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Author: IronicFelix Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1960809  
Subject: I honestly don't get it. Date: 2/4/2005 4:24 AM
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If Social Security is running a surplus and won't run a deficit until sometime about 40 years from now...

...and the country as a whole is currently running a deficit and is actually borrowing from Social Security...

...why is it that Social Security's possible future revenue-payments imbalance is considered a crisis whereas the current federal budget deficit is not?
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Author: deejay7 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679771 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 6:01 AM
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If Social Security is running a surplus and won't run a deficit until sometime about 40 years from now and the country as a whole is currently running a deficit and is actually borrowing from Social Security why is it that Social Security's possible future revenue-payments imbalance is considered a crisis whereas the current federal budget deficit is not?

Because Bush says so!

And when Bush says so, the Bushies rush to support him. After all, he's been President now for four years and hasn't yet made a mistake!!!

deejay7

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Author: 2Leos Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679772 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 6:12 AM
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I dunno. Maybe the fiscally-conservative (chuckle!) Bush needs another diversion?

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Author: Dopeman1 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679779 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 7:33 AM
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...why is it that Social Security's possible future revenue-payments imbalance is considered a crisis whereas the current federal budget deficit is not?



The federal budget doesn't have required outlays that go on into the future more than a couple of years. SS does.

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Author: c1ickfool Big funky green star, 20000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679780 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 8:13 AM
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If Social Security is running a surplus and won't run a deficit until sometime about 40 years from now...

...and the country as a whole is currently running a deficit and is actually borrowing from Social Security...

...why is it that Social Security's possible future revenue-payments imbalance is considered a crisis whereas the current federal budget deficit is not?



You know the answer already, Felix.
But nicely stated.



CF




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Author: kenm47 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679783 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 8:19 AM
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"If Social Security is running a surplus and won't run a deficit until sometime about 40 years from now...

...and the country as a whole is currently running a deficit and is actually borrowing from Social Security...

...why is it that Social Security's possible future revenue-payments imbalance is considered a crisis whereas the current federal budget deficit is not?"

Read a book on magic tricks and "misdirection" - perfected by this Administration into an art form in and of itself.

Ken

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Author: IronicFelix Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679785 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 8:24 AM
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The federal budget doesn't have required outlays that go on into the future more than a couple of years.

What about interest payments on Treasury notes and bonds?

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Author: MrCheeryO Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679787 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 8:29 AM
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What I don't get is why a good Christian like Mr. Bush finds it so easy to lie. He went on at some length about the federal employee savings thrift like it was a model for privatization. Problem is that it's in addition to SS and Mr. Bush knows that. I thought Christians were supposed to have some regard for la verite'.

Anyway, you got your 50 most influential Christians. No surprise who is #1.
http://www.thechurchreport.com/content/view/170/32/

If the IRS is going to go after the NAACP for political activities in the last campaign, are they also going to go after all the religious broadcasters and other Values folks that pimped for Bush/Cheney and the RNC relentlessly? Mr. Falwell essentially told the IRS to get stuffed when they warned tax exempts about the rules. He answers to a higher authority.

Payrolls out this morning. Going with a slight under at 195,000. We will see. Almost back to where the number stood four years ago.

Larry Kudlow praising the magnificent maestro Mr. Greenspan. Was publicly calling for his head less than a year ago and suggesting replacements that were Friends of Larry. Larry is funny.







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Author: goofyinMD Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679806 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 9:11 AM
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If Social Security is running a surplus and won't run a deficit until sometime about 40 years from now

Because the Right wing has wanted to end SS since its inception. It is a major theme on the conservative agenda. The practical politicians in the GOP no they'd get slaughtered if they tried a direct approach. So they have come up with this truly bizarre "plan" based on the the assumption that no one ever went broke underestimating the intelligence of the American people.



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Author: lowstudent Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679809 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 9:16 AM
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"What about interest payments on Treasury notes and bonds? "


Do you really not get it? Suprising.

