Social Security

[chipwhich]

And that's true of all t-bills, right?

All that matters Larry is that when the deficit occurs, and the US government comes calling for repayment of those T-Bills, they are coming calling to the US Government. Not to a BANK filled with cash. Not to a box full of cash stored away. Neither party (the SS trust fund or the US Government have the money). There is no CASH there is just a deficit. So the US Government has to honor those treasury bills that they backed. Problem is, the US Government doesn't have that money. So it has to BORROW money in order to back the T-Bill. A t bill to the SS Trust fund is just a deferred debt by the US government. It's borrowing money from itself to be able to pay operating expenses. When that t-bill comes due when there is a deficit...well that furthers the deficit.

It's a shell game. It's like you writing yourself your own IOU and saying you promise to pay yourself back when you retire. Then when you retire and ask yourself to pay yourself back with interest, you don't have that money so you borrow it to pay yourself back. But one thing is for certain, you had the IOU promising to pay yourself back with interest. And there is no way in hell you wont pay yourself back. But now you had to borrow to pay yourself back, and now have incurred debt to do so.

You need to stay out of any threads relating to matters regarding money until you understand some basics of finance.

[Larry]

All that matters Larry is that when the deficit occurs, and the US government comes calling for repayment of those T-Bills, they are coming calling to the US Government. Not to a BANK filled with cash. Not to a box full of cash stored away. Neither party (the SS trust fund or the US Government have the money). There is no CASH there is just a deficit. So the US Government has to honor those treasury bills that they backed. Problem is, the US Government doesn't have that money. So it has to BORROW money in order to back the T-Bill. A t bill to the SS Trust fund is just a deferred debt by the US government. It's borrowing money from itself to be able to pay operating expenses. When that t-bill comes due when there is a deficit...well that furthers the deficit.

And that's true of all t-bills, right?

If the National Bank of China comes up to the window to redeem their t-bills, then all of those statements are still true, right?

You need to stay out of any threads relating to matters regarding money until you understand some basics of finance.

You need to drop the personal attacks until you can do more than spout slogans and dodge facts.

I understand that there's probably 4,000 different ways you can try to claim that US t-bills don't exist (if SS owns them). (I even listed some of them. On page 1.)

But, funny. I've probably asked you a dozen times whether the t-bills owned by SS are different in any way from t-bills owned by anybody else.

And your response to every single one of them has been a personal attack, and a pile of slogans. I wonder why.

[Hubbs]

Now tell me how we get from there, to:

Well, he certainly didn't need the insults, but he equally-certainly didn't say that SS doesn't have Treasury securities. (I believe most of them are notes and bonds, not bills, but that's just splitting hairs over technical definitions.) He actually explicitly stated that SS holds nothing but Treasury securities. You seem to be trying to "get" him on the fact that the Treasury will have to sell more "standard" debt to pay SS, when he's saying that's the problem. How much US debt do you think the world can absorb?

[chipwhich]

And that's true of all t-bills, right?

If the National Bank of China comes up to the window to redeem their t-bills, then all of those statements are still true, right?

You need to drop the personal attacks until you can do more than spout slogans and dodge facts.

I understand that there's probably 4,000 different ways you can try to claim that US t-bills don't exist (if SS owns them). (I even listed some of them. On page 1.)

But, funny. I've probably asked you a dozen times whether the t-bills owned by SS are different in any way from t-bills owned by anybody else.

And your response to every single one of them has been a personal attack, and a pile of slogans. I wonder why.

I have answered the question, but you don't listen. You spout GOP GOP GOP and are blinded by political reverence.

Here is the difference.

If I sell the Chinese a T-Bill, and it comes due, I may or may not have the money to repay that debt. Either way I have to repay that debt in order to keep up my credit rating.

