Gettin Ugly

Bruce Krasting's picture


I got into a bit of an Internet tussle with Marketwatch 666. This was another of those posts from the defenders of Social Security, and like most of these articles, this one fell back on an old tired line. The author quoted Ronnie Reagan: (I wanted to barf)


Social Security can’t add to the deficit.




So I dashed off a comment:


Social Security does not add to the deficit. Ronnie was right.

Social Security DOES add to the DEBT of the country.

Both statements are true. Which one is the one to focus on?

In 2013 the answer is that it is the debt that matters, not the deficit, and SS is adding to the debt.


The author, R.J Sigmund, comes right back with: (and I’m grabbing for the wastebasket again)


Bruce, the debt is not a problem....the world economy is suffering from a shortage of safe assets, and the only way to alleviate the shortfall is to increase the debt


Then he goes on to add:


you've conveniently omitted the fact that it also earned more than $117b in interest on the government bonds in the trust fund....


I love it when this happens; folks playing “gotcha”, not even understanding the facts. I come back with my standard response:


Careful where you go with that interest income line. Interest is a NON CASH ITEM. SS needs cash to make benefit payments. So SS has to hock its bonds with Treasury to come up with the CASH needed. Treasury, in turn, must borrow from the public to fund the SS shortfall.


I told them to go to SSA, and look at the bottom line results at SS for 2011:




Every penny of the $45.379B cash shortfall had to be borrowed by the Treasury. Treasury did that by issuing more Debt to the Public. I added some number about what's in store for the future with cash deficits at SS:


2010 SS deficit = $47B,

2011 SS deficit =$48B,

2012 SS deficit = $60B,

2013- 2023 SS deficit = ~$1T


Anyway, I doubt I changed RJ's views on this too much. This is an emotive topic, and I suspect it is going to become more charged in the weeks to come. It’s very hard to have a debate with someone who starts with, “debt is not a problem”. It’s even harder when the debate is ended with: take your ranting back to zero hedge, where you might find some other chicken little types who'll buy into your theories...



Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
indio007's picture

WRONG SSI does add to the deficit .

Go read the Treasury's CAFR.


laomei's picture

If you're so worried about SS. Then surely you will not object to uncapping it, applying it to capital gains and means testing any paid-out benefits.

AynRandFan's picture

Why wouldn't we cash in those bonds held by SS first?  You know, the ones representing the $4 trillion borrowed by the Treasury Dept?

Sean7k's picture

This is the problem with all government entitlements: it removes the responsibilty from individual communities that can better determine where funding should go and how much. Whether the recipient is trying or just living off others. It encourages people to forget their neighbors and place their trust in 545 knuckleheads thousands of miles away. It allows the recipient to be beholden to the government, rather than the providers of the entitlement.

Further, it doesn't allow communities to help each other and form bonds that transcend geography. 

It takes all the potential for strengthening self government at the local level and leaves us at war with ourselves- easy prey for the Elites that keep us divided and torn. 

When you give control of your lives to others, you are asking for abuse. Who cares more about you or your family than YOU? Do you think a representative really cares whether you live or die? Maybe long enough to get your vote, but nothing more. 

As long as power in centralized, there will be problems of a massive nature. As long as power is decentralized, there will be problems of a minimal, local nature. Is this really that difficult of a decision?


docj's picture

...the world economy is suffering from a shortage of safe assets, and the only way to alleviate the shortfall is to increase the debt

OK, so I assume by this, I guess it can be called "logic", it's "safe" to assume that the Fed.GOV will be able to butt-rape the American Sheeple in perpetuity, while said Sheeple continue to suffer crushing self-impoverishment under an ever-expanding pile of crap-laden unicorn-paper.

The asshole has a point, sad to say.

Atticus Finch's picture


Can you discuss the phoney-baloney Reagan "Social Security Lock Box" which allowed the looting of Social Security as long as the looter left an IOU? Some estimates say that if the Government had not looted Social Security it would have a 2 trillion dollar surplus.

slightlyskeptical's picture

The most sane fix for social security is to get everyone back to work at decent wages. 


Fix Medicare by letting the government negotiate drug prices like would be the case in any capitalistic, supply/ demand economy. The fact that they refuse to do so, means you have to look no further to prove the whole economy is one great big sham.