The difference is that we can grow out of a budget deficit. It is possible and has been done many times that growth will outstrip spending. The budget deficit can be addressed in many ways, spending decreases or a mere slowdown in speding increases can get you there.

That path does not wor, can not work with social security the exact opposite is happening. The outlays are growing as the nation ages, that can't be changed without an immigration that would be unhealthy. We can't outgrow the problem from a revenue standpoint. That's the big difference.

When folks get to 70 or so, there are just too many jobs that they can not do, therefore there is just so far you can push the retirment age. Tax the rich salaries only go so far until ways other than salary figure to go to compensate folks. This has always proven unhealthy to force these weird compensation plans and that is what will happen with the soak the rich Dem thought, it will (AS ALWAYS!) do more harm than good.


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Author: IronicFelix Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679824 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 9:32 AM
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The difference is that we can grow out of a budget deficit.

We could also inflate the defecit away, I suppose.

What does "grow out of a budget deficit" mean, really?


The budget deficit can be addressed in many ways, spending decreases or a mere slowdown in speding increases can get you there.

Right, the same way you could address the looming (if you can call something 40 years off "looming") SS deficit by cutting spending, a.k.a benefits.

I think you're missing the point.

I'm asking why what might be the one government program that currently runs in the green, but might begin to run in the red 40 years from now if something isn't done, is considered a "crisis" when the much larger problem, it seems to me, is the budget deficit and the national debt.


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Author: FKJacobs Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679825 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 9:39 AM
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Iron.. I agree...

Let's talk about our nations loss of jobs to China & India and the resulting loss in wages for ordenary working people that is causing.
Maybe getting some fair trade not just the "Free" stuff..

If you make less than you will save less.

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Author: IronicFelix Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679835 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 10:04 AM
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The difference is that we can grow out of a budget deficit.

Do you mean that if the economy grows, wages increase and therefore tax revenues increase, reducing the deficit and perhaps creating a surplus?

What about the debt? How much growth would be required to pay down the debt? Or however much of it is necessary?

And if growth increases the overall budget's tax revenue collection, wouldn't it also increase SS tax collection?

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Author: lowstudent Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679841 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 10:20 AM
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"I'm asking why what might be the one government program that currently runs in the green, but might begin to run in the red 40 years from now if something isn't done, is considered a "crisis" when the much larger problem, it seems to me, is the budget deficit and the national debt."

I'm not missing the point GDP will be up next year and the year after that. Tax revenues will be up. The same is not true for social security. 12.4% is already pretty painful. The benefits are already meager for someone who has to live on it.

Any cuts in who gets it admits it is a welfare program. Then the stuff will really hit the fan. So benefit cuts are a problem, 67 is already a little old to be laboring for a large part of the workforce so there is a problem there.

The chance of under sixty sevens growing at an 8:1 ratio reuired for paying benefits is non-existant.

We can inflate our way out of deficit and with inflation coming by many accounts of what deficits lead to, running it up right now makes sense. But that is a different story. SS is indexed so you can't inflate your way out of it.

You can grow your way out of a deficit, but not out of SS problems unless you up youngster immigration to an unbelievable level. That is why SS must be addressed. I do not understand how you can't see the difference between tax revenues on an entire economy and tax revenues on workers only and a non flexible base of growing beneficiaries.


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Author: ramsfanray Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679843 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 10:25 AM
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Anyway, you got your 50 most influential Christians. No surprise who is #1.

No it is not a surprise. He's the president. That makes him number #1 on pretty much any list of most influencial whatevers.

Most influentuial guys named George.
Most influential people with grey hair.
Most influential people with twin daughters.
Most influential people who went to Yale.
Most influential people with 4-letter surnames.
Most influential people that wear ties.

He would not however make the list of the fifty most influential Senators.


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Author: lowstudent Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679844 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 10:25 AM
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"And if growth increases the overall budget's tax revenue collection, wouldn't it also increase SS tax collection?"


This is where the answer is no, no it would not. That is the problem and why SS must be addressed seperately.

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Author: ghdude Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679858 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 10:48 AM
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...why is it that Social Security's possible future revenue-payments imbalance is considered a crisis whereas the current federal budget deficit is not?


