5 Social Security myths that have to go

[Svnla]

From CBS (not Fox) = http://www.cbsnews.com/8334-505146_162-57364896/5-social-security-myths-that-have-to-go/

If we don't do anything now, things are harder to fix later IMO.

 

[Craig234]

Not impressed with the article. Its only point seem to boil down to 'the government has borrowed from the SS trust fund'.

Ya, that's a problem. It's not SS's fault.

Al Gore was right, we should not have allowed that.

One of the comments asked which President started that. I'm not sure, but LBJ? IIRC, LBJ moved SS into the 'general budget'.

 

[ky54]

Al Gore didn't know shit... about anything for that matter. Pat Moynihan was ringing that bell 20 years before Al Gore crawled out of the tobacco and oil stash he inherited.

 

[Craig234]

Al Gore didn't know shit... about anything for that matter. Pat Moynihan was ringing that bell 20 years before Al Gore crawled out of the tobacco and oil stash he inherited.

Uh, Moynihan saying it earlier has nothing to do with your idiotic comment about Gore.

 

[Anarchist420]

They need to do means testing immediately then phase it out completely. Obama's a retard for advocating tax increases on the wealthy while wanting to spend more on them.

 

[drebo]

No, it shouldn't be means tested. Those people paid in to SS with the promise of getting that money (or at least a portion of it) back. The government's irresponsible use of SS should not screw them of their money, whether they need it or not.

Our society and government needs to stop penalizing those who are responsible with their money and absolutely needs to stop rewarding those who aren't.

 

[WHAMPOM]

No, it shouldn't be means tested. Those people paid in to SS with the promise of getting that money (or at least a portion of it) back. The government's irresponsible use of SS should not screw them of their money, whether they need it or not.

Our society and government needs to stop penalizing those who are responsible with their money and absolutely needs to stop rewarding those who aren't.

Time to kill that myth right now. SS is not saving your money for your retirement, it is a PAYGO system. Money collected was paid out to the impoverished elderly, disabled, widows with children. Think of it more as a social contract, not as a retirement fund. Trouble is Reagoon upped the collection rates to fund his tax cuts.

 

[Anarchist420]

No, it shouldn't be means tested. Those people paid in to SS with the promise of getting that money (or at least a portion of it) back. The government's irresponsible use of SS should not screw them of their money, whether they need it or not.

Our society and government needs to stop penalizing those who are responsible with their money and absolutely needs to stop rewarding those who aren't.

Government needs to balance the budget and stop swindling future generations. Means testing needs to be done with SS just like it does with Medicare, especially part D (Big Pharma is overcharging by at least 4x what drugs would cost in a free market).

 

[ussfletcher]

I really wish we could have passed the privatized social security plan under bush.

 

[soundforbjt]

I really wish we could have passed the privatized social security plan under bush.

Why, so Wall Street could lose all the money while lining their pockets at no risk to them?

 

[Craig234]

I really wish we could have passed the privatized social security plan under bush.

Yes, it'd be GREAT to be extracting billions and billions from the people to Wall Street, adding multiples of the overhead costs, creating yet more conflicts of interest!

 

[Fern]

5 Social Security myths that have to go

From the article:

Myth #1: Social Security didn't create the deficit and shouldn't be cut to fix it.

Technically, the first part of the myth is true -- or rather, used to be true. From 1983 until last year, Social Security revenues actually lowered the Treasury's need to borrow in the public markets, as excess payroll taxes collected under Social Security's flag helped fund other government programs.

The surplus years are over, however. The Social Security trustees' report estimates that last year payroll taxes fell short of the sums paid out to beneficiaries. Small surpluses will return for a few years; then the red ink will return for good in 2015. To make up the annual shortfall, Social Security will have to draw on revenues from the general budget. In other words, from here on out, year after year, Social Security only makes the deficit larger.

This mixes a lot truth and fiction.

Social Security has a $4 trillion surplus, invested in special Treas bonds.

So, the payroll tax shortage does NOT increase the deficit. You take some of the accumulated savings, or surplus, and use it to pay for the shortfall.

The SS shortfall will NOT increase the national debt. The Treas merely refinances the special SS bonds into regular bonds, this provides cash for the SS Dept. The total amount of national debt before the refinance remains EXACTLY the same as that before the refinancing. The only difference is the mix of Public debt v SS debt.

The author is confusing finance/accounting terms and concepts.

The significance of SS going from surplus collections, to insufficient collections is one of 'cash flow'.

While enjoying surplus collections, the fed govt had a very convenient source of cash (to borrow and use elsewhere). Now that it doesn't, that easy source of (borrowed) cash is gone. The fed govt must now go out into the public market and issue (sell) bonds. However, instead of keeping that money, it must use it to pay off the special SS bonds. The net effect on debt is zero (sell 1, extinguish 1, net zero). There is no affect on the deficit either (see below).

* Some aspects of SS are partially financed out the general treas account IIRC. Some of Medicare (including Part D) is financed by general revenue. Therefore, and to that extent only, it is correct to say that a portion of the SS program contributes to both the deficit and, therefore, national debt. The author apparently does not grasp this important distinction

Fern

 

[Darwin333]

No, it shouldn't be means tested. Those people paid in to SS with the promise of getting that money (or at least a portion of it) back. The government's irresponsible use of SS should not screw them of their money, whether they need it or not.

Our society and government needs to stop penalizing those who are responsible with their money and absolutely needs to stop rewarding those who aren't.

