Comments on: Social Security is not going broke http://blogs.reuters.com/david-cay-johnston/2012/05/04/social-security-is-not-going-broke/ Sat, 23 Mar 2013 13:49:31 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Allstreets http://blogs.reuters.com/david-cay-johnston/2012/05/04/social-security-is-not-going-broke/#comment-1686 Sun, 09 Dec 2012 01:13:17 +0000 http://blogs.reuters.com/david-cay-johnston/?p=366#comment-1686 Thanks, David, for putting historical context and truth to this debate. You might have also mentioned that many of the lawmakers who cry wolf about SS and want to “privatize” it now, presumably to save it, are the same who could have done, but failed to do, something long ago to protect it, such as putting the trust fund into marketable US Treasuries in a “lock box” instead of raiding it for the general budget. The average interest rate would also have been higher than what was given to the nonmarketable bonds in the trust. Last, but not least, if you’ve read the Ryan plan to privatize it, you’ll find that the plan would actually create a giant government investment operation to regularly invest all the tax receipts on Wall Street that would be the worlds greatest opportunity for graft, insider trading and front running. Curiously, most of the advocates believe government can’t do anything right, and we need to scale it back whereever possible.

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By: PotomacOracle http://blogs.reuters.com/david-cay-johnston/2012/05/04/social-security-is-not-going-broke/#comment-1684 Thu, 15 Nov 2012 21:19:10 +0000 http://blogs.reuters.com/david-cay-johnston/?p=366#comment-1684 First, the SS Trust Fund is a bookkeeping device. Treasury issues all the checks from the GFRA, and if the SS Trust Fund were bone dry empty the checks would go out simply because the Federal Government, in its sovereign capacity, can pay any obligation denominated in dollars. Treasury checks never bounce.

What Mr. Johnson conflates is the bookkeeping function with the actual payout function. Look what’s happening right now. All Federal government expenditures whether Trust Fund or not are payed from the GFRA. Technically, the GFRA is paying the 2% of the FICA suspended in 2011. This fiction, of the SS Trust Fund as paymaster, is compounded by the fiction that tax receipts are used to pay for Federal Expenditures.

They are not per se used to spend. They are in fact a tool used to manage, among other things, inflation, not to pay bills.

Why then would an autonomous Federal government issuing its own currency need to have income/revenue to spend. It simply issues more of its fiat currency. When it taxes it reduces consumption, demand, income. But, it also guards against inflation since it can issue all the fiat currency for which there is an appropriation.

So there is no operational threat of insolvency for the Federal government or any of its programs. Only political, self imposed constraints prevent funding for to meet the nation’s obligations. Self imposed constraints like the debt ceiling, prohibition against Treasury overdraft authority, Congress’s failure to legislate and/or appropriate,

So, Mr. Johnson, we can’t run out of money, can’t go broke operationally, and can afford to pay any obligation denominated in dollars. All the other stuff about Trust Funds and such are distractions. Social Security doesn’t need fixing, not now or ever.

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By: fred123456 http://blogs.reuters.com/david-cay-johnston/2012/05/04/social-security-is-not-going-broke/#comment-1681 Sat, 27 Oct 2012 21:38:58 +0000 http://blogs.reuters.com/david-cay-johnston/?p=366#comment-1681 According to factcheck.org, SS now collects less than it pays in benefits. The surplus is only on paper. During the years that it collected more than it paid, the excess money was used to purchase government debt. My understanding is that the government owes SS about 5 trillion of the 16 trillion dollar national debt. Yes it is true that the government pays interest on that debt. Of course those interest payments come form somewhere, either taxes or more borrowing. The question now that SS no longer collects more than it pays out and the government will have to start paying that debt back so SS can meet its benefit obligations, where will the government get the money. There are only two choices: borrow it or raise revenue. Borrowing it is like like using one credit card to pay another. Raising revenue through tax increases forces tax payers to pay back SS the money we contributed that the government borrowed. In other words, we are paying twice.

