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Re: Understanding the Social Security scam
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[ QUOTE ] [ QUOTE ] Yes corporations do it for economic benefits. [/ QUOTE ] What do you mean by this? A corporation with revenue less than the sum of it's operating expenses and interest on loans would have a hard time finding investors, unless it was a severe outlier with some hope of massive future revenues. [/ QUOTE ] The favorable tax treatment of debt is why more or less. Why do they have to have revenue that is less than it's current operating expenses and interest on loans in order to hve corporate debt on the balance sheet? I guess we'r now going to move towards a hijack of the economic benefits of government deficit spending. Why not just start a new thread on that topic? I can't believe that with as much ranting and raving about the SS scam being perpetrated by the government in lending out the excess trust fund income that people don't have alternatives to that. It's amazing to me all the attempts at dodging the question simply because they don't like it. I guess I just have to conclude that the railing against the government lending money to itself is a smokescreen for just wanting to change the system entirely. or an overall anti-government agenda [/ QUOTE ] |
Re: Understanding the Social Security scam
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[ QUOTE ] [ QUOTE ] I see that the only thing you or TomCollins has as an alternative is to get rid of social security. I doubt that anyone else has any other ideas regarding what to do with the excess being paid to the trust fund either btw. [/ QUOTE ] Incorrect, as I clearly stated in another post. Of course, I would prefer that there was no social security. However, I think the following alternatives are better than the current system. [ QUOTE ] Social Security is not a retirement plan or a welfare plan for poor seniors, it is a government entitlement program funded by revenue to the government. Getting rid of the payroll tax is better than the current system. I think individual accounts would be even better. An opt-out system would be best. [/ QUOTE ] So in case that was too confusing, the following is what I would prefer, in order of best to worst. There are some ideas that could be combined, so I didn't make a full matrix. 1) Scrap social security entirely by buying out seniors with annuities. 2) Have social security as an opt-out system paid for by those in the program. 3) Individual accounts where individuals OWN their retirements, but they are controlled by the government. 4) Partial individual control. 5) Current system without payroll taxes. 6) Current system. And you say I don't have alternatives? [/ QUOTE ] Alternatives with what to do with the excess money being paid to the trust fund. I already realize that you'd like to change the system drastically. I would too but that's not what I was asking. Edit: I'd be interested in knowing if you though SS would be significantly less of a scam if the excess money was lent to the European Economic Union. I realize that maintaining the current system is your least preferred alternative and this wouldn't change that. [/ QUOTE ] It would be considerably less of a scam since you are investing in something rather than writing IOUs to yourself. |
Re: Understanding the Social Security scam
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[ QUOTE ] I edited my reply. Instead of hijacking this thread about the evils/benefits of government deficit spending just make a separate one. [/ QUOTE ] I don't really want to start a separate debate about government spending, but you seem to be defending that the government does it by saying "Hey, private business does it too", which I don't really see as being accurate. [/ QUOTE ] No not necessarily am I defending it. Mosely chimed in with a claim that the U.S. government doesn't meet it's debt obligations and never has. I pointed out that treasuries are considered to have no default risk and thus what he said is total baloney. Then he claimed that having permenant debt is inherently evil and I pointed out that it happens all the time just look at corporate balance sheets as one example. He pointed out an economic benefit to corporations using debt and I pointed out that there are economic benefits to governments using debt albeit different ones. |
thank you (n/m)
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Re: thank you (n/m)
[ QUOTE ]
.... [/ QUOTE ] Its the same thing as if I loan my money to my friend who will repay me with interest. If you take a loan to yourself and promise to pay yourself back 2x, you aren't making any investment. This is because you would have the 2x ANYWAY. I am not surprised by Copernicus's direct concealment of the program, but I am pretty surprised you fail to understand the difference. |
Re: thank you (n/m)
[ QUOTE ]
[ QUOTE ] .... [/ QUOTE ] Its the same thing as if I loan my money to my friend who will repay me with interest. If you take a loan to yourself and promise to pay yourself back 2x, you aren't making any investment. This is because you would have the 2x ANYWAY. I am not surprised by Copernicus's direct concealment of the program, but I am pretty surprised you fail to understand the difference. [/ QUOTE ] And Im not surprised that you let your polictical agenda cloud your reasoning or justify your lying about what you do understand. "If you take a loan to yourself and promise to pay yourself back 2x, you aren't making any investment. This is because you would have the 2x ANYWAY." This is obviously true, and has nothing whatsover to do with the prudence of doing just that. If your savings account yields 5% and you have an investment opporunity "guaranteed" to yield 8%, then "borrowing from yourself" makes perfect sense, even though your net worth is unchanged at the moment of the transaction. If you're an investing savant and your investments are earning 10% (but have exhausted those opportunities), but you can borrow at 6%, then go out and finance the purchase of your guaranteed 8% investment..even though at the moment of your transactions your net worth is unchanged. Its not that hard to understand on a personal level. When you escalate it to the government level the transaction is fundamentally the same as the first transaction, although the decisions carry fiscal/monetary/risk and intergenerational consequences that in fact make it MORE appropriate for the Government to "borrow from itself". If a thread starts on deficit spending many of the issues overlap, and of course, there are situations where deficit spending is appropriate and others where it isn't. The conflation of spending and funding discussions only serve to obfuscate the issues, which are totally independent, but are a common tactic in these attempts to disseminate myths about Social Security, so keeping spending out of this discussion can only improve it. |
