Austerity problem or something else?

They borrow it from themselves. Why are you being such an idiot about this. Can't you tell the difference between intergovernment lending and lending to thir parties by contract. Don't you appreciate the difference between taking the surplus money and putting a note on the account that you took it; compared with selling real bonds in the open market to fund the inevitable deficits?

A real 'loan' involves two parties, it is a contract, and it can be tradeable and enforced at law, it can be securitized. There is a whole section of the law dedicated to 'Secured Transactions.' What you are calling a 'loan' in the SS Trust Fund matter is an intergovernmental trasfer of funds that are tracked by an accounting note called a 'Special Government Obligation.' It is not a loan in the sense that money has been borrowed from some one else...its just from one government account to another. A private business could do this within its operations and it would not be a real loan then either. A company cannot sue itself for moving money from its investment account to its operating account any more than the Government can sue itself.

That is the point. There is no there there. The SS Trust Fund is full of IOU's from the Treasury to itself, promising to borrow money from third parties at auction in order to fund the future deficits. There is nothing that has been saved in order to pay these obligations. There are no 'assets' that Treasury can sell to pay these obligations...its only a promise to borrow more money when they have to face the SS deficits.

Your squirmy responses are ridiculous. I never said that they stole the money. All I said is that they issued IOU's that were not assets and that they spend the money on current operations. You admit that in your response. As far as the interest goes, that can be adjusted at will by the Treasury. It does not even require congressional action. Its clear that when you can change the term and interest of your IOU to yourself that you are not dealing with any sort of contract. It is clear that what I have been saying all along is the case...its a politicial promise; that's all it is, and it is subject to change... without recourse from the beneficiaries.

I can't believe you don't get the distinction. You can be sure that I would never trust you to buy chocolates.
 
Quote from Ed Breen:

...A company cannot sue itself for moving money from its investment account to its operating account any more than the Government can sue itself.

More...

Ed, seriously, are you losing your mind. What does that statement re moving assets from an investment account to an operating account have to do with social security. I have already explained, in the case of Social Security, you can't just move the assets out of Social Security into another budget. That's illegal Ed. You can only borrow money from Social Security at interest. And the requirement to pay the Trust back has the force of law behind it. Of course the law could be changed, assuming 38 million AARP members suddenly drop dead. :D

You're ranting and raving because the government does not have enough revenue to pay its obligations without borrowing more. I agree with you, Ed, that is something worth at least a little ranting and raving. But that's another issue having nothing to do with Social Security, except quite indirectly.

And in regard to the debt obligations held by the Trust, one can reasonably argue that from a political viewpoint these have the highest standing of all U.S. debt obligations! (Don't forget about those 38 million AARP members, Ed. If you want to see ranting and raving that will put your own to shame, just get all those folks in walkers a wee bit angry.)

Your concern should be with deficit spending in the discretionary budget, that's where the indirect danger to the entitlement programs lies. There is nothing fundamentally unsound with Social Security, at least the old age pension part, so long as Congress follows the actuaries recommendations. To protect Social Security from indirect threats, Congress should also, over time, bring discretionary spending into line with revenues.
 
Piezoe, I am done with this again. You have admitted all my pionts but you continue obfuscate the issues with smarmy false assertions and accusations as if you hadn't already concede the substance.

The difference matters...shit and chocolate are both brown but there is a substantial differnce that matters when you eat it.

When the crunch to prioritize what will be paid and what will not be paid as promised then the distinction between and Treasury Bond and a 'Special Government Obligation' will be clear.

In the mean time there is enough information here to deflect the misinformation you were disseminating. Any one who bothers to read it has all the information they need to decide whether the difference matters.
 
Ed, don't try to fool me. You are not done. Not after you read what I am about to write, he he he.

Ed, you have, none too cleverly, forgotten about the first party here. The first party is you and me together with all the others who have contributed to Social Security. So Ed, our lovely government, the third party if you will, is not borrowing from itself, as you have foolishly maintained. They are borrowing our dollars held in Trust for our benefit. That in a nutshell, Ed, is why Social Security is referred to as an entitlement, and why the funds in it are protected, by law, in a trust, which serves as a second party if you will. The Trust can not be legally raided. The money in the Trust can not be transferred directly into the discretionary budget. The Trust can loan our money at interest to the Federal government, but the government can not simply take our money and use it for something else.<sup>*</sup> They can only take it indirectly from us via inflation or malfeasance. (If you want to refer to this as a kind of legal, indirect stealing, that's OK with me.)

