Skip to comments.Social Security Trust Fund 2009: Economy Has Crippled the Fund, Major Overhaul Now Needed
Posted on 01/06/2010 10:48:39 AM PST by blam
Social Security Trust Fund 2009: Economy Has Crippled the Fund, Major Overhaul Now Needed
by: Bruce Krasting
January 06, 2010
The Social Security Trust Fund issued their November and December reports on Monday. They also provided the payment data for January 2010. I think there is some significant information.
From my writings on the Trust Fund I have received many comments from those who believe that the SS is a bankrupt Ponzi scheme. That is not correct. The SSTF did an admirable job in a very tough year. They paid a total of $675 billion in benefits and ended the year with an even $100 billion surplus. On December 31st they were sitting on $2.5 Trillion of US Treasury IOUs.
That said there are some very disturbing trends at the Fund. First a Macro Economic thought:
There was a onetime negative COLA adjustment that kicked in January 1. Rather than the usual increase, beneficiaries are getting smaller checks. The difference between the December and January payments comes to $475 million. That re-base means a reduced outlay for the full year of $6 billion. In the scheme of things that is peanuts. But this is going to be felt most in the Sunbelt states where the bulk of the beneficiaries reside. I believe that a significant percentage of SS payments goes right into consumption. Given that fixed costs are actually rising for this group of consumers (the hell with COLA) the 65+ set might not be going to the Wal-Mart (WMT) in Boca as much as they used to. A year ago we were talking of green shoots. This shoot is decidedly brown.
On the Fund itself:
I think that the recession of 08 and 09 and the anticipated high unemployment (low employment) in 2010 has crippled the Fund. Nothing short of a major overhaul can turn it around at this point. The damage has been too great.
HAHAHAHAHAHAHAHA - good one - TRUST FUND - lol!
Should have followed GW’s advice - privatize. Government has no authority to be in the “Social Security” business - nor the public health care business...
Yep they are doing a great job, that’s why the first 20 years I paid into it, I could retire at 60, now it’s maybe 67, I’m sure it will be 75 by the time I’m 67.
Pres. Bush wanted to fix this well-worn Ponzi scheme, but the Dems beat him up by saying to the ignorant elderly, “He’s going to let Wall Street take away your Social Security!”
Actually, the conservative Republicans of long ago who predicted that this Socialist program was going to go bust were absolutely right...and that was before abortion killed over 50,000,000 future S.S. tax payers.
It’s time the country faced the fact that the U.S.A. is worse than broke. It has maxed out the credit cards of at least three future generations with 39 TRILLION dollars worth of debt. The (Democrat) Party should be over.
Hey a$$hole. The SSTF is part of the national debt. It is included under intragovernmental holdings.
“Should have followed GWs advice - privatize.”
Given what happened with the markets and most folk’s 401k/ira accounts, any thought of privatization is dead for our lifetimes.
***On December 31st they were sitting on $2.5 Trillion of US Treasury IOUs.***
American workers and their employers have fully funded SS since it’s inception. The disgrace is the misappropriation of the funds for all the other unfunded social experiments & earmarks....just signing IOUs in perpetuity.
Foxes in the henhouse we call Congress.
Not a problem, have the Feds pay back the tens of thousands they've confiscated from me, and they can do what they please.
Add that to a $2.5 trillion tax increase and you'll break even.
The SS trust fund is like a drunk saving for his kid's college by putting a $20 bill into the cookie jar every week, then immediately taking it out and replacing it with an IOU and spending the $20 on beer. When college time comes he'll have a stack of IOUs that are worthless to anyone but himself, so he'll have to pay for college out of his current income or just give up on college for the kid just the same as if he had never bothered with the farce of the IOU filled cookie jar in the first place.
Please explain how Social Security, a federal program, holding $2.5 Trillion in Federal Treasuries, is not a Ponzi scheme?
No not by the democrats who just several years back insisted there was no problem during the Bush years. I agree it needs something done but not by this band of theives!
Hope it continues . I use my check to buy beer and bullets !
But Bush WAS still right that it SHOLUD have been privatized.
But look at those 201k’s. Can you keep your funds in REAL cash? How about gold? silver? foreign currencies? Just as I thought. NO. So, do the American people have the FREEDOM to MOVE THEIR OWN MONEY? NOOO. To choose HOW to invest? NOOO.
We need FREEDOM, not this continual robbing of our savings.
What's this guy shooting up?
If it's not a Ponzi scheme, lets see those on SS actually live on what they've paid in plus interest.
Being that they'd be living in a cardboard box and eating graham crackers, it takes several of us to support one SS beneficiary and it's only getting progressively worse.
That is the classic definition of a Ponzi scheme, where those at the bottom of the pyramid pay for those at the top - that is until the house of card inevitably falls apart. "Private" ponzi schemes are far more moral, because most of us can and will avoid them. This public ponzi scheme however is forced, with the ultimate end of refusing to partipate is having your life ruined by those running it.
But the good news, according to the author is that they are "sitting on $2.5 Trillion of US Treasury IOUs"
That just warms my heart.
Have you seen this? http://www.zerohedge.com/article/us-avoids-technical-default-three-days
No, that and other money we working folks paid the government
was and is frittered away on inbred, machete swinging, virgin
raping trash in Africa on AIDS and other reparation, black vote
That and leftist government filth right here in the USA that no decent
citizen will ever see except in anger.
|Year of Birth||Full Retirement Age|
|1937 or earlier||65|
|1938||65 and 2 months|
|1939||65 and 4 months|
|1940||65 and 6 months|
|1941||65 and 8 months|
|1942||65 and 10 months|
|1955||66 and 2 months|
|1956||66 and 4 months|
|1957||66 and 6 months|
|1958||66 and 8 months|
|1959||66 and 10 months|
|1960 or later||6|
What's this guy shooting up?
Of course its a Ponzi scheme, but its not technically bankrupt since they haven't written down the IOU's to their real value yet.
Truth beknown, COngress fraked up the fund.
We’re not broke...hell no....we’ve got US Treasury IOUs !!!!! this is absolutely effing hilarious that someone could purport that IOUs from the US Treasury (all 2.5 umpty Trillion of them) are the SAME thing as a cash fund of money CONFISCATED from working Americans in payment for a pension - some day......If I were with this person face-to-face, I’d punch his ever loving daylights out.
[...sitting on $2.5 Trillion of US Treasury IOUs...]
So basically he is saying, we aren’t broke, because someone owes us something! Heck, we can forget all bankruptcy rulings - you have an IOU, then go back to work!
Someone please explain to this maroon that “I ain’t broke because I still have checks” was an old joke in the 1980’s!!!
LOL. That is supposed to be reassuring? Do they keep the IOU's in a lock box too?
On December 31st they were sitting on $2.5 Trillion of US Treasury IOUs.
Even better one!!!!! Unable to sell Treasuries so Fed is purchasing 47% of them. "Others" (?) are buying a big chunk and a bunch of what "foreigners" are buying are being bought back by the Fed within 10 days of the initial "sale." AND they plan to cash in these Treasuries that SS holds. Toilet paper... BWAHHHHHHHHHAAAAAAAAHA!
[Toilet paper... ]
Actually, toilet paper has some useful value! Heck, you can’t wipe with those IOU’s!!!!
No I haven't, thanks.