Re: thank you (n/m)
[ QUOTE ]
[ QUOTE ] [ QUOTE ] .... [/ QUOTE ] Its the same thing as if I loan my money to my friend who will repay me with interest. If you take a loan to yourself and promise to pay yourself back 2x, you aren't making any investment. This is because you would have the 2x ANYWAY. I am not surprised by Copernicus's direct concealment of the program, but I am pretty surprised you fail to understand the difference. [/ QUOTE ] And Im not surprised that you let your polictical agenda cloud your reasoning or justify your lying about what you do understand. "If you take a loan to yourself and promise to pay yourself back 2x, you aren't making any investment. This is because you would have the 2x ANYWAY." This is obviously true, and has nothing whatsover to do with the prudence of doing just that. If your savings account yields 5% and you have an investment opporunity "guaranteed" to yield 8%, then "borrowing from yourself" makes perfect sense, even though your net worth is unchanged at the moment of the transaction. If you're an investing savant and your investments are earning 10% (but have exhausted those opportunities), but you can borrow at 6%, then go out and finance the purchase of your guaranteed 8% investment..even though at the moment of your transactions your net worth is unchanged. Its not that hard to understand on a personal level. When you escalate it to the government level the transaction is fundamentally the same as the first transaction, although the decisions carry fiscal/monetary/risk and intergenerational consequences that in fact make it MORE appropriate for the Government to "borrow from itself". If a thread starts on deficit spending many of the issues overlap, and of course, there are situations where deficit spending is appropriate and others where it isn't. The conflation of spending and funding discussions only serve to obfuscate the issues, which are totally independent, but are a common tactic in these attempts to disseminate myths about Social Security, so keeping spending out of this discussion can only improve it. [/ QUOTE ] This makes sense if you consider the payments that the government makes as "investment". For example, if spending $x today meant an increase of revenues in the future by $2x, you could argue that this is an investment. Is this your position, Copernicus? That when the federal government spends money, its actually resulting in an asset? What assets do we have to show for the $1T spent in Iraq? The key difference in our debate (and with natedogg) is that we think when the government spends money its like buying hookers and blow (or other things that are not assets), and investing in a company that will appreciate in value. Have I understood your position correctly? I don't think we disagree one bit about the accounting being done. |
Re: thank you (n/m)
[ QUOTE ]
[ QUOTE ] [ QUOTE ] [ QUOTE ] .... [/ QUOTE ] Its the same thing as if I loan my money to my friend who will repay me with interest. If you take a loan to yourself and promise to pay yourself back 2x, you aren't making any investment. This is because you would have the 2x ANYWAY. I am not surprised by Copernicus's direct concealment of the program, but I am pretty surprised you fail to understand the difference. [/ QUOTE ] And Im not surprised that you let your polictical agenda cloud your reasoning or justify your lying about what you do understand. "If you take a loan to yourself and promise to pay yourself back 2x, you aren't making any investment. This is because you would have the 2x ANYWAY." This is obviously true, and has nothing whatsover to do with the prudence of doing just that. If your savings account yields 5% and you have an investment opporunity "guaranteed" to yield 8%, then "borrowing from yourself" makes perfect sense, even though your net worth is unchanged at the moment of the transaction. If you're an investing savant and your investments are earning 10% (but have exhausted those opportunities), but you can borrow at 6%, then go out and finance the purchase of your guaranteed 8% investment..even though at the moment of your transactions your net worth is unchanged. Its not that hard to understand on a personal level. When you escalate it to the government level the transaction is fundamentally the same as the first transaction, although the decisions carry fiscal/monetary/risk and intergenerational consequences that in fact make it MORE appropriate for the Government to "borrow from itself". If a thread starts on deficit spending many of the issues overlap, and of course, there are situations where deficit spending is appropriate and others where it isn't. The conflation of spending and funding discussions only serve to obfuscate the issues, which are totally independent, but are a common tactic in these attempts to disseminate myths about Social Security, so keeping spending out of this discussion can only improve it. [/ QUOTE ] This makes sense if you consider the payments that the government makes as "investment". For example, if spending $x today meant an increase of revenues in the future by $2x, you could argue that this is an investment. Is this your position, Copernicus? That when the federal government spends money, its actually resulting in an asset? What assets do we have to show for the $1T spent in Iraq? The key difference in our debate (and with natedogg) is that we think when the government spends money its like buying hookers and blow (or other things that are not assets), and investing in a company that will appreciate in value. Have I understood your position correctly? I don't think we disagree one bit about the accounting being done. [/ QUOTE ] I haven't stated a position on spending, other than that it doesnt belong in this discussion, because (other than the policy decision to have a national retirement system and that spending) spending has nothing to do with Social Security. On the parenthetical I disagree that spending on a national retirement system is analagous to "hookers and blow", any more than your IRA or 401(k) plan is. (And if youre still spending your money on hookers and blow in retirement age, more power to you!) With regard to the Government investing, I don't think the Federal Government should have any net financial assets other than short term cash flow needs. Introduction of financial assets to the government of a capitalist country creates a myriad of