I'm sure I can find this online but we have some smart folks out here and hopefully this will be a non-partisan discusson
I dont get the budget issues and shortfalls.
I keep reading that most of the US budget is taken up by entitlement progams - SS, Mediacare.
So the "rest" is sort of our cost of living, infrastructure, military, admin, etc.

here is what I dont get.
We all PAY, outside of our taxes, for SS and Medicare. Its gets deducted IN ADDITION to our fed and state taxes.

so, is it that these programs cost more than what is paid in, so then the govt takes the fed income tax revenue and uses to fund these programs?

I guess Im not understanding why its always discussed to raise income tax when the problem appears to be that we not raising enough money for SS and Medicare. Im not sure if my question makes sense :smash:

I think they steal it all for the general fund and then play ponzi games with it

didnt take me long - just found my answers

United States federal budget - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/United_States_federal_budget)

So, its pretty obvious that the issue in this country is not that we need higher taxes or that government is spending too much. Not at all.
The real issue is that SS and Medicare are failed programs! they're not working. The money I pay today, should be invested to pay me tomorrow, the revenue generated from that investment should be paying for the people who didnt pay into the system. This is mind boggling to me. Maybe I havent been paying attention.

yes, every penny that you pay is immediately being sent to someone else, and then some last year(2010)....there is no "lock box"

I wouldn't worry though, the surgeon in chief has taken a scalpel to the budget and in a most thoughtful way he eliminated what was necessary to both cut spending and increase investments(spending) and managed to do it all for a tad under 4 Trillion....we should be just fine by 2012...ahhhhh...2015....ahhhh...2021....

the real problem is that the government has to continue spending their money on these pesky and unnecessary tax cuts...:uhuh: if the goverment didn't have to pay for tax cuts they could keep more of their money and then we could have a 5 trillion dollar budget and then all of our problems would be solved and everyone would be happy:jump1:

Jimmy,

What I fail to understand is how, in the midst of all this talk about cutting spending, the government decided to reduce the FICA by 2% and leave the cap in place. If they wanted to do something to ease the pain they would have left the FICA at 6.2% and removed the cap. I'm willing to continue giving my 2% if it helps.

Jimmy,

What I fail to understand is how, in the midst of all this talk about cutting spending, the government decided to reduce the FICA by 2% and leave the cap in place. If they wanted to do something to ease the pain they would have left the FICA at 6.2% and removed the cap. I'm willing to continue giving my 2% if it helps.

I agree! lets focus on the REAL problem. Its not govt spending, its not federal income tax....its failed programs!

Jimmy,

What I fail to understand is how, in the midst of all this talk about cutting spending, the government decided to reduce the FICA by 2% and leave the cap in place. If they wanted to do something to ease the pain they would have left the FICA at 6.2% and removed the cap.

I'm trying to recall which idiot proposed this???



I'm willing to continue giving my 2% if it helps.

I don't think anyone will argue or complain if you go ahead and send that extra 2% in this year...I will be the first to applaud your generosity :uhuh:

I think it's mostly about increasing costs and demographic changes. Also, as the funds excess shrinks they can't benefit from interest income.

SS can be fixed, it's Medicare that's the biggest problem.

-spence

Scott,

Ther isn't a way to give it back...I know you would be happy to take it for Uncle Sam but that isn't a viable option despite despite the generous offer! :smile: I hate giving the government any more money than I have to but woud prefer that they just keep what they are already getting instead of giving me some and taking more in the form of some new tax (that only makes me mad). Losing the cap makes the government more money as those making more than $110K continue paying while those making less don't hit the cap.

The Feds stole the monies a long time ago to pay for, illegals, federal low income programs, Acorn, Planned Parenthood, federal pensions etc: and it has come back to hit em in the a_ _. We give Planned Parenthood at least 300 million a year, they are a private enity. We could put that towards Social. Where is the millions that we have given to Haiti?

