Financial News

[Balta1701]

So now it looks like instead of making it 50 years, SSI will go negative NEXT year.

You should know the obvious error here.

[kapkomet]

You should know the obvious error here.

He's FEARMONGERING!

 

 

[southsider2k5]

You should know the obvious error here.

 

Trusting the government?

[jasonxctf]

You should know the obvious error here.

 

Hot Air??? Seriously?

 

From Money Magazine, published on Friday and posted on the front page of Yahoo/CNN

 

What You Need to Know About Social Security

by Walter Updegrave

Thursday, September 17, 2009provided by

This benefit should be the cornerstone of your retirement planning. The answers to these five questions will help you to get the most out of it.

 

(Money Magazine) -- You've probably spent a lot of time sweating over your 401(k) and IRA. But have you given much thought to the way Social Security will fit into your retirement plans?

 

 

 

You should. In fact, Social Security provides 50% of the income for more than half of married retired couples and about 20% for high earners. Moreover, it's the only source of income you're likely to have that's guaranteed to last for life and keep pace with inflation.

 

But given the complexity of the Social Security calculations, it's tough to figure out how to make the most of it. The amount of your monthly check will depend on when you retire, how much you and your spouse earned, and whether you work in retirement. "That makes it hard to plan," says former Social Security Administration deputy commissioner Andrew Biggs. The following guide will answer those questions and give you strategies that can help you maximize your benefits.

 

 

 

QUESTION 1: Can I count on Social Security to be there?

 

You can. Despite what you may hear about the system going broke, the funds from workers' payroll taxes will cover all retirees' payments until 2016 even if no changes are made to the current program. After that the Social Security Administration can cover full benefits until 2037 by cashing in its Treasury bonds from the Social Security trust fund. And when the bonds run out, income from payroll taxes would be enough to cover about 75% of payments for decades.

 

That said, the government is looking at ways to shore up the system. President Obama has talked about imposing Social Security payroll taxes on income over $200,000 (currently, earnings over $106,800 are exempt). Other possible fixes: upping payroll taxes, raising the retirement age, and scaling back payments in some way.

 

The good news for anyone in or near retirement: "People 55 and over are likely to see no change or just a marginal change in benefits," says actuary Bruce Schobel, who worked on the commission headed by Alan Greenspan nearly 30 years ago that fixed the system (at least until now). But even younger workers can rest assured that drastic cuts are unlikely.

 

 

[Balta1701]

Trusting the government?

No, the difference between pulling more money out of the trust fund and having no trust fund.

[southsider2k5]

No, the difference between pulling more money out of the trust fund and having no trust fund.

 

You are on a roll today of making up what I am saying... I never said there wasn't a trust fund. I said they were going negative.

[jasonxctf]

so with that logic, if I've been saving for years to buy a new car and then spend $30,000 in 2009, did I run a deficit?

 

what if I bought the car years ago, and am paying interest at $700/mo for 5 years instead?

[NorthSideSox72]

so with that logic, if I've been saving for years to buy a new car and then spend $30,000 in 2009, did I run a deficit?

 

what if I bought the car years ago, and am paying interest at $700/mo for 5 years instead?

Its playing with terminology here. You don't have to worry about even finding other funding or shoring it up in a big hurry, its fine until the 2030's. Its just that its going to start using the trust fund - which is for this very purpose - earlier than anticipated. Its worth noting and monitoring, but nothing worthy of panic.

 

What is not being discussed though, that I have brought up before, is you DO put the whole shebang at serious risk when you continue to allow Congress to BORROW from the SS Trust Fund for general purposes, which they have been doing for a while now. That, IMO, needs to stop immediately.

 

[Rex Kickass]

Its playing with terminology here. You don't have to worry about even finding other funding or shoring it up in a big hurry, its fine until the 2030's. Its just that its going to start using the trust fund - which is for this very purpose - earlier than anticipated. Its worth noting and monitoring, but nothing worthy of panic.

 

What is not being discussed though, that I have brought up before, is you DO put the whole shebang at serious risk when you continue to allow Congress to BORROW from the SS Trust Fund for general purposes, which they have been doing for a while now. That, IMO, needs to stop immediately.

 

And when employment recovers, so will the trust fund deficits.

[Balta1701]

You are on a roll today of making up what I am saying... I never said there wasn't a trust fund. I said they were going negative.

Yes, actually you did. The 50 year out date is the date for the exhaustion of the trust fund. The trust fund was always going to be tapped in the 2010's; that's what it's there for. You brought up the 50 year horizon; the only issue of concern on that horizon is the exhaustion of the trust fund if the economy doesn't return to growth and the income cap is never raised.

[southsider2k5]

Yes, actually you did. The 50 year out date is the date for the exhaustion of the trust fund. The trust fund was always going to be tapped in the 2010's; that's what it's there for. You brought up the 50 year horizon; the only issue of concern on that horizon is the exhaustion of the trust fund if the economy doesn't return to growth and the income cap is never raised.

