How much will it cost to not go broke?

[lehighguy]

We all know SS and Medicare are actuarialy bankrupt, and we are given rough years when this will happen.

What I want to know is how much of a budget surplus we would have to run starting in 2008 in order to make thier 75 year projections actuarially solvent.

Also, since the government already spent the "trust fund" I don't want those fictitious funds included in the calculation.

[Moseley]

Your question is confusing. First you say social security is bankrupt, which it isn't. It's running a 2 trillion surplus, but you're not counting that because it's been spent to fuel the budget deficits.

If we start running a budget surplus, and pay back the 2 trillion over 67 years, that would be 29,850,746,270.00 a year. Pay interest on an average balance of 1 trillion at 5% and that's another 50,000,000,000.00 a year.

Say 80 billion a year, give or take a few bucks and we will have paid ourselves back for the money we stole.

Of course, this is an exercise in futility, as there is no way the United States of America will be a sovereign country in the year 2050.

There is no way we can continue paying for wars, like the one in Iraq and building 600 million dollar embassies, along with funneling billions to a country and then losing track of it and not go broke.

[lehighguy]

So your saying $80B a year surpluses from here on out would push of the insolvency date till the trust fund depletion date. How much more to make it actually solvent.

BTW, where are you getting the numbers you referenced, I want to read through them.

[Moseley]

[ QUOTE ]
So your saying $80B a year surpluses from here on out would push of the insolvency date till the trust fund depletion date. How much more to make it actually solvent.

BTW, where are you getting the numbers you referenced, I want to read through them.

[/ QUOTE ]

The university of berkeley had a budget simulator http://www.budgetsim.org/nbs/ webpage, which is down.

You can find it by googling "budget simulator"

When I was toying around with it about a year ago, it was 2017 (if I remember correctly) that SSI would no longer be running a surplus and it was 2035 when the "trust fund" would be depleted.

My 80b a year is only an approx of what it would take to pay back 2 trillion dollars over 67 years at 5% interest.

Before we could start paying back 80b a year, we would first have to increase revenues by approx over 240b a year, which is what we robbed from social security in 2002. See:

http://www.econedlink.org/lessons/in...m?lesson=EM306

and then click on the link to the simulator, scroll to the bottom, where is shows we took in 703b in social security and paid out only 459b.

That is the problem. The lower class has been financing the bulk of the federal budget.

Take the 2002 budget, which was 2052.03 billion, which included social security payouts. Remove that from the equation, and you have a budget of: 1592.80b

SSI payouts totalled 459.5b and we took in 702.9b, leaving a 243.40b surplus.

The total tax revenue was 1164.5b after removing ssi income.

Individual income taxes accounts for 873.2b of that, or 75%.

Corporate taxes accounts for 144.8b, or 12%.

In the early 60's, it was almost a mirror image of the above; individuals paid 12% of the total and corp paid over 80%.

The govt used the ssi excess (243.b) to help paid the budget of 1164.5b, or 21% of it.

So, not only did individuals pay 75% of the total budget thru payroll taxes, but those making 75K or less, paid another 121.5b (1/2 of the 243 is paid by the employer) or 10% of the budget thru the raiding of the social security trust fund.

This should give anyone, with any amount of common sense, a good picture of why the United States of America is corroding from the inside out, just as the Soviet Union did.

It is just a matter of time.

Japan holds more of our debt than any other country in the world, however, China runs a close 2nd and buys more every year than Japan does.

The only reason Japan buys so much of our debt is because of all the concessions we give them. A big one being the fact that we ship the bulk of the oil from the Alaska pipeline to Japan and sell it at a discount.

China is also getting many and will be demanding more as we become more and more dependent upon foreign investment in our debt as our social security surplus evaporates, not to mention if we borrow to pay back the "trust fund."

[pvn]

How much do you have? We might need more!

[Exsubmariner]

It is a practical impossiblity for the government to behave in such a way as to actually get out from under the interest owed on the national debt.

In fact, the trust fund was raided in order to pay that interest. Paying interest with savings is not healthy financial situation to be in and if you ever had to do it, you would be aware that you were [censored].

[DVaut1]

[ QUOTE ]
We all know SS and Medicare are actuarialy bankrupt, and we are given rough years when this will happen.

What I want to know is how much of a budget surplus we would have to run starting in 2008 in order to make thier 75 year projections actuarially solvent.

Also, since the government already spent the "trust fund" I don't want those fictitious funds included in the calculation.

[/ QUOTE ]

This doesn't address your question, but if the suggestion is that we must either run a huge surplus soon or SS and medicare are doomed to inevitable insolvency, I don't agree. This isn't to say the estimates are wrong, but claiming we need a huge surplus or SS/Medicare will eventually go belly-up is a false dichotomy. Making SS and Medicare solvent could merely involve changing the benefit structure.

As an aside, I doubt anyone can answer your question with any kind of confidence. I don't agree with Copernicus on anything, but I suspect he would give you the best answer on this, if anyone could.

[lehighguy]

Cutting benefits to the point they don't achieve thier stated aims isn't all that different from going belly up.

I'm sure the holders of subprime mortgages will eventually get thier 50 cents on the dollar, but I still consider that going belly up.

[pokerbobo]

[ QUOTE ]
[ QUOTE ]
We all know SS and Medicare are actuarialy bankrupt, and we are given rough years when this will happen.

What I want to know is how much of a budget surplus we would have to run starting in 2008 in order to make thier 75 year projections actuarially solvent.

Also, since the government already spent the "trust fund" I don't want those fictitious funds included in the calculation.

[/ QUOTE ]

This doesn't address your question, but if the suggestion is that we must either run a huge surplus soon or SS and medicare are doomed to inevitable insolvency, I don't agree. This isn't to say the estimates are wrong, but claiming we need a huge surplus or SS/Medicare will eventually go belly-up is a false dichotomy. Making SS and Medicare solvent could merely involve changing the benefit structure.


[/ QUOTE ]

Yes, the US has a fine history in making programs less expensive, and limiting/lowering benefits.

The dems will never propose this ...and any repub who even thinks of speaking the words will be villified as a "poor hating, racist, elderly hating demon" by the left. The repub party always backs down to the tax and spend lefties. I think they are just tired of getting beat with the same bat for the last 40 years. It seems many of them (repubs)have "joined up" and they continue to play "who can spend us into oblivion" first.

How can these aholes take half of our money and still have the stones to say "it's not enough" F F F F F F F !

Please have a blimp sized meteor hit the capitol bldg in the next session. If that happens... I will consider that proof of god and renounce my atheism.

[T50_Omaha8]

Think of everything that happened between 1925 and 2000.

Is it really practical for ametuer economists (I'm being generous here) to make predictions about fiscal balance over the next 75 years? Can we expect to get anything meaningful out of this?

And if our knees buckle under debt financing, the Japanese will already be smothered by it.