We could probably balance the budget just by not giving monies to other countries that do not like or support us. We give 20 million to Cuba, 9 billion to Africa, 913 million to Russia and can you believe we give aide to China. :smash: :wall:

That is just a few.

it's Medicare that's the biggest problem.

-spence

I agree it is a big one. Being on Medicare myself along with many of my friends I see
unsustainable medicine costs due to all the new procedures that are available and
the fact that Docs need to protect themselves from lawsuits.

In addition many Docs are dropping out of Medicare because of the hassles
and fee cuts..
My wife needs a new hip, bone on bone, and the specialist we have opted
out of Medicare because of the hassles. Wait till more government HC.

Therefore his treatments comes out of my pocket, $200 first visit, $75 each
visit after that and $5000 for the surgery.
IMHO he deserves it because he's one of the best, highly trained and has a heavy overhead.
Ya get what you pay for and the Govt is out of dough let alone what it will need as
the Baby Boomers enter the program.

Don't worry though, the $600 Billion saved in Medicare fraud will pay for them. :)

SS can be fixed, it's Medicare that's the biggest problem.
-spence

Absolutely.
Everyone 45-55, bump it 1 or two years later.
everyone under 45, SS now starts at 70.

I can't fathom how either side can't come up with a rational, commonsense way to work on SS

Medicare is the looming claymore w/ the boomer generation reaching AARP status...

Defense. Lets get out of Afganastan and Iraq before we think about anything else.

Everybody wants to pick on Social Security

Lets start with the fraud on welfare and unemployment, needs to be revampt.

Everybody wants to pick on Social Security

Lets start with the fraud on welfare and unemployment, needs to be revampt.

look at the charts in the wiki link i posted. Almost all of the money the govt takes in goes to SS or Medicare. fixing anything else is small change.

look at the charts in the wiki link i posted. Almost all of the money the govt takes in goes to SS or Medicare. fixing anything else is small change.

43% is not 'almost all'
it is huge though, and needs to be dealt with, as does defense.

43% is not 'almost all'
it is huge though, and needs to be dealt with, as does defense.

it is when you subtract the things you cannot control - interest and mandatory

43%! Well then instead of hiring 5,000 more IRS people lets hire 1000 and asign them to go after medicade fraud of which is a few billion.

Everybody wants to pick on Social Security



The problem with the Social Security Trust Fund is the government has been borrowing trillions of dollars
from it since 1942 with the borrowing sky rocketingfrom the 70's on.
There are no $$$ left because of it, a Ponzi scheme for sure.

look at the charts in the wiki link i posted. Almost all of the money the govt takes in goes to SS or Medicare. fixing anything else is small change.

Jim, but they are stealing the SS Surplus

The problem with the Social Security Trust Fund is the government has been borrowing trillions of dollars
from it since 1942 with the borrowing sky rocketingfrom the 70's on.
There are no $$$ left because of it, a Ponzi scheme for sure.
Not sure that's really accurate. There's a lot of money in the trust on paper, but it's invested in the US and shows up as debt.

The problem isn't as much SS as it is overall fiscal health.
Posted from my iPhone/Mobile device

The opposite of progress
Is Congress.

Vote E'm Out.

Not sure that's really accurate. There's a lot of money in the trust on paper, but it's invested in the US and shows up as debt.


Posted from my iPhone/Mobile device

It's basically robbing Peter to pay Paul. Paul spent his money and now Peter
is broke.

If the money was kept in a "locked box" from the beginning Peter would still have his money
and Paul would have to live within his means. :)

The true reason for our financial condition is, we don't live
within our means. :doh:

I guess it depends on if you believe in the full faith and credit of the USA. Good thing we have cash-flow.
Posted from my iPhone/Mobile device

Lots of things we could do immediately. Prisoners don't deserve social security. Stop paying them and anyone who marries them while they are incarcerated.

