[Nesster]

That is how I view it, that is also why I don't want to double down on a loser via higher FICA taxes.

However, 10-20 years down the line, you may wish you had... some of the total return projections I've seen from the CBO and some of the large institutional banks are not very encouraging.

[reeftool]

FICA taxes are going to go up. They will have to at some point to keep the system afloat. The biggest issue to be addressed is the constant raiding of the fund and replacing it with an IOU. That practice has to stop but politicians hate to see money just sitting there earning interest.

[Nesster]

"Raiding" is an inaccurate term, it's not like corporations that raided their employees' pension funds by stealing or underfunding relative to obligation.

As I quoted on the previous page:

Current year expenses are paid from current Social Security tax revenues. When revenues exceed expenditures, as they have in most years, the excess is invested in special series, non-marketable U.S. Government bonds, thus the Social Security Trust Fund indirectly finances the federal government's general purpose deficit spending. In 2007, the cumulative excess of Social Security taxes and interest received over benefits paid out stood at $2.2 trillion.[74] The Trust Fund is regarded by some as an accounting trick which holds no economic significance. Others argue that it has specific legal significance because the Treasury securities it holds are backed by the "full faith and credit" of the U.S. government, which has an obligation to repay its debt.

In other words, the excess funds are invested in non-negotiable government bonds, and the government pays interest. So yes, the government 'borrows' the excess money, and politicians use this 'money' to monkey with the budget numbers... The money sits there earning interest, but WE pay the interest

[mikemike]

In other words, the excess funds are invested in non-negotiable government bonds, and the government pays interest. So yes, the government 'borrows' the excess money, and politicians use this 'money' to monkey with the budget numbers... The money sits there earning interest, but WE pay the interest

So in other words, at some point in the near future when the FICA taxes are less than Social Security benefits being paid out, the Social Security program will stop buying gov't bonds and start cashing them in for the principal.

At that point the federal government will have to either:
1) refinance the debt by borrowing from the chinese,
2) repay the principal out of general tax revenue, or
3) print the money.

Consequences:
1) Financing via foreign lenders just kicks the can down the road anyway
2) Repaying the principal from general tax revenue, increases the rate of transfer of income from Gen X, Y, and Millennials to baby boomers to FICA + whatever percentage of income taxes are used to repay and service debt
3) Printing money would lead to higher inflation, higher COLAs, and hurt both those still working and seniors who rely on other sources of fixed income

Who gets screwed:
1) Everyone born after 2000 as their huge tax burden is sent overseas
2) Everyone born after 1975 as their huge tax burden is sent to their parents and grandparents
3) Everyone still breathing circa 2020 as inflation accelerates

[Nesster]

Good analysis - we can say the same thing about the Bush tax cuts, the two Bush wars, and all other unfunded expenditure or revenue reduction that's been enacted.

This is why the Republican spend machine has been so much worse than the Democrat equivalent - at least the Dems bother to figure out in theory how something gets paid for (another matter is whether or not their assumptions come true).

This is also why controlling medical costs is unequivocally the biggest problem we have: the cost projections for medicaid etc dwarf social security down the road. All those boomers will be sick for a heck of a long time... Thus the priority of medical insurance reform that has a demonstrable chance of controlling costs in the future.

This is why the Bush tax cuts are nice to have but immoral towards the list you have of who gets screwed. Oh, who doesn't get screwed: the very rich, or at least the screwing won't be felt so much...

[GeneV]

Good analysis - we can say the same thing about the Bush tax cuts, the two Bush wars, and all other unfunded expenditure or revenue reduction that's been enacted.

This is why the Republican spend machine has been so much worse than the Democrat equivalent - at least the Dems bother to figure out in theory how something gets paid for (another matter is whether or not their assumptions come true).

This is also why controlling medical costs is unequivocally the biggest problem we have: the cost projections for medicaid etc dwarf social security down the road. All those boomers will be sick for a heck of a long time... Thus the priority of medical insurance reform that has a demonstrable chance of controlling costs in the future.

This is why the Bush tax cuts are nice to have but immoral towards the list you have of who gets screwed. Oh, who doesn't get screwed: the very rich, or at least the screwing won't be felt so much...

This particular solution was from a bipartisan commission whose result was supported by both Ronald Reagan and the congress.

[johnmflores]

So, do you think privatizing it will be any better? Specifically how would it be better?

This is what gets me - Conservatives go to church on Sunday and then fight to dismantle compassionate social programs on Monday....

[Parallax]

This is what gets me - Conservatives go to church on Sunday and then fight to dismantle compassionate social programs on Monday....

What gets me is that liberals think that if one person has $20.00 in his pocket, and another only has $10.00 that it isn't fair and the gummint should take $5.00 from one and give it to the other to even thing out.

[Capslock118]

What gets me is that liberals think that if one person has $20.00 in his pocket, and another only has $10.00 that it isn't fair and the gummint should take $5.00 from one and give it to the other to even thing out.

That's not really a fair judgement as it lacks context.