Good question but it boils down to this. I don't want to work my entire life paying into a system I'm currently unlikely to benefit much from. Call me selfish, but I just don't think Bill Gates needs my hard earned dollars (full disclosure, I've paid very little into Social Security as a government employee for most of my adult life so I'm speaking more as a young adult than for myself.)

Derek

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Author: IronicFelix Big funky green star, 20000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679870 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 11:03 AM
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Good question but it boils down to this. I don't want to work my entire life paying into a system I'm currently unlikely to benefit much from. Call me selfish, but I just don't think Bill Gates needs my hard earned dollars (full disclosure, I've paid very little into Social Security as a government employee for most of my adult life so I'm speaking more as a young adult than for myself.)

Everybody keeps changing the subject.

I don't like Social Security either, in part, for the very same reasons.

The question isn't whether you like it or not. It's why is SS said to be in "crisis" because of some possible impending revenue-payments imbalance whereas Bush's deficit spending and the national debt are oaky-doaky.


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Author: ghdude Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679877 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 11:09 AM
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The question isn't whether you like it or not. It's why is SS said to be in "crisis" because of some possible impending revenue-payments imbalance whereas Bush's deficit spending and the national debt are oaky-doaky.

I'm not changing the subject. For my generation it IS a crisis because we are paying for a pension program we aren't going to get. Fix it now because when we're 50 it will be too late.

It's not a crisis for most of the country but for once, a baby boomer politician seems to be paying attention to the 35 and under set.

And PS the deficit spending isn't oaky-doaky. I was glad to here that his budget proposal will be lean and mean.

Derek

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Author: AdvocatusDiaboli Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679897 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 11:41 AM
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The federal budget doesn't have required outlays that go on into the future more than a couple of years. SS does.

Of course. It would be totally easy for the state to cut the defense budget in half!

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Author: tenworlds Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679904 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 11:51 AM
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I'm asking why what might be the one government program that currently runs in the green, but might begin to run in the red 40 years from now if something isn't done, is considered a "crisis" when the much larger problem, it seems to me, is the budget deficit and the national debt.
-----

Honestly? IMHO...
Conservatives haven't liked SocSec from the getgo. But here, now, I think it's just another situation that the PNAC cabal in the WH is using to their advantage. While everyone is focused on this latest 'crisis', they are quietly advancing their agenda of Pax Americana. The same way they latched onto the 9/11 attacks as a cover to invade, and occupy the ME. (Iraq just happened to be low hanging fruit.)
To them, the deficit is merely the cost of 'doing business'. Strengthening the Patriot Act, consolidating the 'ownership' of Iraq, re-structuring the military to be world police, and much, much more.
http://www.pnac.info/
http://www.oldamericancentury.org/pnac.htm
Same with the 'Marriage Amendment'. It's a bone thrown to the religious right so the neo-cons can maintain power. Whether the amendment happens or not isn't important to them. It's just helping to stir up the ignorant masses so they won't see what's actually happening until it's too late.

The 'peenackers' could care less about any of this stuff. They believe that the US has a responsibility to act as a "benevolent global hegemon." Forcing democracy at the point of a gun.
http://www.csmonitor.com/specials/neocon/neocon101.html

But, so far anyway, it appears they are a bunch of incompetents.

And George Bush is their tool.

Like a chainsaw in the hands of a monkey.






Rich

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Author: MATZOID Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 679922 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 12:24 PM
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Anyway, you got your 50 most influential Christians. No surprise who is #1.
http://www.thechurchreport.com/content/view/170/32/


You know you can trust a list that has as its listees Bush, Pat Robertson, Ralph Reed, and Benny Hinn alongside Jimmy Carter, Barak Obama, and Jesse Jackson.

I know these people are all working hard toward the same Christian ends.

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Author: MrCynic Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 680050 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 2:35 PM
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...why is it that Social Security's possible future revenue-payments imbalance is considered a crisis whereas the current federal budget deficit is not?

