Re: social secuirty bankruptcy in 2010?

On Wed, 26 Aug 2009 04:40:22 -0700 (PDT), Allan
<allan.sanger@xxxxxxxxx> wrote:

On Aug 25, 6:19 am, Rumpelstiltskin
<PleaseDoNotReplyByEm...@xxxxxxxxxxx> wrote:
On Tue, 25 Aug 2009 05:15:35 -0700 (PDT), Allan

<allan.san...@xxxxxxxxx> wrote:
On Aug 17, 3:51 pm, Nestor <nes...@xxxxxxxxx> wrote:

<snip>



Those are special bonds, sure. What makes them special is that the Trust
Fund may redeem them at its discretion at any time for par value.

Yes they may - just like the Chinese redeem the T-bills they hold.
The only difference is when the Chinese redeem their holdings the
money comes from the US government, not the Chinese government whereas
when the Trust redeems its bonds the money comes for the US
government.

Ooops - wait a second, there is no difference.

It's like borrowing against your 410K - when you retire, the money you
borrowed doesn't magically reappear.

Whether the are marketable or not the point.

We are in a world of hurt in Social Security, of that there is no
doubt.

Allan

    No, you're just as deluded as Lawrence.  

Which means what exactly?

snip

 If I put money into SS and the government borrows
some, then the government owes it to SS, not to the
person or persons who borrowed it.

Exactly. If I put money into my 401K and I borrow against it, I have
to pay it back. If I put money into a 401K and the bank loans it to
you, you have to pay it back....very good.

 I didn't borrow
it, John D. Rockefeller borrowed it.  He has to pay
me back, I'm not responsible for the fact that he
borrowed the money and spent it, and now doesn't
want to pay it back.  My SS taxes were not general
revenue.  They were collected mostly from just one
segment of the population: the middle class.  They
were borrowed mostly to relieve a different segment
of the population via tax cuts: the more privileged.

It's not a class warwe are talking about - please stay on topic. When
you let your political ideology get the better of you it may challenge
you to think clearly.


Yes it is class war. SS tax was paid regressively by the
middle class. General tax is paid progressively.
Borrowing from SS and not paying the debt back through
general tax would be converting a regressive tax for the
purpose of retirement into a general tax for government
operations, including tax cuts that went primarily to the
wealthy. Lawrence uses a royal "we" to try to sneak by
his incorrect position that there's no difference in proportion
between the groups that pay those two taxes.

As Warren Buffet, that rare individual, noted,
approximately "Yes, we do have class war, and my class
is winning".



   They were not a regressive general tax revenue,
they were collected for the specific purpose of
making sure SS had money to pay people
according to the agreement when they retired.  

Exactly - SS isd NOT welfare - it is prepaid retirement.

We
do know what was collected for SS.  We do know
what was borrowed from SS.  Any 12-year-old can
understand this, but you and Lawrence and the
Heritage Foundation find it inconvenient to
understand what any 12-year-old can understand
without difficulty.

The problem with a 12 year old is that when he spends his allowance he
can get more from his parents by borrowing against next weeks
allowance. And in most cases he never has to pay it back.


You're arguing just like Lawrence, picking off
differences that are not to the point, which are inevitable
in any analogy, to pretend to thwart a valid analogy.



Here is the problem - there is no cash in the trust fund. Any payment
made from the fund has to come from the government paying back what it
borrowed. Since the government can only raise revenue by taxes, that
means the trust fund is not funded by cash but by future tax flows.
And that is the problem.


Of course there isn't any cash in the so-called "Trust Fund".
The government used the money. That's why the government
borrowed it. The fact that they spent it doesn't mean that they
no longer owe it to SS. And just in case you're going to get
ridiculous like Lawrence, yes of course that means that the
money has to be paid back from taxation - GENERAL taxation.
The alternatives are running up the debt some more or stiffing
the people who paid into SS thinking they were thereby
making SS strong.



Everything was fine as long as todays inflows were sufficient to pay
todays outflows (living hand to mouth). As soon as that stops (next
year or the year after), then the difference has to come from
somewhere. And that somewhere is not the trust fund, but rather
taxes.

Is that too difficult to understand? If the trust fund had real money
in it (like German government treasuries) this would not be a problem
for American tax payers - just a problem for Germans. But alas poor
rumpie, it does not.



You're a pompous twit, very objectionable, and as you
have demonstrated here, not intelligent at all, just another
right-wing ideologue who thinks that makes him intelligent.
That seems to be a routine side effect of the blindness
that's a necessary component of right-wing ideology.

If you never reply to a post of mine again, that will be
just fine with me. Your personality stinks. In both real life
and this group I deal with such people as little as I can.

Now I'm done with you, so you can stop reading now
because you won't find the next bit worthwhile. It's for
other people, not you.

----------------------------------------------

I thought of this little scenario yesterday during a
pleasant walk on a beautiful day, to the Rainbow
Grocery to buy aniseed. (I don't think there's a
connection.)

"Hi Larry"

"HI Jimmy, er, remember that quarter I borrowed from
you last week, and I paid a nickel of it back yesterday?"

"Sure, that means you still owe me twenty cents by
next Monday when you promised to pay it back."

"Yeah, Jimmy. But it's not that simple. You see, I spent
the money on bubble gum so I don't have it any more.
But I already paid a nickel back. My dad's a famous
economist with the Uriah Heep Think Tank, and he
explained to me that created an "outflow" situation. That
changes everything. It's a lot more complicated than
you'd think: you wouldn't believe it until you'd listened
very carefully to my dad. But it means it's not so clear
that I really owe you any money anymore. After all I
already spent it, and we're both cub scouts so it really
doesn't make any difference which of us has the money
anyway. We can negotiate and come to some reasonable
compromise, for example, I could let you ride my trike on ..."

"*$(#& you Larry, you $#(*&&#$ )(*$& $%(*&% (&$%&
%($)$$%* )%(*% jerk, you still owe me twenty cents, and
I'd better have it by next Monday like you promised, or
I'll get my big sister to beat up your big sister. She'll do
anything I say, because I know stuff about her and
Bobby Jameson that she doesn't want mom and dad to
find out about.



.

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