Don't hire more people to find fraud. Make the existing people find it. That's what CMS (part of SS) is for. A good friend was the guy who ran the programs and found the little old ladies in nursing homes double dipping. There has to be a lot more. Convert welfare into welfare for work. Start daycares, provide bus vouchers, and make the third and fourth generation welfare recipients work. They can clean streets or public buildings or something that provides a return and reduces costs.

Finally, open up clinics using new doctors in return for government liability from malpractice (for a certain period). Even if they are free, clinics would reduce the costs to hospitals and thus to health care. Put military medical folks there and use them to distrubute medicine instead of having medicare do it. It has to be cheaper that way...

..and I agree. Get out of the middle east. If only for economic reasons. We have predator drones and icbms...use them to maintain stability.

Just a few suggestions.

Not sure that's really accurate. There's a lot of money in the trust on paper, but it's invested in the US and shows up as debt.

The problem isn't as much SS as it is overall fiscal health.(it's an unsustainable redistribution scheme..a disaster)Posted from my iPhone/Mobile device

there was a lot of money in the Bernie Maidoff trust on paper but it was mostly "invested"(spent)......the "Trust Fund" was invested into the massive expansion of the welfare state and the Great Society(aka Road to Ruin)...that "investment" should really pay off:uhuh:


[QUOTE=spence;837478] I guess it depends on if you believe in the full faith and credit of the USA. Good thing we have cash-flow.


"cash flow"

printing record amounts of money that does not exist
borrowing record amounts to pay for things that you can never afford

"cash flow"

Bernie Maidoff had "cash flow"

let the nationwide dependent class protests begin :uhuh:

That's a pretty lame response.

there was a lot of money in the Bernie Maidoff trust on paper but it was mostly "invested"(spent)......the "Trust Fund" was invested into the massive expansion of the welfare state and the Great Society(aka Road to Ruin)...that "investment" should really pay off:uhuh:


[QUOTE=spence;837478] I guess it depends on if you believe in the full faith and credit of the USA. Good thing we have cash-flow.


"cash flow"

printing record amounts of money that does not exist
borrowing record amounts to pay for things that you can never afford

"cash flow"

Bernie Maidoff had "cash flow"

let the nationwide dependent class protests begin :uhuh:
Posted from my iPhone/Mobile device

That's a pretty lame response.

[QUOTE=scottw;837544]there was a lot of money in the Bernie Maidoff trust on paper but it was mostly "invested"(spent)......the "Trust Fund" was invested into the massive expansion of the welfare state and the Great Society(aka Road to Ruin)...that "investment" should really pay off:uhuh:



Posted from my iPhone/Mobile device

well, the assertions were ridicuolus sooooo...I guess it was a proportionate response....

the protests have begun....btw

From an economic standpoint, the question of whether the trust fund is fact or fiction comes down to whether the trust fund contributes to national savings or not.[16] If $1 added to the fund increases national savings by $1, the trust fund is real. If $1 added to the fund increases national savings by $0, the trust fund is not real. A substantial body of economic research argues that the trust funds have led to only a small to modest increase in national savings and that the bulk of the trust fund has been spent.[16][17][18][19] Others suggest a more significant savings effect.[20]

If the Social Security Trust Fund causes government spending to be higher and/or income tax rates to be lower, then the trust fund is not contributing to national savings. No money is being saved. On the other hand, if government spending and tax rates aren't affected by the existence of the trust fund, then the trust fund has contributed to national savings. If trust fund increases national savings, then it really is a trust fund and has fulfilled its purpose. This has been the subject of considerable controversy.


The economic question is not whether the bonds represent legal obligations that will be fulfilled, the economic question is whether the U.S. bonds held by Social Security represent savings by allowing Social Security taxes collected in the past to reduce the need for taxes in the future. Was the money added to the fund in 1984 actually saved so that it could be spent on a retiring baby boomer in 2020 without a tax increase? If the only way for the federal government to repay the bonds held by Social Security is by raising taxes in 2020, this suggests that the excess money collected in 1980 was spent on other government activities, not saved by Social Security. Those(fools) who believe the trust fund is real would say that tax increases would have been even higher without the trust fund.

this sounds very familiar.."if it weren't for me and my spending, things would have been much worse"

Not sure that's really accurate. There's a lot of money in the trust on paper, but it's invested in the US and shows up as debt.

