[jogiba]

Pat Robertson: Raising Retirement Age To 72 Won't "Hurt Anybody Because People Really Like To Work" | Video | Media Matters for America

[LeDave]

I am 22 and have a long ways to go before I hit 72 or hell even 60. But I sure as hell don't want to work myself to death after 60. By the time most people hit 60, they already have a ton of health problems... Work? Work for what? They've already worked most their lives to build what today has become. What is this guy thinking? Sure he looks older than 72 and is still working, but not everybody makes the money he does for the healthcare he receives.

[Rondec]

Well, not sure what needs to be done to fix social security. Certainly if you want to retire before age 70, you had better be saving on your own now, or it won't happen.

[Parallax]

Well, not sure what needs to be done to fix social security.

Raising the retirement age to 72 would help "fix" it. More people would die before becoming eligible. That''s a big part of the plan, along with having people contribute longer, whenever the retirement age is raised.

[jeffkrol]

Well, not sure what needs to be done to fix social security. Certainly if you want to retire before age 70, you had better be saving on your own now, or it won't happen.

You obviously haven't been paying attention.........
MAYBE you will pay attention to Forbes...............

Why Social Security Cannot Go Bankrupt - Forbes

It is a logical impossibility for Social Security to go bankrupt. We can voluntarily choose to suspend or eliminate the program, but it could never fail because it “ran out of money.” This belief is the result of a common error: conceptualizing Social Security from the micro (individual) rather than the macro (economy-wide) perspective. It’s not a pension fund into which you put your money when you are young and from which you draw when you are old. It’s an immediate transfer from workers today to retirees today. That’s what it has always been and that’s what it has to be–there is no other possible way for it to work.

"sigh"............. only your "masters" want you to work forever.. more meat in the grinder...............

We are fooling ourselves if we think that taking money from the trust fund is giving us a free lunch. If there are only ten fish, there are only ten fish. Nothing other than changing productivity can affect that. The trust fund is worth having as a buffer, but it has zero to do with the feasibility of the system. If it runs out tomorrow, we can still have Social Security because we still have ten fish.

Incidentally, there appears to be every indication that productivity increases should be sufficient for the Baby Boomers to retire AND allow the rest of us enjoy even higher standards of living (assuming the compression of wages ends). That’s good news. In fact, it’s the only news that’s important.

In closing, I’m not telling you whether you should be for or against Social Security, but the argument that it is going bankrupt is a non-starter. It is much ado about nothing

.

now this is not TOTALLY accurate either but it is a start to wisdom, unlike the "path to stupidity"...............

[Rondec]

You obviously haven't been paying attention.........
MAYBE you will pay attention to Forbes...............

Why Social Security Cannot Go Bankrupt - Forbes



"sigh"............. only your "masters" want you to work forever.. more meat in the grinder...............

.

now this is not TOTALLY accurate either but it is a start to wisdom, unlike the "path to stupidity"...............

I understand social security entirely. It is a "program" initially designed to increase tax revenues to the government by creating an entitlement that collected a lot of tax money, but paid out very little in real funds. Life expectancy in the 1930s was in the late 50s for men and early 60s for women. You create a program that covers people at age 65 and you have a program that pays out little and increases revenue.

Everything taken in by social security is "loaned back" to the government in the form of government bonds. That money doesn't exist and is paid back out of current revenues. When the number of people under retirement age compared to those over retirement age shrinks, the transfer of funds becomes more difficult to maintain and either benefits need to shrink or, the retirement age needs to rise.

I think it is realistic for current young people to plan ahead and not depend on social security, certainly not a current pay out levels and save up for their own retirement apart from this.

[jeffkrol]

I understand social security entirely. It is a "program" initially designed to increase tax revenues to the government by creating an entitlement that collected a lot of tax money, but paid out very little in real funds. Life expectancy in the 1930s was in the late 50s for men and early 60s for women. You create a program that covers people at age 65 and you have a program that pays out little and increases revenue.

Everything taken in by social security is "loaned back" to the government in the form of government bonds. That money doesn't exist and is paid back out of current revenues. When the number of people under retirement age compared to those over retirement age shrinks, the transfer of funds becomes more difficult to maintain and either benefits need to shrink or, the retirement age needs to rise.