AynRandFan's picture

Most "capitalistic, supply/demand economies" restrict monopolies.  Medicare is a huge monopoly.  That's why we shouldn't let it negotiate drug prices.  We do, however, let it negotiate medical care reimbursements, and you can see where that has led, i.e., many doctors will not take Medicare patients because of the 25% reimbursement rate.  You want that to happen with drugs?

crzyhun's picture

Keynes is wrong in today's context. With ZIRP which he did not even address in his world there is no incentive to save. The risk premiun is barely visible on the investment side. The world has become Keynesian and his grandfather is K Marx. And this includes many Republicans and on the otherside all the rest. Keynes problem is that it seeked//s to manipulate the price/profit system. Prices are set in the transaction. Profits endure from it. We are in a deep muddle and the end is '1984.' Sorry.   

And again debt does not dissappear at zero rates. Just look at Jap econ. They are not saving anymore and are spending down their per. savings at great rates. This is where we are going, not Greece. Just wait when the whip comes down and the system folds under its weight- who will live. Personally, I will not be out in the cold in line...


devo's picture

Krasting, you realize you're as bad as Bernake et al, only the other extreme, right? (and according to my YouTube research, you work for the Koch brothers!)

Where are the rational, moderate people in this country?

Sean7k's picture

Youtube research? Really? 

Bruce usually will answer questions in the comment section. Hey Bruce, do you work for or funded by The Koch Brothers? The Heritage Institute or other group? Thanks,



devo's picture

The YT comment was a joke for levity.

linrom's picture

Krasting trolls liberal websites and gets into arguments about Social Security. I was also wondering if the guy is a paid Pete Peterson, Heritage Foundation or Koch brothers shill. The one topic that he repeatedly attacks is Social Security policies. Why?

malikai's picture

I have done exhaustive research into the motivations of BK. I have determined that he is a reptillian governmental agent. His job is to undermine the strong peoples of the United States of America by exposing social security weaknesses in order to divide the union. Ultimately in the weakened state, the reptillian invasion will be not only accepted, but demanded by the peoples of the USA who will hail their new overlords and the infinite reptillian Social Security funding vehicle.

This message was paid for by the Koch Brothers, Heritage Foundation, and under special management by Pete Peterson.

CloseToTheEdge's picture

"Well, would it make a difference if the Wall Street Journal was quoting me? A lead story in today's edition:" BK

Is the thrill that'll getcha
When you get your picture
On the cover of the Rollin' Stone

DavyRoySixPack's picture

All charts are pointing to the event called BUST. Once occurs on one chart .... all other charts will bust in a milli-second.

Benjamin Glutton's picture
Charles Murray Author of The Bell Curve; Scholar at the American Enterprise Institute


Charles Murray is one of the most influential right-wing ideological architects of the post-Reagan era. His career began in a secret Pentagon counterinsurgency operation in rural Thailand during the Vietnam War, a program whose stated purpose included applying counter-insurgency strategies learned in rural Thailand on America’s own restive inner cities and minority populations. By the late 1970s, Charles Murray was drawing up plans for the US Justice Department that called for massively increasing incarceration rates. In the 1980s, backed by an unprecedented marketing campaign, Murray suddenly emerged as the nation’s most powerful advocate for abolishing welfare programs for single mothers. Since then, Murray revived discredited racist eugenics theories “proving” that blacks and Latinos are genetically inferior to whites, and today argues that the lower classes are inferior to the upper classes due to breeding differences.

Read more at what hidden history have you BK?
daxtonbrown's picture

Here's a webpage from the CDC showing the murder rate for black males age 20-24 at 109 per 100,000 versus 6.3 per 10,000 for whites.

Statistics can not be racist. We have a problem in the black community that has nothing to dowith racism.

pherron2's picture

Here's the problem I have with people continually quoting such statistics; eventually the gangstas hear it & decide to turn that table around. Couldn't we simply let sleeping dogs lay?

Benjamin Glutton's picture

Personally, I care not what racial outlook one harbors. For comparison purposes perhaps you might provide data for the murder rate by whites for a country in which the white minority endured slavery, oppression, monetary and educational neglect for several centuries.



moondog's picture

That would be Ireland, who was fighting for independence until recently.

AynRandFan's picture

So, a low murder rate in Ireland.  Yeah, but haven't seen much Irish gangsta rap lately.

Bendromeda Strain's picture

Murray revived discredited racist eugenics theories “proving” that blacks and Latinos are genetically inferior to whites, and today argues that the lower classes are inferior to the upper classes due to breeding differences.

You mean the "theories" devised and propounded by the turn of the century progressives? What a joke. Progressives are such chameleons, you truly have to read and understand The Screwtape Letters to keep up with them. I notice that Planned Parenthood doesn't renounce Margaret Sanger, so who says that progressives have publicly called their pet theories discredited?

PS - I am glad the mask has slipped off Yves, no need to waste productive time there.


