Ronald Reagan and The Great Social Security Heist

[FollowTheWay]

I do understand it. I said it about three times now. The bonds the Social Security Trust Fund purchases with their surplus money are special bonds not available to anyone else. There I said it again. You happy now?



They are US Treasury bonds. A special class. Why are these bonds worthless and other US bonds not worthless?



The proceeds from the sale of the special class of bonds (said it again!) to the SS trust fund are put in the general fund, yes. Just like the proceeds from the sale of all other US bonds are put into the general fund.

Why are they worthless?

These bonds can only be cashed by the FED. Where is the FED going to get $2.7T to pay for them?

 

[Salty]

What do you call welfare? Clinton put a work requirement on everything that wasn't directed to the handicapped, the elderly or those who couldn't get a job because of the economy. People look at the unemployment rate and say we're doing great but it's not really true. many people are working 40+ hours per week at minimum wage jobs and still are poor. I talked to a friend of mine from church last Sunday who does that and is living with her mother but still can barely survive. A GA $8.50/hr min. wage doesn't pay the bills.

Welfare is a gift - something not earned and often not deserved (just like salvation)
I love all these exceptions - handicapped, elderly,ect - Unless you are in a comma - you can do something - even if its answering the phone.

Do some people work a second job in addition to their 40 hour job - yes -
BUT what the need to do is live within their means
Do they really need all 500 channels and premium movies
Do they really need a second car
Do they really need to eat out 10 x a month
ect, ect, ect

A job should pay what it is worth - this business of a "living wage" is hogwash.

 

[777]

When they call SS and Medicare "entitlement programs", all that means is that receipts will get paid no matter what.

I'm roughly halfway there, but one thing that has always bugged me about this program is that it's been around for over 80 years now:

the average life expectancy at age 65 (i.e., the number of years a person could be expected to receive unreduced Social Security retirement benefits) has increased a modest 5 years (on average) since 1940. So, for example, men attaining 65 in 1990 can expect to live for 15.3 years compared to 12.7 years for men attaining 65 back in 1940.

Social Security History

look at that dimissive tone - a "modest" extra five years? When they were only expected to draw SS for twelve, now it's seventeen? Now multiply that by millions . . . .

If the Social Security program is such a great program it needs to be voluntary. .

Because it will be a true Ponzi scheme if it was voluntary - why do you think the left screamed about privatizing a portion of it years ago? The ONLY reason SS has worked this well is because it's the only Ponzi scheme that is guaranteed to have new workers participate. If it was made voluntary, it would collapse like a real Ponzi scheme ultimately does.

 

[InTheLight]

These bonds can only be cashed by the FED. Where is the FED going to get $2.7T to pay for them?

Same place they get the money to pay China when they redeem their bonds.

It's not as if they all mature on the same day!

Why are these special bonds worthless?

Again, the FED (Federal Reserve) is not in play here.

Sent from my Pixel 2 XL

 

[FollowTheWay]

Welfare is a gift - something not earned and often not deserved (just like salvation)
I love all these exceptions - handicapped, elderly,ect - Unless you are in a comma - you can do something - even if its answering the phone.

Do some people work a second job in addition to their 40 hour job - yes -
BUT what the need to do is live within their means
Do they really need all 500 channels and premium movies
Do they really need a second car
Do they really need to eat out 10 x a month
ect, ect, ect

A job should pay what it is worth - this business of a "living wage" is hogwash.

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.

 

[FollowTheWay]

Same place they get the money to pay China when they redeem their bonds.

It's not as if they all mature on the same day!

Why are these special bonds worthless?

Again, the FED (Federal Reserve) is not in play here.

Sent from my Pixel 2 XL

You don't understand and I'm going to stop replying to these incorrect statements.

 

[InTheLight]

You don't understand and I'm going to stop replying to these incorrect statements.

Before you go:

Why are the bonds in the Social Security trust fund worthless?


Sent from my Pixel 2 XL

 

[FollowTheWay]

Before you go:

Why are the bonds in the Social Security trust fund worthless?


Sent from my Pixel 2 XL

Misleading the Public: How the Social Security Trust Fund Really Works


The Social Security trust fund is merely an accounting device filled with IOU's that future taxpayers must repay. Any "money" remaining in the trust fund is converted into special-issue Treasury bonds, which are really nothing more than IOU's. In addition, the Treasury pays interest on the trust fund's balance by crediting the trust fund with additional IOU's. These are also strictly accounting entries, and again no money changes hands.

