There's an American tradition of speaking pseudonymously, most prominently exemplified by The Federalist Papers. Why not listen to what is being said and apply your judgment? Have we lost the ability to judge without seeing who's saying it? If our critical thinking is that poor, what's the point of letting us vote?
And listen to how desperate Obama sounds here:
They're fighting back. The empire is striking back. To win this election, they are plowing tens of millions of dollars into front groups. They are running misleading negative ads all across the country.Why not just argue on the substantive merits of the issues? He's inviting us to think in stark good versus evil style — straight out of fantasy movies. You need to know who is saying something, not what is being said, because you should side with the good guys — his government — not think in any detail about the issues.
I hope you notice that Obama is not talking about the identity of campaign donors. He's talking about independent speakers who don't want to reveal the names of all their donors.
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243 comments:
«Oldest ‹Older 201 – 243 of 243You never got back to me after I pointed out your ludicrous claim there wasn't any money in the SS Trust Fund. Remember? You said there wasn't any money in there. And speaking of bonds, lo and behold there are over 3 Trillion dollars of.......BONDS!
Bonds are DEBT instruments. The SS trust fund owns/holds non negotiable US DEBT. This is to say that the SS trust fund owns debt obligations of its own self,
The SS Trust is borrowing from the government who borrows from the trust fund and sells more debt to investors (mostly other countries)
It is like you take out an equity loan on your house and spend all the money and THEN try to say that the debt/loan that you have is an asset.
The bonds have to be redeemed from .....guess who....the US Government to pay the Governmental SS obligations.
It is an endless circle of the snakes eating their own tails.
They down have money.....they have DEBT.
Go fool someone else.
"You said there wasn't any money in there. And speaking of bonds, lo and behold there are over 3 Trillion dollars of.......BONDS!"
I'm sure retiring Americans will be pleased as punch when you start paying them Treasury bonds instead of cash.
Oh, they won't do that? The gov't will have to redeem the bonds and create even more deficit cash to make payments? Oh no!
You never got back to me after I pointed out your ludicrous claim there wasn't any money in the SS Trust Fund. Remember? You said there wasn't any money in there. And speaking of bonds, lo and behold there are over 3 Trillion dollars of.......BONDS!
I keep re-reading this, hoping to detect some sign that GM is being sarcastic and is not really that dumb... .
Calm down folks, this is where garbage ducks the thread, then resurfaces in another thread to declare victory.
It is like you take out an equity loan on your house and spend all the money and THEN try to say that the debt/loan that you have is an asset
The government borrows from a variety of sources. And they spend it! So what? The government borrows from the trust fund, and pays it back, with interest. I never understood this as an argument even worth having. What's the "gotcha"?
I keep re-reading this, hoping to detect some sign that GM is being sarcastic and is not really that dumb... .
Are you another SS Trust Fund Truther? It's "not rally there"?
It is like you take out an equity loan on your house and spend all the money and THEN try to say that the debt/loan that you have is an asset
The government borrows from a variety of sources. And they spend it! So what? The government borrows from the trust fund, and pays it back, with interest. I never understood this as an argument even worth having. What's the "gotcha"?
Because the trust fund just has a big stack of IOUs in it and you're pretending that it's good as cash. Starting this year, SS payments will be more than payroll tax revenue, which means the Fed Gov't has to start borrowing from other sources to stay current with payments. And this trend will accelerate as baby boomers retire.
If you think we have budget issues now, think about the fact that SS, which once provided positive revenue, will now start requiring regular outlays from the treasury.
This is akin to borrowing from your 401k until it's gone. Now you're maxed out on your credit cards, your bank account is empty, and now payments are starting to come due on those 401k withdrawals. "But the money's still there! I still have retirement!"
I keep re-reading this, hoping to detect some sign that GM is being sarcastic and is not really that dumb... .
Are you another SS Trust Fund Truther? It's "not rally there"?
Do you not understand the mechanics of this? There's no money there. All there are are debt instruments. Which the government must pay back if any SS payments are to be made.
