. What the Trust Fund consists of are Treasury Bills, which means that we the taxpayers owe the Social Security Administration all of what has already been spent.

pennview wrote:Just to be clear, there is no money in the so-called Trust Fund. Any surpluses that have been generated in the past have already been spent by the government. What the Trust Fund consists of are Treasury Bills, which means that we the taxpayers owe the Social Security Administration all of what has already been spent.

Is it significant to note that the spent funds were used for something other than what they were originally intended?

If the trust fund had not been pilfered by Congress, would Social Security be solvent today?

This is sorta like having raided the kids college fund and then later complaining when you have to cancel a planned but unfunded vacation because tuition has to be paid.

dusty wrote:Is it significant to note that the spent funds were used for something other than what they were originally intended?

I think that is very significant.

dusty wrote:If the trust fund had not been pilfered by Congress, would Social Security be solvent today?

I could be wrong, but I believe the answer is "yes - but only until about 2030."
http://www.nytimes.com/2013/01/06/opini ... .html?_r=0

dusty wrote:This is sorta like having raided the kids college fund and then later complaining when you have to cancel a planned but unfunded vacation because tuition has to be paid.

More like taking the vacation anyway, but borrowing the money against your kids' and grandkids' future earnings to pay for it.

dusty wrote:Is it significant to note that the spent funds were used for something other than what they were originally intended?

If the trust fund had not been pilfered by Congress, would Social Security be solvent today?

This is sorta like having raided the kids college fund and then later complaining when you have to cancel a planned but unfunded vacation because tuition has to be paid.

Technically, there is "money" in the trust fund the same as there ever was. They never kept an all cash balance, like any company or fund they put the cash in low risk high liquidity investments. They always owned treasuries, they are just directed to ONLY own treasuries now.

Large organizations forecast their cash needs on a daily basis, and the day before sell enough cash equivalents, treasuries, etc. or buy commercial paper to cover (or vice versa if they had positive cash flow). They rarely keep millions in cash laying around in an account.

frank81 wrote:Technically, there is "money" in the trust fund the same as there ever was. They never kept an all cash balance, like any company or fund they put the cash in low risk high liquidity investments. They always owned treasuries, they are just directed to ONLY own treasuries now.

Large organizations forecast their cash needs on a daily basis, and the day before sell enough cash equivalents, treasuries, etc. or buy commercial paper to cover (or vice versa if they had positive cash flow). They rarely keep millions in cash laying around in an account.

We do know that the funds were pilfered to cover other expenses (balance budgets) by previous administrations. There is often a lot of "talk" about those funds no longer being available to Social Security. If that is true, it must mean that the borrower was/is not trustworthy. If the borrower was trustworthy, they would simply "put the money back" in the Social Security Trust Fund.

Wouldn't it be nice if it was this simple?

The problem seems to be that those who dreamed up this Social Security thing (some like to call it a ponzi scheme) just did not anticipate so many of us living past our sixties. I guess that makes the entire problem the fault of us old folks.