It is utter nonsense for you to maintain that the funds in the entitlement trusts are no different from any other government funds and that when the government borrows from these trusts it is, in your words, borrowing from itself. It isn't. It is in fact borrowing our money held in trust for our benefit. We will, I assure you, demand that we be paid back with interest.

________________________
<sup>*</sup>I'm aware that there is a cadre of anarchists out there who simply don't believe this. It is the same cadre hoarding ammo and water and preparing for arrival of government troops.
 
I am done with your obfuscation, this is just more. You are just playing games now. We have no more claim on SS assets then we have on our other taxes. They will means test and poof, those who paid the most will get nada.

Grow up and tell the truth. There is no there there, your claims are exposed as garbage. Try suing the IRS to collect your pay in. You have agreed to all the substantive points, now you are just making a fool of yourself.
 
Quote from 4thaugust1932:

There is only about ~900 billion paper and coin dollars.
There is about ~14 trillion dollars worth of credit supplied by banks.
There is about ~55 trillion dollars in total debt, again, supplied by banks.
What backs the dollar is the faith that the 14 trillion dollars will some day pay the 55 trillion dollars off.
More...

Net worth of the US (assets - liabilities) is:


...$62.9 trillion at the end of the first quarter of 2012, about $2.8 trillion more than at the end of the fourth quarter.
More...


http://www.federalreserve.gov/releases/z1/Current/z1.pdf
 
For those who want to know how the Trust funds really operate and are tired of Ed's drivel, I've excerpted the following from http://www.ssa.gov/oact/progdata/fundFAQ.html#n2 which you should go to for a lot more detail. Of course those with the camo, the
ammo, and the water, see this all as a government conspiracy.

"...A Board of Trustees oversees the financial operations of the trust funds. The Board reports annually to the Congress on the financial status of the trust funds.

How are the trust funds invested? By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are "special issues" of the United States Treasury. Such securities are available only to the trust funds.

In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. Marketable securities are subject to the forces of the open market and may suffer a loss, or enjoy a gain, if sold before maturity. Investment in special issues gives the trust funds the same flexibility as holding cash.

Data on trust fund investments provide a breakdown by interest rate and trust fund for any month after 1989.

What interest rate do the trust funds' assets earn? The rate of interest on special issues is determined by a formula enacted in 1960. The rate is determined at the end of each month and applies to new investments in the following month.

The numeric average of the 12 monthly interest rates for 2011 was 2.417 percent. The annual effective interest rate (the average rate of return on all investments over a one-year period) for the OASI and DI Trust Funds, combined, was 4.401 percent in 2011. This higher effective rate resulted because the funds hold special-issue bonds acquired in past years when interest rates were higher.

What happens to the taxes that go into the trust funds? Tax income is deposited on a daily basis and is invested in "special-issue" securities. The cash exchanged for the securities goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.

If all the income is invested, how do benefits get paid each month? Money to cover expenditures (mainly benefit payments) from the trust funds comes from the redemption or sale of securities held by the trust funds. When "special-issue" securities are redeemed, interest is paid. In fact, the principal amount of special issues redeemed, plus the corresponding interest, is just enough to cover an expenditure.

What were the amounts of securities bought and sold during recent years? The amount bought in 2011 was $1,015 billion, while the amount sold was $946 billion. See investment transactions for more detail and earlier years.

Why do some people describe the "special issue" securities held by the trust funds as worthless IOUs? What is SSA's reaction to this criticism? As stated above, money flowing into the trust funds is invested in U. S. Government securities. Because the government spends this borrowed cash, some people see the trust fund assets as an accumulation of securities that the government will be unable to make good on in the future. Without legislation to restore long-range solvency of the trust funds, redemption of long-term securities prior to maturity would be necessary.

Far from being "worthless IOUs," the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government.

Many options are being considered to restore long-range trust fund solvency. These options are being considered now, over 20 years in advance of the year the funds are likely to be exhausted. It is thus likely that legislation will be enacted to restore long-term solvency, making it unlikely that the trust funds' securities will need to be redeemed on a large scale prior to maturity. ..."

... and there is much, much more on the government websites, including details of how your S.S. benefit is computed.

I am so, so tired of all of the incorrect crap that floods the internet with regard to Social Security.
 
Quote from Ed Breen:

I am done with your obfuscation, this is just more. You are just playing games now. We have no more claim on SS assets then we have on our other taxes. They will means test and poof, those who paid the most will get nada.

Grow up and tell the truth. There is no there there, your claims are exposed as garbage. Try suing the IRS to collect your pay in. You have agreed to all the substantive points, now you are just making a fool of yourself.
More...

See, I was right! You weren't done.:)
 
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