Prior to this year, SS took in more money than they paid out. So not only could they cover SS payments, but all the excess was "borrowed" by the Federal gov't. Now, revenue is less than outflow, so the gov't has to start redeeming those bonds if they want to keep paying SS recipients. In other words, SS has gone from a revenue generator to a nondiscretionary budget sinkhole. So again, there's no money "rally there" to cover it.
If you think I'm a "truther," point to me where there's an actual cash surplus in the SS trust fund.
Because the trust fund just has a big stack of IOUs in it and you're pretending that it's good as cash.
The federal government borrows from the fund, and repays it back, with interest. It has always paid it back, and always will. Why is this so fucking hard to understand. Can't figure it out for the life of me. Can we just tell China we're not paying them because it's just a worthless IOU!? Can you tell your bank you're not paying your mortgage payment anymore because it's just a worthless IOU? Aren't you embarrassed in having to have this explained to you?
Which the government must pay back if any SS payments are to be made.
The federal gov has never missed a payment to anyone. Never has bounced a check. Never will.
If you do not think there is a SS trust fund I don't know what to tell you. But maybe this will help.
Because the trust fund just has a big stack of IOUs in it and you're pretending that it's good as cash.
The federal government borrows from the fund, and repays it back, with interest. It has always paid it back, and always will. Why is this so fucking hard to understand. Can't figure it out for the life of me. Can we just tell China we're not paying them because it's just a worthless IOU!? Can you tell your bank you're not paying your mortgage payment anymore because it's just a worthless IOU? Aren't you embarrassed in having to have this explained to you?
Ugh, you're really having trouble understanding, aren't you? The point is that (1) There's no surplus cash in the SS trust fund, and (2) SS has gone from being a revenue generator to a massive nondiscretionary outlay. Combine that with the fact that we're already looking at record deficits for years to come, we're at the point where debt/GDP ration is going to put us in PIIGS territory soon, and now we're looking at the baby boomers starting to collect SS.
But sure, let's just keep singing the line that SS is fully funded. It's the same unreality facing public pensions right now. Tons of promises made, probably not enough cash in the world to cover all those promises. But maybe if you keep saying that it's fully funded, it'll become true.
Blue
Did you read the link, or no. If we can't agree that there is verifiable data to start from there isn't much sense in going further. I don't know exactly what the federal government owes the trustees, but whatever it amounts to will be repaid, as it always has, and always will. Right now the OASI Fund alone has 2.3 trillion in assets.
Are you another SS Trust Fund Truther? It's "not rally there"?
The SS Trust Fund is basically an accounting mechanism to track how much money in FICA taxes that Congess has spent on non-SS stuff over the years. Here is how it works:
Step 1: Government takes in more money in FICA taxes than it pays out in SS benefits. For the sake of argument, let's say the number is $100B.
Step 2: That same year, Congress takes that $100B and spends it on all the usual stuff: nuclear submarines, bridges to nowhere, blocks of welfare cheese, dick-washing classses for Africans, etc. Poof, it's gone.
Step 3: To keep track of how much money Congress has taken from FICA taxes to spend in the general fund over the years, they have the Treasury issue the SSA with $100B in bonds.
Step 4: In years when SS payments exceed FICA taxes, the SSA can "redeem" its bonds to meet its obligations. But to when the treasury pays out $100B in bonds to the SSA, that money has to come from someplace - the bond is just a statement of debt, an IOU, it's not real money. Treasury gets the money to pay off the bond by raising taxes or cutting an eqivalent amount elsewhere in the budget in the year that the bond is redeemed.
Your problem is that you seem to think of "Social Security" and "the government" as 2 different entities, which is kind of bizzare. If you want to feel good about the fact that "the government" owes "Social Security" a lot of money, go right ahead, but it all comes out of the taxpayer's pocket in the end.
garage spins his wheels: "The government borrows from a variety of sources. And they spend it! So what? The government borrows from the trust fund, and pays it back, with interest. I never understood this as an argument even worth having. What's the "gotcha"?"
What are the "varieties of sources" you mentioned?
Not even the most ardent supporters of the SS trust fund buy into the absolutely insane and ignorant idea that the government will "always pay it back". The best case scenarios take you out to 2037 and these are wildly optimistic. That's when it's supposed to become insolvent. Do you know what that means garage? Do you understand the consequences?