I think it is realistic for current young people to plan ahead and not depend on social security, certainly not a current pay out levels and save up for their own retirement apart from this.

Education lesson 2..
Soc. Sec taxes are completely unnecessary.. you have been scammed..
Fed. Gov can't "go broke" no matter how much it spends (It can inflate a currency and possibly devalue it but it can NEVER run out odf what it CREATES in the first place)

If FICA taxes were eliminated tomorrow, Social Security would not go away, it would become part of our normal budget (as most other programs are) and the talk of a “bankrupt” system would disappear (note, talk of a “bankrupt” nation would not – but that’s a separate topic). One can argue the long term effects of having Social Security on budget or off as well as the wisdom of printing money to fund these programs – but those are entirely different arguments than saying that Social Security is going bankrupt or is revenue constrained – it is not and cannot be, it is only constrained by politics.

Why Can Social Security Go Bankrupt, But The Department of Defense Can’t? | The Meridian Blog

but for now, please, let’s stop the fear mongering that some how the United States, who is the monopoly issuer of the Dollar is somehow revenue constrained and unable to meet some future obligation – it simply isn’t true.

[jogiba]

Raising the retirement age to 72 would help "fix" it. More people would die before becoming eligible. That''s a big part of the plan, along with having people contribute longer, whenever the retirement age is raised.

It has to go to 72 to pay for Romney's tax cut to the rich.

[jeffkrol]

I understand social security entirely.

but you don't understand Federal fiat money............therefore you really don't understand social security........

Can't help you if you are unwilling to learn the basics.....

the United States, who is the monopoly issuer of the Dollar is somehow revenue constrained and unable to meet some future obligation – it simply isn’t true.

People are unwilling to accept even the most basic facts when it is contrary to what they see (their checkbook) and what they have been told (decades of propaganda) and the fact we weren't "free" to money print" until 1972 when the US CHANGED its ENTIRE financial system......(off "specie" completely)

"Reagan proved deficits don't matter" .. Dick Cheney.............

As the sun revolves around the earth another day.............

no matter how you look at it Social Security can never go broke.. Unless "we" want it too.. a very inconvenient truth for many...........

[Rondec]

but you don't understand Federal fiat money............therefore you really don't understand social security........

Can't help you if you are unwilling to learn the basics.....


People are unwilling to accept even the most basic facts when it is contrary to what they see (their checkbook) and what they have been told (decades of propaganda)

"Reagan proved deficits don't matter" .. Dick Cheney.............

As the sun revolves around the earth another day.............

Are you repetitious on purpose, or can you just not think of anything new to say? I don't buy MMT (which you do) and so we are at logger heads in every discussion. Unfortunately, it seems like most of the world is in my camp rather than yours.

[jeffkrol]

Are you repetitious on purpose, or can you just not think of anything new to say? I don't buy MMT (which you do) and so we are at logger heads in every discussion. Unfortunately, it seems like most of the world is in my camp rather than yours.

You don't have to accept MMT to understand how our system actually works.. Fed Gov. can't go "broke" period.. MMT or not Therefore Soc. Sec "cant go broke".. That you don't accept the real world is not my problem.


And the sun goes around the earth.. get it???

Relying on "populist beliefs" is not very scientific now is it...
Even Ron Paul understands and agrees w/ my point BUT he diverges into "moral hazard" and currency debasement. He well understands the US can't go broke.. ever....

for and against what I said but at least it correctly frames the arguement (btw he is only partially correct):
http://www.dailyreckoning.com.au/the-make-believe-world-of-economists/2012/08/21/

But that is just a part of our story. By the late 20th century, economists — especially leading economists — had ceased being useful. They had become a nuisance. They closed their eyes to what an economy actually is...and to how it works...and focused on their own world — a make-believe world of numbers and theories, with little connection to the world that most people lived in.
And now in the 21st century, they are up to mischief. And part of the mischief involves not noticing things that are right in front of their noses.
The most-important single feature of modern economies is growth. Without it, neither businesses, households nor governments can pay their bills. Without it, pension funds...private and public...go broke. Without it, the stock market is doomed....and bonds get crushed when debtors can't pay.
In fact, without growth, every government in the economically developed world faces catastrophe. Its revenues stagnate while its costs — largely driven by open-ended health and pension obligations to aging populations — continue to expand.
By the year 2012, in fact, every major government in the developed world is already in trouble. Some more than others, depending on their ability to borrow money... or to print it.
The US, Japan and Britain are still technically "solvent" because they control the currency in which their debts are calibrated. They can always print money to pay their debts; creditors do not have to worry about a simple default.

