danivon wrote:unlike the simple-minded, I know the diffierences between the two. It's just interesting that a lot of people who do equate the two themselves put their household into debt of about 3x income with no ill effect at all.

Well then, if you "know," why make the comparison? Further, if you "know," why continue the comparison?

By the way, it's not just the Fed that are giving you low interest rates. The bond markets are as well. You know how they work, dontcha?

Yup, and those rates reflect, in large measure, that we are the best of a lot of bad options. Do we really want to bet on that in the long run--that interest rates won't rise, so borrowing is "cheap?" I don't.

In fact, accumulated social security surpluses come to about $2.5Tn, which is quite a lot more than public debt.

Is that true? If so, why did the President during one of the many government shutdown threats suggest he could not guarantee checks would go out?

Answer: because dollars have been replaced by IOU's. The $2.5T was loaned to the government by the government. So, to count that as a real asset is dubious at best. When you have illiquid assets to cover actual cash needs, you've got nothing.

You do know the difference between dollars and Treasury bonds, dontcha?

danivon wrote:Ray, social security made a surplus of $95bn this past year. While it may be a cause for concern in the future, it is most definitely not contributing to current deficits.

In fact, accumulated social security surpluses come to about $2.5Tn, which is quite a lot more than public debt.

I understand your fear that in a generation or so it will be 'bust', but we have rather more immediate problems, and long term problems can be dealt with using long term solutions. For social security that could be higher retirement ages (in line with improved life expectancy), increased contributions, lower benefits, or caps.

But don't confuse a future problem with a current position. It is not helping.

What about medicare and medicaid?

Doctor Fate wrote:

danivon wrote:unlike the simple-minded, I know the diffierences between the two. It's just interesting that a lot of people who do equate the two themselves put their household into debt of about 3x income with no ill effect at all.

Well then, if you "know," why make the comparison? Further, if you "know," why continue the comparison?

I was alluding to the comparison being made by others at various points in the general debate about government debt. I don't think it's hard to understand what I am getting at...

(and a couple of the differences are - governments can issue their own debt and currency; governments are expected to be perpetual...)

By the way, it's not just the Fed that are giving you low interest rates. The bond markets are as well. You know how they work, dontcha?

Yup, and those rates reflect, in large measure, that we are the best of a lot of bad options. Do we really want to bet on that in the long run--that interest rates won't rise, so borrowing is "cheap?" I don't.

And it's not just a comparison between US bonds and those of other nations, it's a comparison between US bonds and a whole heap of alternative investment options. It will of course not remain that way forever, and low interest rates are likely to be followed by higher ones eventually. But the cost of US public borrowing is low in relative terms.

In fact, accumulated social security surpluses come to about $2.5Tn, which is quite a lot more than public debt.

Is that true? If so, why did the President during one of the many government shutdown threats suggest he could not guarantee checks would go out?

Because you need to pay people to actually send the cheques, of course! And a shutdown based on freezing total credit will affect all kinds of cashflow as you tend to get cyclical trends in payments in and out.

And yes, it's true apart from one part. Social Security is not going broke (reuters). It's £2.7tn - I misread it the first time.

Answer: because dollars have been replaced by IOU's. The $2.5T was loaned to the government by the government. So, to count that as a real asset is dubious at best. When you have illiquid assets to cover actual cash needs, you've got nothing.

I didn't count it as an asset. I never said it was.

I pointed out that SS has taken in much more than the goverment owes. Meaning that of all the causes of the current US debt and deficit situation, Social Security cannot be counted as one (RJ has a point about the future after 25-30 years).

You do know the difference between dollars and Treasury bonds, dontcha?

I do. But what that has to do with how payroll tax receipts have been dealt with I'm not sure.

Looks to me like previous governments have frittered away the money collected for Social Security on other stuff, if they haven't put it into a fund (and if they haven't put it into a fund, ideas about allowing people to invest their 'share' of it themselves are utterly bonkers).

What I can only suggest is that the area for spending cuts should be related to what is discretionary.

Like...

57% on the military. Discretionary Budget pie chart (National Priorities)

Ray Jay wrote:What about medicare and medicaid?

They'll end up having to be paid for somehow, whether it's as government paying or provate healthcare. Unless, of course, you think people should go without treatment because it's not worth the cost?

A lot of the problems with the projections for medicare and medicaid are related to assumptions that current trends will continue, and a reluctance to take on the spiralling costs of drugs from profiteering pharmaceutical companies.

danivon wrote:

Ray Jay wrote:What about medicare and medicaid?

They'll end up having to be paid for somehow, whether it's as government paying or provate healthcare. Unless, of course, you think people should go without treatment because it's not worth the cost?

A lot of the problems with the projections for medicare and medicaid are related to assumptions that current trends will continue, and a reluctance to take on the spiralling costs of drugs from profiteering pharmaceutical companies.

Current trends may continue, or they may get better, or they may get worse. I expect that life expectancy will expand beyond the Congressional forecasting.

I don't think there are easy answers here. It certainly cannot be solved by just allowing all the old people to die. Suggesting that people who worry about deficits are just cold-heartted reptiles is not helpful.

