Posted on 07/14/2011 12:43:38 PM PDT by Hojczyk
Well, either Obama and Geithner are lying to us now, or they and all defenders of the Social Security status quo have been lying to us for decades. It must be one or the other.
Here’s why: Social Security has a trust fund, and that trust fund is supposed to have $2.6 trillion in it, according to the Social Security trustees. If there are real assets in the trust fund, then Social Security can mail the checks, regardless of what Congress does about the debt limit.
President Obama’s budget director, Jack Lew, explained all this last February in USA Today:
“Social Security benefits are entirely self-financing. They are paid for with payroll taxes collected from workers and their employers throughout their careers. These taxes are placed in a trust fund dedicated to paying benefits owed to current and future beneficiaries. … Even though Social Security began collecting less in taxes than it paid in benefits in 2010, the trust fund will continue to accrue interest and grow until 2025, and will have adequate resources to pay full benefits for the next 26 years.”
Notice that Lew said nothing about raising the debt ceiling, which was already looming, and it shouldn’t matter anyway because Social Security is “entirely self-financing” and off budget. What could be clearer?
Unconvinced, syndicated columnist Charles Krauthammer wrote a subsequent column questioning Lew’s assertions. “This [Lew’s] claim is a breathtaking fraud. The pretense is that a flush trust fund will pay retirees for the next 26 years. Lovely, except for one thing: The Social Security trust fund is a fiction. … In other words, the Social Security trust fund contains—nothing.”
(Excerpt) Read more at blogs.forbes.com ...
Acutally, it never got into a ‘fund’. It was spent on receipt along with the rest of the money in the general fund we didn’t have and couldn’t afford......
Ask Al Gore.
Doesn’t he have a “lock box” under his bed?
I’ll bet that’s where it is!
WHAT HAVE YOU DONE WITH THE TRUST FUND? WHERE ARE THE PAYROLL TAXES GOING?
Usually, people with one foot outside the door will lie convincingly and confidently. They know that while words they speak are a lie, they will not matter because they will be gone....
Here's where all Obama's financial team, who have conveniently quit or about to quit, differ from him. Obama is a committed liar just like Slick Willie. He will stay with it until the end, and even in the face of an electoral defeat in 2012, will make Mohamar Gaddaffi look like a fair loser.
The "Trust Fund" was spent long ago by the Democrats.They left their IOUs; which are worthless.
“What Happened to the $2.6 Trillion Social Security Trust Fund?”
Ask all the politicians who used it to bribe voters.
Al Gore wrong again. It's looking more and more like the non-reform is the risky scheme.
Oh, you’re just getting all “wee wee’d” up over the biggest Ponzi Scheme in history. Take the Blue Pill.
Wiat a second I got a statement from my Social Security nest egg. Isn’t that Mail Fraud?
that is a fact.
Like Harry and Lloyd in “Dumb and Dumber” when they spent the suitcase full of cash and in turn filled the suitcase with a bunch of IOUs?
The trust fund was stolen by democrats before JFK was martyred by the democrats..
The only ones believing in a SS trust fund are..
Gloria, Meathead, Archie and Edith... in the defunct sitcom..
Yes the IOUs are worthless, because they can only be met from new revenues--taxes or borrowing. But, let's be honest--Obama is the worst, but Bush wasn't particularly careful with finances, either. Both parties thought they could benefit by promising more than the economy could deliver.
On the same note, I just sent this screed to a hardcore Leftist coworker:
There has been ample warning on this issue. How long a lead time for cashing non-liquid bonds is needed? we have over two weeks as of right now, and this fiasco has been brewing for a month. It’s not like the incoming revenue stream will halt outright; there may not be enough money in the coffers to pay everything, but prioritizing payment of bonds (a given) assures Social Security will remain funded. When my outgo exceeds my income, that outflow gets prioritized with debt payments first, and limited discretionary spending replaces fine dining out with beans at home; I expect the same decision-making of our Executive ... which raises question of him raising the threat of not paying basic obligations.
Ah, but that’s where I get ambushed, having the debate reframed to accusations of lying, and injection of subversive viewpoints in order to stir up emotion so that we can’t do an honest assessment. The bait will be overlooked.