Yeah, uhhh, not sure if you have noticed or not but we can't afford to give people what they have been promised.

 

[Darwin333]

From the article:



This mixes a lot truth and fiction.

Social Security has a $4 trillion surplus, invested in special Treas bonds.

So, the payroll tax shortage does NOT increase the deficit. You take some of the accumulated savings, or surplus, and use it to pay for the shortfall.

The SS shortfall will NOT increase the national debt. The Treas merely refinances the special SS bonds into regular bonds, this provides cash for the SS Dept. The total amount of national debt before the refinance remains EXACTLY the same as that before the refinancing. The only difference is the mix of Public debt v SS debt.

The author is confusing finance/accounting terms and concepts.

The significance of SS going from surplus collections, to insufficient collections is one of 'cash flow'.

While enjoying surplus collections, the fed govt had a very convenient source of cash (to borrow and use elsewhere). Now that it doesn't, that easy source of (borrowed) cash is gone. The fed govt must now go out into the public market and issue (sell) bonds. However, instead of keeping that money, it must use it to pay off the special SS bonds. The net effect on debt is zero (sell 1, extinguish 1, net zero). There is no affect on the deficit either (see below).

* Some aspects of SS are partially financed out the general treas account IIRC. Some of Medicare (including Part D) is financed by general revenue. Therefore, and to that extent only, it is correct to say that a portion of the SS program contributes to both the deficit and, therefore, national debt. The author apparently does not grasp this important distinction

Fern

What it does actually do is increase (eventually vastly increase) the amount of (cash value) bonds we have to sell in the open market. If at that time the rest of the worlds economies are doing better the terms might not be so favorable considering the sheer dollar figure we will have to borrow to cover both converting SS bonds and financing our deficits.

 

[Fern]

What it does actually do is increase (eventually vastly increase) the amount of (cash value) bonds we have to sell in the open market. If at that time the rest of the worlds economies are doing better the terms might not be so favorable considering the sheer dollar figure we will have to borrow to cover both converting SS bonds and financing our deficits.

Correct.

1. During surplus years, less public market bond sales required due to sales to SS.

Say the Treas need to sell 10 bonds to finance the deficit. If the SS Dept buys 3, Treas only needs to publicly auction 7.

2. During shortfall years, no sales to SS Dept.

So, if Treas needs to sell 10 bonds, all 10 are publicly auctioned. Since there is a SS shortfall, Treas needs to redeem special SS bonds and it will have to sell even more bonds on public market. If SS Dept needs 3 bonds redeemed to cover it's shortfall, Treas will have to sell a total of 13 bonds on public market.

Of course I made those numbers up, but it's to illustrate the multiplying effect on Treas (public) bonds of going from SS surplus to SS deficit.

Could put a strain on public market's ability to absorb so much debt resulting in higher interest rates.

Fern

 

[Ronstang]

Yeah, uhhh, not sure if you have noticed or not but we can't afford to give people what they have been promised.

Does that also apply to all the useless government workers who have been promised lavish pensions no one in the private sector gets? If my money is to be stolen because a promise by government cannot be met why are the promises made to government workers not considered the same?

 

[IGBT]

social security is a book entry. there is no physical asset. Means testing is theft. You had to earn that money you payed into it. It took time out of your life to earn that money. Earned money is personal property.

 

[Craig234]

social security is a book entry. there is no physical asset. Means testing is theft. You had to earn that money you payed into it. It took time out of your life to earn that money. Earned money is personal property.

Wrong. Think of it as 'social security insurance' - something to help you if you need it.

Like any insurance, you pay for the premiums, and if you don't need it, great.

People like you are ideologues who are not understanding the commonsense issue of the purpose of the program or what's needed for it to work.

You make up one argument and defend the nonsensical policy of paying millionares who do not need this at a time policies have shifted massive wealth from the people to the top.

 

[cybrsage]

Yeah, uhhh, not sure if you have noticed or not but we can't afford to give people what they have been promised.

Yes we can. If you stop giving out SS benefits, you also have to do away with the SS tax. The government will not do this, so they will not do away with SS benefits either. They will simply change the contract on everyone younger than a certain age. Just like they have already done many times.

 

[WackyDan]

Why, so Wall Street could lose all the money while lining their pockets at no risk to them?

Then you have no idea how how the markets work.

 

[soulcougher73]

I really wish we could have passed the privatized social security plan under bush.

This would be one of the worst things ever to happen to this country if that was allowed.

 

[IGBT]

Wrong. Think of it as 'social security insurance' - something to help you if you need it.

Like any insurance, you pay for the premiums, and if you don't need it, great.

People like you are ideologues who are not understanding the commonsense issue of the purpose of the program or what's needed for it to work.

You make up one argument and defend the nonsensical policy of paying millionares who do not need this at a time policies have shifted massive wealth from the people to the top.

where in the social security by laws does the word "insurance" exist in regard to non payment if risk or injury is not experienced?? Where is the language that defines social security payments are "premiums"??

 

[Budmantom]

Why, so Wall Street could lose all the money while lining their pockets at no risk to them?

It's a much better idea to bet all the SS money on green shovel ready jobs.

 

[Budmantom]

This would be one of the worst things ever to happen to this country if that was allowed.

Because this would give Americans a choice?

 

[soundforbjt]

Because this would give Americans a choice?

They would get to choose the investments? Don't think so. :\