issues with regard to how to allocate those investments so it doesnt distort the markets, issues with regard to risky assets and the inter-generational transfer of risk, fiscal and monetary issues that overlap with the Federal Reserve policy decisions and may in fact be in conflict with good fiscal and monetary policy etc. Of course once you believe that the Government should have no net financial assets, the only way to deal with a cash flow surplus such as Social Security generates is to have Social Security invest in Treasury issues (ie have the government "borrow from itself"). Of course the alternative of making Social Security completely pay as you go, and have no surplus whatsoever would eliminate the investment problems. However that violates basic accounting principles in that you are deferring the entire cost of current worker's benefits to future generations, that are not directly benefiting from those workers' efforts. And of course the cries of "scam, Pyramid scheme, Ponzi scheme" would be even louder, to compensate for the rhetoric of "there is no Social Security Trust Fund". |
Re: thank you (n/m)
[ QUOTE ]
I haven't stated a position on spending, other than that it doesnt belong in this discussion, because (other than the policy decision to have a national retirement system and that spending) spending has nothing to do with Social Security.<font color="red"> Except you called it an investment. You compared it to taking money out of a savings account and putting it in a better investment. Your words, not mine. If you take money out of your savings account and spend it on hookers and blow, but write yourself IOUs, the only way to pay for those IOUs in the future is to increase your revenue to meet your typical obligations along with paying back your IOUs.</font> On the parenthetical I disagree that spending on a national retirement system is analagous to "hookers and blow", any more than your IRA or 401(k) plan is.<font color="red">I never compared the retirement system to hookers and blow, I compared it to the government spending the money taken frmo the SS Trust Fund to it.</font> (And if youre still spending your money on hookers and blow in retirement age, more power to you!) With regard to the Government investing, I don't think the Federal Government should have any net financial assets other than short term cash flow needs. Introduction of financial assets to the government of a capitalist country creates a myriad of issues with regard to how to allocate those investments so it doesnt distort the markets, issues with regard to risky assets and the inter-generational transfer of risk, fiscal and monetary issues that overlap with the Federal Reserve policy decisions and may in fact be in conflict with good fiscal and monetary policy etc.<font color="red"> So how is this an investment? You really are claiming its an investment, but its just a way to postpone the repayments that the funds are used for into the future. (Hookers and blow + IOUs)</font> Of course once you believe that the Government should have no net financial assets, the only way to deal with a cash flow surplus such as Social Security generates is to have Social Security invest in Treasury issues (ie have the government "borrow from itself"). Of course the alternative of making Social Security completely pay as you go, and have no surplus whatsoever would eliminate the investment problems. However that violates basic accounting principles in that you are deferring the entire cost of current worker's benefits to future generations, that are not directly benefiting from those workers' efforts. <font color="red">So the IOUs are an Asset or not? You can't make up your mind. Normally when I buy a bond, I would consider it an asset. But when you buy bonds against yourself, you aren't doing a damn thing.</font> And of course the cries of "scam, Pyramid scheme, Ponzi scheme" would be even louder, to compensate for the rhetoric of "there is no Social Security Trust Fund". <font color="red">Have they fooled you, or would your consulting business go away if the real way it was run became more well known and it was all accounting shenanigans.</font> [/ QUOTE ] |
Re: thank you (n/m)
[ QUOTE ]
[ QUOTE ] [ QUOTE ] .... [/ QUOTE ] Its the same thing as if I loan my money to my friend who will repay me with interest. If you take a loan to yourself and promise to pay yourself back 2x, you aren't making any investment. This is because you would have the 2x ANYWAY. I am not surprised by Copernicus's direct concealment of the program, but I am pretty surprised you fail to understand the difference. [/ QUOTE ] And Im not surprised that you let your polictical agenda cloud your reasoning or justify your lying about what you do understand. "If you take a loan to yourself and promise to pay yourself back 2x, you aren't making any investment. This is because you would have the 2x ANYWAY." This is obviously true, and has nothing whatsover to do with the prudence of doing just that. If your savings account yields 5% and you have an investment opporunity "guaranteed" to yield 8%, then "borrowing from yourself" makes perfect sense, even though your net worth is unchanged at the moment of the transaction. If you're an investing savant and your investments are earning 10% (but have exhausted those opportunities), but you can borrow at 6%, then go out and finance the purchase of your guaranteed 8% investment..even though at the moment of your transactions your net worth is unchanged. Its not that hard to understand on a personal level. When you escalate it to the government level the transaction is fundamentally the same as the first transaction, although the decisions carry fiscal/monetary/risk and intergenerational consequences that in fact make it MORE appropriate for the Government to "borrow from itself". If a thread starts on deficit spending many of the issues overlap, and of course, there are situations where deficit spending is appropriate and others where it isn't. The conflation of spending and funding discussions only serve to obfuscate the issues, which are totally independent, but are a common tactic in these attempts to disseminate myths about Social Security, so keeping spending out of this discussion can only improve it. [/ QUOTE ] A real world example of lending money to yourself is borrowing from your 401k and paying yourself back with interest. It's not like that doesn't happen ever, it happens quite frequently. If you're not very dilligent, frugal whatever, probably don't want to do it. If you are though it can be a rational thing to do. |
Re: thank you (n/m)
[ QUOTE ]