The problem isn't as much SS as it is overall fiscal health.
Posted from my iPhone/Mobile device

IOU's are not real money. That's what replaced the $$$ they stole.

Brian's right. Unemployment is another area of wasted $$$. 99 weeks and running......

There's a huge sign on a little store here in Cambridge. I'll take a picture for you. It says " WICs checks accepted , play the lottery".

I went in...No baby fornula for sale....surprise!!!!

this says it all

The Social Security Trust Fund is the means by which the federal government of the United States accounts for excess paid-in contributions from workers and employers to the Social Security system that are not required to fund current benefit payments to retirees, survivors, and the disabled or to pay administrative expenses.

The trust fund contains the securities that will be redeemed to make benefit payments in the future when contributions derived from payroll taxes and self-employment contributions no longer are sufficient to fully fund then-current benefit payments. (The controversy over its meaningfulness is a topic of the sustainability of the unified Federal budget.)

Paid-in contributions that exceed the amount required to fully fund current payments to beneficiaries are invested in securities issued by the federal government. The securities issued under this scheme constitute the assets of the Social Security Trust Fund. Because under current federal law these securities represent future obligations that must be repaid, the federal government includes these securities within the overall national debt.[1] The portion of the national debt that is not considered "publicly held" represents the obligations incurred by the government to itself, the bulk of which consists of the government's obligations to the Social Security Trust Fund.

the term "scheme" is appropriate


just think about the masses that will mobilize in 2102 to save their entitlements!!!!

Good to see you doing some homework on how the US Government work. Now go read up on Madoff so you can actually understand his scheme as well.
Posted from my iPhone/Mobile device

OK

While the system eventually will collapse under its own weight, the example of Bernard Madoff's investment scandal demonstrates the ability of a Ponzi scheme to delude both individual and institutional investors as well as securities authorities for long periods: knowingly entering the scheme even at the last round of the scheme, can be rational economically if there is a reasonable expectation that government or other deep pockets will bail out those participating in the Ponzi scheme..........


yup....:uhuh:

Madoff didn't invest, he just banked the money, falsified returns and paid investors largely from their own money.

If SS is a ponzi scheme than so is any government backed security.
Posted from my iPhone/Mobile device

IOU's are not real money. That's what replaced the $$$ they stole.

Brian's right. Unemployment is another area of wasted $$$. 99 weeks and running......

There's a huge sign on a little store here in Cambridge. I'll take a picture for you. It says " WICs checks accepted , play the lottery".

I went in...No baby fornula for sale....surprise!!!!

I agree w/ Bryan as well, these programs should only serve those with demonstrated need and the limits need to be changed drastically...unfortunately, to politicians.... demonstrated need, is the need to pile bodies into these programs to create greater dependence to ensure their own or their party's viability down the road....government measures the success of their social programs strictly by the size of their budgets and the number of people..legal or illegal that are dependent on them....

Madoff didn't invest, he just banked the money, falsified returns and paid investors largely from their own money.

If SS is a ponzi scheme than so is any government backed security.
Posted from my iPhone/Mobile device

you appear to be catching on....:uhuh:

the government has not "invested" the money(unless you consider the cash transfers by a large beaureaucracy from one individual to another= investment), they spent it and are now paying their "investors" from current contributions by new "investors"(dupes)....exactly the same(except the "their own money" part)

if Madoff could have convinced the Fed to buy his debt and "create" some money for him...he might still be in business...

Not sure that's really accurate. There's a lot of money in the trust on paper, but it's invested in the US and shows up as debt.

