Social Security fund slides into permanent deficit

[golfguru]

WASHINGTON — Social Security's finances are getting worse as the economy struggles to recover and millions of baby boomers stand at the brink of retirement.

New congressional projections show Social Security running deficits every year until its trust funds are eventually drained in about 2037.

http://www.comcast.net/articles/news-general/20110126/US.Social.Security/

[xchrom]

1. um - no. nt

[Po_d Mainiac]

11. um yes

CBO: Social Security to run permanent deficits

The Congressional Budget Office said Wednesday that Social Security will pay out $45 billion more in benefits this year than it will collect in payroll taxes, further straining the nation's finances. The deficits will continue until the Social Security trust funds are eventually drained, in about 2037.

http://news.yahoo.com/s/ap/20110126/ap_on_re_us/us_social_security

[westerebus]

12. Um -no.

We are still a Sovereign Nation. As such, the Congress can direct the Treasury to pay off all current obligations tomorrow. That would be treasury notes and bonds of all holders'.

Once the debts are settled, the Congress can direct the FED to unwind its operations and return to the Treasury all assets it holds. Next, the Congress can dismiss the Federal Reserve after the Treasury takes over the supervision of the banks.

From that point on, as a Sovereign Nation, the Treasury can print as directed by the Congress to the amount authorized for budgetary purposes without issuing debt instruments.

Congress has the obligation to prepared a budget in accordance to the will of the People and upon its authority to direct the Treasury to print the money necessary to met that budget.

See, you don't need debt to create money. That was never the intention of the Constitution to create a bank and tie the American people to debt owed to a bank, not to European banks or one of our own creation.

If other nation didn't want to take our dollars in trade for their goods, well they just couldn't do business here. And we imposed tariffs to protect our markets. Taxes went to pay for the Navy we needed and running of the Federal government which was pretty small. That's what was intended.

Now, the civil war changed most of that. Power went from the States to the Federal Government. Add the FED, WW1, the Great Depression, the New Deal, WW2, and the rest as they say is history.

We are still a Sovereign Nation. If other Nations don't want to take payment in our dollars for the debt instruments they hold, well, sorry but we pay in dollars. Every bank that does business in and with this Nation knows that.

Taxing was the leverage used to keep the wealthy from taking over governments. The Government is the Sovereign Authority that creates laws, determines budgets, prints money, makes treaties, and insures the common welfare of the people. Sovereign Authority in this nation is based on the principles in the Constitution that all power not specified belong to the People.

The Congress has the authority to tell the Pentagon to stand down by not funding it. The Congress has the authority to dismiss the FED. The Congress can pay off the National Debt any time it decides to. They can repeal the Patriot Act too.

In the mean time, you and I are stuck with the critters that were elected. The very same that allow and abet the fraud and theft that continues today.

The Congress can fund SS forever.

But then they don't get elected by doing what's in the People's best interests do they?

BTFD.

[Po_d Mainiac]

13. But, now it will take an act of Congress

BTFD..&...KYPD

[westerebus]

14. X2. n/t

[tortoise1956]

18. Interesting statements...

But the only way the Treasury could pay off all debts and obligations would be by printing money. That would cause inflation on a scale that could bury the economy for years to come. The same goes for paying off the national debt in any way other than actually diverting collected taxes as payment.

As for the story quoted, it is NOT a lie. Burying your head in the sand doesn't change facts - the Social Security trust fund consists of special bonds issued by the Treasury to cover the money taken by the government every year since 1968. The bonds can only be redeemed by Treasury. So essentially the trust fund consists of IOU's that are only good if the government has money to buy them back.

Having said all this, I personally don't believe that the government would renege, or refuse to cover these bonds. (Since I'm 54 years old and hope to retire in 8 years, I REALLY hope they don't...) However, that money will have to come from somewhere, and the only source I see right now is from raising taxes, cutting spending, or a combination of both. Personally, I am willing to pay more taxes as long as I see action by the government to reduce fraud, waste and abuse. If that means cuts in some services, so be it.

