Proof of how insane Bush is (Social Security)....

... all I've been reading about this week is the decline of the dollar and how the Federal Deficit is making it harder and harder to round up foreign loans to keep the whole thing going, and now this:

Bush's Social Security Plan Is Said to Require Vast Borrowing:

http://nytimes.com/2004/11/28/politics/28secure.html?hp&ex=1101704400&en=cd5a720c6da1c654&ei=5094&partner=homepage

<snip>
Proponents say the necessary amount of borrowing could vary widely, from hundreds of billions to trillions of dollars over a decade, depending on how much money people are permitted to contribute to the accounts and whether the changes to Social Security include benefit cuts and tax increases.

Borrowing by the government could be necessary to establish the personal accounts because of the way Social Security pays for benefits. Under the current system, the payroll tax levied on workers goes to benefits for people who are already retired. Personal accounts would be paid for out of the same pool of money; they would allow workers to divert a portion of their payroll taxes into accounts invested in mutual funds or other investments.

The money going into the accounts would therefore no longer be available to pay benefits to current retirees. The shortfall would have to be made up somehow to preserve benefits for people who are already retired during the transition from one system to the other, and by nearly all estimates there is no way to make it up without relying at least in part on government borrowing.
</snip>


I mean, that idiot and 'fiscal conservative' has actually found a way to make Social Security even more expensive.

idiot Bush voters

'The Great Unraveling' is proving itself. We are coming unravelled, as exepected.

His reform is to get the money from SS into private investor hands, bottom line. SS is not a retiremet plan it is a supplement and insurance program which has proven efficient and effective. People already have access to IRA and other retirement schemes so what is really going on?

That the end times are upon us and money wont matter soon anyway

It's really quite dangerous to have a man like that in office

.... I think that he can sell things like this and environmental destruction to his base based on their belief that the Rapture is comin' any day now.

so as to save SS from a crisis that does not exist today - as there will only be a problem of at most a "full benefit age" change from Reagan's 67 to age 70 so as to pay about 30% less in benefits at age 62 for those that retire after the year 2042.

He is totally concerned about a crisis that is nearly four decades away in certain scenarios. Yet, he never planned a year ahead when invading Iraq and it's outcome!! Stupid, confused priorities or outright manipulations for his cronies.

(A sure fire way to become wealthy)-Then why does not the Government just go ahead and invest the Social Security funds in the market? Of course they would be required to insure that loses would be covered.

These people do not have the courage of their convictions.

Go ahead you young people invest your mandatory withholding funds. You can trust Uncle Sam and the Brokers. You young people thinking so do not make any sense to me either.

180

and replace it with one of serfs and vassals, where all the wealth is in the hands of very few.

Notice that Grovel Norquist has recently been on TV a lot? This has been his goal for some time, and it appears that he is getting up there with KKKarl Rove in influence.

The "ownership society" is so completely transparent. They want to own everything - us included.

.. "yep, they've got four years to turn us into slaves."

I think he got that one.

The SS fund has been in surplus every year since 1983. This past year it was $168 billion in surplus and Bush and the Congress borrowed and spent every penny of it. If they had not spent it, there would be well over $1 trillion dollars in the trust fund.

I know this sounds like a bizarre accounting trick, but the fact that the federal government borrowed the SS fund does not mean it is gone. Hence the trillion or so is still there.

In other words, as the ss fund accumulates these surpluses for the retirement of the baby boomers, it has to invest in something to save that fund money and earn some interest. So, it basically invests in treasury bills, just like rich people and money market funds. Instead of having trillions in cash, it has trillions in IOUs.

The big question is, if the government is borrowing from itself, why doesn't it just directly spend ss surplus as part of the federal revenue? It's because it needs to keep track of payroll taxes vs. income taxes. In the future, when it is time to "pay back" the ss fund, it will do so by raising income tax revenue rather than raising payroll taxes. By contrast, it has raised payroll tax revenue today to create the fund, rather than income tax revenue.