[ QUOTE ] [ QUOTE ] [ QUOTE ] .... [/ QUOTE ] Its the same thing as if I loan my money to my friend who will repay me with interest. If you take a loan to yourself and promise to pay yourself back 2x, you aren't making any investment. This is because you would have the 2x ANYWAY. I am not surprised by Copernicus's direct concealment of the program, but I am pretty surprised you fail to understand the difference. [/ QUOTE ] And Im not surprised that you let your polictical agenda cloud your reasoning or justify your lying about what you do understand. "If you take a loan to yourself and promise to pay yourself back 2x, you aren't making any investment. This is because you would have the 2x ANYWAY." This is obviously true, and has nothing whatsover to do with the prudence of doing just that. If your savings account yields 5% and you have an investment opporunity "guaranteed" to yield 8%, then "borrowing from yourself" makes perfect sense, even though your net worth is unchanged at the moment of the transaction. If you're an investing savant and your investments are earning 10% (but have exhausted those opportunities), but you can borrow at 6%, then go out and finance the purchase of your guaranteed 8% investment..even though at the moment of your transactions your net worth is unchanged. Its not that hard to understand on a personal level. When you escalate it to the government level the transaction is fundamentally the same as the first transaction, although the decisions carry fiscal/monetary/risk and intergenerational consequences that in fact make it MORE appropriate for the Government to "borrow from itself". If a thread starts on deficit spending many of the issues overlap, and of course, there are situations where deficit spending is appropriate and others where it isn't. The conflation of spending and funding discussions only serve to obfuscate the issues, which are totally independent, but are a common tactic in these attempts to disseminate myths about Social Security, so keeping spending out of this discussion can only improve it. [/ QUOTE ] A real world example of lending money to yourself is borrowing from your 401k and paying yourself back with interest. It's not like that doesn't happen ever, it happens quite frequently. If you're not very dilligent, frugal whatever, probably don't want to do it. If you are though it can be a rational thing to do. [/ QUOTE ] Ok, I'm glad you and I agree. This is what I have been saying. The question is, you need to pay back that 401k sometime. Eventually, you are going to have to either make more money than you currently do, or cut down your expenses (or a combination of both) in order to pay back the 401k in the future. It also is not any different than just having your money in a single account and not playing accounting shenanigans. |
Re: thank you (n/m)
[ QUOTE ]
[ QUOTE ] I haven't stated a position on spending, other than that it doesnt belong in this discussion, because (other than the policy decision to have a national retirement system and that spending) spending has nothing to do with Social Security.<font color="red"> Except you called it an investment. You compared it to taking money out of a savings account and putting it in a better investment. Your words, not mine. If you take money out of your savings account and spend it on hookers and blow, but write yourself IOUs, the only way to pay for those IOUs in the future is to increase your revenue to meet your typical obligations along with paying back your IOUs.</font> On the parenthetical I disagree that spending on a national retirement system is analagous to "hookers and blow", any more than your IRA or 401(k) plan is.<font color="red">I never compared the retirement system to hookers and blow, I compared it to the government spending the money taken frmo the SS Trust Fund to it.</font> (And if youre still spending your money on hookers and blow in retirement age, more power to you!) With regard to the Government investing, I don't think the Federal Government should have any net financial assets other than short term cash flow needs. Introduction of financial assets to the government of a capitalist country creates a myriad of issues with regard to how to allocate those investments so it doesnt distort the markets, issues with regard to risky assets and the inter-generational transfer of risk, fiscal and monetary issues that overlap with the Federal Reserve policy decisions and may in fact be in conflict with good fiscal and monetary policy etc.<font color="red"> So how is this an investment? You really are claiming its an investment, but its just a way to postpone the repayments that the funds are used for into the future. (Hookers and blow + IOUs)</font> Of course once you believe that the Government should have no net financial assets, the only way to deal with a cash flow surplus such as Social Security generates is to have Social Security invest in Treasury issues (ie have the government "borrow from itself"). Of course the alternative of making Social Security completely pay as you go, and have no surplus whatsoever would eliminate the investment problems. However that violates basic accounting principles in that you are deferring the entire cost of current worker's benefits to future generations, that are not directly benefiting from those workers' efforts. <font color="red">So the IOUs are an Asset or not? You can't make up your mind. Normally when I buy a bond, I would consider it an asset. But when you buy bonds against yourself, you aren't doing a damn thing.</font> And of course the cries of "scam, Pyramid scheme, Ponzi scheme" would be even louder, to compensate for the rhetoric of "there is no Social Security Trust Fund". <font color="red">Have they fooled you, or would your consulting business go away if the real way it was run became more well known and it was all accounting shenanigans.</font> [/ QUOTE ] [/ QUOTE ] Okay I honestly didn't read any of the content in here (because who would ever read something so painful to human eye balls) but this is hilarious. Seriously, I don't want Copernicus banned, but Tom makes an excellent, satirical point here that should be addressed - someone needs to start threatening Copernicus with temp bans if he continues to respond to posts by using red text within a quote box. Can this happen? Iron, someone, anyone, please? I really don't support banning anyone, and I'm not talking about perma-bans, but I'm willing to violate my own standards and support temp banning Copernicus until he stops. |
Re: thank you (n/m)
That type of posting makes my eyes bleed as well, but we're switching software on Sunday so we'll see if he continues to do it and if its still annoying. I never really wanted to moderate that anyway.
