This is good

wrote in message
...
On Wed, 29 Oct 2008 14:31:36 -0700, "Bob Weinberger"
wrote:


"DaveS" wrote in message
...
As I recall the numbers, without any tax increase or changes, the
Trust Fund will not even be tapped till 2016 by which time it will
have grown to $4 trillion, then we will be paying out more that we
collect from payroll taxes. Then even with no increase in taxes or
changes, we would not spend out the Trust Fund paying full benefits
until 2038. After 2038, again even with NO tax increase or changes,
the payroll taxes collected will pay for 73% of the benefits promised.

snip

Dave

In practical terms, the size of the "Trust Fund" is irrelevant . There is
no
fund of money out there earning interest. Congress has spent that money on
other things and depends on the excess between the inflow of social
security
tax payments and outflow of SS payments to help fund government. The
concern is that that differential is shrinking, and will totally
dissappear
and reverse at some point in the not too distant future (2016?). The money
for both SS payments and that used to run other government requirements
will
need to come from somewhere, either increased debt, increased SS taxes, or
increased taxes of other sources. So while, in theory if in fact a real
trust fund existed, there may be no need to increase SS payroll taxes
before
2038 to maintain SS payments, a source of funds to pay the entitlements
will
need to be found well before then.

Geez, what were they doing, running a sale at Paris Hilton's Skool of
Innertube Modeling or something? The "Trust Fund" isn't a "fund," and
it's Uncle Sugar - there's sure no trust from a fiduciary standpoint
there. What happened, generally, is that Alan Greenspan, in yet another
of his monumental ****ups, recommended an increase in "Social Security"
taxes, supposedly to help create a surplus to fund the mess when
baby-boomers started hitting the roles and the outlay was going to
exceed input. So the tax was increased and sure enough, there was a
surplus - no surprise there. However, instead of actually setting up a
trust account - you know, like a business would be required by law to do
- Congress decided it would be just ducky to create an accounting system
by which the money could be spent. However, strictly on paper, it would
be (basically) managed by the, ahem, the US Dept of the Treasury - you
know, those guys who spend all the other money - who would, ahem,
"invest" it by "loaning" it out to other parts of the Fed in exchange
for cute little IOUs which say they owed, with interest, back to the
SSA. And naturally, they needed a name for this sca, er, scheme - "The
Social Security Trust Fund." The check may be in the mail, but it's
rubber and unfortunately, they already came in your mouth and this will
hurt you more than it does them...

So, let's recap - they took more of your money, lent it to themselves at
a sub-market rate, and called it an investment for your future. And the
deposit account or margin requirements? Pish-posh, it's all backed by
the full faith and credit of the US Government. And don't worry, if
they can't pay you back with your current tax dollars, they can always
increase your taxes to pay you back...and according to Obama, Wall
Street CEOs are the problem...

Sheesh,
R


Actually Greenspan was just continuing tradition. LBJ was the first to
decide that you could promote SS as a retirement system and raised the rates
to get more money for the Federal Government. And I think the Chairman of
the Fed then was William McChesney Martin Jr.

On Thu, 30 Oct 2008 23:21:47 -0700, "Bob Weinberger"
wrote:


wrote in message
.. .
Er, no. As the tax receipts' input and "investment" occurs constantly,
and the "bonds"/IOUs are at a variety of interest rates and maturity
dates, the size and, generally, scope does matter. Moreover, the money
is out there and earning interest. You may be confusing the money
(principal) _earning_ interest with the interest earned actually being
paid - the interest is being earned daily and bonds are maturing and
interest is being paid to the SSA constantly. The problem is that they
continually lend it back out again to the same and only borrower. Look
at it like this - let's say you own a bank and Bill Gates and Warren
Buffett, your only customers, each deposit 1 million US with your bank.
They then come in and say, "Banker Bob, loan us each a mil at 6%." Sure,
you say. You know they are good for a measly mil so you loan them the
money. And sure enough, in a year they come in and pay you back with
interest. However, they immediately say, "Bob, now loan us 1,060,000 at
6%," and you say, "Um, well, how about letting me keep my interest, but
I'll happily loan you another mil?" "Sorry, nope, we want the
1,060,000," they say and you reluctantly agree, thinking the next year
will be your year. The next year, they pay right on time and clean you
right back out. So, you say, OK, I'll just sell this paper to another
investor, but the guys tell you to read the contracts - you can't
because the IOUs you accepted are "special" and can't be sold, bartered,
or otherwise negotiated.

OK, at what point do you begin to say, "hey, wait a damned minute,
here..." They are still, as of this point, "performing loans," earning
interest and all, but Bob's Bank has jack **** to show for it all.

And then, it really gets good - they come in after several years and
say, "Bob, we've always paid our debts and now, we'd like to borrow 100
mil, but don't worry, we know it's a bigger loan, so we're prepared to
make it worth your while - we'll pay 7%..." And then, it gets even
better. One day, they come in and say, "You know, Bob, we're going to
die eventually, and we'd sure hate to see you stuck, so we're going to
pay you off in full and we're not going to borrow another dime..."
Halle-****in-lu-yahoo, you think! "We've set up 'Trust Funds' and
they'll do all the borrowing, just like us, but better - they'll borrow
5 time as much as we ever did personally" WHAT!?! "Oh, don't worry,
they'll NEVER die - they'll go on being good little borrowers long after
we're all dead...you, too, Bob...and Bob, you really ought to go see our
tailor - it won't do for a prosperous banker like you to be in that same
shiny suit day after day...Bob...you seem to be crying, Bob...why are
you crying, Bob...?"

Your analogy has two fatal flaws.

Sorry, no.

