Social Security to start cashing Uncle Sam's IOUs

http://news.yahoo.com/s/ap/20100315/ap_on_bi_ge/[WORD TOO LONG]

http://tinyurl.com/ydydnhf

Social Security to start cashing Uncle Sam's IOUs

By STEPHEN OHLEMACHER, Associated Press Writer Stephen Ohlemacher, Associated Press Writer – 53 mins ago

PARKERSBURG, W.Va. – The retirement nest egg of an entire generation is stashed away in this small town along the Ohio River: $2.5 trillion in IOUs from the federal government, payable to the Social Security Administration.

It's time to start cashing them in.

For more than two decades, Social Security collected more money in payroll taxes than it paid out in benefits — billions more each year.

Not anymore. This year, for the first time since the 1980s, when Congress last overhauled Social Security, the retirement program is projected to pay out more in benefits than it collects in taxes — nearly $29 billion more.

Sounds like a good time to start tapping the nest egg. Too bad the federal government already spent that money over the years on other programs, preferring to borrow from Social Security rather than foreign creditors. In return, the Treasury Department issued a stack of IOUs — in the form of Treasury bonds — which are kept in a nondescript office building just down the street from Parkersburg's municipal offices.

Now the government will have to borrow even more money, much of it abroad, to start paying back the IOUs, and the timing couldn't be worse. The government is projected to post a record $1.5 trillion budget deficit this year, followed by trillion dollar deficits for years to come.

Social Security's shortfall will not affect current benefits. As long as the IOUs last, benefits will keep flowing. But experts say it is a warning sign that the program's finances are deteriorating. Social Security is projected to drain its trust funds by 2037 unless Congress acts, and there's concern that the looming crisis will lead to reduced benefits.

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I think that reduced benefits will become a reality.

string 'em up! 😠

the benefits are ALREADY reduced from what was paid in, apparently!

There is NO provision for the Social Security Administration to actual collect ANY of the money which was borrowed (actually stolen) from the taxpayers. The bill which allowed this money to be legally appropriated does not contain any provision for repayment. This has been one of my pet peeves for 20 years.
Apparently, in this country it is possible to pass a law which allows the government to take money and never repay the agancy which it took it from. Social security tax money has been used to run the government for over 40 years.
The last politician to discuss this was Al Gore when he suggested that the surplus which was there in 2000 be put into Social Security. Now the wolf is at the door and no one will admit responsibility.

Originally posted by zeeblebot
the benefits are ALREADY reduced from what was paid in, apparently!

Where did you come up with that?

I don't see what the big deal is; the government borrowed money from Social Security when SS was running a surplus and is now paying a small portion of it back now that SS is running a deficit because of the recession. If the money had been borrowed from investors, than the government's debt would be higher because of interest. What's the problem?

Originally posted by zeeblebot
Social Security's shortfall will not affect current benefits. As long as the IOUs last, benefits will keep flowing. But experts say it is a warning sign that the program's finances are deteriorating. Social Security is projected to drain its trust funds by 2037 unless Congress acts, and there's concern that the looming crisis will lead to reduced benefits.

...

so in 2037, Social Security suddenly stops paying out benefits. And a really BIG government program will come to the end. Conservatives everywhere will be cheering.

But I would imagine there might just a wee bit of pressure on Congress to act.

Originally posted by no1marauder
Where did you come up with that?

I don't see what the big deal is; the government borrowed money from Social Security when SS was running a surplus and is now paying a small portion of it back now that SS is running a deficit because of the recession. If the money had been borrowed from investors, than the government's debt would be higher because of interest. What's the problem?

that's bcoz you think the government

if what you're saying is true, the govt is not paying interest (or equitable interest, what the "investors" would have paid) to the SS fund.

that is stealing from the poor to pay for the rich.

and passing it over to their friends at Goldman Sachs! 😠

Thread 128087

I was awarded S.S. disability in 2009. So I'm getting my money back...what has me puzzled, is the one year wait for medicare.?
How do people make it for a year, with a disablity, and the costs that go along. I was lucky, and through COBRA I had portability. But even so, COBRA was 1000.00 a month for just myself.
So, I waffle back and forth on this Helath care plan,, mostly because I don't think we can afford it. secondly, I don't see much kicking in up front, too much is back loaded.
Anyone who thinks S.S. is there to retire with, needs to change their mindset. It was intended as a safety net, which appears to have holes large enough to fall through.