Why the Social Security Trust Fund Differs from Real Trust Funds. Private-sector trust funds invest in real assets ranging from stocks and bonds to mortgages and other financial instruments. However, the Social Security trust funds are only "invested" in a special type of Treasury bond that can only be issued to and redeemed by the Social Security Administration. (These are not marketable securities.)
***********************************************************************************************************************
Social Security has run a surplus in every year since 1984, as was anticipated when Congress enacted and President Reagan signed the legislation based on the recommendations of the Greenspan Commission in 1983. None of this money is in the Trust Fund now. It has all been replaced by special issue bonds which can only be redeemed by the FED, in other words future taxpayers because that's where the money will have to come from.

The Trust Fund represents a legal obligation of the federal government to program beneficiaries. The government has borrowed nearly $2.8 trillion as of 2014 from the Trust Fund and used the money for other purposes.


The larger question posed by critics of the trust fund system is if and how the government will provide cash for all the bonds, now totalling $2.8 trillion. These bonds are a special class of securities unique to the Social Security fund that can’t be sold. Because they’re not-marketable, some contend that they’re "worthless IOU's."

"These special-issue things, they’re all in a filing cabinet in West Virginia. That’s the entire trust fund," Smith said in an interview. "There’s no trust, and there are no funds."

 

[InTheLight]

Misleading the Public: How the Social Security Trust Fund Really Works


The Social Security trust fund is merely an accounting device filled with IOU's that future taxpayers must repay. Any "money" remaining in the trust fund is converted into special-issue Treasury bonds, which are really nothing more than IOU's. In addition, the Treasury pays interest on the trust fund's balance by crediting the trust fund with additional IOU's. These are also strictly accounting entries, and again no money changes hands.

Exactly how a TIPS bond, an EE Series savings bond works. A bond is an IOU, a promise to pay the bondholder a certain amount at a future date. Along the way, interest is earned which is credited to the bondholder's account. No money changes hands.

Why the Social Security Trust Fund Differs from Real Trust Funds. Private-sector trust funds invest in real assets ranging from stocks and bonds to mortgages and other financial instruments. However, the Social Security trust funds are only "invested" in a special type of Treasury bond that can only be issued to and redeemed by the Social Security Administration. (These are not marketable securities.)

Correct, they are not marketable securities. Are you suggesting that they should be marketable? Things like stocks and bonds and the like? Is that your suggestion? I'm pretty sure you opposed this idea when George W. Bush suggested that a small portion of a person social security account could be invested in the market. Am I right?

Social Security has run a surplus in every year since 1984, as was anticipated when Congress enacted and President Reagan signed the legislation based on the recommendations of the Greenspan Commission in 1983. None of this money is in the Trust Fund now. It has all been replaced by special issue bonds which can only be redeemed by the FED, in other words future taxpayers because that's where the money will have to come from.

Supposing the surplus money just sat in an account somewhere as cash. Is that what you would do with the money? Having it earn no interest whatsoever? Even if this was your method of saving the money, it's just an electronic digit in a government computer representing an IOU to the social security recipients. It's just as "worthless" as special SSA bonds.

The Trust Fund represents a legal obligation of the federal government to program beneficiaries. The government has borrowed nearly $2.8 trillion as of 2014 from the Trust Fund and used the money for other purposes.

By borrow, you mean issued special bonds. And then they use the proceeds from the sale of those bonds to fund government operations. Just like they do with other T-Bills, T-notes, and T-bonds.

The larger question posed by critics of the trust fund system is if and how the government will provide cash for all the bonds, now totalling $2.8 trillion. These bonds are a special class of securities unique to the Social Security fund that can’t be sold. Because they’re not-marketable, some contend that they’re "worthless IOU's."

Ah, finally an answer to my question. So the bonds are worthless because they can't be sold. That's the reason they are worthless. I wonder, can pension holders sell their pension? Isn't a pension just an IOU to the pension holder?

"These special-issue things, they’re all in a filing cabinet in West Virginia. That’s the entire trust fund," Smith said in an interview. "There’s no trust, and there are no funds."

My Mom's series EE savings bonds are in a metal lock box in my closet. They are IOU's from the government to pay her back at a future date.

If the bonds in the Social Security trust fund were regular US Treasury securities, i.e. bonds that were sellable to anyone, would that satisfy you?

 

[FollowTheWay]

Exactly how a TIPS bond, an EE Series savings bond works. A bond is an IOU, a promise to pay the bondholder a certain amount at a future date. Along the way, interest is earned which is credited to the bondholder's account. No money changes hands.



Correct, they are not marketable securities. Are you suggesting that they should be marketable? Things like stocks and bonds and the like? Is that your suggestion? I'm pretty sure you opposed this idea when George W. Bush suggested that a small portion of a person social security account could be invested in the market. Am I right?




