Social Security: How to Maintain Solvency?

That simply isn't true, because it implies that the only variable involved is the number of workers. In reality, the increases in production which are certain to occur, are just as capable of making up any gap in birthrate!! It is not like we have a birth rate like say Russia, where it actually is a problem. Our birth rate is plenty high to maintain the system.


As far as the OP goes, the system is solvent now for about 25 years without a single change. However, the easiest change is to remove the cap on SS taxes, or at least make it higher than 106,000 dollars a year. That would instantly make the system solvent for decades.

 

Each person [and his/her employer(s)] has already made contributions by law that are eligible for payment to that person when the requisite age is reached. The Government has been holding all of it in trust, and so the money is the Government's responsibility -- period.

If the Government has been stealing it to squander on other things, and allowing people to collect Social Security who didn't pay into it, then that, too, is the Government's responsibility.

So, if there's a money shortage in Social Security (and there won't be on for at least another twenty years) then the Government can just GO GET IT FROM THE SAME F-ING PLACE THAT THE FEDERAL RESERVE GOT TRILLIONS TO SAVE INVESTMENT BANKERS AND WALL STREET GAMBLERS in 2007 and on!

And if anybody seriously tries to screw people out of their Social Security money that they were FORCED BY LAW to pay into, there will be unbridled, holy hell to pay! Baby Boomers especially are an enormous segment of voters. Today's "occupy" movement is nothing but a gaggle of ineffective, ignorant children running around creating a nuisance... but when Baby Boomers raised hell, the Vietnam War was shut down, Lyndon Johnson was shut down, and later, Richard Nixon was forced out of office.

Any of you slimy, spineless politician bastards reading this? Are you paying attention, Rick Santorum? Don't whine to us about the "children and grandchildren" -- BECAUSE THEY HAVEN'T PAID A DOLLAR INTO ANYTHING YET! F*** WITH US BABY BOOMERS AND YOU WILL BE THROWN OUT... BECAUSE WE VOTE! Go to hell and ask Lyndon Johnson and Richard Nixon....

 

Any bank, their choice. The funds are untouchable until they reach that age (or like normal you can pull it out early but at a cost). There might be some interest, maybe not.

What bank is irrelevant (for this discussion though of course it's an important detail if they did this).

Basically right now they take your SS money out of your paycheck then spend it. STOP spending it. Put it somewhere safe.

 

Tell that to all the financial planners and chartered financial consultants in America, plus the millions of private investors who buy them.

 

Private investors investing their money in treasuries is much different than the Govt investing money in treasuries. It is an asset and a liability to the US Govt. That is illogical. Accounting-wise it is simply an allowance. The debt doesn't actually exist because the Govt can't "owe" themselves money.

 

That, in time, would make it weaker and as a welfare program. Bad idea.

SS has not added a penny to the deficit. Zero. Nada. And it's funded for the next quarter century. What other program can boast that?

QUITE NOT!! Lost in the general fund it would be unclear how much dedicated tax revenue contributes to it and the Trust Fund is far more fiscally transparent than the general fund as it is.

 

Under your plan, as I understand it, whatever a person had in his account at retirment would be his retirement fund under SS. IOW, a person working for, say, $15/hr, would have a much smaller fund than a person who earns $35/hr. This defeats the whole purpose of SS, which is to assist with easing elderly poverty. A person who earned little needs MORE help to avoid poverty than one who earned more.

Actually it is invested in what is recognized by all financial planners as the safest, most stable investment there is. Safety and stability is desirable for such a purpose as SS is intended to serve.

 

The SS funds ARE private individuals' money, dedicated specifically and only to their collective retirement needs.

Accounting details don't sway me. The important thing is that it works better than most every other government program, and it has never added to the debt or deficit. Even redemption of the SS Treasuries don't add to the deficit or debt.

 

So it is just a welfare program that was sold to the people as an insurance program?

 

1) There is no money in this fund, it has been lent out to the US government in the form of bonds, this means that every single penny the SS fund pays out has to come from bond payments and where do bond payments from from? Taxpayers or the printing press which is just a stealthy way to tax people.

2) I dont give a (*)(*)(*)(*) whether you payed into the system, there is no money in it atm so that means the only way of funding it would be to enact enormous taxes on young people and we sure as hell didnt ask for that nor deserve it.

You old people need to face reality and understand that you were scammed, you will either have to work or rely on family members or charity in the future, that is the only just solution.

 

Whether or not it should be isn't as important as the fact that it's all most people have. Which is the reason it was needed in the first place.