I suspect that greedy pharmaceutical companies are a tiny part of the problem. I think that we have to address all of the levers and switches, and in particular out of whack incentives that encourage ultra medical care in the final months of life. Unfortunately, I don't see either candidate doing that as they are both stuck in their ideological constraints.

danivon wrote:

Is that true? If so, why did the President during one of the many government shutdown threats suggest he could not guarantee checks would go out?

Because you need to pay people to actually send the cheques, of course! And a shutdown based on freezing total credit will affect all kinds of cashflow as you tend to get cyclical trends in payments in and out.

And yes, it's true apart from one part. Social Security is not going broke (reuters). It's £2.7tn - I misread it the first time.

Actually, there was no chance that no one would actually send the checks. That was not the issue. It was a cashflow issue.

Who cares how many trillions there are in Social Security because they're not actual dollars. They are "we owe ourselves" notes, not money. There is a difference. If I replace money in my safety deposit box with notes that promise money, those notes have no intrinsic value. At best, the US government could try to sell the bonds to recoup what they already borrowed. However, the interest is another matter.

I pointed out that SS has taken in much more than the goverment owes. Meaning that of all the causes of the current US debt and deficit situation, Social Security cannot be counted as one (RJ has a point about the future after 25-30 years).

But, that money you keep referencing has been borrowed. It's not just sitting in the proverbial "lockbox."

Social Security and Medicare have unfunded liabilities stretching into the $100T range. That Democrats want to pretend there is no issue says more about their absurd notions of "responsibility" than reality.

You do know the difference between dollars and Treasury bonds, dontcha?

I do. But what that has to do with how payroll tax receipts have been dealt with I'm not sure.

Looks to me like previous governments have frittered away the money collected for Social Security on other stuff, if they haven't put it into a fund (and if they haven't put it into a fund, ideas about allowing people to invest their 'share' of it themselves are utterly bonkers).

Personal accounts could not be raided by the government.

That money you keep saying is there is not there. That is the issue.

What I can only suggest is that the area for spending cuts should be related to what is discretionary.

Like...

57% on the military. Discretionary Budget pie chart (National Priorities)

Or, Green Energy . . . or subsidies for college students . . . or subsidies for ethanol . . .

I called for our troops to be out of Afghanistan a couple of years ago. I'm not the President.

Which, nicely, brings us back to the election. I'll start a new forum and expect you to fill it up.

Doctor Fate wrote:Actually, there was no chance that no one would actually send the checks. That was not the issue. It was a cashflow issue.

Did I not mention cashflow?

And please, try to understand. I'll use short words for you, and make them nice and big so you can read them:

I DID NOT SAY SS WAS AN ASSET

So stop arguing as if I had. In case you had forgotten, that's a case of a Straw Man.

I was pointing out that Social Security is far from causing the deficit or debt issues - quite the reverse. That the government then borrows against Social Security is a different issue (although it is issuing bonds against actual tax receipts instead of just inventing money out of thin air).

danivon wrote:

Doctor Fate wrote:Actually, there was no chance that no one would actually send the checks. That was not the issue. It was a cashflow issue.

Did I not mention cashflow?

And please, try to understand. I'll use short words for you, and make them nice and big so you can read them:

I DID NOT SAY SS WAS AN ASSET

So stop arguing as if I had. In case you had forgotten, that's a case of a Straw Man.

To refresh your recollection, you also said:

Because you need to pay people to actually send the cheques, of course!

SO NO, IT WAS NOT A STRAW MAN.

You clearly implied the government shutdown would mean no one would be available to send out the checks. That is what I was responding to. Take a pill.

I was pointing out that Social Security is far from causing the deficit or debt issues - quite the reverse. That the government then borrows against Social Security is a different issue (although it is issuing bonds against actual tax receipts instead of just inventing money out of thin air).

It's not "quite the reverse." The money isn't there. SS could take in $1T annually and if we spend it all it would not be an actual 'plus.' It would be a theoretical 'plus' wiped out by actual policies and spending.

As for not "inventing money," maybe. It depends on how high interest rates get to sell the bonds. In any event, it's not quite the boon it would be if the money was actually sitting there.

The election will be fought in the battleground states, so those polls are interesting. Today PPP published polls showing Obama ahead in Ohio by 7, last week Quinnipac had him up by 2 there and up by 7 in Pennsylvania.
PPP had Obama ahead in Iowa by 7.
The good news for Mitt was Florida where Q had him up 1.
For Mitt to win, these are states he has to win.

Doctor Fate wrote:

Because you need to pay people to actually send the cheques, of course!

SO NO, IT WAS NOT A STRAW MAN.

You clearly implied the government shutdown would mean no one would be available to send out the checks. That is what I was responding to. Take a pill.

Which is seperate. If the government shuts down, then it will do less. Part of what it does is sent out cheques.

But the main part was cash flow.

However, that has nothing to do with the idea that I'd said the SS fund was an asset. I did not.

