It turns out I was right. SS turned a tremendous corner in 2009. That was the last year of cash surpluses. We will never see them again. When I first made this observation I got rained on hard. Liar, charlatan, bond vigilante, "chicken-little" and a few other things were tossed at me. This week the Congressional Budget office took me a bit by surprise and proved what I have been saying all along.
Consider this slide from the CBO. This is their estimate of the surplus at SS all the way out to 2021.
The CBO’s definition of “surplus” includes script interest from Treasury. This script is not a cash item.
All other flows into and out of SS are actual cash receipts and
disbursements. Therefore the CBO surplus minus non-cash interest is
equal to net cash flow. The Social Security Trust Fund projects this
interest surplus in their report to congress. Of all of the variables,
the interest income is the easiest to forecast. The SSTF estimate for
script interest minus CBO surplus produces these results:
That’s right. SS will run a cash deficit forever. They will run up a trillion dollar (+) cash deficit over the next decade. All of it must be borrowed in the public market. This big nut must be added to the trillion dollar deficits that have to be financed. Even worse is the trend. It starts off slow but then explodes. It is truly a slippery slope that we are now on.
IMHO even the CBO numbers will not be realized. It will be worse.
The CBO assumes that there will no economic recessions over the next
ten years. History says that is a very unlikely outcome. SS gets killed
in periods of low relative employment and high relative inflation (AKA: Stagflation). This economic condition will be the result of ZIRP and QE. Those policies will bring us inflation, but very few new jobs.
The SSTF told Congress, the press and the American people that the SSTF
was a 2037 problem in their 2010 report. That date has been used
repeatedly in defense of the program. Supporters point to something that
is far into the distant future and say, “Worry about something else”. Wrong! The CBO has confirmed it. The future is today.
I see Bruce is twisting peoples panties into wads. People must not like reality.
Reality is promissory notes are repaid, unless the borrower is able to default - Of course if the banksters get their way, the entire currency scheme will be repudiated!
Wouldn't it be more prudent to force .GOV to do with a whole hell less .MIL (like as in 99% less), bring public servants down to reality with the rest of us, and dump the .GOV leechfuck make-work jobs?
Reality? I don't you think the likes of you and comrade Brucie are gonna be able to handle it...
Can't wait to see the .GOV solution now that the SS Cash Cow is done (only took 45 years), I also can't wait to see the reaction of the comrade bloggers and trolls...
QE is just an interim solution to a systemic failure, which the Golden Hoard on Fraud St. saw coming a LONG way off, hence the looting.
Fun times!
The only answer people will give you when you tell this:
There is nothing we can do about it.
It is just like the warming of global warming that they've been warning us about.
It must first get real, real bad before any action will be taken, and that WILL ONLY BE AFTER the blame games.
Are you seriously that stupid and easily brain-washed?
Just merge the lender of last resort function with SS admin starting now. Any money lent at the various windows become SS assets, revenue stream gets automatically shunted to the SS pool. ..Borrowing from the Lender of last resort = borrowing from the taxpayer, the money is no longer credited out of thin air, it is credited to the SS general pool.
What I just love about this scenario, which those of us that were awake in the USofA have been watching for 20+ fucking years, is how many 'MeRiKans are ready to support the final rip-off of Social Security by the (D) & (R) Kleptocrats.
Sure, there are a few leeches that are juicing the system for returns far & beyond what they paid, but what about the majority of people like my wife and I that were FORCED to pay close to $1 million into a volunteery .GOV run retirement program?
Which was then RAPED from LBJ forward to supplement the .GOV General Fund and mask out-of-control deficit spending?
And then, when this became publik knowledge back in the 80s, the good lil' sheeple KEPT VOTING for the (D) & (R) Kleptocrats?
In my legal opinion, the .GOV (with the consent of the sheeple) borrowed Social Security funds as a debt, no different than issuing a Treasury Bill, and now that the notes are maturing, some of you treasonous bastards want to renegotiate the terms of the contract!
Well I say fuck that, and fuck the traitors that want to engage in wealth redistribution by screwing the honest contributors to the trust.
How many of you morons failed to support Perot and voted Clinton (X2)?
Good thing I'm not alone on this position (majority won't support cuts in SS, but then again did that matter with TARP et al?), but the REAL bad news is the (D) & (R) Kleptocrats are readying their Final Solution; TOTAL destruction of the U$D when Social Security threatens their avarice and rapacious lust for power!
How many are gonna be surprised when that happens?!? ROFL
P.S. Notice I didn't mention Medicare? That's because the whole "Health" Industry question is an entirely different quagmire...
The tax for SS is 12.5%. You say you contributed $1mm. That means your income taxed by ss was $8mm. So you and your wife average $320k a year every year for the last 25. Not bad.