1. Gates' and Buffet's sources of money come from a different source than my
bank's funds, while SS and the rest of government get their income primarily
from one source - the american taxpayer.

Nope. I didn't state where their money came from, so you can't state
that it is a different source, but it doesn't matter anyway, but the
biggie is that you didn't read very closely: your bank has no other
funds. They are your only customers, hence the use of the phrase, "your
only customers." And while "the american taxpayer" is the primary
source of the revenue in the general fund, he is not the primary source
of the SSA's funds - remember that employers pay the same rate in FICA,
etc., plus there is income from the Trust Fund workings, etc. (and that
which is paid by individuals as SE Tax doesn't "tip the scales" for a
variety of reasons).

2. Gates and Buffet didn't sign a contract with my deposters that obligates
the bank (and in a sense would also obligate Gates and Buffet) to pay some
of the bank's depositers amounts that are mandated by Gates and Buffet (and
over which I have no real independant control), regardless of whether or not
I have enough new depositers to cover the mandated payouts.

No, they didn't sign your example contract, but it non sequitur because
you have no other depositors to whom you must or in fact could pay
anything, and you do not have "new depositors" - again, see above
your only customers. And while I think you are alluding to an implied
contract with the current and future recipients of contributory "Social
Security," you might wish to refer to your copy of that contract. Don't
have a copy? Well, shoot, that's OK, it really isn't all that much of a
contract...well, unless you're the, um, party of the first part...

And since it was merely an example, I'll let you in on something - if
you wanna be technically correct, it has one REALLY big fatal flaw - you
don't own a bank with Warren and Bill as its only customers...

HTH,
R

Bob Weinberger


** Posted from http://www.teranews.com **

wrote in message
...
On Thu, 30 Oct 2008 23:21:47 -0700, "Bob Weinberger"
wrote:

Your analogy has two fatal flaws.

Sorry, no.

1. Gates' and Buffet's sources of money come from a different source than
my
bank's funds, while SS and the rest of government get their income
primarily
from one source - the american taxpayer.

Nope. I didn't state where their money came from, so you can't state
that it is a different source, but it doesn't matter anyway, but the
biggie is that you didn't read very closely: your bank has no other
funds. They are your only customers, hence the use of the phrase, "your
only customers." And while "the american taxpayer" is the primary
source of the revenue in the general fund, he is not the primary source
of the SSA's funds - remember that employers pay the same rate in FICA,
etc., plus there is income from the Trust Fund workings, etc. (and that
which is paid by individuals as SE Tax doesn't "tip the scales" for a
variety of reasons).

2. Gates and Buffet didn't sign a contract with my deposters that
obligates
the bank (and in a sense would also obligate Gates and Buffet) to pay some
of the bank's depositers amounts that are mandated by Gates and Buffet
(and
over which I have no real independant control), regardless of whether or
not
I have enough new depositers to cover the mandated payouts.

No, they didn't sign your example contract, but it non sequitur because
you have no other depositors to whom you must or in fact could pay
anything, and you do not have "new depositors" - again, see above
your only customers. And while I think you are alluding to an implied
contract with the current and future recipients of contributory "Social
Security," you might wish to refer to your copy of that contract. Don't
have a copy? Well, shoot, that's OK, it really isn't all that much of a
contract...well, unless you're the, um, party of the first part...

And since it was merely an example, I'll let you in on something - if
you wanna be technically correct, it has one REALLY big fatal flaw - you
don't own a bank with Warren and Bill as its only customers...

HTH,
R

Bob Weinberger

Yes I was wrong. Your anagogy doesn't have just two fatal flaws, it has at
least five that make it a very poor analogy of the SS system. Thank you for
doing such a good job of pointing out the other flaws.

Your analogy is only good for pointing out the bookeeping aspects of the
system. The monies we are talking about are all government funds that all
come primarily from the same source (via different mechanisms and vehicles,
but from basically the same source). I was trying to make a point (that you
obviously missed) in my side note in a previous post - when you become
almost solely focused on the accounting/bookeeping of a project/program such
that that aspect becomes the driver of decisions, actual productive
management and decision making of the program/project suffer greatly.

And BTW speaking of not reading carefully, I wrote "the american taxpayer"
not "individual american taxpayers". Any american entity - individuals,
corporations, sole proprietorships, LLC's, etc.- that pays income or social
security taxes, or other taxes disguised as fees or assessments is an
"american taxpayer".

Bob Weinberger


** Posted from http://www.teranews.com **

On Oct 30, 1:44*pm, DaveS wrote:
On Oct 30, 2:38*am, "

wrote:

Look Greg, I will cut to the chase because I want to get my ass on the
road and Ive got a ways to go.

1. You believe what you believe. I am not going to change what you
believe.
2. Your initial post had more than the initials SSI wrong with it.
3. Do some of the reading, and I will discuss it with you. Although I
hope others do so first.
4. You apparently do not understand the basics. No offense but even
Dean who is not in love with the system apparently on ideological
grounds at least understands how it works. I suggest you go to this
site. . .
*www.ssa.gov
then search on "Trust Fund" . Then if you want you can argue with
whoever you want about the non-existence of the Trust Fund(s). But not
me.

I also suggest you check out the CNN/Money , (then retirement) site
for a decent roll up of the real scope of the problem and what it and
OASD means for people in this country.

Good luck and I hope Ive left no hard feelings. Like I said before,
the anti social security propaganda and *attempts to paint a crisis
picture have got in the way of a rational people taking a rational
approach to making needed adjustments in the most successful
sustainable retirement system in the Western world.

Dave

So where are these Trust Funds and what do they consist of, Dave? Oil
leases? Real estate? Mutual funds? Gov't bonds???