Myth #4: The Social Security Trust Fund has been raided and is full of IOUs
Reality: Not even close to true. The Social Security Trust Fund isn’t
full of IOUs, it’s full of U.S. Treasury Bonds. And those bonds are
backed by the full faith and credit of the United States.
Bonds _are_ IOUs. No substantial difference save formality & interest.
We have been assured, as MoveOn insists on behalf of those in question, that Social Security is fully funded without fail (for decades at least), that it is not subject to fluctuations in income - the money WILL BE THERE. Those who assured us it would be now tell us that it won’t be. Wait, what? Cash flow understood, this gives proof to what those crazy right-wing objectors have been saying for years: Social Security funding, at least in part, is siphoned off to general revenue being routed thru the smoke-and-mirrors of bonds (aka IOUs); lacking sufficient general revenue to pay those bonds on demand, the SS trust fund reveals a suspicious absence of trust and funds.
Let’s rehash that. Money was put aside into a trust fund. That money was swapped for bonds (IOUs) so the money could be sent into the general fund (which is why bonds are issued). Time comes for cashing in those bonds (FICA income being less than SS outgo), and the Social Security Administration turns to the Treasury and says “U O I $XB”, to which the Treasury says “uh, sorry, we don’t have the money”. This is EXACTLY what conservatives have been complaining about as summarized by, as you put it, “http://www.ssa.gov/OACT/ProgData/investheld.html being an outright lie”.
There IS, and will be via ongoing revenue streams, enough money in the coffers to pay off those cashed-in bonds ... just not enough to also pay off all the other promised spending AND increase spending as much as some would like. Short of monthly income, I can either enjoy fine dining and miss a mortgage payment, or I can make the mortgage payment and eat beans for a couple weeks. Short of income, our Legislature and Executive can agree to send out NEA grants and skip sending grandma her Social Security check for a few weeks, or make sure grandma can cover her cost of living and forego funding street theater & poetry slams for a few weeks; as it is now, the Legislature wants to pay grandma, skip the frivolities for a bit, and pay down some debt, while the Executive wants to ask the bank to increase the credit line so he can take yet another cash advance on the Visa so there will be enough in checking to pay both grandma and the mimes - and ignore the increased interest payment until that becomes a problem.
Hmmm...now wait a minute: what do you mean by “a lag between the request and the payout”? It’s the government transferring bytes from one of its own accounts to another, not moving truckloads of cash around. If there’s money in the coffers (electronic, remember) then it can be moved in short order - maybe not instant, but not much longer than me moving a wad of bills from the safe to my wallet. We’ve got weeks to do it; the Treasury is equipped to make multi-billion-dollar transactions overnight, so unless the coffers are empty (which proves the lie previously framed against me), “it’s not liquid” isn’t a sufficient excuse.
So: either “it’s” a lie, or our Executive is lying when he says “I cannot guarantee that those checks go out on August 3rd”. Which is it? ...and how long _does_ it take for the left hand to cash out a $1B bond to the right hand?
“Do not be one who shakes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you.” Proverbs 22:26-27
But they claim that SS won’t run out of money for several more years. Yes, I know that their estimates only take into account that SS is now taking in more than it is paying out.
Well truth is there is no trust fund.It was put into the general fund starting during LBJ’s administration and the “overage” has been spent every year since.”Overage” would be what those of us who aren’t getting benefits paid in.
I haven’t read the entire article, but it gets off to such a dumb start I just quit. Here are a few facts:
1. Over the years the SS Trust Fund did build up a $2.6 trillion surplus when SS FICA receipts exceeded what was paid out currently to SS recipients.
2. The government started spending that money in the 1960s and there is nothing in the Trust Fund but non-negotiable, promissory notes from the US government adding up to the $2.6 trillion.
3. But, here’s where the article starts off all wrong: SS monthly benefits are not paid out of the Trust Fund, but out of current month/year collections of FICA tax tax.
4. The current year collections were always adequate until 2010, when they fell $30 - 40 billion short.
5. But still, this year, SS is being paid largely out of current FICA taxes with the government making up some shortfall about like 2010.
The current year receipts are there to pay SS benefits, it’s just whether the feds use those receipts to pay SS recipients, or play games and do something else with it.
There should be money coming into Social Security every month, whenever payroll taxes are paid.
If that money is supposed to be used to fund Social Security, they can use that money for the checks next month.
So there are 2 ways to raise your federal taxes by payroll deduction...
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