If my SS Fund T-Bill comes due. It's only coming due because MYSELF, the FEDERAL GOVERNMENT, doesn't have the money to pay the social security they owe. You see, if we ALWAYS operate in surplus mode, those T-Bills WILL NEVER COME DUE. It's only when we are operating at a DEFICIT that they will demand payment. But if THEY ARE AT A DEFICIT, THE GOVERNMENT is at a deficit. They are one in the same. There IS NO MONEY. Bottom line is, all the Social Security Trust Fund is delaying borrowing money to the future. Pushing it off until tomorrow. THERE IS NO MONEY. It's not a personal attack Larry, it's really scary to be honest that Americans don't understand this. You aren't the only one. You do have one thing correct though. The Social Security trust fund does have Treasury Bulls (iou's from itself the US Government) and paying interest. Heck why don't we just give the SS Trust Fund T-Bills with 30% interest rate paybacks, that way we can really cover our future gains Heck make them 50%. SS will never go in debt if the US Government gives itself that kind of return.

[Larry]

Well, he certainly didn't need the insults, but he equally-certainly didn't say that SS doesn't have Treasury securities. (I believe most of them are notes and bonds, not bills, but that's just splitting hairs over technical definitions.) He actually explicitly stated that SS holds nothing but Treasury securities. You seem to be trying to "get" him on the fact that the Treasury will have to sell more "standard" debt to pay SS, when he's saying that's the problem. How much US debt do you think the world can absorb?

But he didn't just say that they'll have to sell t-bills on the open market. I said that. He said things like "there is no money", "It's worthless IOUs", "there is no vault full of cash".

There has never been a vault full of cash to pay back any treasury note, in the history of this or any other nation. (That's why it's called "a debt".) We sell t-bills because we don't have the cash.

But, when there's a chance that social security might actually want their money back, then the fact that the US Government doesn't have a vault full of cash for those t-bills, suddenly leads to cries on bankruptcy, and claims that anybody who says otherwise is a delusional idiot.

----------

Now, if you want to argue that, if SS starts to demand their money back, and the US has to go out and try to sell more t-bills, then this might lead to some Bad Results, then I'm right there with you. The impression I'm getting (admittedly from way out here in the cheap seats) is that the world is approaching the point where the US Government won't be able to borrow money at interest rates that are often below the inflation rate, any more.

At the very least, I could see that this could lead to us having to pay much higher interest rates, to get people to buy more t-bills. (The fact that our debt is so huge that we might as well paint the words "We're planning on printing money to pay this back" on a blimp, could be a factor, too.)

(And higher interest rates could well lead to a feedback effect, since if the interest on the debt goes up, then the deficit gets bigger, meaning we need to borrow more.)

But all of these factors certainly appear, to me, to be problems with our overall debt. SS cashing in their debt, at least in the early days, would be a trivial portion of that problem.

[wilsonian]

Social security is no different from Bernie Madoff's infamous ponzi scheme. Eventually, it will all come crashing down, like a house of a cards.

[DRSmith]

The treasury bills EXIST. The money to back them DOESN'T. Where is the MONEY Larry? When the deficit arises, a treasury bill has to be cashed in. Who provides that cash? The US government. Cash THEY DON'T HAVE. Are you really that dense?

So rather than pay back the money they owe they want to screw those who have paid into SS and keep the tac cuts for the rich

This is like the guy in Kasich in Ohio who took the state pension and benefits funds and was able to get the money for wall street lost it all and is now attacking the state employees wages pensions and benefits

[Larry]

I have answered the question, but you don't listen. You spout GOP GOP GOP and are blinded by political reverence.

No, you haven't, and no I didn't. Try to sell that lie someplace else.

Or at least have the common freaking courtesy of not continuing it.

Here is the difference.

If I sell the Chinese a T-Bill, and it comes due, I may or may not have the money to repay that debt. Either way I have to repay that debt in order to keep up my credit rating.

If my SS Fund T-Bill comes due. It's only coming due because MYSELF, the FEDERAL GOVERNMENT, doesn't have the money to pay the social security they owe. You see, if we ALWAYS operate in surplus mode, those T-Bills WILL NEVER COME DUE. It's only when we are operating at a DEFICIT that they will demand payment. But if THEY ARE AT A DEFICIT, THE GOVERNMENT is at a deficit. They are one in the same. There IS NO MONEY. Bottom line is, all the Social Security Trust Fund is delaying borrowing money to the future. Pushing it off until tomorrow. THERE IS NO MONEY. It's not a personal attack Larry, it's really scary to be honest that Americans don't understand this. You aren't the only one. You do have one thing correct though. The Social Security trust fund does have Treasury Bulls (iou's from itself the US Government) and paying interest. Heck why don't we just give the SS Trust Fund T-Bills with 30% interest rate paybacks, that way we can really cover our future gains Heck make them 50%. SS will never go in debt if the US Government gives itself that kind of return.