However, if they go that route, then nothing should be off the table, from making changes to Social security payments or retirement age, to cutting defense spending, to reducing the insane amount of money that is wasted on bureaucratic red tape and redundant functions. No sacred cows. I want my children and grandchildren to be able to save for themselves, instead of having to pay for the greed of my generation.

[dixiegrrrrl]

19. AND they just cut the payroll tax that feeds the already broke SS fund.

I am hoping for a lot of things, but I am seeing action which points to acceleration of the end of
Soc. Sec.

[tortoise1956]

21. Just for a little while

My understanding is that the cut in payroll taxes is for one year only - Honest! However, once the young'uns (18-30) see how much of a difference 2% makes in their take-home pay, they might rebel against SS completely. After all, most of them that I know have no doubt at all that SS will NOT be there for them.

Our job is to push for the actions that will maintain SS for at least the next 50 years, and hopefully longer. The program itself is a great help for a lot of seniors. The problem is convincing those in the program now, or about to enter, that we can make changes that will help, not hurt. Enlightened self-interest is still self-interest, after all...

[westerebus]

20. No sacred cows.

The US Government does not need to collect taxes to pay its debt.

The US Government is a Sovereign nation and has its own Sovereign currency.

Any one who purchased US debt knows they are to be paid in US Sovereign currency.

Did your taxes go up when the US Government bailed out the banks? No.

The US Government was loaned money from the FED. The national debt increased. Who holds this debt? The FED. It created the money. Congress told them to. It did not raise your tax bill by 25% to cover this authorization. It doesn't have to. It can run a deficit.

The US Government does not need your tax dollars to pay its obligations.

The Congress knows it. It just doesn't want you to know it. Why?

Politicians get elected on political promises...

ie eight years of Bush and ten years of tax cuts and two wars and a huge fraud.

Still got two wars, tax cuts and a huge fraud. Kinda odd don't you think?

So where is the Congress with the power to tax and regulate? To do the will of the People?

Sovereign Nations, democratic or not, apply their power to rule in two major ways.

To write and impose laws and to tax.

Both are used to control the rich from becoming too powerful.

Both are used to influence the economy by rewarding savings and investments and punishing crime.

Both ties the citizen and the corporation to the Nation's fortune. Infrastructure in necessary to both citizen and corporation. Security and a legal system that is functional are requirements that need to be paid for. Pensions and health care are universal in developed countries, so what's our problem?

The fact the Congress fails to carry out its obligations to put the interests of the People first is reflected in the tax code, the appropriations of monies, the lack of policies supporting Main Street America. Its obligation to do the will of the people has failed, as evident in your belief that the only way to correct the problems is to raise taxes and/or cut spending.

The Congress can order the Treasury to print any amount of dollars it requires debt free. Our Government does not require borrowing from the Federal Reserve Bank, it chooses to use the FED as a funding mechanism to sell bonds. Sovereign nations do not need to sell bonds. It is a good idea to sell bonds to people you trade with. They have a vested interest in you and you in them. It keeps money moving and offers a basis to set interest rates on.

Bonds and debt instruments are products of banks lending money. It assumes someone will buy the debt if the reward is greater than the risk. The risk is the price of the interest paid on the bond.

If there is no one willing to purchase governments bonds, the national bank of the government can purchase those bonds. That's why we have the FED. The lender of last resort is the national bank. Good news for us, it is the lender of last resort for the planet earth. Which is to our advantage. That doesn't mean we have to keep the current system of creating money by issuing debt.

The United States is a Sovereign Nation and can print its currency as needed. What do you think China does? It prints its own money. Undervalues it and creates it own economic model.

Should China demand payment what do you think they will be paid with? Right, dollars. Do we need your tax dollars to pay back China? No.

Do we need to cut the size of the Government to get within a balanced budget? No. Cut Social Security to balance the budget? No. Tax your grand kids? No.

