Future Solvency of Social Security

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DmaxSilver's picture
DmaxSilver
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Future Solvency of Social Security

Is he believable? Is there money in the Fund? 

 Just curious on others thoughts . . . 

http://www.c-spanvideo.org/program/FutureofSocialSecurity12

Poet's picture
Poet
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The Big Lie Of Social Security

This topic has been brought up quite often in the past...

But I'll point you to an article to help anwer your question:

The Big Lie Of Social Security
"There is a big lie about Social Security benefits that a lot of people believe in. It is a huge lie hidden in plain sight. And yet because this lie comforts millions of Americans with little else to look forward to in terms of income and support in their old age, it remains widely believed. Unfortunately, there will be a lot of pain and sorrow when people find out that this lie cannot be depended upon... The truth is, Social Security benefits cannot be counted upon to deliver its promise because the [surplus] money was all spent and now benefits depend on the government’s ability to borrow. "
http://minoritysurvival.com/2011/06/19/the-big-social-security-lie/

Poet

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rjs
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the social security trust fund

http://www.ssa.gov/cgi-bin/investheld.cgi

thats a listing of $2.654 trillion in US govt bonds...they're just as good as the bonds you have in your 401-k, the bonds held by pension funds & investment grade mutual funds, the bonds held by china, the saudi's, & the brits, & the bonds held by the TBTF banks as part of their Teir 1 capital...

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earthwise
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Boy, do I feel better now!!
rjs wrote:

http://www.ssa.gov/cgi-bin/investheld.cgi

thats a listing of $2.654 trillion in US govt bonds...they're just as good as the bonds you have in your 401-k, the bonds held by pension funds & investment grade mutual funds, the bonds held by china, the saudi's, & the brits, & the bonds held by the TBTF banks as part of their Teir 1 capital...

Hmmmmm..... US gov't bonds, huh? What is a bond? I'm no financial genius, but I think it's a promise to (re)pay, it's an IOU. As such it has counterparty risk. Who is the counterparty WRT to SS? Why, it's the federal government who is bankrupt and is currently borrowing $1.5 trillion/yr as far as the eye can see just to meet current obligations not including SS which just went negative this year.

Somehow, as a future SS recipient, I am not greatly comforted by the existance of $2.6 trillion in bonds.

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rjs
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earthwise, what would you rather have?
earthwise wrote:
rjs wrote:

http://www.ssa.gov/cgi-bin/investheld.cgi

thats a listing of $2.654 trillion in US govt bonds...they're just as good as the bonds you have in your 401-k, the bonds held by pension funds & investment grade mutual funds, the bonds held by china, the saudi's, & the brits, & the bonds held by the TBTF banks as part of their Teir 1 capital...

Hmmmmm..... US gov't bonds, huh? What is a bond? I'm no financial genius, but I think it's a promise to (re)pay, it's an IOU. As such it has counterparty risk. Who is the counterparty WRT to SS? Why, it's the federal government who is bankrupt and is currently borrowing $1.5 trillion/yr as far as the eye can see just to meet current obligations not including SS which just went negative this year.

Somehow, as a future SS recipient, I am not greatly comforted by the existance of $2.6 trillion in bonds.

so what would you prefer the SSA put its trust fund in? gold coins?  

US govt debt still underpins the financial system, until the world decides on a new reserve currency...treasury notes are still the world's money supply, & they are collateral for financial transactions around the world..

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earthwise
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rjs wrote: earthwise
rjs wrote:
earthwise wrote:
rjs wrote:

http://www.ssa.gov/cgi-bin/investheld.cgi

thats a listing of $2.654 trillion in US govt bonds...they're just as good as the bonds you have in your 401-k, the bonds held by pension funds & investment grade mutual funds, the bonds held by china, the saudi's, & the brits, & the bonds held by the TBTF banks as part of their Teir 1 capital...

Hmmmmm..... US gov't bonds, huh? What is a bond? I'm no financial genius, but I think it's a promise to (re)pay, it's an IOU. As such it has counterparty risk. Who is the counterparty WRT to SS? Why, it's the federal government who is bankrupt and is currently borrowing $1.5 trillion/yr as far as the eye can see just to meet current obligations not including SS which just went negative this year.

Somehow, as a future SS recipient, I am not greatly comforted by the existance of $2.6 trillion in bonds.

so what would you prefer the SSA put its trust fund in? gold coins?  

US govt debt still underpins the financial system, until the world decides on a new reserve currency...treasury notes are still the world's money supply, & they are collateral for financial transactions around the world..

Yeah, US govt debt underpins the financial system---until it doesn't. It would appear that the debt based monetary system's underpinnings are working themselves loose starting in Europe-and we should be comforted by this?

My personal preference, as unimportant as it may be, is that there be no SS ponzi scheme at all. That not being possible at this juncture, my next preference would be that the U.S. government would have actually kept those funds in trust, in an actual lockbox a la Al Gore, some sort of financial device where feckless politicians could not have spent what should not have been spent. Gold coins?? Hmmmm.....  hadn't thought of that but it would be lookin' pretty good right now had they done so. It would  have been better than what we got: bupkis. Just about anything would have been better than shifting those funds into the general fund in order to offset budget expenditures, leaving behind a note that in all likelihood will be worthless.

Fiscal and monetary responsibility. That would be my preference.

 

 

Poet's picture
Poet
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Better, more solid investments

I'd have preferred it invested it in money-generating concerns - profits generated and delivered every month - rather than stocks which are subject to all sorts of wild manipulations and depend on finding another buyer. The State of Arizona sold off its capitol building and prisons - leasing them back. Why not invest in that for some good profit?

Canadian pension funds invest in hotels and department stores. Retired Texas teachers own Chicago parking meter revenue for the next several years, and also physical gold. You've got money-generators and diversification, rather than investing in IOUs.

Poet

earthwise's picture
earthwise
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You want butter or jam on that?

 

Let's look at it from another angle:

The big bubble, the one that will reverberate for a very long time after it bursts, is faith in US Treasuries, and, by extension, the US dollar itself. Some people like to say that the US dollar is not backed by anything, but that is not true. It is backed by US Treasury debt, which is backed by the productive output of the US citizenry.

 

http://www.peakprosperity.com/martensonreport/understanding-what-happens-next

The productive capacity of the US seems woefully inadequate to repay the following:

thats a listing of $2.654 trillion in US govt bonds...they're just as good as the bonds you have in your 401-k, the bonds held by pension funds & investment grade mutual funds, the bonds held by china, the saudi's, & the brits, & the bonds held by the TBTF banks as part of their Teir 1 capital...

 

....escpecially since they're borrowing a further $1.5 trillion +/-  every year just to make ends meet, let alone pay back any debt.

Social Security is toast.

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dshields
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Posts: 599
Poet wrote: This topic has
Poet wrote:

This topic has been brought up quite often in the past...

But I'll point you to an article to help anwer your question:

The Big Lie Of Social Security
"There is a big lie about Social Security benefits that a lot of people believe in. It is a huge lie hidden in plain sight. And yet because this lie comforts millions of Americans with little else to look forward to in terms of income and support in their old age, it remains widely believed. Unfortunately, there will be a lot of pain and sorrow when people find out that this lie cannot be depended upon... The truth is, Social Security benefits cannot be counted upon to deliver its promise because the [surplus] money was all spent and now benefits depend on the government’s ability to borrow. "
http://minoritysurvival.com/2011/06/19/the-big-social-security-lie/

Poet

Once again - correct...

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