Ronald Reagan and The Great Social Security Heist

[InTheLight]

Twenty years is a long time to wait for maturity, and other financial products like money markets offer a far better rate of return.

Show me a money market fund that earns more than a savings bond.

How much more evidence than 20 trillion dollars of a debt load do you need to convince you of your fool's choice?

Guess people should have had their money in Lehman Brothers 10 years ago. Much safer than the US government.

 

[Adonia]

Show me a money market fund that earns more than a savings bond.



Guess people should have had their money in Lehman Brothers 10 years ago. Much safer than the US government.

Here are the rates from Savingsbonds.com that I got today.

Savings Bond Series Current rate if purchased from May 1, 2018 to Oct 31, 2018 Rate of prior period
(Nov 1, 2017 to Apr 30, 2018) Change from prior
6-month period
Series EE Bonds 0.10% 0.10% ---%
Series I Bonds 2.52% 2.58% -0.06%
Series I Bond Variable Rate 2.22% 2.48% -0.26%
Series I Bond Fixed Rate 0.30% 0.1% + 0.20%
Series HH Bonds 1.50% 1.50% ---%
Series E Bonds --- Varies from 3.98% to 6.00% Varies

Note the bonds Series EE - 0.10 %. (That's not even a 1 percent return on your money). That is a low, low, low return on investment in my book. Mutual fund investing is a far better place for your money and there are all levels of investment from high, intermediate, and low risk. I listen to a lot of financial advisors on the radio and not one of them has ever advised buying savings bonds - not one!

 

[FollowTheWay]

Not to criticize (since I see nothing wrong with Savings Bonds), but you do realize that if the Treasury has to default on the SS Bonds because of the US Debt, they will also have to default on Savings Bonds and other Government Backed Investments.

[Just pointing out the irony.]

No irony. Seniors have simply been lied to for years about the SS Trust Fund. The boomers paid into it producing a surplus but now we find out it was simply a trick reagan used to cover his deficit spending.

 

[Wingman68]

Do you know anyone who is in a nursing home and running out of their money? Medicaid steps in and pays their nursing home bills when that happens. 60% of the people in nursing homes are on Medicaid.
Medicaid’s Role in Nursing Home Care

Go ahead. Toss them out on the street.

The people I’ve known in a nursing home seem to expire as soon as their money does.

 

[FollowTheWay]

The people I’ve known in a nursing home seem to expire as soon as their money does.

The statistic is 60% of the people who are there could not be there without Medicaid.

 

[Adonia]

Congress passed the Social Security Amendments of 1983, which included a hefty increase in the payroll tax rate. The tax increase was designed to generate large Social Security surpluses for the next 30 years. The public was led to believe that the surplus money would be saved and invested in marketable U.S. Treasury Bonds, which could later be resold to raise cash with which to pay benefits to the boomers. But that didn’t happen. The money was all deposited directly into the general fund and used for non-Social Security purposes. Reagan spent every dime of the surplus Social Security revenue, which came in during his presidency, on general government operations. His successor, George H.W. Bush, used the surplus money as a giant slush fund, and both Bill Clinton and George W. Bush looted and spent all of the Social Security surplus revenue that flowed in during their presidencies. So we can’t blame the whole problem on Reagan. Reagan was the one who figured out a way to use Social Security money as general revenue, and his successors just followed his example.

The $2.7 trillion, which is alleged to be in the trust fund, was all spent for wars, tax cuts for the rich, and other government programs. If the money is repaid at some point in the future, we could say is was just “borrowed.” But no arrangements have been made to repay the money, and nobody in government is suggesting that the money should be repaid. So, if it is never repaid, the money will definitely have been stolen.

This would not be such a serious problem if Social Security was still running annual surpluses. But Social Security ran it last annual surplus in 2009, and began running permanent annual deficits in 2010. The cost of paying full Social Security benefits for 2010 exceeded Social Security’s total tax revenue by $49 billion. So how did the government pay full Social Security benefits in 2010? They borrowed $49 billion from China, or one of our other creditors. And the amount that will have to be borrowed in future years will become larger and larger. If the trust fund had not been looted, there would be $2.7 trillion of marketable U.S. Treasury bonds in the fund that could be sold in the open market for cash. But the trust fund doesn’t hold a dime’s worth of marketable real assets of any kind.


So the great Social Security fraud, which began under Ronald Reagan in 1981, is still alive and well 32 years after it began. Republican and Democrat presidents and Republican and Democrat members of Congress, all share in the blame. There is nothing broken about Social Security. If the government had not stolen $2.7 trillion from Social Security, or, if the government would make arrangements to repay the stolen money, Social Security would be able to pay full benefits for at least 20 more years without any other action. But crooked politicians, who do not want to repay the money, are trying to convince the public that Social Security is a flawed system, which needs to be replaced with private accounts.

Social Security is a sound program that has worked well for more than 75 years. It ain’t broke, so why try to fix it? The government—not Social Security—is what is broken and needs to be fixed. It is time for the American people to stand their ground and fire the crooked politicians. President Obama, and every member of Congress know that everything in this article is true. But they have succeeded in fooling the people for three decades and seem to think they can continue to do so. Don’t let them get by with it!

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This is the first explanation of the real Social Security problem I've ever been able to find. What's really in the Social Security fund are "Special" 15 year government bonds which can only be sold to the Fed. Great. So where is the Fed going to get the money to repay this debt? That's the $2.7T dollar question.

Why is Ronald Reagan given star billing in your title when the Congress in 1983 was led by Democrats? They had 272 members against 163 for the Republicans. Surely you are aware that all spending is originated in the Congress of the United States and the President (Mr. Reagan) could only spend what the Congress (Democrat controlled) authorized.

 

[FollowTheWay]

Here are the rates from Savingsbonds.com that I got today.

Savings Bond Series Current rate if purchased from May 1, 2018 to Oct 31, 2018 Rate of prior period
(Nov 1, 2017 to Apr 30, 2018) Change from prior
6-month period
Series EE Bonds 0.10% 0.10% ---%
Series I Bonds 2.52% 2.58% -0.06%
Series I Bond Variable Rate 2.22% 2.48% -0.26%
Series I Bond Fixed Rate 0.30% 0.1% + 0.20%
Series HH Bonds 1.50% 1.50% ---%
Series E Bonds --- Varies from 3.98% to 6.00% Varies

Note the bonds Series EE - 0.10 %. (That's not even a 1 percent return on your money). That is a low, low, low return on investment in my book. Mutual fund investing is a far better place for your money and there are all levels of investment from high, intermediate, and low risk. I listen to a lot of financial advisors on the radio and not one of them has ever advised buying savings bonds - not one!

I would have guessed that savings bonds are not a good deal now with interest rates so low. I was lucky to buy these in the early 1990's and they are all yielding about 5%. I didn't recommend this as a current investment. Someone accused me of not being an astute investor for owning these. As I said before, I wish i had bought 10 times more of these back then.