The problem isn't as much SS as it is overall fiscal health.
Posted from my iPhone/Mobile device

It depends on if you lump it all in one bucket, and thats why i started this post, its very misleading.
If this was a business and you had a few different product lines, your overall financial picture would include the revenue and expense from all products. However if you wanted to fix the problems you focus on the products that are not selling or too expensive to produce. Looking at the US financial picture, its SS and Medicare. The data doenst show this but I bet if you took all the income (payroll taxes) we pay for SS and Medicare away and the programs. We could lower our fed taxes and still pay all of the other pieces of the pie. The problem is not govt expense and income tax (which is what 99% of the bitching is), the problem is that those 2 programs are not sustaiinable - the income is not covering the expense.

you appear to be catching on....:uhuh:

the government has not "invested" the money(unless you consider the cash transfers by a large beaureaucracy from one individual to another= investment), they spent it and are now paying their "investors" from current contributions by new "investors"(dupes)....exactly the same(except the "their own money" part)

if Madoff could have convinced the Fed to buy his debt and "create" some money for him...he might still be in business...

scott is 100% correct.

it's really not too complicated, the problem is that "some" would like to tell you that it is, blather on about complexities and then tell you that you aren't smart enough to comprehend their blather when all that they've really succeeded in doing is to defend the indefensible while hypnotizing themselves with their own rhetoric.....which reminds me...have you seen/heard O'baby's new press guy.....HAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA AAAAAAAAAAAAAA!!!!!!!!!!!!!!!

I do not understand the big deal about social security at this time. Social is solvent to 2017 and still taking in more monies then it is paying out. The last incease to employers and employees to the payroll tax was in the early 80's of which has kept social solvent for the last 25 years or so. I would think that if the payroll tax was raised about 1.5% for employer & employee social will be good for another 40 years beyond 2017. Are your elected officials using social as a scape-goat? Social only takes up about 6% of the GDP As they take money from the reserve of social security, they are putting in IOU's. If elected officials would pay some of the IOU's it would make social even more solvent, but I am sure that the government has no intention of paying back, just keep taking. They are thieves and should not be taking monies to put into the general fund. Just because the country is broke does not give them the right.

When Rosservelt passed social in the 1930's it was a ploy for re-election since the average life span then was about 58 years old the government figured that 1 out of 10 would collect, then in the late forty's- fifties vacines were dicovered that increased the life span.

The young people of today should be paying more, their life span is much greater today with today's medicine and vaccines.

The young people of today should be paying more, their life span is much greater today with today's medicine and vaccines.

No..They pay into it for longer and won't be able to collect, if they are lucky, until they are 70.

I guess it's probably not a big concern...but remember, all of these projections are based on rosy scenarios...of course the world is quite stable right now :rotf2: oh, and remember that SS recipients haven't been getting COLA increases because the admin. claims there's no increase in the cost of living...the number should be higher


Jan 27, 2011 The Congressional Budget Office said Wednesday that Social Security will pay out $45 billion more in benefits this year than it will collect in payroll taxes, further straining the nation’s finances. The deficits will continue until the Social Security trust funds are eventually drained, in about 2037.

Previously, CBO said Social Security would start running permanent deficits in 2016. In the short term, Social Security is suffering from a weak economy that has payroll taxes lagging and applications for benefits rising. In the long term, Social Security will be strained by the growing number of baby boomers retiring and applying for benefits.
.............................
August 18, 2010: 6:49 PM ET


NEW YORK (CNNMoney.com) -- It's official: Social Security will reach its tipping point this year.

For the first time in nearly 30 years, the system will pay out more benefits than it receives in payroll taxes both this year and next, the government officials who oversee Social Security said on Thursday.

And while Social Security cash flow will likely head back into the black for a few years after that, starting in 2015 it looks to stay in the red for the long haul, the trustees said in their annual report.

"The improving economy is expected(always count on the opposite of what this bunch says is "expected") to result in rough balance between Social Security taxes and expenditures for several years before the retirement of the baby boom generation swells the beneficiary population and causes deficits to grow rapidly," Treasury Secretary Tim Geithner said.