All the money in the SS trust fund is spent. That's OK. We have debt instruments that say we are to be paid in US dollars to cover it. US Sovereign Dollars.

As far as causing inflation by paying off our debt that's not a problem. Other holders of our debt would likely invest it. The FED would destroy the excess in country so there would be limited inflation. Just like now. It put trillions of dollars into the banks reserves around the world and the only inflation is from commodity speculation.

We are still in an deflationary depression in this country. Why?

Congress is not doing its job. We are getting political promises. Huge heaping piles of it.

[William769]

2. Social Security is NOT running deficits.

The People in our Government borrowing from the Social Security trust fund IS running deficits.

[MannyGoldstein]

3. Bullshit. It's adding money every year for at least the next decade.

Fuckers don't want to pay the interest on the T-Bills they bought from the trust fund, so they can keep historically-low taxes on the wealthiest.

[xchrom]

4. i'm not sure what your point is in posting this --lie -- is -- but really

'"We need to get past the politics of the past and deal with this issue, making the hard decisions that have to be made," Sen. Mike Crapo, R-Idaho, said Thursday at a Senate hearing on the budget deficit. "As we move forward in that context, I personally believe strongly that all aspects of the spending and revenue side of the equation must be on the table."

mike crapo?!?! -- from his lips?

[golfguru]

9. I just signed up for social security

so naturally I have an interest in it's well being.
What is wrong with posting a news item? I did not make the news!

One thing I do know is that during fiscal 2010 is the first time
(in many years) social security outflows exceeded tax revenues.

Another thing I also know is that all future projections are only
as good as the assumptions made. If economy roars back and more
jobs are created, then tax revenues obviously will go up but the
number of benefit recipients remains the same. So it is very good.

OTOH if economy tanks (and not a single living person knows what
the economy will look like 2-3-5 years from now) then social security
gets in trouble sooner.

[xchrom]

5. ok -- still crickets from you? nt

[xchrom]

6. still waiting for you to explain the propaganda piece here. nt

[liberal N proud]

7. Propaganda intended to foster the need to change it

Congress has been stealing from Social Security for years and never pay it back.

[golfguru]

10. see my post above

[HereSince1628]

8. DUH!??? The unemployed don't make contributions so the solution

isn't to create American jobs, the solution is this depraved indifference to causes and proposals that whack SS.

I am sure that sort of thinking make sense to the Laffer Curve folks, but jezus h christ! What would you expect an annuity fund to do when it no longer has money being deposited?

You can cut American pay and benefits by 80% and you still wouldn't attract back from China the jobs the government paid American corporations to move there.

[upi402]

15. And BushCo neocons wont pay back

what they've "borrowed".

[Warpy]

16. Either they have to RAISE THE CAP

or consider how they're going to pay back all the Boomers they've robbed for 30 years.

It should be fun to watch them wriggle and writhe as they're speared upon the horns of that particular dilemma.

[bemildred]

17. What a load of horseshit. nt

[jtown1123]

22. This article is FALSE. AP made some huge factual errors here. Rebuttals from economists:

The AP story claims that “Social Security will run at a deficit this year and keep on running in the red until its trust funds are drained by about 2037.” The story misrepresents the trust fund’s solvency by excluding interest earnings, a major source of revenue for Social Security. The article also fails to mention that even if nothing is done to shore up the system’s finances, current tax receipts will be sufficient to cover most benefits in 2037, which will still be higher in inflation-adjusted terms than benefits are today. Social Security is not in crisis.

Get the facts:

http://www.alternet.org/newsandviews/article/452075/ap_passes_off_dishonest_editorial_about_social_security%27s_finances_as_a_news_story/

http://www.epi.org/index.php/newsroom/press-entry/news_from_epi_cbo_budget_report_shows_little_change_to_social_security_outl

[jtown1123]

23. Oh, here is one more article rebutting this:

http://www.businessinsider.com/eyes-on-the-prize-a-social-security-summary-2011-2