Sounds like a scam, but it is only halfway a scam.

the $trillion dollars will be needed by the retirees, right ? And when it is needed, where will the government get it? Will they print it? Won't that cause massive inflation? Yes, we have heard, "we owe it to ourselves" but does that mean we don't have to pay it back? Is there no negative to spending all of the SS fund?

Just as the government routinely pays back money it borrows represented by T-bills, it will pay back T-bills held by the SS fund, as they mature. So yes, they do have to pay it back. They can't really differentiate between a T-bill held by the SS fund and a T-bill held by Citibank. The benefit of this to the SS fund is that it actually will earn interest, rather than just sit in a bank vault. Hence they should not have to print money.

But the underlying reality of what will be happening is that revenue coming in under the income tax will be payed out to the SS fund, which in turn will replace money that otherwise would be coming in under payroll taxes (ie, the part of your paycheck deduction that says SSI). In other words, the entire point of this excersize is to prevent the payroll taxes from being cripplingly high. It also enables the government to tax rich people more, to pay for social security, because ordinarily SS taxes are capped.

The biggest threat to the system isn't that the government borrows it, but that the government has run gigantic deficits under bush. This means that when the time comes to raise income taxes to pay for the T-bills held by the SS fund, there will also be all these other T-bills that were issued to fund the deficit. And there may not be enough current revenue to pay all the t-bills as well as current costs, like military spending, education, etc.

In that event, which is a worse case scenario, yes, the govt would just print money. If it does that, then there will be very, very severe inflation, and the debt will effectively be shrunk because it will not be worth as much. The SS crisis will be solved, because the amount paid (promised) to retirees will also be worth much less, with the effect that retirees will starve. But at least the govt will seem to have paid its debts.

the bad move was when they tied SS to the budget.

That is why federal bonds are considered world wide the safest investment possible, against which all other investments are measured. The US has never once defaulted on an obligation.

You may be referring to the fact that it often pays back investors by recycling its debt by borrowing from others. But as long as it can do this it has a perfect credit rating. I believe that no other government has this record, except perhaps the Bank of England.

Under the republican crazies, however, there may be a first time. Newt toyed with the idea of missing a debt payment to force Clinton to bow to his budget/tax policies, and the Washington establishment, led by Greenspan took him aside and read him the riot act.

the whole point of the GOP is to never raise FIT taxes on the investing class.

when you starve it first. That's the goal, the total death of any social program that does'nt benefit the wealthy.

They have done a great job snowing a small majority of people who can't understand what's good for them, and creating a financial boom for the very wealthy. I mean if you can't figure out that Iraq is an illegal and immoral war, how the hell can these pinheads ever begin to understand this economy is not in their interests. They really believe that a huge tax cut is coming their way to save their pathetic lives.

Americans are so willing to give their SS money to corporations like Enron and Aruthur Anderson and some of the others who have bilked their customers. Enron and Arthur Anderson = Republican interests. Political thiefs.

I'm still waiting for California to get out on the street and demonstrate against the pillage of business and private citizens. Instead they voted for AS who partnered with Cheney.

So now we'll see how many of them want to give their SS money to a new Enron.

How vulnerable are the Treasury Notes backing our SS system now?

We are not and won't be borrowing....We'll be taking Social Security away for good and that's a whole different game..

If the American Public is so dumb as to allow this to happen, they deserve exactly what they get...

I still think this may be the Bush Adm's Waterloo...But it won't happen unless we make it happen..

To the barracks!

If as W has been suggesting, people under 35 will be able to invest and be the first group of personal account holders, the feds will have to borrow the equivalent of all the payroll tax revenue provided by under 35 year old workers until they turn 65 to finance the revenue it will not be getting from them to pay for retirees.

The stupidity of this makes the tax cuts and invasion of Iraq look like Einsteinian level thought by comparison. W's plans for SS border on -- no they actually are -- delusional and psychotic.