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Thu Nov 29, 2012, 09:49 PM

Oh, I need help again, this time with 401k's and social security.

If you feel like helping me smack a monkey, please feel free. If you feel like 'thanking me for my concern' or bitching in any other way, please bugger off. kthanks.


(start quote)

Rightie: Did you know there is also work to convince Govt to take control of your 401K to shore up social security? IS That Constitutional? And then there's a link to an article that is *this* one. (I don't think you need to click it and give them the pleasure, but here it is) http://kingfish1935.blogspot.com/2008/10/who-is-teresa-ghilarducci.html

Laydeebug: No, there isn't. Also, social security has NOTHING, ZERO, NADA, ZILCH to do with the deficit. You should stop lying.

Rightie: Laydeebug, you should explain where you learned your understanding of finance and how you are more knowledgable than those who work in it for a living. There is no money in the SS system only IOUs. The IOUs helped hide the general spending of the Govt. To cover the IOUs Govt will have to pull from the general fund in the future. This is doing what to the already 40% deficit?????

(end quote)

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Reply Oh, I need help again, this time with 401k's and social security. (Original post)
LaydeeBug Nov 2012 OP
A HERETIC I AM Nov 2012 #1
NMDemDist2 Nov 2012 #2
PoliticAverse Nov 2012 #6
alc Nov 2012 #7
PoliticAverse Nov 2012 #9
FogerRox Nov 2012 #12
PoliticAverse Nov 2012 #3
LaydeeBug Nov 2012 #5
PoliticAverse Nov 2012 #4
quaker bill Nov 2012 #8
PoliticAverse Nov 2012 #11
quaker bill Dec 2012 #19
Mariana Nov 2012 #10
LaydeeBug Nov 2012 #14
Mariana Nov 2012 #15
LaydeeBug Nov 2012 #16
Mariana Nov 2012 #17
LaydeeBug Nov 2012 #18
LaydeeBug Nov 2012 #13

Response to LaydeeBug (Original post)

Thu Nov 29, 2012, 09:51 PM

1. If that person thinks a US Treasury Bond is equivalent to an "IOU".....

Then that person is a moron.

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Response to LaydeeBug (Original post)

Thu Nov 29, 2012, 09:52 PM

2. those "IOUs" are T-Bills

and if they're no good, this country has bigger problems than your 401.

what the hell does the rightie think T-Bills are? they are "IOUs" from the full faith and credit of the US government

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Response to NMDemDist2 (Reply #2)

Thu Nov 29, 2012, 10:02 PM

6. They are not T-bills (which are a specific type of government security)

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Response to NMDemDist2 (Reply #2)

Thu Nov 29, 2012, 10:03 PM

7. "special Treasury bonds"

http://www.socialsecurity.gov/pressoffice/factsheets/WhatAreTheTrust.htm

It's hard to find the full description of what is "special" about them. For one thing, they are non-marketable. If congress decides to ignore servicing them, then SSA has no recourse (can't sell on the open market). It will have to happen to see the effect, but many if not all major investors in "normal Treasury bonds" would likely see it as an internal bookkeeping move that helps them keep their guarantee to external bondholders and not as a default on debt.

SSA will need to redeem bonds every year from now on, and servicing that debt comes out of the general budget, so they do have an effect on our deficit. Congress could decide not to service them as a way to reduce the deficit. SSA would also need to reduce benefit payments. That's why they've been having the discussion.

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Response to alc (Reply #7)

Thu Nov 29, 2012, 10:14 PM

9. There are a few things that make them 'special'...

The first, which you mentioned, is that they aren't marketable to the public. They may only be held by the trust funds.

The second is that they can be redeemed at any time (whenever the trust funds need the cash). Normal treasury
securities may only be redeemed at maturity.

The third is that they are actually printed out as certificates (normal treasury securities these days are only electronic
bookkeeping entries). The special issue securities of the trust fund reside in a file cabinet at the Bureau of the Public Debt.

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Response to NMDemDist2 (Reply #2)

Thu Nov 29, 2012, 10:49 PM

12. special rated T-BIlls, the best of the best available

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Response to LaydeeBug (Original post)

Thu Nov 29, 2012, 09:55 PM

3. "Also, social security has NOTHING, ZERO, NADA, ZILCH to do with the deficit."

Did you miss the 'temporary payroll tax cut' that cut part of Social Security's main funding source which was
made up from the general fund thus increasing the deficit.

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Response to PoliticAverse (Reply #3)

Thu Nov 29, 2012, 09:58 PM

5. That's what *I* said to him

and I am not sure what you're talking about. lol

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Response to LaydeeBug (Original post)

Thu Nov 29, 2012, 09:58 PM

4. "To cover the IOUs Govt will have to pull from the general fund in the future."

When the securities in the trust fund have to be redeemed the government has to come up with the money. Since
the government runs at a deficit redeeming any trust fund securities will increase the (external) deficit. Note that
when the trust fund grows the opposite happens, net money flows into the Government decreasing the deficit.

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Response to PoliticAverse (Reply #4)

Thu Nov 29, 2012, 10:10 PM

8. actually almost none of this is really true

money is notional when you own the "printing press". When it comes time to redeem the t-bills the requisite 1s and 0s will be mouse clicked into the required accounts which will then be mouse clicked into the beneficiaries accounts. No greenbacks and very few if any checks will ever be printed to do this. The money supply is not fixed or finite, ever. Warren Buffett put it, "you figure out how to collect 18.5% of GDP and where to spend 21% of GDP" (basically forever, because a 3% GDP deficit is sustainable, roughly forever, in fact this grows the money supply by 3% a year which is roughly where you want to be for economic growth). This is roughly 450 billion dollars in the current economy, more as it grows.

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Response to quaker bill (Reply #8)

Thu Nov 29, 2012, 10:20 PM

11. What you refer to is generally known as 'monetizing the debt'...

Which can be done as you point out by just creating computer entries out of thin air but is currently
done mostly by the Federal Reserve buying US Government debt.


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Response to PoliticAverse (Reply #11)

Sat Dec 1, 2012, 09:22 AM

19. with what do they buy it?

Where does the Fed get its notional money? (They pretty much just click it into existence). They are not only "buying" government debt, they are "buying" private debt, specifically mortgage debt. It is called quantitative easing (QE III) and what it does is increase the supply of money by clicking funds (money) into existence and using this new money to "purchase" debt. The banks lose loan liability and gain cash, that they can, in theory, loan. They aren't loaning it much which is why the program has had little effect, other than keeping interest rates very low for well qualified borrowers.

They are creating computer entries every day, and they have been telling us about it for some time now. This is why the PM market is so inflated, because the traders are expecting the value of the currency to plummet because so much new money has been created. The system is literally awash with new money, and to the extent anyplace isn't, the Fed makes more. The reason that the currency has not devalued is because is that this new money is largely not being circulated. This is actually a bad thing.

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Response to LaydeeBug (Original post)

Thu Nov 29, 2012, 10:14 PM

10. They've been saying this for 20 years that I know of.

There have been variations of it, but they all come down to "The Democrats are going to confiscate/take control of your personal IRA/401k/Pension!!11!" Often, that statement is followed by something like, "And they're going to give it all to illegal aliens and welfare bums1!!!11"

Ask your pet rightie to produce ONE proposal made by ONE person who is actually in a position to initiate action toward implementing such a plan. Blog entries and RW radio rants don't count.

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Response to Mariana (Reply #10)

Thu Nov 29, 2012, 11:30 PM

14. He said that

"in 2008-09 there were congress hearings with Teresa Ghilarducci promoting this concept."

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Response to LaydeeBug (Reply #14)

Fri Nov 30, 2012, 12:07 AM

15. You might ask him why he's speaking in the present tense

about something that took place years ago. That's frankly dishonest and intentionally misleading. Why is he pretending that this is going on now?

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Response to Mariana (Reply #15)

Fri Nov 30, 2012, 12:23 AM

16. I told him she's not an elected official, and she hasn't held hearings on anything because *she*

CAN'T, and then I told him this is an old scare tactic.

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Response to LaydeeBug (Reply #16)

Fri Nov 30, 2012, 12:59 AM

17. You know, he probably knows all that already.

One of the most slimy things I've seen RWers do is pretend to believe stuff they know damn well isn't true. A lot of them do it (think of all those ridiculous e-mails they pass around) and your friend appears to be no exception. Look how carefully he chose his words in the first post you quoted in your OP - he's trying to avoid lying outright, but nevertheless wants to give the readers the impression that they're in danger, right now, of losing their retirement accounts. I think he's deliberately misrepresenting the situation. If I'm right about that, then he's a perpetrator of the scare tactic, not a victim of it.

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Response to Mariana (Reply #17)

Fri Nov 30, 2012, 01:44 AM

18. Oh, he is ABSOLUTELY the perpetrator, you have NO IDEA...or, rather, you do.

But I really get under his skin.

He posted this gem about me a few weeks ago, when he was grappling with failure. I shared that little gem and told him to go cry in his christmas sweater.

http://www.democraticunderground.com/10021781521

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Response to LaydeeBug (Original post)

Thu Nov 29, 2012, 11:11 PM

13. BWAHAHAHA!! I "shared" his post, so he couldn't delete it and he wrote,

"When we pack up and leave how will you survive then?"



I said, PLEASE GO. Another chimed in with "swimmingly"

I can't stop

Thanks DU! I get too upset in the heat of these.

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