Copernicus, if you want us to read your posts, people are much less likely to if the post is hard to follow. The red text is hard to follow. |
Re: thank you (n/m)
[ QUOTE ]
[ QUOTE ] [ QUOTE ] [ QUOTE ] .... [/ QUOTE ] Its the same thing as if I loan my money to my friend who will repay me with interest. If you take a loan to yourself and promise to pay yourself back 2x, you aren't making any investment. This is because you would have the 2x ANYWAY. I am not surprised by Copernicus's direct concealment of the program, but I am pretty surprised you fail to understand the difference. [/ QUOTE ] And Im not surprised that you let your polictical agenda cloud your reasoning or justify your lying about what you do understand. "If you take a loan to yourself and promise to pay yourself back 2x, you aren't making any investment. This is because you would have the 2x ANYWAY." This is obviously true, and has nothing whatsover to do with the prudence of doing just that. If your savings account yields 5% and you have an investment opporunity "guaranteed" to yield 8%, then "borrowing from yourself" makes perfect sense, even though your net worth is unchanged at the moment of the transaction. If you're an investing savant and your investments are earning 10% (but have exhausted those opportunities), but you can borrow at 6%, then go out and finance the purchase of your guaranteed 8% investment..even though at the moment of your transactions your net worth is unchanged. Its not that hard to understand on a personal level. When you escalate it to the government level the transaction is fundamentally the same as the first transaction, although the decisions carry fiscal/monetary/risk and intergenerational consequences that in fact make it MORE appropriate for the Government to "borrow from itself". If a thread starts on deficit spending many of the issues overlap, and of course, there are situations where deficit spending is appropriate and others where it isn't. The conflation of spending and funding discussions only serve to obfuscate the issues, which are totally independent, but are a common tactic in these attempts to disseminate myths about Social Security, so keeping spending out of this discussion can only improve it. [/ QUOTE ] A real world example of lending money to yourself is borrowing from your 401k and paying yourself back with interest. It's not like that doesn't happen ever, it happens quite frequently. If you're not very dilligent, frugal whatever, probably don't want to do it. If you are though it can be a rational thing to do. [/ QUOTE ] Yeah, in a prior thread I used the IRA/401(k) example but then the obfuscators wanted to get into the minutae of it, such as tax effects, instead of the big picture. |
Re: thank you (n/m)
[ QUOTE ]
[ QUOTE ] [ QUOTE ] [ QUOTE ] [ QUOTE ] .... [/ QUOTE ] Its the same thing as if I loan my money to my friend who will repay me with interest. If you take a loan to yourself and promise to pay yourself back 2x, you aren't making any investment. This is because you would have the 2x ANYWAY. I am not surprised by Copernicus's direct concealment of the program, but I am pretty surprised you fail to understand the difference. [/ QUOTE ] And Im not surprised that you let your polictical agenda cloud your reasoning or justify your lying about what you do understand. "If you take a loan to yourself and promise to pay yourself back 2x, you aren't making any investment. This is because you would have the 2x ANYWAY." This is obviously true, and has nothing whatsover to do with the prudence of doing just that. If your savings account yields 5% and you have an investment opporunity "guaranteed" to yield 8%, then "borrowing from yourself" makes perfect sense, even though your net worth is unchanged at the moment of the transaction. If you're an investing savant and your investments are earning 10% (but have exhausted those opportunities), but you can borrow at 6%, then go out and finance the purchase of your guaranteed 8% investment..even though at the moment of your transactions your net worth is unchanged. Its not that hard to understand on a personal level. When you escalate it to the government level the transaction is fundamentally the same as the first transaction, although the decisions carry fiscal/monetary/risk and intergenerational consequences that in fact make it MORE appropriate for the Government to "borrow from itself". If a thread starts on deficit spending many of the issues overlap, and of course, there are situations where deficit spending is appropriate and others where it isn't. The conflation of spending and funding discussions only serve to obfuscate the issues, which are totally independent, but are a common tactic in these attempts to disseminate myths about Social Security, so keeping spending out of this discussion can only improve it. [/ QUOTE ] A real world example of lending money to yourself is borrowing from your 401k and paying yourself back with interest. It's not like that doesn't happen ever, it happens quite frequently. If you're not very dilligent, frugal whatever, probably don't want to do it. If you are though it can be a rational thing to do. [/ QUOTE ] Ok, I'm glad you and I agree. This is what I have been saying. The question is, you need to pay back that 401k sometime. Eventually, you are going to have to either make more money than you currently do, or cut down your expenses (or a combination of both) in order to pay back the 401k in the future. It also is not any different than just having your money in a single account and not playing accounting shenanigans. [/ QUOTE ] You do so well, and then blow it by using inflammatory words like "shenanigans". The accounting is straightfoward, appropriate, and totally visible. The fact that the Government has something to "pay back" goes back to the spending issue. If they spend $1 trillion more than non-SS tax revenues, that money has to be borrowed from somewhere. The existence of the supply of SS surplus has negligible effect on the spending decisions. When the King of Pork gets one of his projects funded nobody voted yes because SS has an off-budget surplus, and nobody voted yes because of the miniscule interest rate difference that might come from using non-marketable securities for SS instead of marketable securities. Dont spend the money, then you dont float as much marketable securities. Meanwhile SS surplus is unchanged and the economic/social/political issues inherent with SS holding marketable securities are avoided. If Slick Willie or some other politician wants to obfuscate by aggregating SS surplus with on-budget deficits, they should be called on it. That again has nothing to do with the appropriate accounting for and investment of the SS surplus. |
Re: thank you (n/m)
[ QUOTE ]
That type of posting makes my eyes bleed as well, but we're switching software on Sunday so we'll see if he continues to do it and if its still annoying. I never really wanted to moderate that anyway. Copernicus, if you want us to read your posts, people are much less likely to if the post is hard to follow. The red text is hard to follow. [/ QUOTE ] And I find layers of embeddded quotes much harder to follow and much longer to write. If someone doesnt want to read it, so be it. If you don't want the responses, say so and I'll go away, but I'm not going to be told how to format them. |
Re: thank you (n/m)
[ QUOTE ]
[ QUOTE ] That type of posting makes my eyes bleed as well, but we're switching software on Sunday so we'll see if he continues to do it and if its still annoying. I never really wanted to moderate that anyway. Copernicus, if you want us to read your posts, people are much less likely to if the post is hard to follow. The red text is hard to follow. [/ QUOTE ] And I find layers of embeddded quotes much harder to follow and much longer to write. If someone doesnt want to read it, so be it. If you don't want the responses, say so and I'll go away, but I'm not going to be told how to format them. [/ QUOTE ] A little known fact is that Copernicus uses the device he grew up with, the telegraph, to make posts. Someone on the other end translates it, which results in the red formatting. |
Re: thank you (n/m)
Please explain how the surplus is "invested" is different than me "investing" money by promising to save twice as much next year when I spend my money this year on hookers and blow.
