Posted on 07/14/2011 12:43:38 PM PDT by Hojczyk
Is it just a coinsidence that wefare and food stamps started at troughly the same time that the so called fund was put into the general fund in the 1960’s? I personally don’t think so.
The "trust fund" money has to be put somewhere. They're not going to warehouse pallets of cash, so they convert it into the most secure financial instrument in the country: Special Issue Securities. This has the side effect of converting the revenue into general-funds cash. So long as the government has power of taxation and a functioning mint, there shall be funds to repay those "bonds" as needed. Thing is now the government is self-restraining the power of taxation, has spent too much cash to pay up, and is refusing to coin money. Whither grandma's check?
Frankly, I'm not even sure now that this is true, either. Too many people not working. The only thing they have going for them now is the illegals paying OASD and Medicare payments (they max out their dependent deductions to avoid income taxes).
All that will come to a screeching halt when these illegals become legal by Obama edit and all their prior contributions on fake or duplicated accounts have to be reconciled and honored.....bad times are approaching, for chure....
The Reps should be on this like white on rice. They should ask Obama why can't SS checks go out since, as the Dems have been saying, SS does not contribute to the deficit and does not need a fix for some time. We all know why, but asking such a question will bring home the fact that we need to borrow money to pay SS benefits and Medicare as well, which receives 51% of its funding from the General Fund.
I suspect the Reps are afraid to bring this up because it is also an indictment of them. Both parties have been guilty of promoting this fiction about the SSTF and its "assets." If the public learned the real truth, they would want to throw all of the bums out.
Actually, the federal government takes in enough revenue in payroll taxes (FICA) to pay about 98% of current Social Security and Medicare expenditures. So what Obama is saying is that those payroll taxes, which are supposed to be segregated from the general treasury funds and dedicated to Social Security and Medicare, are actually just being dumped into the general fund and being spent for such things as foreign aid, NEA, welfare, and all of the other liberal programs.
EVERY administration and congress since LBJ has been spending that fabled "trust fund."
Call your Congresscommie and ask them if there is a Trust Fund. They will say yes. Then ask if so how come there is a chance it will not be paid. My idiot said because the cuts may stop them from being able to afford to mail the checks due to the lack of funding. But assured me the money was in the Trust Fund. I said well in that case I will pay the postage...he hung up. This is not a joke. Actually happened today.
I was cracked open by Johnson for his “War On Poverty”, “The Great Society” and other “entitlements”.
SS is a pay as you go program. It has been running in the red for several years now. A few years ago, the Trustees estimated that SS would go permanently in the red starting in 2017. Now, it looks like the date has been moved up. Moreover, the deal that Obama struck on extending the Bush tax cuts for two years included a reduction of 2% of the employee's share of the 6.2% contribution. The effect is that there is even less revenue going into SS to pay for benefits meaning more of the IOUs have to be cashed in to make up the shortfall.
In essence, we are borrowing more money from SS as part of a mini stimulus. The bill that authorized this one year reduction includes a clause that the money must be paid back at some future date by the General Fund to make up for the loss of revenue into the SSTF. And Obama wants to extend that benefit for another year.
If we had any clever, unbiased reporter, he or she would be asking Obama some hard questions on his statement about the SS checks not going out. He made a major mistake in mentioning it because it means that the USG must borrow money to pay SS benefits and that the SSTF is really just filled with IOUs, not real assets. It really is Pandora's Box.
Worse than that, if you take the time to visit your local SS office you will puke from what you see! The place is filled with the “Great Society” riff raft ahead of every one else to get handouts.
Oh SNAP!!! It has been the feeding trough for dem and reps..
Don’t think I’ll be going there. By the time I’m eligible there won’t be any money left.
Not so.
The idea here is basically correct. However, this statement is usually joined to a second statement to the effect that this principle was violated by subsequent Administrations. However, there has never been any change in the way the Social Security program is financed or the way that Social Security payroll taxes are used by the federal government.
The Social Security Trust Fund was created in 1939 as part of the Amendments enacted in that year. From its inception, the Trust Fund has always worked the same way. The Social Security Trust Fund has never been "put into the general fund of the government."
Most likely this myth comes from a confusion between the financing of the Social Security program and the way the Social Security Trust Fund is treated in federal budget accounting. Starting in 1969 (due to action by the Johnson Administration in 1968) the transactions to the Trust Fund were included in what is known as the "unified budget." This means that every function of the federal government is included in a single budget. This is sometimes described by saying that the Social Security Trust Funds are "on-budget." This budget treatment of the Social Security Trust Fund continued until 1990 when the Trust Funds were again taken "off-budget." This means only that they are shown as a separate account in the federal budget. But whether the Trust Funds are "on-budget" or "off-budget" is primarily a question of accounting practices--it has no affect on the actual operations of the Trust Fund itself.
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.
Actually the payroll tax revenue for SS is deposited into the SSTF, which then makes the payments. Any "surplus" is deposited into the Treasury, which issues non-market, interest bearing T-bills in the amount of the surplus and deposits them into the SSTF.
4. The current year collections were always adequate until 2010, when they fell $30 - 40 billion short.
If you recall, Reagan made his famous deal on SS with Tip O'Neill in 1983 that raised the retirement age for full benefits from 65 to 67, increased taxes, and forced all new employees joining the federal government to be under SS. It was supposed to make SS "solvent" for the next 75 years. It didn't work.
It is a Pandora’s Box that no politician wants to open.
Pretty much...they have had this slush fund to spend on whatever since 1967 (?) now those funds are needed for those people starting to retire.The can has been kicked down the road as far as it can be.We may have have had an easier time had the dems not spent a fortune since 2007 but still the piper has to be paid....It is not going to be pretty for those of us in the 50 and under crowd.
Not so for Medicare. The General Fund pays for 51% of all Medicare costs. Medicare Part A is funded thru the HI trust fund, which started cashing in its IOUs in 2008. By law, the General Fund pays for 75% of the Medicare Parts B and D costs. The premiums only account for 25% of the costs. In 2011 the projected expenditures for SMI (Medicare Parts B and D) will amount to $295 billion, 75% of which are paid by the General Fund. SMI costs are larger than Medicare Part A costs. The HI trust fund will run out in 2024 because of the Obamacare "fix." Prior to that the date was 2017.
Isn’t the so called SS Trust Fund filled with government bonds which are replaced by more bonds as they mature? Seems like I spent the cash coming in and replaced it with money I borrowed from myself....?
LOL. Besides being an idiotic answer, the vast majority of SS payments are done electronically.
The government has created an enormous, unpayable unfunded liability for social security and medicare. When the Budget was unified by Lyndon Johnson Social Security became classic Ponzi scheme. It is fraud, pure and simple. Social Security taxes pay for current recipients and contribute to the general fund. Over $2.6 trillion that people have thought they were contributing to their retirement was spent as part of the general government expenditures.
Because total government spending is too great to be supported by the tax revenues this economy can generate the only way to fund current government expenditures is through massive borrowing(about $1.5 trillion per year every year).
This is unsustainable. When people stop buying trillions of dollars per year of our bonds the “special issue” bonds in the so called Social Security Trust Fund will be totally worthless. They are totally worthless now but people just don't realize it yet.
There is no trust. There are no funds. The money has all been spent.
It is the greatest single fraud in the history of human civilization.
What happened to it?
There is no ‘lockbox’ and has never been such a thing.
It was and is one huge ponzi scheme and I demand that a multitude be put in the same cell with Madoff, starting with the rotting corpse of FDR. =.=
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