Because we can grow our way out of a deficit, but the size of the social security liablity increases as the economy increases since benefits are tied to wages.

I honestly can't get too excited about social security. I don't expect to get any benefits at all. In the meantime, it's just another tax, just another transfer payment.

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Author: MrCynic Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 680060 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 2:44 PM
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What I don't get is why a good Christian like Mr. Bush finds it so easy to lie. He went on at some length about the federal employee savings thrift like it was a model for privatization. Problem is that it's in addition to SS and Mr. Bush knows that. I thought Christians were supposed to have some regard for la verite'.

He didn't say that it would be exactly like the federal employee savings program, he said it would be something like that. And so once again you distort what he says and make the bogus claim that he's lying.

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Author: JustWhoIAm Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 680088 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 2:58 PM
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...why is it that Social Security's possible future revenue-payments imbalance is considered a crisis whereas the current federal budget deficit is not?


It is a crisis for the politicians, because they will have to be accountable for all of their wasteful spending as SS progresses toward break even and deficit. Right now they have a nice cash cow to milk without having "the masses" realize just how bad things are.

Keith

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Author: kwag7693 Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 680114 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 3:29 PM
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Because we can grow our way out of a deficit, but the size of the social security liablity increases as the economy increases since benefits are tied to wages.

I honestly can't get too excited about social security. I don't expect to get any benefits at all. In the meantime, it's just another tax, just another transfer payment.


This post made me sad. You sound beaten down by the man.


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Author: Ibsulon Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 680133 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 4:23 PM
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The difference is that we can grow out of a budget deficit.

We have growth because we have been adding more people to this country by birthrate and immigration.

While the Earth's population is getting ugly, the United States has lowered itself to stable without immigration. That means we're going to depend on immigration for this population growth to grow the economy.

Now, lucky for us, we're more used to this than Europe is, as they've been having major problems introducing a heterogeneous culture. We also have Latin America and India from which to draw rather than the Middle east, which is closer to our current values than their immigrants are to their countries' values.

But this depends on people wanting to come to America. "Come to America and help us pay off our debt!" may not be as appealing in 20 years.

Oh, by the way... the interest on the debt could pay for Iraq -- or world war 3 for that matter... or an across-the-board 4% tax cut... or a fully-funded health-care program... or, frankly, the government we have now. The level of spending wouldn't be a problem without the interest on the debt!

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Author: XCgeoff Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 680147 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 4:45 PM
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Here are my 2 cents on why SS is in a crisis mode and the budget deficit and national debt aren't in as much a crisis....

The ordinary budget deficit is a problem, but it isn't a huge crisis because spending can be cut from a wide number of things to balance the budget. A growing economy would generate significantly more tax revenue for the federal government than it would for SS revenues with their different tax structures.

Social Security is facing a crisis because when the boomers start retiring, the revenues will soon fall below expenditures which will put additional strains on the federal budget. Some sort of transition would probably temporarily add to the budget deficit, but the net effect of reducing future benefit obligations would be less of a budget crisis in the future when the trust fund is exhausted and SS can't pay its obligations.

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Author: matadorph Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 680198 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 6:45 PM
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For my generation it IS a crisis because we are paying for a pension program we aren't going to get.

That's an absurd statement and I find it troubling that so many people of my generation (18-34) believe this sad canard. How are you not going to get Social Security? As long as there are payroll taxes, there will be SS benefits distributed. And, according to the non-partisan Congressional Bugdet Office, Social Security will pay full benefits until 2052 if we do nothing at all.

You'll get yours, ghdude. So will I. There is no crisis.

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Author: Dopeman1 Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 680200 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 6:48 PM
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That's an absurd statement and I find it troubling that so many people of my generation (18-34) believe this sad canard. How are you not going to get Social Security? As long as there are payroll taxes, there will be SS benefits distributed.

Sure, just not to us. They'll be going to pay the Boomer's SS, not yours and not mine.


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Author: ghdude Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 680219 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 8:07 PM
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That's an absurd statement and I find it troubling that so many people of my generation (18-34) believe this sad canard. How are you not going to get Social Security? As long as there are payroll taxes, there will be SS benefits distributed. And, according to the non-partisan Congressional Bugdet Office, Social Security will pay full benefits until 2052 if we do nothing at all.