I can see it now, the Copernicus Retirement Plan! Take your retirement money, spend it on hookers and blow, but promise to save next year twice as much to make up for this years expenses! |
Re: thank you (n/m)
[ QUOTE ]
[ QUOTE ] I haven't stated a position on spending, other than that it doesnt belong in this discussion, because (other than the policy decision to have a national retirement system and that spending) spending has nothing to do with Social Security.<font color="red"> Except you called it an investment. <font color="blue">I did no such thing. I called the purchase of Treasuries an investment, which it undeniably is. I never said that the spending by Congress on hookers and blow is an investment, and have specifically stated numerous times that spending is a totally different issue than investment. </font> You compared it to taking money out of a savings account and putting it in a better investment. Your words, not mine. If you take money out of your savings account and spend it on hookers and blow, but write yourself IOUs, the only way to pay for those IOUs in the future is to increase your revenue to meet your typical obligations along with paying back your IOUs.</font> <font color="blue">Correct, but it is not the SS system that has to increase its revenues its the other branches of the Government that SPENT BORROWED MONEY. THE SOURCE OF THAT MONEY IS IRRELEVANT. </font> On the parenthetical I disagree that spending on a national retirement system is analagous to "hookers and blow", any more than your IRA or 401(k) plan is.<font color="red">I never compared the retirement system to hookers and blow, I compared it to the government spending the money taken frmo the SS Trust Fund to it.</font> <font color="blue"> Where the money comes from doesnt matter, its the spending that matters. I can't believe your this gd dense. </font> (And if youre still spending your money on hookers and blow in retirement age, more power to you!) With regard to the Government investing, I don't think the Federal Government should have any net financial assets other than short term cash flow needs. Introduction of financial assets to the government of a capitalist country creates a myriad of issues with regard to how to allocate those investments so it doesnt distort the markets, issues with regard to risky assets and the inter-generational transfer of risk, fiscal and monetary issues that overlap with the Federal Reserve policy decisions and may in fact be in conflict with good fiscal and monetary policy etc.<font color="red"> So how is this an investment? You really are claiming its an investment, but its just a way to postpone the repayments that the funds are used for into the future. (Hookers and blow + IOUs)</font> <font color="blue"> the Treasuries are an investment of the SS system, not an investment of other branches of the government. On the Social Security books its (Taxes + interest income - benefit payments minus expenses = surplus cash) (Surplus cash - purchase of new Treasuries = 0 Cash) (existing Treasuries + new Treasuries = total investments) Straightforward, visible, approriate accounting</font> Of course once you believe that the Government should have no net financial assets, the only way to deal with a cash flow surplus such as Social Security generates is to have Social Security invest in Treasury issues (ie have the government "borrow from itself"). Of course the alternative of making Social Security completely pay as you go, and have no surplus whatsoever would eliminate the investment problems. However that violates basic accounting principles in that you are deferring the entire cost of current worker's benefits to future generations, that are not directly benefiting from those workers' efforts. <font color="red">So the IOUs are an Asset or not? You can't make up your mind. <font color="blue">horse manure. I have consitently said that Treasuries are an asset of the SS system, and they are. </font> Normally when I buy a bond, I would consider it an asset. But when you buy bonds against yourself, you aren't doing a damn thing.</font> <font color="blue">You are doing something or you wouldnt be doing it. Your current net worth is unchanged but that isnt the same as doing nothing. You have avoided transactions costs, youve improved your net return on your investments, youve accessed money when you may have had no other source, whatever. You have done something. What the Social Security system does is invest in the safest asset available. </font> And of course the cries of "scam, Pyramid scheme, Ponzi scheme" would be even louder, to compensate for the rhetoric of "there is no Social Security Trust Fund". <font color="red">Have they fooled you, or would your consulting business go away if the real way it was run became more well known and it was all accounting shenanigans.</font> [/ QUOTE ] [/ QUOTE ] <font color="blue">My business has nothing to do with SS and isnt effected in the least. You are the one who has been fooled into thinking that one government agency borrowing surplus cash from another agency is somehow worse than borrowing on the open market. </font> |
Re: thank you (n/m)
Very patriotic! [img]/images/graemlins/grin.gif[/img]
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Re: thank you (n/m)
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Very patriotic! [img]/images/graemlins/grin.gif[/img] [/ QUOTE ] And easier to read then 4 or more layers of embedded quotes. [img]/images/graemlins/smile.gif[/img] [img]/images/graemlins/smile.gif[/img] |
Re: thank you (n/m)
copernicus,
seriously, it really isn't. at least put some spaces/breaks between the colors - you don't need to break each post up into 37 quotes, but one large block of multicolored text is pretty hard to absorb. |
Re: thank you (n/m)
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That type of posting makes my eyes bleed as well, but we're switching software on Sunday so we'll see if he continues to do it and if its still annoying. I never really wanted to moderate that anyway. Copernicus, if you want us to read your posts, people are much less likely to if the post is hard to follow. The red text is hard to follow. [/ QUOTE ] Iron, when you were at school, what coulor pen did your teacher mark your work in? You catch my drift? |
Re: thank you (n/m)
And using blue seems to be a much better color than red.