I was pointing out that Social Security is far from causing the deficit or debt issues - quite the reverse. That the government then borrows against Social Security is a different issue (although it is issuing bonds against actual tax receipts instead of just inventing money out of thin air).

It's not "quite the reverse." The money isn't there. SS could take in $1T annually and if we spend it all it would not be an actual 'plus.' It would be a theoretical 'plus' wiped out by actual policies and spending. [/quote]Sigh...

Which is what I had said - if previous governments have been using the SS fund to spend money on other things, that is not a problem with SS, is it? It's a problem somewhere else.

As for not "inventing money," maybe. It depends on how high interest rates get to sell the bonds. In any event, it's not quite the boon it would be if the money was actually sitting there.

Really? Who actually does just let money 'sit there'? And why would they?

Besides, the thing is that the SS fund is buying the bonds and they tend to be sold at a fixed rate.

Doctor Fate wrote:On the other hand, you cite something the Obama Administration could have written.

OH WAIT!!!!

They did! http://www.treasury.gov/about/organizat ... Mokri.aspx

Cyrus Amir-Mokri serves as the U.S. Department of the Treasury's Assistant Secretary for Financial Institutions.

You call my source a "hack," then cite the Administration.

Feeble . . . as usual.

*Bump*

No response Ricky?

To "refute" my source (that you implied was biased), you cited the Administration.

*chirp*

danivon wrote:You forget a pretty key reason why lots of people are leaving the workforce that you may well be ignoring:

The baby boomers born in the late 1950s are retiring.

I doubt they care much about regulation as much as they do about being able to take their pensions.

Once again, my socialist friend, your "facts" are at odds with reality.

One reason for the rise: A greater proportion of older workers have remained in the workforce. Early retirement – once considered part of the American Dream – is losing ground. The workforce participation rate for individuals 55-and-older grew to 40.2 percent in 2010, up from 39.4 percent in 2008 and 29.4 percent in 1993, according to Census Bureau data. Relatively recent changes in Social Security law may account for the dramatic increase. . . .

The sharp decline in retirement assets from the 2007-08 stock market plunge has also contributed to older workers remaining in the job market. Defined-benefit pensions – which penalized work past a certain age by capping benefits — have gone from covering 80 percent of private-sector workers in 1985 to only 20 percent in 2008.

This growing desperation among older workers has given a boost to career coaches like Bruce Blackwell, who is based in White Plains, N.Y. He never saw 58-and-older workers five years ago, but now his business is thriving.

“People in that age group were either gainfully employed or, if not, often had the means to think about retiring before. But now I have plenty of people in their late 50s and early 60s knocking on my door,” he said. “That age used to be a time where people could wind down their careers and enjoy the fruits of their labor if they wanted to…Now they are fighting for work so that they can eventually enjoy financial stability.”

http://www.thefiscaltimes.com/Articles/ ... aspx#page1

Facts are so inconvenient for those championing their Man:

In April, 522,000 people, and in March, 333,000 left before them. That’s nearly 900,000 workers who have left the workforce in just two months, while at the same time the number of jobs dropped by almost 200,000.

In fact, the civilian population participation rate hit a 30-year low in April, according to the BLS …

Some have argued that this trend shows nothing more than aging baby boomers heading into retirement as expected, but that’s not the case, either. Investors Business Daily reported from the BLS data that employment among workers 55 years of age and older has hit a new high, as boomers put off retirement – perhaps because of economic uncertainty, the debate over pensions, or the damage done to their retirement accounts in the 2008 crash.

The number of jobs for seniors has grown 3.9 million since the beginning of the recession in December 2007, hitting a 42-year high. That means, of course, that those jobs are not getting passed down to younger workers. The same data shows that there are 8.1 million fewer jobs for those under 55 in the same four-years-plus period.

The decline in workforce participation hasn’t come from natural outflow of workers in the boomer bubble to retirement, but from a lack of jobs in the economy. Indeed, if the civilian participation rate had remained where it was at in January 2009, the jobless rate today would be 11.1 percent, not 8.1 percent, and no one would be confused about the state of job creation and the economy.

http://hotair.com/archives/2012/05/10/w ... s-at-367k/

I didn't realise that the retirement age in the USA was 55. Or perhaps your stats don't actually mean what you think they do Could it be that the number of people between 55 and 65 has increased, coincidentally about 60 years after the baby boom?

danivon wrote:I didn't realise that the retirement age in the USA was 55. Or perhaps your stats don't actually mean what you think they do Could it be that the number of people between 55 and 65 has increased, coincidentally about 60 years after the baby boom?

Keep reaching . . . in the meantime, you might want to provide some proof for your thesis.

I could turn it around: So, could it be there is a magical divide in the wealth of those who are 65 and those who are 66 and older? Like, they hit 66 and all their problems are solved?

Seriously, do you have any evidence beyond your own imagination?

Oh, and you have already undercut this latest posting of yours. You also said:

The baby boomers born in the late 1950s are retiring.

Let's see: late 50's. That would be starting in . . . 1957? That would make them . . . 55.

So, my statistics are spot on to refute your argument.

I meant 40s. Sorry for the typo