Greece, Italy, Spain, Ireland, Illinois and California, on the other hand, are already keeping lenders up at night worrying that they will not and cannot pay their bills

.

funny (and complettely CONTRARY to your check book world) from a bond world financial perspective.............

Even on these terms, Japan and Britain stand out, each with total debt of more than 500% of GDP.

They are happy to take no real flesh at all. The U.K. 10-year bond yielded all of 1.68% in mid-August 2012, well below the rate of consumer price increases. As for the Japanese equivalent, investors were content with 0.8%. If there were any consumer price inflation at all, investors would lose money.

W/ those financials if you were a company your bond rates would be astronomical...................ask yourself what the difference is............

http://www.dailyreckoning.com.au/three-out-of-four-economists-are-wrong/2010/08/02/

The thing economists said was nearly impossible actually happened last week. Yields on 2-year US debt hit a record low just as the Treasury prepares for another record-setting deficit. The supply of Treasury debt and the demand for it hit new highs - together. Stranger things have happened. But the strangeness of this event has caused a furor loquendi amongst economists. Usually, there are only two major ways of misunderstanding current events. Now there are at least four of them.

[jeffkrol]

A bit more detail.. Link it to Soc. Sec any way you want (actually to solve the Soc sec "trust fund issue just roll it into the DOD "trust fund".. )

The USA has an institutional arrangement in which it is a currency issuer. That is, while the Treasury is an operational currency user (meaning it must always have funds in its account at the Fed before it can spend those funds) it is always able to harness the banks to procure funds. This is achieved through bond auctions in which the dealers are required to bid. The NY Fed explains:

Primary dealers are also required to participate in all auctions of U.S. government debt and to make reasonable markets for the New York Fed when it transacts on behalf of its foreign official account-holders.

So there’s never a concern about auctions failing in the USA. That is, the Treasury is a currency user, but the government as a whole can be seen as a currency issuer by institutional design because of this implicit funding guarantee. And even in a worst case scenario (let’s say a hyperinflation in which the dealers boycott auctions as bond prices collapse) the Treasury can always use the Fed as funding agent (but don’t mistake the current cases of QE as “debt monetization”!). So the key here is that there’s no solvency constraint as in, “running out of money”. Greece doesn’t have this arrangement. In fact, since the ECB is essentially a foreign central bank there is a real solvency constraint. So banks and private investors have become hesitant to buy Greek bonds because of this flawed institutional arrangement and the lack of an implicit guarantee. It’s apples and oranges compared to the USA.

http://pragcap.com/why-the-usa-isnt-going-bankrupt
2 cherry picked comments..

Right. But loss of purchasing power is very different from solvency. We’ve had inflation since the day the Fed came into existence. And yet our living standards have soared through the roof. The true constraint for an autonomous currency issuer is always inflation. Not solvency. So next time you hear a politicians talking about our Greek moment or our need to cut spending because we might go bankrupt, remember that they have no clue what they’re talking about.

n

ot just politicians but everyone in the mainstream – the media, most of the public, most economists and so-called pundits and financial gurus. John Mauldin, Kyle Bass, Peter Schiff and the list goes on… some of these guys have built their careers on being right (or claiming to have been right) about the housing bubble collapsing, and now rant on and on about US Gov debt being the same as private sector debt, and since one bubble collapsed, the other will too. The media and public eat that stuff up which makes it impossible to get most people to even entertain a conversation about this topic without them thinking you’re nuts. Reading pragcap is like therapy after frustrating conversations elsewhere where clearly no one wants to even listen.

[Nesster]

that there’s no solvency constraint as in, “running out of money”.