As for this year's dip into the red, Geithner said the recession is to blame.

Again, you don't seem to know what you're talking about. By law the SS trust must be invested in interest bearing securities.

you appear to be catching on....:uhuh:

the government has not "invested" the money(unless you consider the cash transfers by a large beaureaucracy from one individual to another= investment), they spent it and are now paying their "investors" from current contributions by new "investors"(dupes)....exactly the same(except the "their own money" part)

if Madoff could have convinced the Fed to buy his debt and "create" some money for him...he might still be in business...
Posted from my iPhone/Mobile device

No..They pay into it for longer and won't be able to collect, if they are lucky, until they are 70.

Someone that is in their 40's should be waiting until they are 70.

I have been paying in since 1964 and now I have to wait till I'm 66 not 65 to collect.

Again, you don't seem to know what you're talking about. By law the SS trust must be invested in interest bearing securities.


Posted from my iPhone/Mobile device

but I do, I posted this earlier, the govenment has issued IOU's to itself for any SS overage and promises to pay it back sometime and lumped the amount onto the National Debt...don't know about you...but if a guy running trillion dollar deficits gives me an IOU promising that the money will just materialize at a later date even though the account that the IOU is written on is overdrawn and will be so for as far as the eye can see....welll???

Paid-in contributions that exceed the amount required to fully fund current payments to beneficiaries are invested in securities issued by the federal government. The securities issued under this scheme constitute the assets of the Social Security Trust Fund. Because under current federal law these securities represent future obligations that must be repaid, the federal government includes these securities within the overall national debt.[1] The portion of the national debt that is not considered "publicly held" represents the obligations incurred by the government to itself, the bulk of which consists of the government's obligations to the Social Security Trust Fund. now that's funny...and you wonder where Wall Street get's all of their crazy ideas

you should start you own Ponzi scheme Spence :uhuh:

Someone that is in their 40's should be waiting until they are 70.

I have been paying in since 1964 and now I have to wait till I'm 66 not 65 to collect.

I'm 49 and not thrilled with 70:fury: Just keep bending over and taking it like a good American or be a public employee .

I'm 49 and not thrilled with 70:fury: Just keep bending over and taking it like a good American or be a public employee .

49! You will live to you are 100 ,in your case it should be 80, they will have the miracle drug by the time your 60 :) :)

43% is not 'almost all'
it is huge though, and needs to be dealt with, as does defense.

just an update :)

Sacred Cows: Why Lawmakers Are Stuck on Medicare, Medicaid, Social Security
ABC News Feb. 17, 2011

With all the finger-pointing in Washington this week over the need to reform Medicare, Medicaid and Social Security, one thing is clear: it might just be Americans' very sense of entitlement to those programs that's the biggest barrier to getting something done.


The three programs have ballooned to 57 percent of the government budget this year and are widely cited as the most significant contributors to the federal deficit, something nearly all Americans want to see aggressively brought under control.

49! You will live to you are 100 ,in your case it should be 80, they will have the miracle drug by the time your 60 :) :)


It hurts to get out of bed now. Obama care has other plans for me:hang:

just an update :)

Sacred Cows: Why Lawmakers Are Stuck on Medicare, Medicaid, Social Security
ABC News Feb. 17, 2011

With all the finger-pointing in Washington this week over the need to reform Medicare, Medicaid and Social Security, one thing is clear: it might just be Americans' very sense of entitlement to those programs that's the biggest barrier to getting something done.


The three programs have ballooned to 57 percent of the government budget this year and are widely cited as the most significant contributors to the federal deficit, something nearly all Americans want to see aggressively brought under control.

"Americans' very sense of entitlement to those programs that's the biggest barrier to getting something done"
Imagine the nerve of feeling you should get something you paid for your whole working life.

Imagine the nerve of feeling you should get something you paid for your whole working life.