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By: SamHill http://blogs.reuters.com/david-cay-johnston/2012/05/04/social-security-is-not-going-broke/#comment-1680 Wed, 24 Oct 2012 07:26:48 +0000 http://blogs.reuters.com/david-cay-johnston/?p=366#comment-1680 Social security will eventually go broke as all ponzi schemes do.

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By: UselessEater http://blogs.reuters.com/david-cay-johnston/2012/05/04/social-security-is-not-going-broke/#comment-1626 Sun, 12 Aug 2012 18:39:13 +0000 http://blogs.reuters.com/david-cay-johnston/?p=366#comment-1626 Can you comment on this new article I find it flawed. Thanks

FACT CHECK: Social Security adds to budget deficit

http://www.twincities.com/national/ci_21 296385/fact-check-social-security-adds-b udget-deficit

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By: FixSSNow http://blogs.reuters.com/david-cay-johnston/2012/05/04/social-security-is-not-going-broke/#comment-1492 Sat, 23 Jun 2012 00:22:07 +0000 http://blogs.reuters.com/david-cay-johnston/?p=366#comment-1492 David, I would have to question the accuracy of this statement

“One effect was to finance tax cuts for those at the top, whose highest tax rate fell during the Reagan years from 70 percent to 28 percent, and for corporations, whose rate fell from 50 percent of profits to 35 percent. Those with less subsidized those with more.”

Reagan cut taxes in 1981. At that time, Social Security’s Trust Fund was in negative cashflow. Social Security’s Trust Fund financed exactly zero of Reagan’s 1981 tax cut. The 1986 tax package was revenue neutral so again, Social Security didn’t finance any of the tax cuts. Social Security didn’t generate really much cash flow until Reagan’s last year.

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By: Carllehb http://blogs.reuters.com/david-cay-johnston/2012/05/04/social-security-is-not-going-broke/#comment-1433 Fri, 08 Jun 2012 16:30:08 +0000 http://blogs.reuters.com/david-cay-johnston/?p=366#comment-1433 $200,000???? OMG with Police sargeants getting paid over $250,000 in San Jose let’s get real. The ceiling should be more like $750,000.

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By: QuidProQuo http://blogs.reuters.com/david-cay-johnston/2012/05/04/social-security-is-not-going-broke/#comment-1429 Fri, 08 Jun 2012 14:26:15 +0000 http://blogs.reuters.com/david-cay-johnston/?p=366#comment-1429 I like positive articles that aren’t all doom and gloom. But I will say I do have some concern about where Social security will stand in 20 years based on trends in employment in the USA. I want the younger generation to succeed and prosper so they will pay into the system that will be helping my social security payments remain on solid ground. Looking at the demographics of what our workers will be like in 20 years, I hope things do a 360 otherwise we are going to be faced with low paid, service worker employees funding our pensions!

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By: WealthGoddess http://blogs.reuters.com/david-cay-johnston/2012/05/04/social-security-is-not-going-broke/#comment-1376 Wed, 30 May 2012 19:03:14 +0000 http://blogs.reuters.com/david-cay-johnston/?p=366#comment-1376 I am late to this discussion but after 4 decades working with retired clients, am fascinated that no one sees the obvious problems under the current system:

1) Double taxation of Soc Sec benefits..we have the computer technology to trace the precise payments into the pool.. they have already been taxed. No SS payments should be taxed until they are paid out.

2) More critically, ditch the antiquated and deeply unfair system that pays high Spousal Benefits when nothing has been contributed for same. If a spouse wants their wife/husband to have their benefits, then the SS payment should be reduced ..just as every other pension system demands.

In this day asking me as a single parent to pay Anne Romneys benefit is obscene.

I would like to see the projections based on both scenarios How do you think we can begin this conversation in the country?

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By: zotdoc http://blogs.reuters.com/david-cay-johnston/2012/05/04/social-security-is-not-going-broke/#comment-1375 Tue, 29 May 2012 14:03:10 +0000 http://blogs.reuters.com/david-cay-johnston/?p=366#comment-1375 I’m sure we will all get the dollars we are supposed to get, but I worry that the dollars won’t buy much when I retire. The universal complaint I hear from my elderly patients is when they were contributing it sounded like they would have enogh, but now prices have all increased and the benefits won’t cover things.

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