There is no trust fund
I’ve said that for years, to the ridicule and scorn of folks who claimed I didn’t know what I was talking about. I would tell them that a promise to pay, even if backed by the US government, is not actually, you know, a real fund. I am right. And now, it gets interesting:
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 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.
There is no money. Just paper saying the .gov has an obligation to pay. The whole trust fund thing is a lie.
ESR says it’s the fiscal event horizon. Soon, bonds could lose a lot of value.
March 16th, 2010 at 10:05 am
Wow, weird how people have warned of this for years, only to be shouted down by the government supremecists.
March 16th, 2010 at 11:06 am
That’s why health care “reform” needs to
pass.
ObamaCare will collect billions in taxes
up-front without providing any services —
it is this budgetary gimmick that allows
Dems to argue that ObamaCare will be
“deficit neutral”. Those billions will be
used to shore up MediCare and SS for the
Boomer generation. When ObamaCare finally
goes into effect, it will serve as a pretext
to raise taxes radically. Coupled with severe
rationing of primary and specialty
health care services, as well as R&D,
ObamaCare will yield enough new funding
to keep MediCare and SS solvent for a while.
It will also provide a nice little political
slush fund for the Dems — you don’t think
the new, unionized federal health care
bureaucracy will be Republicans, do you?
The goal is to provide a new revenue stream
via a new entitlement to “save” the old
entitlements until this generation of
politicians are dead-n-gone. If ObamaCare
passes, I don’t think that the fiscal storm
will break until mid-century or so. If
ObamaCare does NOT pass, then you best start
stockpiling now.
March 16th, 2010 at 12:22 pm
The whole .gov budget is a sham – any business accountant who looked over the .gov’s books would have his head explode from the sheer idiocy of it all. Social Security is just the tip of the iceberg.
There’s a reason the government doesn’t follow the same accounting rules they require taxpayers to follow. If they did, the whole government would collapse and every department except the IRS would have to shut down for decades for lack of actual money.
March 16th, 2010 at 1:40 pm
I heard yesterday on the news that one of the bond rating companies was looking at downgrading US Treasury Bonds from AAA to AA. It’ll happen eventually…
March 16th, 2010 at 10:05 pm
I read that Social Security will in 2015 or so take in about 80 cents for every dollar it doles out. OMG!!!
Sounds awful…until you remember that right now the rest of the Federal govt only takes in 67 cents.
There are a lot of canaries in the coal mine that are going to have their shit splattering the fan before Social Security is a problem.
March 16th, 2010 at 10:06 pm
Should read 67 cents per…you get the point.
March 18th, 2010 at 2:26 am
I can’t believe you were ridiculed for saying that. That has been general knowledge for more than thirty years, well more. At one time the SS fund was kept separate, but it accumulated so much money that the politicians couldn’t resist it and moved it to the general fund. There was a huge fuss over it, but greed won, as usual. The records were kept, but the funds went to every wet dream every politico could think of.
I suspect Oscar is correct as to the reason so many politicians are willing to commit political suicide over the Health Care Bill. They prefer it to the actual physical consequences apt to be visited upon them when SS collapses about 2 years from now without the new revenue stream. One of the reasons to collect revenue for four years before engaging in any payment of any benefits. Need that money to stave off the lynchings.
destroying