And the only one of those statements that isn't true of every t-bill ever sold is that if the government renegs on the debt it borrowed from SS, it won;t affect the US's credit rating. (Sounds like a great reason to reneg, huh?)

Show me where the money is in the vault, to pay back all the t-bills we've sold to China.

Guess what? It's the same vault that holds all of the cash to repay SS's t-bills.

Yes, I'm well aware that if SS runs a surplus forever, then the government can keep taking the money forever, and spending it someplace else forever, and never ever pay it back forever.

But that's certainly no reason to say that the debt doesn't exist.

The same thing is true about the t-bills sold to China. If China never asks for their money back, then we never have to give it to them.

Both t-bills are backed up by exactly the same thing. The full faith and credit of the US Government. And nothing else.

----------

Now, since you want to run away from an honest answer to the question, I'll tell you what the differences are between the t-bills owned by the SS trust fund, and the ones owned by China.

The ones owned by SS aren't officially listed, on the official statistic of how far in debt the government is.

That's the only difference. (Well, the only firm, binary difference. It's certainly possible that when SS cashes in her t-bills, and the government has to sell new ones, that the new ones might have higher interest rates than the ones being redeemed. I certainly don't know. But it wouldn't surprise me.)

But the fact that SS t-bills haven't been listed on the official "total government debt" statistic isn't a crisis. And, frankly, arguing that if they start cashing in their t-bills, then it's going to count against their statistics, is like complaining that when the Redskins QB gets sacked, then it counts against the rushing yds/attempt statistic.

[chipwhich]

But the fact that SS t-bills haven't been listed on the official "total government debt" statistic isn't a crisis. And, frankly, arguing that if they start cashing in their t-bills, then it's going to count against their statistics, is like complaining that when the Redskins QB gets sacked, then it counts against the rushing yds/attempt statistic.

Trust me, I have answered your question 9 ways till Sunday.

The point is, which you really don't understand, when the deficit in receipts for SS versus outlays occurs, it is a crisis. I don't care if you tell me the SS Trust Fund has 500 Trillion Dollars in it. The US government doesn't have that money. The trust fund doesn't have that money. It's the left hand passing the right hand an iou in exchange for cash, and vice versa, but when both hands are empty of cash, the debt then has to occur. So that's when we start borrowing against the imaginary 500 Trillion dollars. Who cares how it is "accounted for". It doesn't exist.

You basically admit that in your "honest answer". They don't list it on the official statistic of how far the government is in debt. That's because the SS treasury bill is nothing but a mirage, writing yourself an IOU. So how you can stand on a soap box and say this isn't an issue is dumbfounding to me. Before you can discuss Social Security politically, you first have to understand it fiscally, and what is really going on. Every post you make shows you can't grasp step one. I can tell however, you are slowly getting it, but don't want to man up and admit it to me

---------- Post added April-3rd-2011 at 03:03 PM ----------

So rather than pay back the money they owe they want to screw those who have paid into SS and keep the tac cuts for the rich

Yet another post that doesn't have any basis or factuality with regards to the issue, or what is going on, but takes a meaningless political cheap shot. First understand the topic, then once you grasp it, defend it with regards to your political viewpoint. Thanks.

[DRSmith]

So instead of cutting SS and making the tax cuts for the rich permenant why not bring the tax rates back to what they were in 2000 use the money to repay the money owed to SS

[Larry]

Trust me, I have answered your question 9 ways till Sunday.

Yes, you have.

By throwing around a dozen slogans, every one of which applies equally to all government debt. And by insulting me.