 

Unfortunately, you are right, Daybreaker. This is the reason why the Bowles-Simpson Proposal included a provision to encourage personal investment for retirement. In general, this nation has forgotten how to save.

 

I don't think social security is meant to be solvent. Everybody makes a big deal out of the fact that more money comes out of it than was put into it by the people taking advantage of it, but I think that's the way it's supposed to work. The current generation of working people takes care of the previous generation of working people -- one of the short definitions of a society.

 

The problem is that we have to give a larger and larger amount - both in terms of dollars and in percentage of income - each generation. It started at 2% from the employee and employer, not it has gone all the way up to 7.65%.

Something has to be done to stop the increases.

 

Too bad, dude -- reality is this: we who have paid into Social Security and Medicare for DECADES, or be liable to prosecution under the law, are NOT GOING TO ROLL OVER AND TAKE A F******G FROM ANYBODY -- DEMOCRAT OR REPUBLICAN! We've got the numbers, the money, the power, AND, the VOTES! If the Government blew all our SS money, they can get it from somebody else, print it, or pull it out of their asses for all we care....

Obama has already arranged to STEAL a half-trillion dollars out of Medicare to float his socialized medicine scheme called Obamacare. And Republicans? From them we hear all these vague threats about how half the problems in the country are because of "entitlements"... but they completely ignore the fact that we who paid into these systems for DECADES deserve to be paid every single dime we have coming!

The Obamanite Socialist Welfare State, which is what the "occupy" morons want, is undeserving, un-American, and un-Constitutional! In very simple terms that even today's dumbed-down generation can understand: an EARNED entitlement is NOT the same thing as welfare! Cut welfare all you like, but leave the rest of us the hell alone!

Obviously, there's no sense of fairness or honor in any of the lousy bastards who would deliberately cheat older Americans, but they screw us AT THEIR PERIL! So, c'mon, Obama... c'mon Santorum... c'mon all you deceitful crudballs who want to steal what we EARNED from us to fund your own agendas -- and find out what it's like to be hurled out of office on your stunned, surprised asses!

 

First remove the cap. Next, diversify all the money into US stocks, eliminating govts propensity to tap into the funds with IOU's as well as a give an economic surge to the US economy.

 

You know, you nay-sayers need to get a clue. I mean really. Is there any money in your savings account? How about your IRA? Same answer.

Again, get a clue. Look into it. NOT A DIME comes from taxpayers or "printing presses". Go find out how the Trust Fund Treauries (TFTs) are redeemed and get back to me. If you're too lazy, let me know and I will TELL you.

Entirely and pathetically wrong, as I just said. Again, let me know if you need help with this.

And you wet-behind-the-ears parvenus need to get some actual education and stop pretending to know something.

Let's go, bring on your arguments. I'm up to it.

 

It works because of how massive it is. Just think of it with out the Trust Fund. All it is, is a pay as you go system where surpluses go right back in to the economy and deficits have to be borrowed. The only thing that happens when their is a deficit in SS is that the Govt replaces intragovernmental debt with debt held by the public.

Like I said, accounting wise, the Trust Fund is nothing but an allowance and not a real debt.

 

Forgotten??? The median income is now about $50,000. To retire with an income of $40,000/yr if no SS is available and personal accounts is the only source, requires a nest egg of $1 million. Tell me how an average family with a median income can save $1 million for retirement. I know: save $1400 every month starting at age 25. Great.

Don't slander the public with accusations that they "forgot" how to save.

 

Invest in the stock market. Choose stocks that have high interest rates and that you can hold for decades. Furthermore, buy those stocks while they are cheap. Invest in financial products such as options, forwards, futures, and swaps. Their rates of return are even greater.

For the more conservative investor, utilize a 401k, 403b, IRA, etc. Invest in T-Bonds or other types of bonds.

 

Right, like, . . think of your 401k without the money in it. duh

You are saying that the payroll tax was invested in dedicated Treasury securities and the proceeds from the sale went where the proceeds of the sale of all Treasury securities go: the general fund.

So the Trust Fund Treasuries (TFTs) are essentially the same as T-bills except that the TFTs cannot be sold to the public. And redemption involves conversion of those TFTs to public debt via public sale of a matching value of T-bills repayable to those investors.

Okay fine. The TFTs were paid for in full as are the T-bills held by the public. The proceeds of sale in both cases were spent on wars, $500 hammers, military, etc. etc.

Does that determine the worth of the TFTs? No more than any T-bill.

Is it the fault of SS? No more than it's the fault of an investor who bought T-bills.

If tax dollars don't ultimately pay for the T-bills held by the public in both cases, where should we get the money to redeem them, -from retirees? IOW default on them? No more than we should default on any investor-held T-bill.