 

We aren't going negative in decades like was claimed by Democrats. We will have gone negative next year, and for the forseeable futures, which is at least 10 years sooner than has been predicted by leading Democrats. I hardly call that nothing to worry about.

[Balta1701]

We aren't going negative in decades like was claimed by Democrats. We will have gone negative next year, and for the forseeable futures, which is at least 10 years sooner than has been predicted by leading Democrats. I hardly call that nothing to worry about.

Democrats never, and I mean NEVER claimed we weren't going to go negative on there for decades And it's not Democrats; its the Social Security Trustees. They've always projected 2015ish as the date to begin tapping the trust fund; it's 2010 because of the banking collapse. Of course, it's also worth noting that they predicted earlier this year we'd tap it briefly in 2010, then it would turn around, and then we'd resume tapping it in 2016. And the trustees report still gives you nearly 30 years before the fund is tapped out in the pessimistic growth scenario (High-growth still makes the fund solvent for all time with zero changes).

 

You're really, really, really off the mark on who you're blaming here and what you're blaming them for.

[kapkomet]

Democrats never, and I mean NEVER claimed we weren't going to go negative on there for decades And it's not Democrats; its the Social Security Trustees. They've always projected 2015ish as the date to begin tapping the trust fund; it's 2010 because of the banking collapse. Of course, it's also worth noting that they predicted earlier this year we'd tap it briefly in 2010, then it would turn around, and then we'd resume tapping it in 2016. And the trustees report still gives you nearly 30 years before the fund is tapped out in the pessimistic growth scenario (High-growth still makes the fund solvent for all time with zero changes).

 

You're really, really, really off the mark on who you're blaming here and what you're blaming them for.

They've stolen that money out of the trust fund long before now. But yes, like usual, you defend the government's actions as altrusitic and noble, protecting us from ourselves and all that bologna.

 

[Balta1701]

They've stolen that money out of the trust fund long before now. But yes, like usual, you defend the government's actions as altrusitic and noble, protecting us from ourselves and all that bologna.

The only way in which they've "Stolen" money from the trust fund is if the U.S. government decides to default on its debt. True, they treated the raise in social security taxes as a way to raise taxes on the working and middle classes so that upper class tax cuts and fancy wars would be more affordable. But the problem in our government is in no sense a social security problem. Minor tweaks and it goes away. Our government has a health care cost problem, and a "We're the lender of last resort for the banks" problem. Fix those 2 and the long term budget outlook is beautiful.

[southsider2k5]

Democrats never, and I mean NEVER claimed we weren't going to go negative on there for decades And it's not Democrats; its the Social Security Trustees. They've always projected 2015ish as the date to begin tapping the trust fund; it's 2010 because of the banking collapse. Of course, it's also worth noting that they predicted earlier this year we'd tap it briefly in 2010, then it would turn around, and then we'd resume tapping it in 2016. And the trustees report still gives you nearly 30 years before the fund is tapped out in the pessimistic growth scenario (High-growth still makes the fund solvent for all time with zero changes).

 

You're really, really, really off the mark on who you're blaming here and what you're blaming them for.

 

Except that the report mentions someone specifically in the Obama administration...

[Balta1701]

Except that the report mentions someone specifically in the Obama administration...

The Hot Air article? Do you mean Harry Reid or Orzsag?

 

If you actually pay any attention at all to the numbers, the projections are worse now than they were in 2007. Why? Because the CBO didn't predict the complete implosion of the U.S. economy. The projections are worse now because the economy imploded. But that still doesn't suddenly mean that there aren't easy fixes. Raise the cap a little bit and the problem goes away. Adjust the output ratio so that payments don't go up faster than inflation and the problem goes away. Have growth over the next 50 years be similar to economic growth over teh last 50 years and the problem goes away.

[southsider2k5]

The Hot Air article? Do you mean Harry Reid or Orzsag?

 

If you actually pay any attention at all to the numbers, the projections are worse now than they were in 2007. Why? Because the CBO didn't predict the complete implosion of the U.S. economy. The projections are worse now because the economy imploded. But that still doesn't suddenly mean that there aren't easy fixes. Raise the cap a little bit and the problem goes away. Adjust the output ratio so that payments don't go up faster than inflation and the problem goes away. Have growth over the next 50 years be similar to economic growth over teh last 50 years and the problem goes away.

 

You mean the projections that were made at the top of the economic cycle? Depending on the best numbers on an era to make your arguement is pretty much the definition of an easy fix.

[Balta1701]

You mean the projections that were made at the top of the economic cycle? Depending on the best numbers on an era to make your arguement is pretty much the definition of an easy fix.