But wild fantasies aside, does it not occur to you that one government entity borrowing from another is kinda sorta slightly fucked up? This is not "trutherism", it's stark reality. In the private world, this would be illegal. You just need to come to grips with the fact that you don't understand debt instruments and government financing.
Think about it this way - about the interest you mention. Who is paying the interest to whom? Answer: the government to the government. Just stop and think about it.
How is this interest generated? (This is a really important question) Who is ultimately liable? Stop and think about this for a minute.
You pay the government for SS. The government takes that money and borrows it while simultaneously paying out benefits from it.
I keep asking you over and over - what is backing the treasuries? Do you have the first clue?
I'm going to stop here and vainly hope you're going to make an effort to answer some questions. (identified by the question marks)
You said there wasn't any money in there. And speaking of bonds, lo and behold there are over 3 Trillion dollars of.......BONDS!
Bonds are not money. They are a promise from the government to give money to the bondholder. The government has the power to break this promise, and every government in the world (except, so far, ours) has done exactly that at some point.
So the situation is that the government has promised to give the Social Security Administration (i.e., the government) $3 trillion dollars. Let's take a quick look at the government's bank balance, shall we?
Bank balance: -$13.6 trillion
Net yearly income: -$1 trillion
Uh oh.
So. Where's the $3 trillion going to come from to pay back Social Security? The options are:
(A): Borrow $3 trillion.
(B): Raise $3 trillion in taxes.
(C): Cut $3 trillion in other government spending
Now, let's suppose there were no bonds, and the Social Security Administration had neither money nor debt instruments in its "trust fund". How would the government meet its Social Security obligations then? Why, it would have to do one of the following:
(A): Borrow $3 trillion.
(B): Raise $3 trillion in taxes.
(C): Cut $3 trillion in other government spending
How about that. It would appear that the current state of the SSA is indistinguishable from it having... no money. Weird.
The government borrows from the trust fund, and pays it back, with interest. I never understood this as an argument even worth having.
Why, yes: "I borrowed the money from myself and spent it, but I paid myself back with interest so I came out ahead in the end" is, indeed, not the kind of statement most people feel a need to have arguments about. There being a fairly obvious response to it and all.
But to when the treasury pays out $100B in bonds to the SSA, that money has to come from someplace - the bond is just a statement of debt, an IOU, it's not real money.
If it didn't borrow from the SS Trust Fund, it would simply borrow and repay it to someone else. The fund gets repaid with a little bit of interest. And old people don't have to beg for food or eat out of dumpsters. Pretty good deal.
By the way what or how is your bank deposit insured? When all else fails and calamity hits the place where your money is located, guess who backs it? Who is the only one that can?
So the situation is that the government has promised to give the Social Security Administration (i.e., the government) $3 trillion dollars. Let's take a quick look at the government's bank balance, shall we?
Ah no, stop right there. the federal government didn't tell SSA they would give them 3 trillion dollars. The 3 trillion are the excess funds over disbursements, specifically designed to do so, to offset the retiring boomers. Ronald Reagan started that. The fact that money is borrowed out of the fund by the federal government, or a "promise to repaid" is irrelevant. As I said, it would have just borrowed it from somewhere else.
Not even the most ardent supporters of the SS trust fund buy into the absolutely insane and ignorant idea that the government will "always pay it back". The best case scenarios take you out to 2037 and these are wildly optimistic. That's when it's supposed to become insolvent. Do you know what that means garage? Do you understand the consequences?
The government has always repaid its debts. It has never bounced a check. Well, it doesn't write checks but you know what I mean. SS won't become insolvent in 2037, it will still be able to pay 75% of benefits for decades, if congress did nothing.
The government borrows from the trust fund, and pays it back, with interest. I never understood this as an argument even worth having.
Says Garage.
Gaaaaah!!! Such monumental stupidity.
garage said: "As I said, it would have just borrowed it from somewhere else."
From where? And why would it have to borrow it?
(I know you have no intention of answering these questions, but I'll keep tossing them out there)
Gaaaaah!!! Such monumental stupidity.
So the gov doesn't borrow from the trust fund, or the gov doesn't pay it back. Which is it.
garage: "The government has always repaid its debts. It has never bounced a check."
