GOP blinks on debt limit.

[GuitarDaddy]

No. That is incorrect. SS funds are placed in their own account.

Read here: http://www.ssa.gov/oact/progdata/fundFAQ.html

Fern

🙂 You mean (from your link) payroll tax revenues are placed into their own account where they are immediately and fully used to purchase special issue govt bonds. And the revenue from the sale of these bonds goes into the general fund. In other words the government puts an IOU in your account and the cash is used to pay the governments bills


Play semantics all you want and try and give the impression that the funds are segregated and in reserve to pay your individual benifits, but that just isn't the case as your link clearly spells out.

There is absolutely $0 liquid funds backing up the SS trust fund balance, the only security that we have is the governments word (from your link) "the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest"

 

[Craig234]

🙂 You mean (from your link) payroll tax revenues are placed into their own account where they are immediately and fully used to purchase special issue govt bonds. And the revenue from the sale of these bonds goes into the general fund. In other words the government puts an IOU in your account and the cash is used to pay the governments bills


Play semantics all you want and try and give the impression that the funds are segregated and in reserve to pay your individual benifits, but that just isn't the case as your link clearly spells out.

There is absolutely $0 liquid funds backing up the SS trust fund balance, only the security that the government hasn't ever failed to pay full benifits + the nominal interest earned on the special issue bonds (2+% for 2010) when the benifits are due.

You're right, the government faces a disaster needing to repay the SS funds it's borrowed.

That's why we need to fix the economy - using stimulus as needed - and then grow it and revenues with spending cuts to fix the deficit and raise money to repay that money.

The way it's going is just 'starve the beast' crap that will destroy the middle class and turn the US into a lot closer to third world plutocracy - and threaten democracy.

 

[werepossum]

They are not playing the same game. Obama has specifically offered to compromise on cuts to programs that Democrats consider to be a priority. Republicans have offered to compromise on literally nothing.

Let us look at the Obama proposal to cut $4 trillion over 12 years.

First, we don't touch Obamacare, simply agreeing that it saves $1 trillion over that same time span.

Next, we cut $400 billion from defense spending as agreed by Gates.

Next, we cut another $400 billion from defense spending.

Next, we cut another $480 billion from Medicare/Medicaid, on top of the $400 billion looted to (partially) fund Obamacare.

Next, we cancel the Bush tax cuts "for the wealthy" to raise another $840 billion. (This will have no effect on the economy because the Magic Cupboard theory posits that removing money from the private sector has no secondary effect.)

Next, we pinky swear that if after 12 years we haven't reduced the deficit to 2.8% of GDP, Congress will cut spending and raise taxes. (It helps at this point to forget that the people now in power will likely be retired or defeated by then, that a whole new set of Congresscritters will be seeking to buy a whole new set of votes, and that 12 years of even the 2.8% GDP target deficits yields another 1/3 GDP in new debt. It also helps to be bad at math, since you'll be 22% shy of your $4 trillion target.)

Yup, the Messiah is clearly the very definition of integrity. The way he bravely sacrifices Democrat sacred cows is awe inspiring.

 

[Fern]

🙂 You mean (from your link) payroll tax revenues are placed into their own account where they are immediately and fully used to purchase special issue govt bonds. And the revenue from the sale of these bonds goes into the general fund. In other words the government puts an IOU in your account and the cash is used to pay the governments bills


Play semantics all you want and try and give the impression that the funds are segregated and in reserve to pay your individual benifits, but that just isn't the case as your link clearly spells out.

There is absolutely $0 liquid funds backing up the SS trust fund balance, the only security that we have is the governments word (from your link) "the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest"

You're right, the government faces a disaster needing to repay the SS funds it's borrowed.
-snip-

No. Not unless and until the market for regular treasuries dissappears.

All that need be done is convert the special SS bonds into regular bonds and sell on the market. Basically you're replacing the SS fund as lender with the market. SS fund gets it's money. And the overall amount of fed debt will not have changed (so no problem with the debt ceiling.)

Fern

 

[Craig234]

One of my favorite economists, James Galbraith, on the debt ceiling:

http://www.commondreams.org/view/2011/07/12-3

One line summary:

President Obama’s proposed debt ceiling deal is a disastrous solution to an imaginary fiscal crisis, but the pain it causes will be all too real.

 

[GuitarDaddy]

No. Not unless and until the market for regular treasuries dissappears.

All that need be done is convert the special SS bonds into regular bonds and sell on the market. Basically you're replacing the SS fund as lender with the market. SS fund gets it's money. And the overall amount of fed debt will not have changed (so no problem with the debt ceiling.)

Fern

That.s just making shit up you can't resell debt like that. You can't resell debt thats owed to the SS trust fund as a regular treasuries and collect more money, thats called monkey business or fraud. You can issue new debt by issuing regular treasuries but that would go against the debt ceiling.

 

[Fern]

That.s just making shit up you can't resell debt like that. You can't resell debt thats owed to the SS trust fund as a regular treasuries and collect more money, thats called monkey business or fraud. You can issue new debt by issuing regular treasuries but that would go against the debt ceiling.

Refinancing debt is common place.

Common sense should tell that we have been refinancing SS debt as I've described. If we're running a deficit in our general account (as we've have been for many years), and SS revenues were insufficient to meet monthly payments then we've been what I described.

I take it finance isn't your strong suit.

Fern

 

[GuitarDaddy]

Refinancing debt is common place.

Common sense should tell that we have been refinancing SS debt as I've described. If we're running a deficit in our general account (as we've have been for many years), and SS revenues were insufficient to meet monthly payments then we've been what I described.

I take it finance isn't your strong suit.

Fern

Wrong, finance is my strong suit. Talk in circles all you want, but refinancing debt doesn't raise cash unless you increase debt. PERIOD

What you have proposed is nothing more than accounting trickery at best, to attempt to circumvent the debt limit rules nothing more. But by any true sense you can't create cash by refinancing with out increasing the debt. Claiming you can some how rename the debt and sell it to raise cash with out increasing debt owed by the treasury is pure bullshit. And transfering debt from the treasury to the market as you call it, is issuing new debt PERIOD end of story

Or maybe you can do a $20k cash out refi for me on my mortage without changing my loan balance 🙂 I would sure appreciate it

 

[Jaskalas]

One of my favorite economists, James Galbraith, on the debt ceiling:

http://www.commondreams.org/view/2011/07/12-3

One line summary:
-------------------------------------
President Obama’s proposed debt ceiling deal is a disastrous solution to an imaginary fiscal crisis, but the pain it causes will be all too real.
------------------------------------

That commentary seems to be of the notion that you can just tax and spend. Tax and spend. Tax and spend some more. Money must grow on trees for you.

Clearly there is no deficit or debt problem, just a lack of taxes problem.

 

[hal2kilo]

That commentary seems to be of the notion that you can just tax and spend. Tax and spend. Tax and spend some more. Money must grow on trees for you.

Clearly there is no deficit or debt problem, just a lack of taxes problem.

Yes shinking demand by laying off more people no matter who is employing them is really going to work out in the long run.

 

[UberNeuman]

At this point - it's quite clear... It's simply to attack the democrat - no matter what concessions have been made towards the other party....

Mitch the Bitch has made this clear....