Supposing the surplus money just sat in an account somewhere as cash. Is that what you would do with the money? Having it earn no interest whatsoever? Even if this was your method of saving the money, it's just an electronic digit in a government computer representing an IOU to the social security recipients. It's just as "worthless" as special SSA bonds.



By borrow, you mean issued special bonds. And then they use the proceeds from the sale of those bonds to fund government operations. Just like they do with other T-Bills, T-notes, and T-bonds.



Ah, finally an answer to my question. So the bonds are worthless because they can't be sold. That's the reason they are worthless. I wonder, can pension holders sell their pension? Isn't a pension just an IOU to the pension holder?



My Mom's series EE savings bonds are in a metal lock box in my closet. They are IOU's from the government to pay her back at a future date.

If the bonds in the Social Security trust fund were regular US Treasury securities, i.e. bonds that were sellable to anyone, would that satisfy you?

Yes, I would be satisfied if the bonds in the Social Security Trust Fund were marketable securities. I own savings bonds. They were a great investment and still yield over 5%. But converting the special securities to marketable securities would cost the tax payer $2.8T. I challenge the Trump ,administration to fix this problem created by Reagan.

 

[InTheLight]

Yes, I would be satisfied if the bonds in the Social Security Trust Fund were marketable securities.

Ok, you accept marketable securities. Like what?

US savings bonds. You accept.

What about:
Corporate bonds?
Mutual funds?
Individual stocks?


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[FollowTheWay]

Ok, you accept marketable securities. Like what?

US savings bonds. You accept.

What about:
Corporate bonds?
Mutual funds?
Individual stocks?


Sent from my Pixel 2 XL

Marketable U.S. government bonds would be fine.

 

[Adonia]

Yes, I would be satisfied if the bonds in the Social Security Trust Fund were marketable securities. I own savings bonds. They were a great investment and still yield over 5%. But converting the special securities to marketable securities would cost the tax payer $2.8T. I challenge the Trump ,administration to fix this problem created by Reagan.

You own savings bonds? That says volumes about your investing acumen. The next thing you are going to tell us is that a "whole life" insurance policy is the way to go too. Good grief!

 

[InTheLight]

You own savings bonds? That says volumes about your investing acumen. The next thing you are going to tell us is that a "whole life" insurance policy is the way to go too. Good grief!

Savings bonds have a place in people's portfolios, especially in retired people's portfolios like FollowTheWay. Five percent yield is very good especially in the market we've had for the past 10 years. I'd guess savings bonds with yields of 5% have not been issued since 2002 or so.

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[FollowTheWay]

You own savings bonds? That says volumes about your investing acumen. The next thing you are going to tell us is that a "whole life" insurance policy is the way to go too. Good grief!

What investment do you own that has generated 5.6% tax deferred income since 2000 (actually much earlier) and is backed by the U.S. government? Actually I bought these through payroll deduction in the early 1990's and unfortunately stopped at one point. I wish I had bought 10 times more.

 

[atpollard]

What investment do you own that has generated 5.6% tax deferred income since 2000 (actually much earlier) and is backed by the U.S. government? Actually I bought these through payroll deduction in the early 1990's and unfortunately stopped at one point. I wish I had bought 10 times more.

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.]

 

[Adonia]

Savings bonds have a place in people's portfolios, especially in retired people's portfolios like FollowTheWay. Five percent yield is very good especially in the market we've had for the past 10 years. I'd guess savings bonds with yields of 5% have not been issued since 2002 or so.

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Savings bonds are a bad investment all the way around. It takes up to 20 years for them to mature and the rate of return is set by the U.S. Government and market conditions. Seriously, do you really want your money in a financial entity that continues to operate at a deficit, an entity that has proven time and time again that is beholden to no one for sound financial operation? They only get their money through force, the government makes no products for exchange of dollars, it's a financial nightmare of complete incompetence and mismanagement..

It's a free country and you can continue to "invest" in that rat hole called the U.S. Government, but that is the last place I would put my hard earned money

 

[Adonia]

What investment do you own that has generated 5.6% tax deferred income since 2000 (actually much earlier) and is backed by the U.S. government? Actually I bought these through payroll deduction in the early 1990's and unfortunately stopped at one point. I wish I had bought 10 times more.

My investments are certainly not in that terrible financial entity called the U.S. Government. Drunken sailors are more careful with their cash that the government, and that is the last place I would voluntary surrender any of my money. Twenty years is a long time to wait for maturity, and other financial products like money markets offer a far better rate of return. How much more evidence than 20 trillion dollars of a debt load do you need to convince you of your fool's choice?

 

[Adonia]

[

Not to criticize (since I see nothing wrong with Savings Bonds)

It's a free country and you can waste your own money as you see fit.

 

[atpollard]

It's a free country and you can waste your own money as you see fit.

Thank you for your permission.