One of two things. You did very well for yourself, you should be pleased. If you really have $8mm in the bank you shouldn't complain if they cut back your checks.
The other is that you did not contribute anything close to $1mm. That you don't have a fat bank.
Should the later be the case, stop griping. They are not going to mess your checks. You will get what they have been telling to you.
If your eligible, but have a fat bank account you will not get a full check. I see no problem with that, even though it will hurt me.
You're seeing things in this piece that are not there....
Oh, I see...you're the arbitrator concerning what .GOV debt is repaid, and what is not.
Well done comrade!
Except your math is all fucked up, and you're inventing variables/constants from thin air (P.S. Wifey and I have been working/paying FICA for almost 35 years each, and had our own business for the last 15).
And $8 million est. gross (I'm not giving a communist real numbers to play with) is only about $4 million net, after TOTAL taxes + FICA, so you go ahead and divide that into 34 years...
It ain't Blankfein "I'm doing god's work here" money.
The next time you want to play with others' money, I suggest you do it on margin like the (D) & (R) Kleptocrats do!
P.S. I do have a bit stashed away from the reach of you & your socialist/fascist comrades, and screw you for thinking you can use that as an artifice to defraud & steal!
Even a broken clock is right twice a day...
You're off on your read of me, and this piece. But If you looked what I have said again and again is that a means test is required. You would get less than normal if you and the wife were 65 and had income GREATER Than $200k. If you are still taing down over $350k a year, you lose the check.
That is (one) way to address the problem. Now I ask you again which side of the fence are you? If your 65 and still making $350k a year in other income, then you lose your check.
If your under that this idea protects your interests. If your over, then I say congrats.
A question for you. Is it right that Warren Buffett gets $24k a years from SS? His answer to that is no he should not. But he does. So tell me again why I am a socialist facist that defrauds and steal?
Are you over or under what I described. If you say under shut up. I am looking out for your interests. If you are over the limits, shut up. You have nothing to bitch about.
wow bruce, you lost me there. he has already been robbed of his production, we shouldn't have more welfare policies in place.
just because someone is richer they shouldn't keep their money?
you really are a statist to the core. fuck off
Listen, I understand you consider yourself just a good lil' apparatchik, perhaps you're just trying to help Comrade Barry with Change you can bleed in, but don't for a minute think I appointed/consented/voted for a socialist/fascist of your ilk to redistribute MY CONTRIBUTION to those more in need.
Oh yeah, it's none of your business how much me and mine make, so you SHUT the fuck UP!
Bruce is just one more brain dead libtard justifying the rape and pillage of the SS taxpayer. Disgusting.
"One of two things. You did very well for yourself, you should be pleased"
huh? Be pleased you gave uncle Sam a $1M check and get nothing in return? Doesnt matter if its SS, MED, Taxes, etc, That is nothing to be please about.
There was never a doubt in my mind that the SSTF would eventually be as results-efficient as Amtrak, the USPS, Fannie and Fred.....the list is long. It should have been called Socialized Security from the outset.
Enjoy the vindication, Bruce, you deserve it.
Damn it! Should have privatized SS in 2007 and the stock market would now be over 16,000 with most over 62 in sunny FL with a booming RE market. At least that is what Greenspan is still thinking in his reliance on "the markets"
I can see it now.....year 2018
The United States Office of Social Security Benefits Equivalency has finalized the distribution standards for 2019:
If you are 65 and older you will receive 1000 units of carbohydrate equivalents and 280 protein equivalents, and 450 housing vouchers dollars.
Have a nice day
so, if Soc Sec will be unavailable, does it mean that everyone who is "middle class" paying 12.4% into the fund effectively paying HIGHER taxes than any hypothetical millionair/billionaire?
25% Federal +12.4% Soc Sec > 35% top margianl rate. In reality, it's about 2X what the billionaires pay on average.
I think this is grounds to do not just "Egypt", but the French and the Russian revolutions together!
The last 3 decades "top" has been involved in the greatest wealth transfer ever. Someone has to chop few heads, and freeze few bank accounts
It turns out I was right. SS turned a tremendous corner in 2009. That was the last year of cash surpluses. We will never see them again.
----- We planned on this to happen in 1983, when we raised the social security withholdings. Back then, they forecasted we would turn the corner in 2010, which isn't too bad considering the state of the economy the last two years. This tax increase led to large SS surpluses. These surpluses would have covered the SS deficits for decades from now. I know it's hard to believe, but the fucking government SPENT every last dollar of the surpluses and replaced them with WORTHLESS IOUs. The government cannot and will not pay off any debt, including what they owe to SS. It's just not gonna happen.
My solution is raising the income cap from $106,000 to $250,000. This would take care of SS for quite some time. I'd rather see the people in this income category pay a little more than see your grandma die in the street.