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Re: thank you (n/m)
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copernicus, seriously, it really isn't. at least put some spaces/breaks between the colors - you don't need to break each post up into 37 quotes, but one large block of multicolored text is pretty hard to absorb. [/ QUOTE ] coming from almost anyone but you Id ignore this, but I will break them up in the future. thanks for the Cardrunners videos, first rate. |
Re: thank you (n/m)
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[ QUOTE ] copernicus, seriously, it really isn't. at least put some spaces/breaks between the colors - you don't need to break each post up into 37 quotes, but one large block of multicolored text is pretty hard to absorb. [/ QUOTE ] coming from almost anyone but you Id ignore this, but I will break them up in the future. thanks for the Cardrunners videos, first rate. [/ QUOTE ] np. it's a style thing - people are used to [.quote] tags and it's hard to adjust when one guy's not using them. |
Re: thank you (n/m)
If you think that the SSA and the government are two separate entities, you are correct. Do you believe the Federal Government should be treated as an independent entity as the SSA? If so, why? They are controlled by the same people and funded in the same manner- taxes.
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Re: thank you (n/m)
Lets try one more time, TC, since (as opposed to Natedogg) you are actually thinking about these things instead of spouting rhetoric, we just arent communicating. The disconnect seems to be your aggregation of the actions of different branches of the government, so lets expand the personal analogy.
You have $50,000 in the bank earning $250 interest a month, you have $200,000 in your 401(k) plan which you are no longer contributing to and its bond investments are earning 5% a year because youre an extremely conservative investor, and you have utility bonds worth $25k that are throwing off coupon payments of $250 a month...and you are married to a non-working wife who keeps the house clean, helps the kids with homework, and has (ahem) other benefits. She has a funny name too...Congress (pun intended regarding her other benefits). Unfortunately youve gotten into a position where your salary plus all of your investments exactly equal your monthly expenses, no room for additional savings or investments or 401(k) contributions. You get the end of the month statement from your bank, and WTF, the 50,000 is gone, and you realize Congress has fallen off the wagon and snorted the 50k. But her Uncle is your boss, and theres no way you can rock that boat, you are dependent on him for paying your salary. (So far nothing has happened except Congress has spent 50k on blow, and your family net worth has dropped from 275k to 225k). But you realize that since she paid her dealer at the end of the month that while youre okay this month, next month you are going to be $250 short on your bills. What to do? Well, heres one solution. Borrow $50k from your 401(k) plan, that you have to repay at $250 per month, amoritizing that loan at 5% interest. Use that $50k to buy more of the same utilities, which will throw off $500 per month. Youve restored the net cash flow you needed. Your liquid net worth is unchanged from these transactions, but your family has tapped the 401(k) plan to meet its cash flow needs (needs it wouldnt have if wifey didnt have a drug problem). Whats happened from the point of view of your 401(k) plan? All it knows is that its invested $50,000 in a different asset...ZOMG a different IOU...its net worth is unchanged. That IOU happens to have TC's name on it instead of XYZ company, but its an extremely safe investment. Why? Because if you default on a 401(k) loan you are going to face all kinds of early withdrawal penalties and income taxes, and you arent about to let that happen. Your 401(k) plan doesnt give a damn that your wife had a helluva ride for a month. Its earning 5% in an extremely safe asset. YES, that IOU is an asset, it doesnt matter to your 401(k) plan that the IOU is coming from "within the family". Whats happened to your liquid finances since you decided to make this transaction? Youve restored the blown 50k in assets, but incurred an equal amount of debt, so "nothing has happened" except you are now able to make your monthly nut because that other part of your family finances had some surplus assets. Net sum? Congress spent 50k too much money, money you would have to find somewhere. You happened to find it in your personal little Social Security system, and you gave it an IOU. You could have given a 3rd party an IOU, but that effects your credit rating and you wont be able to finance other transactions as cheaply in the future. Your own personal little Social Security system is in the exact same position it was before this all happened. There are no "accounting shenanigans", no worth has been created out of thin air, there is no "scam" and your own personal SS system has an IOU for an asset...a very real asset. I'll respond to issues of substance and accounting for these transactions, not minutiae like interest rate differentials, the length of time it takes to pay back your SS system etc. |
Is there no one who can articulate the purpose of Social Security?
Someone, anyone, take a shot at it.
natedogg |
Re: thank you (n/m)
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[ QUOTE ] Very patriotic! [img]/images/graemlins/grin.gif[/img] [/ QUOTE ] And easier to read then 4 or more layers of embedded quotes. [img]/images/graemlins/smile.gif[/img] [img]/images/graemlins/smile.gif[/img] [/ QUOTE ] <font color="red"> WTF!!!! NO IT ISN'T!! its the most irritating illegible thing I've ever seen in my life! </font> Jesus hit a space bar or something, no one can read that crap who isn't on crack. edit to add: as for your other "coke head wife analogy" post. Its just about right expt the the wife would be doing 50k in blow a month every month for 40 years or so.Also she would be [censored] ing all your friends, robbing neighborhood houses, and stealing cars to pay for her habit, all while while paying your boss to sodomize you at lunch. |
Re: Is there no one who can articulate the purpose of Social Security?