If I, Person A, had $20 and you, Person B, had $10, and we both need that money to last 1 week, and it cost $15 to purchase 1 weeks worth of food, then I would gladly give you $5 so that both of us can carry on the week without starving.....not wanting you to starve makes me a crazy liberal, I know .

That kind of highlights the point of social programs like:

-social security (our elders can relax with some dignity at the end of their lives, rather than working until the end) (and how many folks do you know that had to go back to work because of the stock market crash of '08? I know a couple),
-food stamps (a lot people just have it that bad, and even more since '08)
....
-libraries (I can afford to buy my books, buy can everyone?),
-public schools (everyone should have an opportunity for education),
-parks (everyone should have an opportunity to escape, no matter how poor or rich one is)...

[raz-0]

Roubini Global Economics - The U.S. Municipal Bond Market


And there are issues with the muni bond market.


Muni Bond Market May Be Next Phase Of Financial Crisis - Daily Brief - Portfolio.com



The idea that the Trust Fund has been ‘raided’ is debatable:


Social Security (United States) - Wikipedia, the free encyclopedia)


Note that the cumulative excess thus invested is $2.2 trillion. This amount is nearly the total size of the municpal bond market. Note further that purchasing these bonds will have a few other effects: due to demand, will states now be tempted to issue more debt? And in bad economies, state revenues decline and there's default risk in munis. Who steps in to back the states up? The Federal government, of course.

Well other than the size of the market being an issue if that design actually improved anything in terms of expense and revenue, your gripe is the worst case scenario is that the federal government has to service the payments on money borrowed from the SS trust fund? Which is different from the scheme currently in place how?

[Parallax]

That's not really a fair judgement as it lacks context.

.........

You're right, it isn't fair on it's own; but it was made in response to a sweeping indictment of all conservatives for being hypocrites. In that context it was as fair as what it was in response to.

[Capslock118]

In that context it was as fair as what it was in response to.

Fair and balanced

[Parallax]

Fair and balanced

[mikemike]

That's not really a fair judgement as it lacks context.

If I, Person A, had $20 and you, Person B, had $10, and we both need that money to last 1 week, and it cost $15 to purchase 1 weeks worth of food, then I would gladly give you $5 so that both of us can carry on the week without starving.....not wanting you to starve makes me a crazy liberal, I know .

That kind of highlights the point of social programs like:

-social security (our elders can relax with some dignity at the end of their lives, rather than working until the end) (and how many folks do you know that had to go back to work because of the stock market crash of '08? I know a couple),
-food stamps (a lot people just have it that bad, and even more since '08)
....
-libraries (I can afford to buy my books, buy can everyone?),
-public schools (everyone should have an opportunity for education),
-parks (everyone should have an opportunity to escape, no matter how poor or rich one is)...

The thing is that its not that it costs $15/week to eat, it costs $5/week but people have already committed themselves to other vapid consumerism before they go to the grocery store

But food, housing, and healthcare is only the beginning for the government's compassion when it comes to OPM...
Home Phones: Lifeline Across America - Consumers
Cell Phones: How to Benefit from the Government's Free Cell Phone Program | eHow.com
Televisions: NTIA: Digital TV Transition and Public Safety
Home Improvements: Weatherization and Intergovernmental Program: Weatherization Assistance Program
New Cars: CARS.gov - Car Allowance Rebate System - Home - Formerly Referred to as “Cash for Clunkers”
New Appliances: Energy Savers: Rebates for ENERGY STAR Appliances

Then you have to take care supplement the industrial farming complex to distort the market for food by pushing unhealthy food.
Watch Food Inc. Official Food, Inc. Movie Site - Hungry For Change?
Farm Income Data Debunks Subsidy Myths | Environmental Working Group

By overpaid bureaucrats (More federal workers' pay tops $150,000 - USATODAY.com) in a government that is so large that the right hand which is fighting obesity doesn't even realize that the left hand is pushing unhealthy amounts of cheese (http://www.nytimes.com/2010/11/07/us/07fat.html]NYT Article on Dairy Management).

Then once everyone is fattened up and develops diabetes and heart disease off of subsidized junk food, we need to provide health care.

The ineptitude is exhausting and it has nothing to do with being compassionate. The compassionate thing to do is not interfere with peoples lives beyond what is absolutely necessary and to be consistent in policies.

While the federal government provides some funding and guidance for stuff like public schools and libraries those are mostly state and locally run institutions so I am not even going to address those. But as to people's access to national parks can you please explain to me how someone living in a section 8 housing project, relying on food stamps, and public transportation can travel to a remotely located national park to escape?

[GeneV]

In the case of social security, though, this bit about conservative or liberal attachment to one's money really doesn't apply. In 1983, the taxes on people making less were raised on the promise that the extra funds would make the program solvent. The surplus money was then used for other things, including part of the borrowing to fund a tax cut for the person with $20. Now, the person with $20 does not want to pay it back. To the exent there was a transfer, it was from the person making $10 to the person making $20.