So the government is infallible and/or has a bottomless moneypit?
"SS won't become insolvent in 2037, it will still be able to pay 75% of benefits for decades, if congress did nothing."
Again, waaaaaay optimistic. But let's go with that. You just appealed to emotion upthread about old people not being able to do whatever, but seem fine with a 25% reduction in benefits. What gives?
So the government is infallible and/or has a bottomless moneypit?
Things would have to go so cataclysmic wrong, something you or I couldn't imagine happening. We are the sole issuers of our currency. We aren't on the gold standard anymore.
Speak for yourself dude. We're in it up to our eyeballs. I imagine it every day.
Things would have to go so cataclysmic wrong, something you or I couldn't imagine happening
Wanna bet?
garage said: "So the gov doesn't borrow from the trust fund, or the gov doesn't pay it back. Which is it."
It. Does. Not. Matter.
It borrows from itself and pays itself. As Maguro pointed out upthread, it's just an accounting scheme.
Do you actually know how, other than taxes, the government borrows money?
garage said: "Things would have to go so cataclysmic wrong, something you or I couldn't imagine happening."
Were you living under a rock for the entirety of 2008 or something?
The bond auctions are always consistently over prescribed. When they aren't, you let us know.
Was that an answer to any of the questions asked of you?
Oh, garage mahal.
Suppose that you have a paycheck and a savings account. You have saved (let's say) two thousand dollars toward your retirement.
Now you decide to take that two thousand out and make a down payment on a Porsche. You write yourself a note that says "I promise to put $2000 in my savings account".
Can you spend that note? No. You can only spend your paycheck. The note is just an accounting device. If you showed that note to a bank, saying that this note proves you can pay them two thousand dollars for something else when you've already spent the money that backed the note, you'd be laughed out.
Social Security, for years, took in more taxes than it paid out, and those taxes were spent. The "trust fund" is a note the government wrote itself.
Now, Social Security is about to take in less than it pays out. The government has already spent the money. To meet its SS obligations it has to raise taxes, cut benefits, or borrow the money. Just as though the "trust fund" didn't exist.
Remember in "Dumb and Dumber" when the two characters were giving each other other IOUs for millions of dollars, and so thought they were rich? Well, you're the chump, in this case.
The government can probably afford to pay SS for a long time, but the "trust fund" isn't an asset. It's a second order promise--a promise to keep the promises of SS.
garagemahal, don't take it from me:
http://en.wikipedia.org/wiki/Social_Security_Trust_Fund
It is instructive to note that the $2.5 Trillion Social Security Trust Fund has value, not as a tangible economic asset, but because it is a claim on behalf of beneficiaries on the goods and services produced by the working population. This claim will be enforced by the United States Government although the precise monetary mechanism of enforcement is yet to be determined. In order to repay the Trust Fund, the United States government has three options, which may all be pursued to varying degrees.
(1) The government may issue debt by selling treasuries, which would further raise the deficit. This scenario would likely increase the tax burden on future generations, as annual interest payments on the national debt would increase. If government revenues do not increase sufficiently either through taxes of economic growth, the government would be forced to cut spending on other programs (such as Defense, Education, Research) or else default on all or part of the debt.
(2) The government may raise taxes. Ironically, by reducing take home pay for workers, the government would make it harder for the younger, working generations to invest and save for retirement.
(3) The government may monetize trust fund obligations by transferring the treasuries held by the Trust Fund onto the Federal Reserve balance sheet. In such a transaction, the bonds would become "assets" on the Fed's balance sheet, and the Fed would create money "out of thin air" to purchase the bonds from the government. Under such a scenario, the bonds are converted into cash, which would then be used by the government to cover social security payments. This scenario would likely lead to increased inflation, as it would inflate the money supply without directly increasing the amount of goods and services produced by the economy as a whole.
Social Security, for years, took in more taxes than it paid out, and those taxes were spent. The "trust fund" is a note the government wrote itself.