Benjamin Glutton's picture
I for one do not appreciate CIA manipulation of US politics and posted the article as reminder of its pervasive influence of both major party's. Both party's are guilty and thereby traitorous,imo. I see AEI feels the need to deflect and attempt to defend itself by attacking dissemination of this piece.  GLWT. The Charles Murray Fan Club

President Bill Clinton: “He did the country a great service. I mean, he and I have often disagreed, but I think his analysis is essentially right. … There’s no question that it would work,” Clinton said in interview with NBC News in 1993.

Billionaire Charles Koch: According to the Wall Street Journal, Charles Koch named Murray as one of the “authors who have had the most profound influence on his own political philosophy.” (The respect is mutual: Murray admitted that he has “enjoyed a friendly acquaintance with both Charles and David Koch for more than 20 years” and continues “to admire their efforts on behalf of a cause that I share.”)

New York Times columnist David Brooks: “I’ll be shocked if there’s another book this year as important as Charles Murray’s Coming Apart,” wrote Brooks in 2012 about Murray’s latest book, which argues that wealthy people are wealthy because they are genetically superior to the poor due to interbreeding. “I’ll be shocked if there’s another book that so compellingly describes the most important trends in American society.”

Reason.TV: In a 35-minute video tribute to Murray, Reason said: “Libertarian intellectual Charles Murray is perhaps America’s most influential social policy thinker.”

New York Times columnist Ross Douthat: “‘Coming Apart’ is one of the strongest and most lucid explorations of the existing data on the long-simmering social crisis in working-class life,” Douthat gushed in a piece headlined “What Charles Murray Gets Right”. Among those things Murray “gets right” according to Douthat: crackpot eugenics, and the dubious notion that America is currently ruled by a meritocracy, disastrous wars and financial collapses notwithstanding: “‘Coming Apart’ offers a convincing account of how meritocracy has exacerbated the problems that Murray describes — encouraging the best and brightest to work and live and (especially) mate within the cocoons of what he calls the SuperZIPS, segregating Americans by intelligence to an unprecedented degree…”

Cato Institute Senior Fellow Doug Bandow: “Murray does not ignore or sugarcoat the tough side of liberty,” Bandow wrote in 1997, applauding Murray’s understanding that government social programs are incompatible with liberty and freedom. “Actions have consequences, and free people must bear the consequences of their actions.”

Christian Reconstructionist Gary North: North praised Murray as a writer who has “presented for us in bone-chilling detail . . . how poor people, in our own country and abroad, have been transformed by humanitarian policy . . . completely dehumanized by the programs that were supposed to be motivated by compassion.” North, a former research assistant to Ron Paul, also believes that homosexuals should be stoned to death, as should children who disobey their parents and women who have abortions or engage in “unchastity before marriage.”

Dave Weigel, Slate columnist and MSNBC Contributor: “I’m a Charles Murray fan…” (October 25, 2010)

Former National Review columnist John Derbyshire: Derbyshire praised him: “On the welfare state itself, which he has been studying most of his adult life, Murray is infallible.” (Derbyshire, a well-known racist, wrote a guide to what parents should teach their children about black people, which included “tips” like: “Do not act the Good Samaritan to blacks in apparent distress, e.g., on the highway.” and “Avoid concentrations of blacks not all known to you personally.”)

Libertarian Murray Rothbard: Rothbard, co-founder of the Cato Institute and supporter of David Duke, praised Murray’s Bell Curve for “expressing in massively stupefying scholarly detail what everyone has always known but couldn’t dare to express about race, intelligence, and heritability.”

Reason magazine: In 1984, Reason magazine placed Murray’s Losing Ground second only to Aleksandr Solzhenitsyn’s The Gulag Archipelago as one of the books that “had kept liberty alive over the past two decades.”

Andrew Sullivan:  “I had no interest in this subject until I saw the data in Murray’s and Herrnstein’s book [The Bell Curve]. I was, frankly, astounded by it. As a highly educated person, I had never been exposed to this data. And yet, it turned out it was undisputed.” Sullivan defended Murray’s argument that intelligence is determined by race as “not racist,” writing in The New Republic: “The notion that there might be resilient ethnic differences in intelligence is not, we believe, an inherently racist belief.”

William Hammett, former president of the Manhattan Institute: “Every generation produces a handful of books whose impact is lasting; books that change basic assumptions about the way the world works (or ought to work…),” wrote in Hammat in a personal memo, describing why he thought the Manhattan Institute should bankroll Murray’s research. “Charles Murray’s Losing Ground could become such a book. And if it does it will alter the terms of debate over what is perhaps the most compelling political issue of our time: the modern welfare state.”

wonderatitall's picture

i dont know about bruce but i draw up secret plans every day to rid ourselves of a certain b. glutton asshole. we all do it, bush , coulter , bush, rumsfeld and howdy doody



cretin thy name is b. glutton, asshole

I am more equal than others's picture

Wow, I do the same thing but its pelosi, reid, and a gaggle of like-minded democrats

blonderatitall, maybe we should conference and try to work out our differences. 