Bingo.
I think it is fair to add a year to your age group and a few years to mine, but we have been paying into it.

The Social Security system is primarily a pay-as-you-go system, meaning that payments to current retirees come from current payments into the system. In the early 1980s, however, the financial projections of the Social Security Administration indicated near-term revenue from payroll taxes would not be sufficient to fully fund near-term benefits (thus raising the possibility of benefit cuts).



Government will have to borrow to pay Social Security IOUs
March 14, 2010 3:33 PM
The Associated Press

PARKERSBURG, W.Va. • The retirement nest egg of an entire generation is stashed away in this small town along the Ohio River: $2.5 trillion in IOUs from the federal government, payable to the Social Security Administration.

It's time to start cashing them in.

For more than two decades, Social Security collected more money in payroll taxes than it paid out in benefits — billions more each year.

Not anymore. This year, for the first time since the 1980s, when Congress last overhauled Social Security, the retirement program is projected to pay out more in benefits than it collects in taxes — nearly $29 billion more.

Sounds like a good time to start tapping the nest egg. Too bad the federal government already spent that money over the years on other programs, preferring to borrow from Social Security rather than foreign creditors. In return, the Treasury Department issued a stack of IOUs — in the form of Treasury bonds — which are kept in a nondescript office building just down the street from Parkersburg's municipal offices.

Now the government will have to borrow even more money, much of it abroad, to start paying back the IOUs, and the timing couldn't be worse. The government is projected to post a record $1.5 trillion budget deficit this year, followed by trillion dollar deficits for years to come.

Social Security's shortfall will not affect current benefits. As long as the IOUs last, benefits will keep flowing. But experts say it is a warning sign that the program's finances are deteriorating. Social Security is projected to drain its trust funds by 2037 unless Congress acts, and there's concern that the looming crisis will lead to reduced benefits.

For more than two decades, regardless of which political party was in power, Congress has been accused of raiding the Social Security trust funds to pay for other programs, masking the size of the budget deficit.

But to illustrate the government's commitment to repaying Social Security, the Treasury Department has been issuing special bonds that earn interest for the retirement program. The bonds are unique because they are actually printed on paper, while other government bonds exist only in electronic form.

They are stored in a three-ring binder, locked in the bottom drawer of a white metal filing cabinet in the Parkersburg offices of Bureau of Public Debt. The agency, which is part of the Treasury Department, opened offices in Parkersburg in the 1950s as part of a plan to locate important government functions away from Washington, D.C., in case of an attack during the Cold War.

One bond is worth a little more than $15.1 billion and another is valued at just under $10.7 billion. In all, the agency has about $2.5 trillion in bonds, all backed by the full faith and credit of the U.S. government. But don't bother trying to steal them; they're nonnegotiable, which means they are worthless on the open market.

More than 52 million people receive old age or disability benefits from Social Security. The average benefit for retirees is a little under $1,200 a month. Disabled workers get an average of $1,100 a month.

Social Security is financed by payroll taxes — employers and employees must each pay a 6.2 percent tax on workers' earnings up to $106,800. Retirees can start getting early, reduced benefits at age 62. They get full benefits if they wait until they turn 66. Those born after 1960 will have to wait until they turn 67.

Social Security's financial problems have been looming for years as the nation's 78 million baby boomers approached retirement age. The oldest are already there. As that huge group of people starts collecting benefits — and stops paying payroll taxes — Social Security's trust funds will shrink, running out of money by 2037, according to the latest projection from the trustees who oversee the program.

The recession is making things worse, at least in the short term. Tax receipts are down from the loss of more than 8 million jobs, and applications for early retirement benefits have spiked from older workers who were laid off and forced to retire.

Stephen C. Goss, chief actuary for the Social Security Administration, says the crisis has been years in the making. "If this helps get people to look more seriously at that in the nearer term, that's probably a good thing. But it's only really a punctuation mark on the fact that we have longer-term financial issues that need to be addressed."