The point is, which you really don't understand, when the deficit in receipts for SS versus outlays occurs, it is a crisis. I don't care if you tell me the SS Trust Fund has 500 Trillion Dollars in it. The US government doesn't have that money. The trust fund doesn't have that money. It's the left hand passing the right hand an iou in exchange for cash, and vice versa, but when both hands are empty of cash, the debt then has to occur. So that's when we start borrowing against the imaginary 500 Trillion dollars. Who cares how it is "accounted for". It doesn't exist.

Yes, I understand. You have a bunch of statements which are true of every single dollar of the government's debt, and which you want to pretend applies only to SS.

Tell me, where's the bank vault full of cash that we're going to use to pay China back it's money? You seem to think it's of earth-shattering importance that there is no such vault with which to pay back SS's t-bills. Does China hold Billions of dollars worth of worthless IOU's, because the money isn't there to pay them back?

Yet another post that doesn't have any basis or factuality with regards to the issue, or what is going on, but takes a meaningless political cheap shot. First understand the topic, then once you grasp it, defend it with regards to your political viewpoint. Thanks.

Oh, the irony.

---------- Post added April-3rd-2011 at 03:55 PM ----------

So instead of cutting SS and making the tax cuts for the rich permenant why not bring the tax rates back to what they were in 2000 use the money to repay the money owed to SS

Please, let's not go there.

[chipwhich]

Tell me, where's the bank vault full of cash that we're going to use to pay China back it's money? You seem to think it's of earth-shattering importance that there is no such vault with which to pay back SS's t-bills. Does China hold Billions of dollars worth of worthless IOU's, because the money isn't there to pay them back?

There isn't a bank vault full of cash to pay China back either. But your knowledge is growing. Stop throwing around Social Security is fine, we have a trust fund full of treasury bills to prove, AND they are paying INTEREST!!!, and we will be best friends.

There is no politics in any of my posting, love for you to point that out. It's strictly financial with regards to how the system works. You don't need politics to understand that, and I haven't used it once. But quote me if I have.

I can tell you are grasping what I am saying now, as your posts are morphing into something more factual.

[Larry]

There isn't a bank vault full of cash to pay China back either.

At least!!! After only two pages, and probably a dozen personal insults, he finally gets around to mentioning, grudgingly, that the slogans he's been throwing at SS are true of all government debt, and always have been.

But your knowledge is growing. Stop throwing around Social Security is fine, we have a trust fund full of treasury bills to prove, AND they are paying INTEREST!!!, and we will be best friends.

Of course, it wouldn't be a chipwich post without yet another insult, and more pretention.

:secret: Usually, the condescending attitude and the insults go better when you aren't admitting that you've been shoveling doodoo for the whole time.

I can tell you are grasping what I am saying now, as your posts are morphing into something more factual.

My posts haven't changed since my first one.

You've been trying for two pages to tell me that the t-bills owned by SS are different, special, t-bills, because "OMG!!! THERE'S NO MONEY TO PAY FOR THEM!!! IT'S ALL GONE!!! THE SKY IS FALLING!!! YOU IDIOTS, YOU DON'T KNOW ANYTHING ABOUT FINANCE!!!"

And every time you've done it, I've pointed out that the t-bills owned by SS are exactly the same as every t-bill in the world.

And you've responded with a couple more insults, and 5-6 more slogans about IOUs, empty bank vaults, and falling skies.

US Treasury securities are owned by millions of people. (Probably by billions of people, indirectly.) They are the most trusted, most secure instrument in the world.

Except when the topic of conversation is the t-bills owned by Social Security. At which time, suddenly it's time to run out and fetch a bucket full of slogans. (And, in the case of some people, a sanctimonious attitude, and a dozen insults.)

[chipwhich]

Again: The actual balance if the SS trust fund went up in 2010, by a bit over $100B.

Larry if you feel I insulted you, I apologize. That was not the intent.

My frustration is based on the post above.

You make it sound like the SS Trust Fund is so secure. It doesn't have $100B because the US Government doesn't have the $100B.

You call it an "asset" when clearly it is not. If it's not counted toward our countries debt, it shouldn't be counted towards the countries assets either.

The reason it's even anything to discuss politically is because we are on the verge of payouts exceeding tax receipts. That is why it is a political hot topic. As soon as that happens, the country is in further debt.