You show up like a sterotypical democrat and I'll show up like a NRA, military and constitution loving individual.

Jafo's picture

I look upon SS as the bribe that we pay to the poor NOT to engage in crime.  Granted it doesn't work for all of the poor people but it sure works for a lot of them.  Does anybody have a better solution?


That said, with the politicians running it it is not running as efficiently as it could be run.  There is room for improvement.

MassDecep's picture

I have a better solution to the $400 take out of my check every month. I could buy PM's and have them delivered and not live off the Gov when I retire. Is this really that hard to understand?

How much is taken out of your check every &^%$%^# month? My statement is well over $200,000 which would have made a nice retirement for my family, but now? Who knows what the %$#^ they will take from me to pay for the others. It is discouraging, to say the least, to throw all my earned money into this shithole.

Janice's picture

Umm yeah. The problem is that because of gov under reports inflation data, the SS isn't keeping up with maintaining a "poor" quality of life. It takes a little extra than a SS check to maintain the rank of "poor". Anyway, the only peeps on SS are the elderly and disabled...not much of a risk of violence there. Welfare and snap are a different story. Those handout go to healthy, perps.

CloseToTheEdge's picture

Anyway, the only peeps on SS are the elderly and disabled...not much of a risk of violence there. Welfare and snap are a different story. Those handout go to healthy, perps.


"Wo ein Gebildeter weilt, kann keine Rohheit aufkommen."

Chris88's picture


I found the scribbled upon memo you posted the other night more believable than: "Bruce, the debt is not a problem....the world economy is suffering from a shortage of safe assets, and the only way to alleviate the shortfall is to increase the debt" 

The fact somebody said that in a serious, actually not surprising.  There truly is no limit for human stupidity.  

TheMerryPrankster's picture


Zerohedge has its share of moronic comments, but it also has a good bit of outstanding thought.

I find it entertaining and enlightening and a great break from the "I know you are, but what am I?" dialogue that dominates most web sites.

Things are getting serious, Obama is willing to violate the Constitution quite publicly, this is a sign of desperation. The foundation of our laws, of our country of our commerce is currency.

How will we bribe politicians when toilet paper is worth more than Federal Reserve Notes? Maybe i just answered my own quesion.

pfairley's picture

why bother in this online debate?...even dems in congress believe SS is problem in future..they just keep harping that stimulus will give us growth...then later the needed higher tax income...

  The key issue is to point out differences between WW2 hi debt America (growth machine...the Krugman lie)..and today's America being more like Japan and EU (weak growth- lost decades machine- despite stimulus & QEs).

Geruda's picture take your ranting back to zero hedge, where you might find some other chicken little types who'll buy into your theories...


He is making true speaking about one thing.   The zerohedge is the place to be having very many stupids who are saying and believing many stupid things.

forwardho's picture

If you fprgot the /sarc tag, good humor.

If meant as posted...

There, but for the grace of God, go I

I am more equal than others's picture

Your grammar skills must be a product of a Union-filled public school.  Or, you are just a vanilla moron.  Its difficult to tell the two apart,

wonderatitall's picture

what theory? he pointed out his points and you nazi democrat obama worshipper's say your deluded points. 

seems like only huff duff post and the democrat/nazi underground are the only places where "facts" are printed.  

i know i left out the kos retards but , really its not polite to bring up and ridicule conspiracy addicted disabled people.

TheMerryPrankster's picture

Are you being ironic or moronic?

The Old Man's picture

Oh.... Bruce, there's assets all over the place. China is mounting a mission to the moon. I seriously doubt they'll stand by the International Space Aggreement to leave the moon and the planets for all mankind and make the moon their first attempt to allocate their allotment of land there, and if their fair, which I doubt, ratio based on population. Boy, being a Chinese astronaut, financed by our money never really occurred to me before.  I'm certain that when they get there, targeting the landing for the minerals and elements contained within, instead of looking for rocks of origin, and riding around with a geoligists hammer and a $10,000 bag to hold the rocks, they'll start staking out PROPERTY and begin making CLAIMS for mineral rights through our beloved United Nations. Using there vast investment in UST's they'll march over to the IMF and use them for future exploration and MINING/DEVELOPMENT funds. Of course, Social Security and the like will go on forever, as long as Congress keeps there hands off it. But if us old folk aren't dead by the time China has CITIES on the moon, we'll be eating tree bark and shitting in the, by then, overflowing sewers.