It isn't the fault of retirees that proceeds from their fully paid-for TFTs were spent out of the general fund for everything imaginable. That is the fault of the government and the right and the left disagree on what the government should be paying for. But it isn't the fault of retirees. So don't talk of dinging retirees for the fund AGAIN. They already PAID for them in full.... just like an investor in T-bills.

Another point on redemptions: by selling a matching value of T-bills on the open market to willing investors in order to generate funds to retire TFTs as needed, the expenses of programs and items which the proceeds of the sale of TFTs originally funded, are transferred to investors, where they should be.

IOW, funds from payroll taxes come into the TF and are invested in Treasuries. The proceeds of the sale are put into the general fund. From there, some of those proceeds are spent on military paychecks. Payroll taxes made it possible. But when dollars are needed from the TF to pay for current SS benefits and T-bills are sold on the open market to raise those funds, -and a matching value of TFTs are retired (destroyed), that process essentially transfers the source of the funds for those military paychecks from the TFTs to the T-bills sold to the public.

Hence, blaming retirees or SS for the excess expenditures for military paychecks, $500 hammers, Air Force One maintenance, or subsidies to oil companies, is to blame the renter for the landlord's delinquent taxes.

 

LOL!!! That is SO easy to say and sound good!

Fact is, most people who invest in stocks, lose money.

Invest in options, forwards, swaps, and futures???????? You apparently don't know about these things. Such things are akin to gambling. And taking such risks with retirement funds is entirely inappropriate. To advise the public to "invest" in them is grossly irresponsible. And a 401k, 403b, or IRA doesn't protect the investor from disasters.

T-bonds? Not very different fron the Treasuries in the Trust Fund now, which so many righties are complaining about. So no point in changing if that is the "solution".

 

The reason why I can say invest in options, futures, forwards, and swaps is because I am well aware of their inner workings. I do not need a lesson on the risk associated with them because I understand such risk. It is certainly like gambling, if not worse, but if you can play your cards right, it is a great investment. I know a couple people invested in puts that are seeing great rates of return. Furthermore, I am invested in two stocks, Bristol Myers Squibb and Exxon Mobil. My purpose for such investments are to pay for college. Since buying Bristol Myers Squibb, the stock has gone up. Exxon Mobil has essentially broke even. Overall, my stock portfolio's value has increased. In addition, I have a couple T-bonds that my family has held for years.

 

When you invest in your 401k it does not go in to the General Fund. There is no similarities between intragovernmental debt and 401ks. That would be like the Govt taking your income taxes and investing that money back in to the Govt and then spending it. All it is, is an intermediary that keeps track of how much Social Security spending it is allowed in the future. The interest rates are an arbitrary number driven by the Govt not by the market.

And when you purchase your 401k it is not a liability to you, it is simply an asset unlike the Govt purchasing treasuries from themselves.

Yes, except the person who owns the treasury is the person who issues the treasury unlike when you buy a treasury yourself.

They are created by the Govt with a yield created by the Govt. There is no market for them, they are nothing but a number the Govt has allowed themselves to borrow in the future to pay for SS receipts.

No it doesn't. No one owns the treasuries other than the US Govt. We are owed SS payments, that is it. That money does not come from the treasuries, it comes from other SS tax payments or from borrowing and creating real debt. There is nothing in the Trust Fund other than made up pieces of paper that the Govt gives themselves and sets their own interest rates.

Since intragovernmental debt is an asset and a liability to the Govt the only way to "redeem" them is by creating real debt and borrowing from the private/bank sector. There is no change in the overall debt when intragovernmental debt is redeemed. That should tell you something.

You are way off track here. You are still assuming that we pay for the intragovernmental debt. We do not. It is a pay as you go system. When we retire our children our supposed to be paying our social security payments. If there is a deficit in SS than the Govt has to borrow just like any other expense. They borrow money, pay themselves off, then spend it on SS. All that happens in this process is intragovernmental debt is swapped with public debt.

Like I said, accounting wise there is absolutely no point of the Trust Fund other than an allowance for future SS borrowing.

 

I like mutual funds. They don't require as much research or effort yet give very good returns.

For instance, I'm standing with an average 10% annual return, even counting the 2008 correction.

Even if a person doesn't do as well as I do and average 8%, they just have to contribute $300 a month starting at 25 to have a million by the time they are 65. If they make that same $300 contribution and get the 10% that I've averaged, they will have a million by the time they are 55.

10%, 8% or even 4% all look far better than the 2% return today's workers can expect from Social Security.