Originally posted by zeeblebot
that's bcoz you think the government

if what you're saying is true, the govt is not paying interest (or equitable interest, what the "investors" would have paid) to the SS fund.

that is stealing from the poor to pay for the rich.

That doesn't make any sense.

Originally posted by Hugh Glass
I was awarded S.S. disability in 2009. So I'm getting my money back...what has me puzzled, is the one year wait for medicare.?
How do people make it for a year, with a disablity, and the costs that go along. I was lucky, and through COBRA I had portability. But even so, COBRA was 1000.00 a month for just myself.
So, I waffle back and forth on this Helat ...[text shortened]... t. It was intended as a safety net, which appears to have holes large enough to fall through.

people say it's just a safety net, but i'm wondering if retirees 20, 30, or 40 years ago had any trouble treating it as a retirement fund.

Originally posted by no1marauder
That doesn't make any sense.

it makes perfect sense.

workers pay monies into a fund intended to benefit them upon retirement.

if the government is holding on to this money instead of paying it back out, it is harming the worker who put the money in there. especially when it splurges on nonproductive things, or counterproductive things like tobacco farm research.

if it were just a fair-weather fund, that'd be one thing, but apparently it's serious money.


http://en.wikipedia.org/wiki/Social_Security_(United_States)#Estimated_net_Social_Security_benefits_under_differing_circumstances

Estimated net Social Security benefits under differing circumstances

In 2004, Urban Institute economists C. Eugene Steuerle and Adam Carasso created a Web-based Social Security benefits calculator.[67] Using this calculator it is possible to estimate net Social Security benefits (i.e., estimated lifetime benefits minus estimated lifetime FICA taxes paid) for different types of recipients. In the book Democrats and Republicans - Rhetoric and Reality Joseph Fried used the calculator to create graphical depictions of the estimated net benefits of men and women who were at different wage levels, single and married (with stay-at-home spouses), and retiring in different years. These graphs vividly show that generalizations about Social Security benefits may be of little predictive value for any given worker, due to the wide disparity of net benefits for people at different income levels and in different demographic groups. For example, the graph below (Figure 168) shows the impact of wage level and retirement date on a male worker. As income goes up, net benefits get smaller - even negative.
Impact of gender and wage levels on net SS benefits

However, the impact is much greater for the future retiree (in 2045) than for the current retiree (2005). The male earning $95,000 per year and retiring in 2045 is estimated to lose over $200,000 by participating in the Social Security system.[68]

Originally posted by zeeblebot
people say it's just a safety net, but i'm wondering if retirees 20, 30, or 40 years ago had any trouble treating it as a retirement fund.

I'm sure they did look at it that way.
It's real hard to see the future, when youre young, and invincible. I had a hard time understanding a couple of things in my group.
1. Why they didn't take short term disabilty for themselves, at a real small cost.
2. Why the heck they were bragging about how much of an income tax return they got back
3. How they didn't see that the money they put in the 401K, was better than loaning it to Uncle sam, by paying extra tax, and getting it back?
4. why they didn't buy a life insurance plan, rather than just think the one at work would be fine, that usually goes away with the job.

Originally posted by zeeblebot
it makes perfect sense.

workers pay monies into a fund intended to benefit them upon retirement.

if the government is holding on to this money instead of paying it back out, it is harming the worker who put the money in there. especially when it splurges on nonproductive things, or counterproductive things like tobacco farm research.

if it were j ...[text shortened]... in 2045 is estimated to lose over $200,000 by participating in the Social Security system.[68]

It isn't harming the worker at all if the government replenishes the fund as needed. You still are talking gibberish.