And now that we're much closer to the bottom...we've still got 30 years, and even then, OASDI will still pay out a higher rate of benefits to retirees than it does today if the trust fund is allowed to go bankrupt, and even given that, the tiniest tweak makes the trust fund solvent on the infinite horizon.

 

Social Security is a drop in the bucket in the long term budget. If you're worried at all about the future, Social Security should be the last of your worries. Cutting the rise in Health Care costs should be your first and only priority. The future budget problem is a health care problem. Plain and simple.

[mr_genius]

fancy wars would be more affordable.

 

those fancy wars are cheap compared to the complete blowout of spending we've seen in the past 2 years.

[Balta1701]

those fancy wars are cheap compared to the complete blowout of spending we've seen in the past 2 years.

Not if you do the math, actually. The $2-$3 trillion price tag for Iraq is still less than the $800 billion stimulus and $700 billion bank bailout and even the other things like AMT reform, SChip expansion, etc. put together.

 

Of course, GWB alwo managed to cut taxes by well over $2 trillion over 10 years in his first 3 years in office as well. And added the $750 billion Medicare drug and insurance company bailout bill of 2003.

[mr_genius]

Not if you do the math, actually. The $2-$3 trillion price tag for Iraq is still less than the $800 billion stimulus and $700 billion bank bailout and even the other things like AMT reform, SChip expansion, etc. put together.

 

700 billion bank bailout? they have already paid out like3 trillion. And your numbers about Iraq are suspect

 

http://www.nytimes.com/2009/03/01/weekinreview/01glanz.html

 

President Obama’s soaring speech on Friday announcing the drawdown and eventual pullout of troops from Iraq, framed by martial music and the cheering of an audience of Marines when he gave the timetable, could not help but be seen partly in an economic frame of reference: The war has cost an estimated $860 billion;

 

Bank bailout? terrible idea

 

Iraq war? terrible move

 

Bailout cost more. that is a fact.

Edited September 23, 2009 by mr_genius

[Balta1701]

700 billion bank bailout? they have already paid out like3 trillion. And your numbers about Iraq are suspect

 

http://www.cnn.com/2007/POLITICS/11/13/hidden.war.costs/

 

Bank bailout? terrible idea

 

Iraq war? terrible move

 

Bailout cost more. that is a fact.

$1.6 trillion by 2009 = $2 to $3 trillion by the time it's done. That one is easy as can be. Your link proves my number is correct.

 

So basically, you add in $2 to $3 trillion on Iraq, another trillion or so on Afghanistan, $750 billion on the Medicare drug and insurance company bailout act, and $2-3 trillion in tax cuts, and even before the bank bailouts the Bush Administration had put us on the line for something like $6-$8 trillion in additional debt. Not to mention the interest on their accumulated debt.

 

The Money paid out by the federal reserve is not money that goes on to the government's balance sheet. The Fed started this mess with like a trillion dollars in assets at least, and has the ability to basically print money to cover its debts. The Fed has also received assets of some unknown value in exchange for much of it. Can't say exactly what they've done because there's no government oversight, but it's a mistake to count the fed's actions to expand the money supply out there as an increase in the federal debt.

 

Edit: LOL, I see what you did there, when you changed from this link including the external costs of the war (i.e. veterans health benefits) to another link while I was typing.

[mr_genius]

$1.6 trillion by 2009 = $2 to $3 trillion by the time it's done. That one is easy as can be. Your link proves my number is correct.

 

no it doesn't, actually. you are predicting a ramp up or the Iraq war? that article was from 2007 and they were saying 1.6 trillion by 2009, I updated it with a recent one.

 

from the NY Times article:

 

President Obama’s soaring speech on Friday announcing the drawdown and eventual pullout of troops from Iraq, framed by martial music and the cheering of an audience of Marines when he gave the timetable, could not help but be seen partly in an economic frame of reference: The war has cost an estimated $860 billion;

 

so you are predicting a major ramp up and a tripling of cost. no way, you're wrong. it's not going to happen. the numbers, the math, and basic statistics prove you incorrect.

 

So basically, you add in $2 to $3 trillion on Iraq, another trillion or so on Afghanistan, $750 billion on the Medicare drug and insurance company bailout act, and $2-3 trillion in tax cuts, and even before the bank bailouts the Bush Administration had put us on the line for something like $6-$8 trillion in additional debt. Not to mention the interest on their accumulated debt.

 

balta, there is interest on the money we are borrowing from China. your numbers are wrong, and you keep adding things as I said Iraq. Admit it, you were way off.

 

 

 

 

[mr_genius]

The Fed has also received assets of some unknown value in exchange for much of it.

 

those assets are f***ing toxic. but, if obama tells you they are good, you will blindly believe. unreal.

[Balta1701]

those assets are f***ing toxic. but, if obama tells you they are good, you will blindly believe. unreal.

How many times on this site have I been told that Toxic assets do not have zero value?