You'll get yours, ghdude. So will I. There is no crisis.


First, the calculations are based on people living no longer than they actually do now. If you think's that the case, you're in the extreme minority. Second, if the surplus is spent before we retire and the baby boomers live longer than expected, you and I will never see remotely what we paid in.

The problem with this whole theory of paying as we go is that it assumes a static payee to benificiary ratio when the reality is that ratio has dramatically shifted.

You may be right. We might get to see social security, but our generation and our children will pay a far larger portion of their salary to keep benefits where they are. Otherwise, benefits have to be dramatically reduced.

Derek

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Author: MadCapitalist Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 680228 of 1960809
Subject: Re: I honestly don't get it. Date: 2/4/2005 8:34 PM
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If Social Security is running a surplus and won't run a deficit until sometime about 40 years from now

You are right. You don't get it. Your premise is wrong, so I ignored the rest. The Social Security Trust Fund is expected to run a deficit beginning in 2018, which is in only 13 years.

If you think the deficits are big now, just wait until the government has to find a way to come up with massive amounts of cash to cover the SS and Medicare deficits.

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Author: matadorph Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 680327 of 1960809
Subject: Re: I honestly don't get it. Date: 2/5/2005 2:44 AM
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Sure, just not to us. They'll be going to pay the Boomer's SS, not yours and not mine.

Wrong.

Again, as long as there are people working in the good 'ole US of A, there will be SS benefits paid. Why is this concept so hard for people to grasp?

Employment = payroll taxes = tax revenue = SS benefits paid.

Saying the Social Security system will be bankrupt and that our money won't be there for us is a gross distortion of the truth. If no action is taken at all, SS is fully solvent and will pay full benefits until 2052. After that point, assuming no action has been taken at all, benefits will be reduced by approximately 27%.

That's a problem worth addressing, sure, but is it bankruptcy? No.

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Author: XCgeoff Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 680403 of 1960809
Subject: Re: I honestly don't get it. Date: 2/5/2005 10:41 AM
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Wrong.

Again, as long as there are people working in the good 'ole US of A, there will be SS benefits paid. Why is this concept so hard for people to grasp?

Employment = payroll taxes = tax revenue = SS benefits paid.

Saying the Social Security system will be bankrupt and that our money won't be there for us is a gross distortion of the truth. If no action is taken at all, SS is fully solvent and will pay full benefits until 2052. After that point, assuming no action has been taken at all, benefits will be reduced by approximately 27%.

That's a problem worth addressing, sure, but is it bankruptcy? No.


I think your math is a little fuzzy and I'd like to see a link or something to back up your claims. Right now, most projections say that SS can pay out the promised benefits until 2042. One major assumption is that the "trust fund" money will be available to pay out benefits. For that to happen, we will have to see either major spending cuts or tax increases elsewhere in the budget.

Sure, it will pay out reduced benefits, but who in their right mind would pay $1000 a month into a system that is promising to pay them $1200 a month when they retire, but everyone agrees that there is no way it can pay the promised benefits. You just say no big deal, it will pay you $900 instead and there is nothing wrong with that. What a crock.

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Author: matadorph Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 680534 of 1960809
Subject: Re: I honestly don't get it. Date: 2/5/2005 3:55 PM
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"I think your math is a little fuzzy and I'd like to see a link or something to back up your claims. Right now, most projections say that SS can pay out the promised benefits until 2042. "

It's not my math, it's math done by the Congressional Budget Office....

Trust-fund-financed benefits equal scheduled benefits until the trust funds are exhausted (projected to occur in 2052) and Social Security revenues thereafter. In 2053, dedicated revenues are projected to equal only 81 percent of scheduled outlays, so trust-fund-financed benefits are 19 percent lower than scheduled benefits (see Figure 1-3). The difference grows: by 2100, projected revenues are only 71 percent of projected outlays.
http://www.cbo.gov/showdoc.cfm?index=5530&sequence=2

While the reduced revenue is undoubtedly an issue to be addressed, it's definitely not a crisis, and the above numbers show how ignorant most young Americans are in regards to SS. If they knew this, I doubt many of them would characterize the situation as bankrupt or make silly statements that "the money won't be there."

