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 IOU’s.
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.
[snip]
| 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 |
| 1943-1954 | 66 |
| 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 IOU’s...]
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 IOU’s.
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.
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