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To: justlurking
The calculations were correct as far as straight numbers are concerned. And people would be getting more back than contributed, under those conditions. It doesn't change the fact that people could have/would have done much better had they been left in control over their own destiny.

Assuming, of course, that they invested the money instead of spent it. Judging by 401K participation rates, only about half would have invested. The rest likely would be reaching into your pocket demanding you share your wealth.

Its only fair, you see./s

640 posted on 01/03/2011 10:13:12 AM PST by ex 98C MI Dude (Alea Iacta Est)
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To: ex 98C MI Dude
The calculations were correct as far as straight numbers are concerned.

No, they weren't.

Let me try again to explain. The Social Security "trust fund" is literally a stack of special US Treasury bonds in someone's file cabinet in a government office. I wanted to link an article that I read about it recently, but haven't been able to find it.

Those US treasury bonds are real, and yield interest at the prevailing rates at the time each one was issued. What I've done is calculate the present value of a past stream of Social Security contributions, using the government's own information. I can provide you the URLs of historical interest rates, if you like.

Yes, if everyone had the option of spending it, many would have done so. But, they didn't, and the government invested it into Treasury bonds instead. Of course, in exchange for that piece of paper in the filing cabinet, the government then spent the money on everything else. But, that's no different than any other government bond.

In effect, every Social Security contributor has a partial interest in that stack of US Treasury bonds. What Lindsey Graham (I refuse to address him as Senator) is proposing is to default on those bonds for a small set of people with insufficient political power to prevent it.

And that's not much less than armed robbery, with Congress holding the gun.

655 posted on 01/03/2011 10:37:23 AM PST by justlurking (The only remedy for a bad guy with a gun is a good WOMAN (Sgt. Kimberly Munley) with a gun)
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