Where should Social Security surplus be kept?

[Exterous]

Is it a government mandated retirement savings program or is it social insurance?

Indeed - and we need to keep in mind what the public would use it for not what we want them to use it for. My recollection might be wrong but I believe the intent was social insurance but the public expectation has grown to retirement savings program. So I would say 'defined benefit' for retireee planning purposes

 

[KB]

US Treasuries are not the safe investment they once were. The US has had its credit rating lowered recently. If you include SS trust fund debt, we have a debt to gdp ratio of over 100%. http://en.wikipedia.org/wiki/United_States_public_debt

In order to pay interest on our debts and fund our government, we must borrow nearly 1 trillion this year.
http://en.wikipedia.org/wiki/2013_United_States_federal_budget

The SS fund would be in better shape if it was making 0% interest in a savings account. It would at least be there to be paid out.

 

[The-Noid]

Norway seems to be doing it well. Why not look at them.

http://www.nbim.no/

The good thing is I will never collect but get to pay the max every year.

 

[QuantumPion]

Norway seems to be doing it well. Why not look at them.

http://www.nbim.no/

The good thing is I will never collect but get to pay the max every year.

The population of Norway is only 5 million yet they are the 5th largest producer and exporter of oil in the world. 20% of their GDP and 45% of their exports is oil production. They also have a strict immigration policy. They can probably afford socialism for a while.

 

[The-Noid]

The population of Norway is only 5 million yet they are the 5th largest producer and exporter of oil in the world. 20% of their GDP and 45% of their exports is oil production. They also have a strict immigration policy. They can probably afford socialism for a while.

Their investment returns appear a lot better than ours. They also have real money put aside, rather than line entries.

It's a crazy thought.

Also oil production is irrelevant. The source of GDP is not important as long as there is a GDP. A more diverse economy is preferential to oil exports.

It couldn't possibly be a spending problem in this country, could it?

If the surplus would have been invested similarly to Norges there would actually be money left.

 

[werepossum]

Look at Galveston Texas.

http://www.ncpa.org/pub/ba514

Check it out their retirees get 3-4 times more a month than Social security.

I'd rather scratch SS altogether even though I have paid for over 20 years

Galveston is indeed a shining example of responsible free market investment. I have to wonder though; had Social Security been set up like that, all retirees up to now would be substantially better off. The market would also be substantially higher. But - now that the baby boomers are retiring, that would switch from a net adder to the market to a net drain on the market. Might that crash the market?

Either way, Social Security was set up in 1935. At that time, I can't imagine anyone really advocated investing in the market. And now, I doubt the federal government could survive shifting excess Social Security revenue to the private market, even if such an excess should materialize. (And certainly no one is predicting a SS surplus within the foreseeable future.) So it's an idea that in hindsight we should have implemented somewhere in the sixties through nineties, but probably not one we can embrace now.

 

[werepossum]

Their investment returns appear a lot better than ours. They also have real money put aside, rather than line entries.

It's a crazy thought.

Also oil production is irrelevant. The source of GDP is not important as long as there is a GDP. A more diverse economy is preferential to oil exports.

It couldn't possibly be a spending problem in this country, could it?

If the surplus would have been invested similarly to Norges there would actually be money left.

I think it's not GDP that's important, but net wealth creation. We have a huge GDP, but it's mostly wealth redistribution and consumption. While there are substantial benefits to trading among ourselves, that generates no wealth surplus to invest. Trading one form of wealth for another within our own economy leaves no surplus to be invested. Norway, by accident of geography coupled with hard work and sound government, has a net wealth surplus to invest. They simply consume less wealth than they produce.

Incidentally we have the available oil to match Norway. If we chose, we could easily become a net exporter of oil once again. However, since we've exhausted most of our cheaply recoverable oil, the fraction of recoverable wealth would be much smaller; it would take a LOT more oil to generate the same investable surplus. And the environmental damage from recovering that much oil, considering our appetite, would likely be considerable, if not intolerable.

 

[The-Noid]

I think it's not GDP that's important, but net wealth creation. We have a huge GDP, but it's mostly wealth redistribution and consumption. While there are substantial benefits to trading among ourselves, that generates no wealth surplus to invest. Trading one form of wealth for another within our own economy leaves no surplus to be invested. Norway, by accident of geography coupled with hard work and sound government, has a net wealth surplus to invest. They simply consume less wealth than they produce.

Incidentally we have the available oil to match Norway. If we chose, we could easily become a net exporter of oil once again. However, since we've exhausted most of our cheaply recoverable oil, the fraction of recoverable wealth would be much smaller; it would take a LOT more oil to generate the same investable surplus. And the environmental damage from recovering that much oil, considering our appetite, would likely be considerable, if not intolerable.

The answer continues to be for government to do nothing about anything.

Social Security, nothing.
Tax Reform, nothing.
Medicare, nothing.
Energy Policy, non-existent.

The lack of ability to do anything in this country is beyond embarrassing.

The only way anything ever gets done in this country is if we see a major spike in interest rates.

Like I said I pay the max into Social Security, I pay both sides of medicare on my full income and there is no chance I will collect on either. By the time I am old enough to collect, the CBO projects that Medicare/Medicaid will be 19% of GDP. That seems sustainable. SS will only be 7% at that point.

 

[CADsortaGUY]

My wallet.

^ this should have ended the thread.

Unfortunately we have weak minded do-gooders who like to take from some by force and give to others. It was a failed policy from the start and it's still a policy today. It needs to go away so people can keep their own earnings.