What would you do with the money?

More resources.

More land,

More power.

It's not science fiction. Not any more.

Sean7k's picture

When the mineral wealth that lies on the floor of the oceans was discovered in the early sixties, by the US- which was the only nation capable of retrieving it, the UN did what it does best: It created the sea treaty that assigned every nation on earth a portion of the wealth of the oceans. 

The Moon would be the same thing. It isn't the age of discovery anymore, where you plant a flag and it's yours. It's not science fiction, it's global socialism. 

TheMerryPrankster's picture

at current cost of 10k$ per pound launched, it will take a whole lot of very valuable minerals to make extra-terrestrial mineral pursuits break even, let alone profitable.

It would be more cost effective to mine the oceans or Antartica, than to recover minerals from the moon, let alone mars or father out.

Space is very good for one thing only and that is separating large masses of matter  from one another.

Since matter cannot be destroyed, we should have every mineral ever created on this world, still on this world, except for the bits we've left in space and various probes etc.

Evil Bugeyes's picture

Bruce, I'd like to recommend that you see this movie when you get a chance:

Dr. Strangemoney (or How I learned to stop worrying and love the Deficit)


Diamond Jim's picture

time to just pass out the SOMA..drones and middle class.........

mendigo's picture

shortage of safe assets

is that another way of saying there is too much money in circ and nothing worth spending it on so somehow that means we need to put more money into circulation? I think we need to check that guys credentials - did he mean to say that? Clearly a trillion dollar coin supporter. That guy is taking crazy pills.

working class dog's picture

The corporations and the banksters got rich all the while stealing our labor , time for them to man up and pay up. I say if you worked your 30 to 40 years in the private sector and paid in, we should get it back. Gubbament workers screw off, you got paid by my taxes.

Pancho Villa's picture

2013- 2023 SS deficit = ~$1T

So SS deficits might cause US debt to be $27T rather that $26T if we act "prudently"? To me, that shows that SS is far from the worst of our problems. Bruce, why do you dwell on SS so much? Medicare seems to be a bigger problem. It is pretty certain that there is eventually going to be a painful debt reset sometime in the next 10-15 years. But most people are not concerned about it and won't be until it is too late to do anything about it. Until then, trying to convince people that the government should reduce the deficit is like trying to convince an alcoholic to stop drinking while he is in the middle of a binge.

The only thing that individuals can do is to try to position themselves to survive the "Great Debt Reset". Buy physical assets like gold and farmland. Avoid dollar/euro/yen debt like the plague! I think the "Great Reset" will be very painful, but mainly for those people who are counting on paper currencies to maintain their value.

Vendetta's picture

indeed.  The relative amount to other stuff is virtually insignificant.  At least $600/$700 billion annually on military stuff to keep us safe from what?  Its not keeping us safe from bankers-and-politicians-gone-wild and they are the only statistically significant threat to my well-being

Bicycle Repairman's picture

SSI, medicare, food stamps, military spending, pensions for government workers.

One of these things has Bruce's knickers in a knot, the others don't matter to Bruce.


Michaelwiseguy's picture

Unified budget From Wikipedia,

In the United States a unified budget is a federal government budget in which receipts and outlays from federal funds and the Social Security Trust Fund are consolidated.[1] The change to a unified budget resulted in a single measure of the fiscal status of the government, based on the sum of all government activity. When these fund groups are consolidated to display budget totals, transactions that are outlays of one fund group (i.e., interfund transactions) are deducted to avoid double counting.[2]


The United States government adopted a unified budget in the Johnson administration in 1968, beginning with the 1969 budget. The surplus in the Social Security OASDI (Old Age Survivors and Disabilities Insurance) budget offsets the total deficit, making it appear smaller than it otherwise would.[3]

The Budget Enforcement Act of 1990, however changed this so that the two Social Security Trust Funds, and the operations of the Postal Service, are considered to be 'off-budget' and are excluded from the unified budget.[3] This means that the Social Security Tax is not counted as revenue to the General Fund, and interest paid to the Trust Funds is counted as an expense to an external entity. Often Federal budget reports will contain two sets of numbers for the yearly Federal Budget: an 'off-budget' deficit (or surplus) and an 'on-budget' deficit (or surplus) the former of course including the receipts and outlays of these budgets, but by law for purposes of balancing the budget they are 'off-budget'.

disabledvet's picture

All aboard the Omnibus! The Omnibus is leaving the station! All aboard!