That note is the closest thing to cash there is. It is so secure than banks back their lending with it. The fed mandates that banks keep a certain ratio of t-bills to the amount of money they lend. This is to prevent overextension and bank collapses. the Fed has a bunch of these t-bills, there’s a n exchange between the two and it’s the way in which the fed exerts control over the money supply. When the Fed buys t-bills from the banks, it is releasing money out into the economy and taking t-bills in, thereby increasing the money supply, then it sells t-bills, it is releasing those t-bills out into the economy and taking the money in.
GMay said: "Do you actually know how, other than taxes, the government borrows money?"
A little clarification on my part - I don't mean to suggest that the government borrows money by taxing.
I should have just asked: "Do you know how the government borrows money?"
Garage mahal, having the government "secure" debt with treasuries is exactly like you writing checks to yourself and then saying you're good for it.
Yes, we all know the government has promised to pay SS forever. The "trust fund" is a promise to keep the promise--it's not money.
If the government can't collect enough taxes in a given year to meet the obligation, it has to cut benefits or borrow. Just as though the "trust fund" weren't there.
If you believe the government will keep its promises, fine--but those promises are made in the form of future taxes or future borrowing. It has no pile of accumulated money with which to pay.
The fact that money is borrowed out of the fund by the federal government, or a "promise to repaid" is irrelevant
The fact that SSA lent all their money to people who can't pay it back is irrelevant to the question of whether SSA has money. Well said, garage.
garage said: "That note is the closest thing to cash there is. It is so secure than banks back their lending with it."
Ugh.
No, it's not the closest thing to cash there is. Treasuries are non-negotiable. Banks back their lending with it because that's all most of them have (or the government allows depending on how you look at it). Those bills/bonds/notes are IOUs from the government that are a promise to pay in cash.
They are only backed by the taxing power of the government. Federal tax revenues have taken a severe hit since the economic collapse. To shore up the gap, the Treasury can only create more securities to pay. These securities are then backed by the government printing more money.
So you have China, Japan, the UK, and the Fed who are the main purchasers of Treasuries. There are two problems with this scheme, 1) it assumes there will always be a market for Treasuries (other foreign powers are already looking elsewhere), and 2) because of #1, The Fed (wow, another U.S. government entity, is now the leading purchaser of U.S. government debt.
Apply that to your newfound knowledge you displayed at 10:57pm. Are you starting to grasp the insanity of the situation?
That note is the closest thing to cash there is. It is so secure than banks back their lending with it. The fed mandates that banks keep a certain ratio of t-bills to the amount of money they lend. This is to prevent overextension and bank collapses. the Fed has a bunch of these t-bills, there’s a n exchange between the two and it’s the way in which the fed exerts control over the money supply. When the Fed buys t-bills from the banks, it is releasing money out into the economy and taking t-bills in, thereby increasing the money supply, then it sells t-bills, it is releasing those t-bills out into the economy and taking the money in.
Actually, no. The notes that the U.S. government gives the SS trust fund are NOT the t-bills that you are talking about. As repeatedly pointed out above, they are specifically non-negotiable and non-transferable. And, they have nothing to do with the money supply as a result.
But, good try.
The bond auctions are always consistently over prescribed. When they aren't, you let us know.
October 14, 2010:
Treasurys Fall On Tepid Bond Sale; 30-Year Tumbles
http://online.wsj.com/article/BT-CO-20101014-712198.html
You know, never say never about American insolvency. Our debt to GDP ratio is already close to 100%. With little hope of growing our way out of it anytime soon, and this massive explosion of government spending that will continue for decades, we will soon be at insolvency's door. At some point our debt will loom so large that auctions start failing consistently. Once that happens, watch for the snowball effect.
It may be spam, but long's post comes closer to justifying a claim of Social Security solvency than anything garage has ever written here.
If garage is wrong the only explanation I can see is that Reagan raised Social Security taxes to make up for the revenues lost from his tax cuts for the rich. This implies Ronnie knew all along that supply side economics was bullshit.
thanks dbq, blue, gmay, rev, et al, for confirming my belief that Reagan did more to ruin the country than did the Rosenburgs.
At least he can't spend his tax cuts in hell.
If garage is wrong the only explanation I can see is that Reagan raised Social Security taxes to make up for the revenues lost from his tax cuts for the rich.
We already knew you were deeply stupid, FLS. But thank for confirming that.
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