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Someone, anyone, take a shot at it. natedogg [/ QUOTE ] Trying to anticipate and avoid as many of your nits as possible: Social Security is a government administered social program that may be amended from time to time, the purpose of which is to provide a mechanism for individuals to be provided with a core defined Joint and Survivor retirement benefit upon disability or healthy retirement, and which is to be supplemented by personal savings, insurance and/or other employer provided retirement benefts to maintain a total standard of living comparable to pre-retirement standards, and which is to be funded based on payroll taxes sufficient to provide those benefits. |
Re: thank you (n/m)
Amazingly I think we are on the same page and I don't think there are any contradictions between what you said here, what I've said, or what nate has said.
You claimed that you made as much money as your expenses and were not saving anything. Where are you going to get the extra $250/month to pay off the loan? You are going to have to cut expenses or get more money somehow. And if you keep getting more and more IOUs, eventually you are going to have to pay the piper. Getting more money is going to mean increased tax revenues. |
Re: thank you (n/m)
So the crux is that because the IOUs are safe Treasury bills, and there would be larger financial implications if the United States defaulted on THOSE, there's no shenanigans going on. Am I right?
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Re: thank you (n/m)
[ QUOTE ]
Amazingly I think we are on the same page and I don't think there are any contradictions between what you said here, what I've said, or what nate has said. You claimed that you made as much money as your expenses and were not saving anything. Where are you going to get the extra $250/month to pay off the loan? You are going to have to cut expenses or get more money somehow. And if you keep getting more and more IOUs, eventually you are going to have to pay the piper. Getting more money is going to mean increased tax revenues. [/ QUOTE ] Theres may not be any differences in the understanding of the transactions but there are huge differences in interpretration of those transactions and you and natedogg have said: "Scam, pyramid scheme, ponzi scheme" No it isnt "There is no Social Security trust fund" Yes there is "Treasury investments by SS aren't assets" Yes they are "Accounting shenanigans" no, there are none If the prior nauseatingly detailed analogy isnt enough to convince you of the "no, yes, yes, no", theres nothing else I can do. Others of reasonable financial understanding and without anti-government agendas should be able to see past the rhetoric, Iron included. Its a nit I said I wouldnt respond to but to make it clear, there are no additional loans to take or income needed, the new cash flow exactly replaces the $250 cash flow lost from the savings account. Yes there are underlying policy changes and interest rate differentials (eg why werent all of the assets invested in the utilities the whole time and more income generated) that result in that increse cash flow, just as there are policy decisions that were made regarding where Social Security funds get invested, but that doesnt change the essence of the transactions. |
Re: thank you (n/m)
[ QUOTE ]
Amazingly I think we are on the same page and I don't think there are any contradictions between what you said here, what I've said, or what nate has said. You claimed that you made as much money as your expenses and were not saving anything. Where are you going to get the extra $250/month to pay off the loan? You are going to have to cut expenses or get more money somehow. And if you keep getting more and more IOUs, eventually you are going to have to pay the piper. Getting more money is going to mean increased tax revenues. [/ QUOTE ] He never said otherwise. Nate is criticizing SS when he should be saving his fire and brimstone for Congress spending like drunken sailors (and I know a bit about drunken sailors. [img]/images/graemlins/smile.gif[/img] )I know natedogg probably does hate the way the Congress spends. There are some legit criticims (the regressive nature of the taxes being most legitimate in my eyes) |
Re: thank you (n/m)
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[ QUOTE ] Amazingly I think we are on the same page and I don't think there are any contradictions between what you said here, what I've said, or what nate has said. You claimed that you made as much money as your expenses and were not saving anything. Where are you going to get the extra $250/month to pay off the loan? You are going to have to cut expenses or get more money somehow. And if you keep getting more and more IOUs, eventually you are going to have to pay the piper. Getting more money is going to mean increased tax revenues. [/ QUOTE ] He never said otherwise. Nate is criticizing SS when he should be saving his fire and brimstone for Congress spending like drunken sailors (and I know a bit about drunken sailors. [img]/images/graemlins/smile.gif[/img] )I know natedogg probably does hate the way the Congress spends. There are some legit criticims (the regressive nature of the taxes being most legitimate in my eyes) [/ QUOTE ] Why would you focus on the regressive nature of the taxes, when the net system of benefits and taxes is not regressive, and is in fact slightly progressive? If you believe that the net system should be even more progressive, eg a needs test to receive benefits, then that is social policy that can be debated. However, that definitely moves you further away from a relatively pure and self-supporting retirement system to another wealth transfer program. With the boomers retirement a rational retirement policy needs to continue to focus on its main purpose, and not become just another welfare program. |
Re: Is there no one who can articulate the purpose of Social Security?
[ QUOTE ] the purpose of which is to provide a mechanism for individuals to be provided with a core defined Joint and Survivor retirement benefit upon disability or healthy retirement [/ QUOTE ] So the purpose of the Social Security plan is to provide a retirment and/or disability benefit? Why do we have a program to provide a retirement benefit? natedogg |
Re: Is there no one who can articulate the purpose of Social Security?
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Why do we have a program to provide a retirement benefit? natedogg [/ QUOTE ] From the standpoint of the government, they have already make the promise to provide all citizens with adequate income. It's also true that, by the government's measures of "adequacy", citizens in the US do not save "enough" in their working years to have "adequate" post-employment income. Government gets caught in a game where they hand money over to people during their working years so they have "adequate" income, the people spend it all, and then at retirement they come looking for more income. It's easier for the government to manage this game if they have one program dedicated to providing post-employment income because then they can focus the rest of their energy on the employed citizens, which is who they really care about because their first focus in on manipulating the economy (where retirees don't play as big a part in production). |
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