Note to Weston White

[SteveSy]

$11 trillion isn't much cosnidering the assets

It isn't $11 trillion, it's $50-60-70 trillion in total liabilities, but, unfortunately, we don't use accrual accounting for most federal government purposes.

Are you suggesting that we should accrue future Social Security benefits as a liability, but not accrue future Social Security taxes as an asset?

That wouldn't make much sense.

Have at it, it would still be so negative it would be mind boggling especially considering there are more money going out than coming in. At least if it hasn't happened yet it will very soon, within 5 years or so. Can't remember the exact year the CBO said it would happen. I think they projected taxes would have to be 110% of income when the tsunami of retirees hits.

[The Operative]

Are you suggesting that we should accrue future Social Security benefits as a liability, but not accrue future Social Security taxes as an asset?

That wouldn't make much sense.

Have at it, it would still be so negative it would be mind boggling especially considering there are more money going out than coming in. At least if it hasn't happened yet it will very soon, within 5 years or so. Can't remember the exact year the CBO said it would happen. I think they projected taxes would have to be 110% of income when the tsunami of retirees hits.

http://www.cbo.gov/ftpdocs/96xx/doc9649 ... Update.pdf

CBO projects that outlays will first exceed revenues in 2019 and that the Social Security trust funds will be exhausted in 2049. (Page 1)

That scenario incorporates the assumption that once the Social Security trust funds are exhausted, SSA will reduce all benefits by a percentage that varies each year, so that the program’s total outlays equal its total available revenues. (Page 1)

In 2049— CBO’s projected date for the trust funds’ exhaustion— revenues will equal only 84 percent of scheduled outlays. Thus, payable benefits will be 16 percent lower than scheduled benefits. Beginning in about 2070, the gap between scheduled and payable benefits will begin to grow, and by 2082, CBO projects, payable benefits will be 19 percent less than scheduled benefits. (Page 2)

If payable benefits under the current law will only be 19 percent less than scheduled benefits, only a 19% increase in revenues will be needed to pay full scheduled benefits. So, instead of a 6.2% tax (or 12.4%, if you include the employer's contribution), it will need to be a 7.4% tax (or 14.8%).

[SteveSy]

If payable benefits under the current law will only be 19 percent less than scheduled benefits, only a 19% increase in revenues will be needed to pay full scheduled benefits. So, instead of a 6.2% tax (or 12.4%, if you include the employer's contribution), it will need to be a 7.4% tax (or 14.8%).

One itty bitty problem....the "trust fund" is nothing but IOU's. It's already "exhausted", what you quoted assumes the government pays those IOU's. Now, with that in mind how do you propose the government is going to be able to pay those back considering it's already running a deficit larger than in any point in history by far. The government has been siphoning every iota of surplus funds in the program to offset its massive spending since its inception. Furthermore, since the government will be losing the surplus it uses to fund other spending its going to need to replace that money from somewhere else. btw, that's actually the smaller problem, we have the same issue with the Medicare "trust fund" except its probably three times bigger.

[The Operative]

If payable benefits under the current law will only be 19 percent less than scheduled benefits, only a 19% increase in revenues will be needed to pay full scheduled benefits. So, instead of a 6.2% tax (or 12.4%, if you include the employer's contribution), it will need to be a 7.4% tax (or 14.8%).

One itty bitty problem....the "trust fund" is nothing but IOU's. It's already "exhausted", what you quoted assumes the government pays those IOU's. Now, with that in mind how do you propose the government is going to be able to pay those back considering it's already running a deficit larger than in any point in history by far. The government has been siphoning every iota of surplus funds in the program to offset its massive spending since its inception.

No, it is not "exhausted". I have a question for you, Steve. Exactly where is the extra revenue from social security taxes supposed to be invested? Do you think the government should have just stuffed it in a big mattress? Or, do you think it should have invested $2 trillion in the stock and debt of public companies? I believe the government should have invested the trust fund money into the safest, most reliable investment in the world. Oh right, they did.

[SteveSy]

No, it is not "exhausted". I have a question for you, Steve. Exactly where is the extra revenue from social security taxes supposed to be invested? Do you think the government should have just stuffed it in a big mattress? Or, do you think it should have invested $2 trillion in the stock and debt of public companies? I believe the government should have invested the trust fund money into the safest, most reliable investment in the world. Oh right, they did.

So investing it by spending it all was the safest investment, who would of thunk

I'll tell you what if that kind of investing is so safe why don't you try it. Get your check, invest it by writing yourself an IOU and spend it....Golly gee you should have a cool million in assets before you know it! All you have to do to collect is, well, uh, use your next pay check to pay the IOU! You're rich!

[Joey Smith]

I'll give Stevie the last word, and then lock this topic as having run far away from its original purpose.