Obama: All the money seniors have been paying into Social Security, is gone

[dogtowner]

You are kidding, right? You are trying to get a quick laugh, right?

You do realize that Republicans are trying to desstroy the credit standing of the USA, a credit standing that it has taken 230 years to build. And Republicans want to destroy it because... it gives them a power rush, I guess.

It really has nothing what so ever to do with anything else/.

Republicans listened to the citizens last November when they explained to DC that the problem was out of control spending. Even Obama's economic team say the spending is unsustainable. Yet he insists on more taxes to pay off special interests for another two years.

The party is long since over but a few drunks have yet to sober up.

 

[ProudLefty]

Republicans listened to the citizens last November when they explained to DC that the problem was out of control spending. Even Obama's economic team say the spending is unsustainable. Yet he insists on more taxes to pay off special interests for another two years.

The party is long since over but a few drunks have yet to sober up.

Name me one candidate who ran on out of control spending. Everyone of them ran on jobs, jobs, jobs. That was John Boehner's opening remarks on the first day of the 112th Congress.

 

[Stalin]

My understanding is that the funds have been repalced by a collection of IOUs - US treasury bonds - and the practice started with William Clinton.

Wait till you see what the Masters of the UNiverse have done with priivate pension plans.

Comrade Stalin

 

[ProudLefty]

My understanding is that the funds have been repalced by a collection of IOUs - US treasury bonds - and the practice started with William Clinton.

Wait till you see what the Masters of the UNiverse have done with priivate pension plans.

Comrade Stalin

Here are some FAQ questions:

1. What are the Social Security Trust Funds?
2. How are the trust funds invested?
3. What interest rate do the trust funds' assets earn?
4. What happens to the taxes that go into the trust funds?
5. If all the income is invested, how do benefits get paid each month?
6. What were the amounts of securities bought and sold during recent years?
7. Why do some people describe the "special issue" securities held by the trust funds as worthless IOUs? What is SSA's reaction to this criticism?
8. Can the Social Security Trust Funds remain solvent without making changes to the program?
9. Were the assets of the Social Security Trust Funds depleted in the past?

http://www.ssa.gov/oact/progdata/fundFAQ.html

FAQ 7 :... Far from being "worthless IOUs," the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government. ..."

Take 5 minutes and give it a read. I doubt it will comfort you, but perhaps it will let you take a few minutes and think about whether or not your party leaders are being truthful with you.

 

[Lagboltz]

FAQ 7 :... Far from being "worthless IOUs," the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government. ..."

One further fact that is not in the FAQ is,
"How much are the trust fund's assets worth?"
Ans: Around $2.6 trillion.

In principle that is enough to last 25 years, so there is no urgent to change it. In practice the government depends on a surplus of SS receipts because it has been taking the surplus and spending it. When the government says, "We are running out of SS money!" they are really saying, "We don't want to redeem any the $2.6 trillion securities because we would rather increase SS revenue so we can steal it for the general fund." They have been doing this since 1968.

 

[ProudLefty]

One further fact that is not in the FAQ is,
"How much are the trust fund's assets worth?"
Ans: Around $2.6 trillion.

In principle that is enough to last 25 years, so there is no urgent to change it. In practice the government depends on a surplus of SS receipts because it has been taking the surplus and spending it. When the government says, "We are running out of SS money!" they are really saying, "We don't want to redeem any the $2.6 trillion securities because we would rather increase SS revenue so we can steal it for the general fund." They have been doing this since 1968.

Good point!

In other words, the crisis wasn't caused by SS, Medicare, or Medicaid. It is a contrived crisis based on the actions of a \n irresponsible Congress and president during the 2000s.

It needs to be fixed, but why would we listen to the people who caused it to find a solution?

 

[Lagboltz]

Good point!

In other words, the crisis wasn't caused by SS, Medicare, or Medicaid. It is a contrived crisis based on the actions of a \n irresponsible Congress and president during the 2000s.

It needs to be fixed, but why would we listen to the people who caused it to find a solution?

Yes, and I would go further to say that it has been going on since 1968. Here is the problem as I see it, and this is what grinds me:

Before 2007, a person had to pay 6.2% of his full income to social security, if he were making less than the maximum taxable earnings of $97,500.

A person making $1,000,000 would only have to pay 6.2% of 97,500 which is = $6045. The percentage of his income is 6045/1000000 = .6%. The first thought is that it is fair that the millionaire pays one tenth the SS tax because what he will get back is relatively insignificant to him.

But the problem is that 90% of the lower wage earners have subsidized the rich because their contribution was put into the general fund for the rich to enjoy. Under this circumstance the rich should pay the full social security as the lower classes. That would make SS a flat tax.

Obama has lightened this unfairness as a part of the stimulus package, but the unfair highly recessive tax still exists.

 

[ProudLefty]

Yes, and I would go further to say that it has been going on since 1968. Here is the problem as I see it, and this is what grinds me:

Before 2007, a person had to pay 6.2% of his full income to social security, if he were making less than the maximum taxable earnings of $97,500.

A person making $1,000,000 would only have to pay 6.2% of 97,500 which is = $6045. The percentage of his income is 6045/1000000 = .6%. The first thought is that it is fair that the millionaire pays one tenth the SS tax because what he will get back is relatively insignificant to him.

But the problem is that 90% of the lower wage earners have subsidized the rich because their contribution was put into the general fund for the rich to enjoy. Under this circumstance the rich should pay the full social security as the lower classes. That would make SS a flat tax.

Obama has lightened this unfairness as a part of the stimulus package, but the unfair highly recessive tax still exists.

I have mixed emotions about the payroll cap. We pay in, and our benefits are based on the amounts we paid in, with the amount paid back being slightly more for high earners than for low earners. Its regressive, but I always felt it was fair. However, if the cap were lifted that would mean the millionaires, who have no need of it, would receive very large benefits. With the cap, their benefits are limited, as are their benefits.
All in all, I would prefer to find other ways to noodge the SS Fund in the right direction. Its entirely possible, and not painful.

 

[Lagboltz]

I have mixed emotions about the payroll cap. We pay in, and our benefits are based on the amounts we paid in, with the amount paid back being slightly more for high earners than for low earners. Its regressive, but I always felt it was fair.

I don't think it is completely fair until the SS trust is reinstated. Then the contributors would have their money safeguarded, rather than raided.

However, if the cap were lifted that would mean the millionaires, who have no need of it, would receive very large benefits. With the cap, their benefits are limited, as are their benefits.

I agree with you on that. One point is that the low earner would probably pay almost nothing in taxes after retirement. The high wage earner would be taxed at the full rate of up to 35% on their SS.

There might be other fudges and fixes, but if it's too complicated it would never get passed.

 

[ProudLefty]

I don't think it is completely fair until the SS trust is reinstated. Then the contributors would have their money safeguarded, rather than raided.



I agree with you on that. One point is that the low earner would probably pay almost nothing in taxes after retirement. The high wage earner would be taxed at the full rate of up to 35% on their SS.

There might be other fudges and fixes, but if it's too complicated it would never get passed.

Its not too complicated. We have had this program 75 years. It is well understood by everyone who is interested.

Please realize this: Republicans have hated this program since before it became law. They have fought the program every step of the way. They are still fighting it. However, it remains one of the most successful government programs of all time.

When Republicans try to terrify you with their stories of doom and gloom, just remember: Republicans have been wrong about the safety and future of Social Security for 75 years in a row. Their record is 0 and 75, not even a tie. There is no legitimate reason to start believing them now.