There are many ways to deal with this. One thing that WILL NOT happen is that grandma will die in the street. This is a financial problem that can and must be solved. Calm down. This grandma thing distorts the discussion.
I didn't flag you BK, but many grandmoms will starve and die from not being able to heat their homes.
There is no will the reduce the debt, we can't even agree to slow the 2nd derivative of debt growth. Within the next 5 years there will be wicked inflation in America, commodity prices will soar and the SS checks will come but sadly Grandmom won't be able to buy anything with them.
The inflation tax, the most insidious of them all and lurking.
Exactly right.., nail smack on the head. While Pensions are an insane problem, SS is an order of magnitude larger - there are few solutions - and the sooner government finances are reorganized to address these, the sooner the world can begin to recover.
In five years, the average SS check and one ounce of silver will buy the same basket of goods.
Thanks. Bruce.
I'm sure everyone here already knows this, but Social Secuity is a Ponzi scheme.
http://www.endofinnocence.com/2010/10/social-security-is-ponzi-scheme.html
If everybody knows it, its not a Ponzi scheme. A Ponzi scheme is when "investment returns" are believed to come from investments, not new investors. SSA makes no such claim. Anybody bothering to read for 10 minutes can learn that those receiving the "returns" are simply receiving the "new investors" money". The only "investment returns" are the interest on the surplus of receipts over expenditures, and that is the interest earned on the non-marketable securities that the SS Trust holds.
SS is an insurance scheme, just like its official name. You pay the premiums and your grandparents make the claims. Someday you become your grandparents and get to make a claim. Whether that claim gets paid depends on the solvency of the insurance at the time the claim is made. Just like regular insurance, the solvency often depends on the continued flow of new premiums, not just the adequacy of existing capital.
There's nothing remotely "unfixable" about SS. As Rand Paul says, moving the retirement age by one month every year for 30 years makes SS just a solvent as it was in the 1960's. This is the most equitable and rational fix because SS was designed to provide insurance for income lost after retirment. At a time when life expectancy was 67, that was 3 years worth of income. With life expenctancy now 77, we're expecting 10 years of income protection for the same premium that previously financed only 5-7 years of protection. That's not possible. So if we don't want to pay more premiums, we've got to accept the same, not more insurance coverage. That means a rising retirement age.
Yep, all those that don't want to pay for .GOV debt, which the sheeple consented to, want to classify SS a "Ponzi" scheme.
And they would be 100% wrong...
IF 'MeRiKans wanted things to change in the Dist. of Criminals, they should have stopped voting for (D) & (R) Kleptocrats!
BK, if not 2037 when do you think? I think it will be much earlier, as soon as 2020? But I don't think SS checks will ever end, we will just debase the dollar to such an extent they won't be able to buy anything.
Pssss....the 2037 number is based on .GOV IOUs in the SS Trust Fund, as in DEBT to be REPAID!
Now we're seeing the IOUs kicking in, and thus the knee-jerk reaction from the Credit Card Comrades (CCC)...
Party on Garth, party on Wayne!
I don't have a computer big enough to answer that question.
It very much depends on the economy. If we do have stagflation as a significant issue over the next 5-10 years (likely) then SS will run dry between 2025-30.
Another big recession like 2008 and the well runs dry between 2020-2025.
So, that 1983 Greenscam Commission that was going to fix things so that the boomers paid for both their parents and themselves by doubling SS taxes didn't work? Now they want us to take cuts (real or nominal) to pay for the fact that the FUCKING MONEY WAS STOLEN by Congress and the White House?
feels good to be proven right?? well you and about 110m other taxpaying adults...
hmmmm, to take the money at 62 or wait until 70.....such a difficult decision
We already knew this years ago. That the CBO is just now figuring it out is fucking pathetic at best, and criminal at worst.
Now.......Where did I leave my pitchfork....?
Trust me, the CBO knew about this a LONG time before We did...
This is all PR spin to gauge publik sentiment about austerity measures, i.e. attempting to renegotiate debt certificates and scare the sheepsters to approve.
Although it appears there are a few socialist/fascist bloggers/forumites that are drooling over the thought of screwing old people out of their retirements, don't think for a minute that boomer 'MeriKans grazing on pastures of ignorant bliss are gonna be fooled...ANY cuts in SS will spook the herd to stampede, and the politicos know it!
P.S. I'm surprised so few (as in -0-) have connected the dots between 2010 moon-shot of .GOV deficit spending -and- The loss of the SS fund surplus availability to the (D) & (R) kleptocrat oligarchs...
Hola? Is this mic on...?
ROFL
Thanks Bruce. Very good work, as usual.
I'm certain they have a plan to make all payouts in nominal terms, but not real. Hey, if you can't obey the spirit of the law, then obeying the letter is the next best thing, right?
I can't help but think all of this is going to come to a head in a year or so, like a 98 year old debt-currency carbuncle...