In the short term, the nonpartisan Congressional Budget Office projects that Social Security will continue to pay out more in benefits than it collects in taxes for the next three years. It is projected to post small surpluses of $6 billion each in 2014 and 2015, before returning to indefinite deficits in 2016.

For the budget year that ends in September, Social Security is projected to collect $677 billion in taxes and spend $706 billion on benefits and expenses.

Social Security will also collect about $120 billion in interest on the trust funds, according to the CBO projections, meaning its overall balance sheet will continue to grow. The interest, however, is paid by the government, adding even more to the budget deficit.

While Congress must shore up the program, action is unlikely this year, said Rep. Earl Pomeroy, D-N.D., who just took over last week as chairman of the House subcommittee that oversees Social Security.

"The issues required to address the long-term solvency needs of Social Security can be done in a careful, thoughtful and orderly way and they don't need to be done in the next few months," Pomeroy said.

The national debt — the amount of money the government owes its creditors — is about $12.5 trillion( I think we just passed 14 trillion), or nearly $42,000 for every man, woman and child in the country. About $8 trillion has been borrowed in public debt markets, much of it from foreign creditors. The rest came from various government trust funds, including retirement funds for civil servants and the military. About $2.5 trillion is owed to Social Security.

Good luck to the politician who reneges on that debt, said Barbara Kennelly, a former Democratic congresswoman from Connecticut who is now president of the National Committee to Preserve Social Security and Medicare.

"Those bonds are protected by the full faith and credit of the United States of America," Kennelly said. "They're as solid as what we owe China and Japan.":rotf2:

CNN Money
Useless: The Social Security trust fund
August 10, 2010: 11:24 AM ET


FORTUNE -- There's real money in the world, then there's funny money -- stuff that looks real, but isn't.

Today, let's talk about one of the world's biggest piles of funny money -- the $2.54 trillion Social Security trust fund. The trust fund matters now, because Social Security revealed last week that it plans to tap it for $41 billion this year, and will begin tapping it on a regular basis in less than five years.

This year's cash deficit, the first since the early 1980s and the biggest ever, means the Treasury will have to borrow money to redeem some of the trust fund's Treasury securities. Even at a time when Uncle Sam is borrowing $1.5 trillion a year to keep his checks from bouncing, $41 billion is real money.

Here's why the trust fund has no economic value. Let's say I begin taking Social Security when I hit the full retirement age of 66 later this year. Because its tax revenues are below its expenses, Social Security would have to cash in about $3,400 of its trust fund Treasury securities each month to get the money to pay my wife and me. The Treasury, in turn, would have to borrow $3,400 from investors to get the money to pay Social Security. The bottom line is that the government has to borrow from investors to pay me, regardless of how big the trust fund is.



Why the Social Security trust fund is useless - Aug. 10, 2010 (http://money.cnn.com/2010/08/09/news/economy/social_security_value.fortune/index.htm)

Bingo.
I think it is fair to add a year to your age group and a few years to mine, but we have been paying into it.

No Brian,
See I have a problem paying for others who don't do there jobs right. I didn't screw up SS.
SS was not set up to cover every person who claims a disability. Medacare was not set up to make scooter and stair elevator companies rich. You could cut the cost by 25% (open your eyes) of all these programs just in by stopping abuse and waste alone.
Being passive and allowing this BS to continue WILL NOT fix anything.

No Brian,
See I have a problem paying for others who don't do there jobs right. I didn't screw up SS.
SS was not set up to cover every person who claims a disability. Medacare was not set up to make scooter and stair elevator companies rich. You could cut the cost by 25% (open your eyes) of all these programs just in by stopping abuse and waste alone.
Being passive and allowing this BS to continue WILL NOT fix anything.

The Coalition for Insurance Fraud reported $23.7 Billion in improper
billing in Medicare and Medicaide in 2007 alone.

WTH, who's watching the hen house. :huh: