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Fri Apr 27, 2012, 10:23 AM

There is no Social Security Crisis

Great OpEd in USA Today:

Opposing view: 'There's no Social Security crisis'
By Max Richtman

The annual release of the Social Security Trustees Report is hands-down the least understood and most widely manipulated tool used in the campaign to cut Social Security under the guise of fiscal discipline. This "never let a crisis go to waste" strategy ignores many critical facts provided by the 2012 Trustees report, including:

•The trust fund solvency date for Social Security has seen fluctuations many times in recent decades, from a depletion date as distant as 2048 in the 1988 report to as soon as 2029 in the 1994 and 1997 reports. This year's report is well within that range.
•Social Security will be able to pay full benefits until the year 2033. After that, there will be sufficient revenue to pay about 75% of benefits.
•There is $2.7 trillion in the Social Security Trust Fund, which is $69 billion more than last year, and it will continue to grow until 2020.

There is no Social Security crisis. Contrary to the sky-is-falling prognosticators, we don't have to destroy Social Security to save it. We don't have to turn it over to Wall Street, raise the retirement age (which is a benefit cut for future generations), or adopt a cost-of-living adjustment that guarantees benefits won't keep up with inflation, leaving our oldest seniors vulnerable.
We do need to agree on a modest and manageable set of reforms to address Social Security's modest long-range funding gap. However, reforms touted as a "grand bargain" but designed to cut middle-class benefits in exchange for tax cuts is a "bargain" our nation cannot afford.

THE REST: http://www.usatoday.com/news/opinion/story/2012-04-26/National-Committee-to-Preserve-Social-Security-Medicare/54561846/1?loc=interstitialskip

Also, a good blog post busting myths in the Trustees Reports: http://www.ncpssm.org/entitledtoknow/?p=2322

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Response to jtown1123 (Original post)

Fri Apr 27, 2012, 11:18 AM

1. Keep pounding that story

I'm not too far from official retirement age so I get these statements from SSA. I could live comfortably for a few decades from what I contributed. I never made a top level wage but it was good enough and long enough to cover me until I expect to die. I was lucky enough to put away retirement funds ( minus the $24K I had to pull out for medical expenses) but I worry for those that are and will be working marginal or minimum wage jobs till they can't work any more. Their contribution will be lucky to carry them for more than a decade.

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Response to tech3149 (Reply #1)

Fri Apr 27, 2012, 01:10 PM

6. Actually, SS has a formula that lower income workers

will receive a higher SS benefit relative to their incomes, which softens the blow a bit.

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Response to jtown1123 (Original post)

Fri Apr 27, 2012, 11:23 AM

2. Kicked and recommended.

Thanks for the thread, jtown.

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Response to Uncle Joe (Reply #2)

Fri Apr 27, 2012, 01:09 PM

5. You're very welcome!

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Response to jtown1123 (Original post)

Fri Apr 27, 2012, 12:46 PM

3. The article is short on information.

The author doesn't even mention 'special issue securities', which is how Social Security is 'invested' these days. They are not marketable, and will have to be redeemed from the general fund. If the federal government is in debt by trillions of dollars, where is this money going to come from?

Social Security could become solvent again, but first, we'll have to stop waging wars of aggression and showering elites with "tax cuts" and "bail outs", IMO.

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Response to ronnie624 (Reply #3)

Fri Apr 27, 2012, 01:01 PM

4. It doesn't matter. It's just debt owed to ourselves.

If you're really concerned about "where" the money will come from, let Bush tax cuts expire. This will entirely cover the future funding shortfall according to CBO. I'm surprised you're suggesting we would default on bonds. We never have and never will.

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Response to jtown1123 (Reply #4)

Fri Apr 27, 2012, 01:17 PM

7. They are not bonds.

They are "special issue" securities, which have no marketable value, as per the Social Security website (for some reason, I can't post a link from that site).

In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. Marketable securities are subject to the forces of the open market and may suffer a loss, or enjoy a gain, if sold before maturity. Investment in special issues gives the trust funds the same flexibility as holding cash.

The initial bonds were used by the Reagan Administration for covert wars in Latin America and other such illegal activities, and replaced by these worthless 'securities'.

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Response to ronnie624 (Reply #7)

Fri Apr 27, 2012, 02:11 PM

8. That's right wing propaganda. Claiming security treasuries are worthless is the same

as claiming any other US bond is worthless. The money was real when it was contributed by workers and it is still a very real obligation today.

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Response to jtown1123 (Reply #8)

Fri Apr 27, 2012, 02:30 PM

9. It isn't a bond.

It is a "special issue" security. It must be replaced by cash from the general fund, which is depleted and in debt.

These are basic facts that people will have to deal with, sooner or later.

The fact of the matter is, the corporatists who control our government, intend to eliminate all social programs, and that includes Social Security. They will make certain that there is no way to fund it. Get ready for it.

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Response to ronnie624 (Reply #9)

Fri Apr 27, 2012, 02:56 PM

10. Yes, we *know* it has to be replaced with money from the general fund. Just as SS bonds

 

have *always* been replaced with money from the general fund, whether they were "marketable" or "special issue". SS bonds have *never* been placed on the open market for redemption.

So that whole issue is a red herring. The only issue is whether the PTB will redeem the bonds. Except that they redeem SS bonds nearly every bloody day.

If you're worried that they plan to *not* redeem them at some point in the future, then using the R-wing talking point "they're worthless special interest bonds" is not a wise strategy to block that move.

So I wonder why you're using it?

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Response to HiPointDem (Reply #10)

Sat Apr 28, 2012, 02:05 AM

11. Your post makes no sense to me.

The value of U.S. treasury bonds derives from the publicly traded market. The 'value' of "special issue securities" does not. Their 'value' derives from a treasury that is 15 trillion dollars in debt. The Social Security trust fund was not supposed to come from the general fund. Is was supposed to be a surplus that was specifically set up to fund Social Security and nothing else, and by law, it was supposed to be held in the form of U.S. Treasury Bonds, which it is not. "Special issue securities" have no value.

Why do I say this? Because it's true.

Me, a right-winger? Please.

You need to do some reading. And so do I.

Good night.

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Response to ronnie624 (Reply #11)

Sat Apr 28, 2012, 02:08 PM

12. the value of us bonds comes from the strength of the us government & its capacity to

 

create money & extract value via taxation.

the social security tf does not come from the general fund & never has. however, the tf represents ss monies *borrowed* by the general fund; that is what the tf is & always has been.

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Response to HiPointDem (Reply #12)

Sat Apr 28, 2012, 02:38 PM

13. Bonds represent investments in tangible assets,

like stocks, real estate, and precious metals. They have value independent of the government.

A "special issue security" is nothing more than a pledge to repay what has been taken, with no value on the public market. It is solely dependent on the U.S. tax revenue for its redemption, which is being wasted on other things.

Currently, the U.S. government has next to no credibility, anyway.

I'm almost late for work. Bye.

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Response to ronnie624 (Reply #13)

Sat Apr 28, 2012, 02:43 PM

14. government bonds have no value independent of the existence of the government that issued

 

them. as history demonstrates (confederate bonds, anyone?)

nor can bondholders claim government assets if the bonds aren't paid off. as history demonstrates.

though the proxies of bondholders have fomented war to make good their claims. as history demonstrates.

for someone who claims they don't lean right you sure are pushing the meme.

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