"One major assumption is that the "trust fund" money will be available to pay out benefits. For that to happen, we will have to see either major spending cuts or tax increases elsewhere in the budget."

Isn't that the specific purpose of the trust fund, to augment expected shortfalls in payroll taxes in order to pay out benefits? How is that an assumption? Or are you referring to when the total bonds owned in the fund will be cashed out and depleted? Obviously, if no action is taken, the bonds held in the trust fund will eventually be converted to cash and spent on benefits. But that's still forty years away, and right now the system can pay FULL benefits up until that point. After 2052 (or 2042, depending on who you ask) the system will not be able to pay out full benefits, but partial benefits will be paid! And that's if we take no action at all. This isn't a big deal. It's a problem, sure, but it's nothing we haven't dealt with before. In fact, the projected shortfall for the next 75 years is smaller than ones we covered by adjustments in previous decades. And it's also about one-third the size of Bush's tax cuts.

By the way, I hope you realize that the 2042 figure used by the privateers relies upon an unspoken yet pessimistic assumption that overall economic growth will slow as the Baby Boomers leave the workforce. Where the economy grew at a 3.4% annual rate over the last 75 years, the SS trustees see it growing at a much lower rate of 1.9% per year over the next 75 years. If that's the case, how in the world is privatizing SS a good idea? Considering the program is essentially retirement insurance, how is it a good thing to encourage individuals to increase their exposure to risk at a time that the SS trustees assume slowing economic growth? The only thing it will accomplish is lowered tax revenues, higher government deficits, and increased risk for average Americans.

Want a private account? Open an IRA!

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Author: coyote97 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 680536 of 1960809
Subject: Re: I honestly don't get it. Date: 2/5/2005 4:07 PM
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Want a private account? Open an IRA!

I have an IRA. I want the 13% they take back to put in my IRA!! At this point I would settle for somebody having the guts to tell my what percent of my contributions really should be mine. On social security it is most assuredly all about me.

13%!!!!!!!!!!!! That is a huge tax on every dollar working class Joe makes. It astounds me there isn't widespread outrage and its just taken for granted they just take it for our own good with no clear explanation of how its for our own good and no promise as to what portion of it is the contributors.

That is the point of it...... A private account is a claim on your contributions. Those opposing any level of privatization are opposing that any contributors have any real claim to their contributions.

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Author: matadorph Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 680580 of 1960809
Subject: Re: I honestly don't get it. Date: 2/5/2005 5:54 PM
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Sure, it will pay out reduced benefits, but who in their right mind would pay $1000 a month into a system that is promising to pay them $1200 a month when they retire, but everyone agrees that there is no way it can pay the promised benefits.

Just out of curiousity, what does the phrase "reduced benefits" mean to you? I think you're forgetting a very important aspect of the benefits structure: they increase substantially over time to account for inflation and wage increases. Sadly, most people have the wrong idea that the benefit reduction is measured in today's benefits and today's dollars. Most of them assume they're going to receive nothing at all or they will receive benefits that are much, much lower than what SS beneficiaries receive this year. Nonsense!

Again, the system can pay the promised benefits in full until the year 2042, according to the most pessimistic view! And those promised benefits are substantially higher than what today's recipients get. How many Americans actually know this?

In order for the SSA to meet its scheduled increase in individual benefits beyond 2042, action will have to be taken or the program will be forced to cut promised payouts by an estimated 27%. However, those promised benefits will be significantly higher than the benefits promised today, so in reality that 27% cut isn't as dire as most Americans believe. And that's if we do nothing at all.

We've been down this road before, right? We made adjustments then--adjustments which benefitted the wealthiest Americans, by the way--and solidified the solvency of the Social Security program.

There is no crisis, people!


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