Yeah, but as well you know, individuals can and do run out of money.
At the same time, Large Multinationals will be facing Wage Inflation in current off-shore locations, as well as Trasnsport Cost of Goods will increase due to upcoming shortages of fossil fuels.
And we know the US demographics are getting skewed by the Baby Boom reaching retirement age.
Further, we know that a large percentage of wannabe retirees are planning to survive solely on mooching from the paychecks of their kids and grandkids - via Social Security and other transfer programs.

Therefore, means-testing the retirement age will be a solution to the problem: the more money you've saved by yourself the earlier you may retire. Those who have not saved a penny will be tax-advantageously hired by said Large Corporations to assemble their widgets at low cost - yet the low wages are a net plus to this group of retirees, as they would be dependent on social security alone otherwise. Outmoded industrial buildings and army barracks can be used to house this population, where compliance is easily enforced.

[jeffkrol]

Yeah, but as well you know, individuals can and do run out of money.
At the same time, Large Multinationals will be facing Wage Inflation in current off-shore locations, as well as Trasnsport Cost of Goods will increase due to upcoming shortages of fossil fuels.
And we know the US demographics are getting skewed by the Baby Boom reaching retirement age.
Further, we know that a large percentage of wannabe retirees are planning to survive solely on mooching from the paychecks of their kids and grandkids - via Social Security and other transfer programs.

Therefore, means-testing the retirement age will be a solution to the problem: the more money you've saved by yourself the earlier you may retire. Those who have not saved a penny will be tax-advantageously hired by said Large Corporations to assemble their widgets at low cost - yet the low wages are a net plus to this group of retirees, as they would be dependent on social security alone otherwise. Outmoded industrial buildings and army barracks can be used to house this population, where compliance is easily enforced.

And the corporation name... "Faux-con"

One more addendum:
An alternative to popular faith

Ask a debt hawk why he hates federal deficits and he will give you four main reasons:

1. Federal debt must be paid back by taxpayers. (But, because the federal government has the unlimited power to create the money to pay its bills, there is no need to ask taxpayers to do it.)

2. Federal debt adds to the government’s interest paying burden. (Again, interest is no burden to a entity having the unlimited ability to create money.)

3. Federal debt uses up lending funds that otherwise would go to private needs. (But, federal spending adds money to the economy, making more, not less, funds available for private lending.)

4. By increasing the money supply, federal deficits reduce the value of money, thereby causing inflation. Readers of this blog have seen the graph (below) which shows no relationship between federal deficits — even large federal deficits — and inflation. Note how the peaks and valleys of deficit growth do not match the peaks and valleys of inflation growth:

http://rodgermmitchell.wordpress.com/2010/04/06/more-thoughts-on-inflation/

[Nesster]

Federal debt uses up lending funds that otherwise would go to private needs

Theory there is, there's only so much money to be invested at any one time. If there's plenty of no-risk treasuries available, why would anyone buy a corporate bond? Therefore the spread between corporates and treasuries must be increasing in order that the corporates are competitive - because at some level of yield, the investor will be buying corporates over treasuries.

But reality says... hmmmm...

Treasury Debt and Corporate Bond Rates - The bond yield spread reflects a Treasury debt convenience yield for investors

The researchers believe that this negative correlation between the debt-to-GDP ratio and the corporate bond spread occurs because of variation in the “convenience yield” on Treasury securities. Investors value Treasury securities—which have convenience value—beyond the securities’ cash flows. When the stock of debt is low, the marginal convenience valuation of debt is high. Investors bid up the price of Treasuries relative to other securities, such as corporate bonds, causing the yield on Treasuries to fall further below corporate bond rate. This situation leads the bond spread to widen. The opposite applies when the stock of debt is high.

Brad DeLong: Record Interest Rate Spreads

Except for the credit crisis, there is little evidence that more treasuries (higher govt debt) adversely affects corporates.

Indeed, one driving reason for the credit bubble was that the yields of AAA corporates was so low - and Treasuries even lower, that the institutions were chasing yield - manufactured with the requisite Moody's and S&P ratings to fit their covenants - via mortgage derivatives.