The reason for not creating personal accounts for any portion of social security is that it would have expedited when payouts exceed receipts.

[youngestson]

Why would anyone in their right mind want to give retirement $$$ to the Government to invest for you?

:ols: Ahh that was a good one...what? You're serious? Oh.

You have not read a newspaper or seen a newscast in the last three years?

Yea the banking and investment industry do a bang up job with you money, just great. As a matter of fact, thanks to their theft of America's money (both investment and tax payer supported bailout money) their top layers of vital masterminds of finance can now afford three private islands rather than just one.

[Larry]

My frustration is based on the post above.

You make it sound like the SS Trust Fund is so secure. It doesn't have $100B because the US Government doesn't have the $100B.

And you want to claim that all US Treasuries are worthless. (But, only when the subject is Social Security.)

And to claim that all US Treasuries have always been worthless. Because there has never been money somewhere to pay them back.

:secret: If we had the money set aside somewhere, we wouldn't need to issue the securities in the first place.

You call it an "asset" when clearly it is not

I call it an asset because it is. US Treasuries are the most secure, most trusted investment in the world. That's why the world will line up to buy them, at interest rates that absolutely stink.

Now, they are also a debt. A debt which is owed to the holder. (In this case, SS.)

If it's not counted toward our countries debt, it shouldn't be counted towards the countries assets either.

Now, if you have a problem with the government pretending that this debt doesn't exist, on it's balance sheet, then I agree with you.

But that's arguing about some statistic. It's not some grave imminent threat to the survival of the country.

The reason it's even anything to discuss politically is because we are on the verge of payouts exceeding tax receipts. That is why it is a political hot topic. As soon as that happens, the country is in further debt.

Bzzzt. Wrong again.

When the country sells $100M in new t-bills, so they can pay off $100M in old t-bills, then the country didn't go further into debt. It was $100M in debt before, and it still is.

It may look like it went further in debt. But that's because we were pretending that the original debt didn't count. And that's not a Social Security problem. That's a "government funny accounting to make the debt look smaller" problem.

Just like, if SS decides to cash in some t-bills, and the government tries to sell new t-bills to come up with the cash, and China decides that they don't want to buy any more, then that's not a SS problem. That's a "we're so far in the hole that China won't loan us any more money" problem. We'd be having exactly the same problem if

anybody

tried to cash in their t-bills.

In that case, the identity of the entity that's cashing in the t-bills is irrelevant.

[chipwhich]

And you want to claim that all US Treasuries are worthless. (But, only when the subject is Social Security.)

And to claim that all US Treasuries have always been worthless. Because there has never been money somewhere to pay them back.

:secret: If we had the money set aside somewhere, we wouldn't need to issue the securities in the first place.

I never claimed that, only you the drama queen did.

I call it an asset because it is. US Treasuries are the most secure, most trusted investment in the world. That's why the world will line up to buy them, at interest rates that absolutely stink.

Thats because you have no understanding of fiscal responsibility or value.

Now, they are also a debt. A debt which is owed to the holder. (In this case, SS.)

Now, if you have a problem with the government pretending that this debt doesn't exist, on it's balance sheet, then I agree with you.

FINALLY.

But that's arguing about some statistic. It's not some grave imminent threat to the survival of the country.

No that is arguing FACT. Unless you don't understand anything financial.

Bzzzt. Wrong again.

When the country sells $100M in new t-bills, so they can pay off $100M in old t-bills, then the country didn't go further into debt. It was $100M in debt before, and it still is.

It may look like it went further in debt. But that's because we were pretending that the original debt didn't count. And that's not a Social Security problem. That's a "government funny accounting to make the debt look smaller" problem.

Wow did you really say that????

Just like, if SS decides to cash in some t-bills, and the government tries to sell new t-bills to come up with the cash, and China decides that they don't want to buy any more, then that's not a SS problem. That's a "we're so far in the hole that China won't loan us any more money" problem. We'd be having exactly the same problem if

anybody

tried to cash in their t-bills.

In that case, the identity of the entity that's cashing in the t-bills is irrelevant.

Exactly. Thanks for playing.