Comments on: Social Security Will Cause Fiscal Headaches Within Just Two Years http://www.bizzyblog.com/2008/04/05/social-security-to-cause-fiscal-headaches-within-just-two-years/ The Business End of the Blogosphere Sun, 21 Mar 2010 14:04:29 -0700 http://wordpress.org/?v=2.8 hourly 1 By: dscott http://www.bizzyblog.com/2008/04/05/social-security-to-cause-fiscal-headaches-within-just-two-years/comment-page-1/#comment-121640 dscott Mon, 07 Apr 2008 15:54:00 +0000 http://www.bizzyblog.com/2008/04/05/social-security-to-cause-fiscal-headaches-within-just-two-years/#comment-121640 Let's not also forget all the jobs that could have been created by the proper investment of $4.5 trillion instead of frittering it away on social programs that these jobs would have made unnecesary in the first place. As usual, liberals create problems to solve them in a vicious cycle of waste and spend. Let’s not also forget all the jobs that could have been created by the proper investment of $4.5 trillion instead of frittering it away on social programs that these jobs would have made unnecesary in the first place. As usual, liberals create problems to solve them in a vicious cycle of waste and spend.

]]> By: dscott http://www.bizzyblog.com/2008/04/05/social-security-to-cause-fiscal-headaches-within-just-two-years/comment-page-1/#comment-121639 dscott Mon, 07 Apr 2008 15:44:37 +0000 http://www.bizzyblog.com/2008/04/05/social-security-to-cause-fiscal-headaches-within-just-two-years/#comment-121639 I was reading somewhere that it's around $4.5 trillion of US bonds held by SS. You are right, the government is not going to default on those IOUs, never the less, the money must come from somewhere in the form of cuts to social spending, increased taxes or increased borrowing or a combination of all three. The bigger issue though is the misappropriation of funds or rather the inappropriate investing of SS money in low interest US Bonds. This is the same level of incompetence as parking all your 401k money in a low interest CD which reduces the potential capital gains needed to fund retirement, thus forcing you to contribute more money from your current wages in order to meet your retirement objectives. Had the money been properly invested in a diversified portfilo the 2017 date would be of no consequence since proper financial management would have anticipated it to draw down on investments in an orderly manner. What really makes this situation totally unacceptable is the lost investment capital that the markets were denied. Can you imagine the wealth creation effects of some $4.5 trillion investment dollars? This utter incompetence on the part of greedy politicians has actually lowered the GDP of the US substancially. I was reading somewhere that it’s around $4.5 trillion of US bonds held by SS. You are right, the government is not going to default on those IOUs, never the less, the money must come from somewhere in the form of cuts to social spending, increased taxes or increased borrowing or a combination of all three.

The bigger issue though is the misappropriation of funds or rather the inappropriate investing of SS money in low interest US Bonds. This is the same level of incompetence as parking all your 401k money in a low interest CD which reduces the potential capital gains needed to fund retirement, thus forcing you to contribute more money from your current wages in order to meet your retirement objectives. Had the money been properly invested in a diversified portfilo the 2017 date would be of no consequence since proper financial management would have anticipated it to draw down on investments in an orderly manner.

What really makes this situation totally unacceptable is the lost investment capital that the markets were denied. Can you imagine the wealth creation effects of some $4.5 trillion investment dollars? This utter incompetence on the part of greedy politicians has actually lowered the GDP of the US substancially.

]]> By: TBlumer http://www.bizzyblog.com/2008/04/05/social-security-to-cause-fiscal-headaches-within-just-two-years/comment-page-1/#comment-121621 TBlumer Sun, 06 Apr 2008 12:09:21 +0000 http://www.bizzyblog.com/2008/04/05/social-security-to-cause-fiscal-headaches-within-just-two-years/#comment-121621 #2, no, I don't think Uncle Sam will repudiate the debt, though the possibility exists, and there are people who think that the IOUs have some kind of escape clause in them (I personally doubt it). My second-last sentence at the column assumes that they can't repudiate it, but that that the rest of the government will be required to undertake a massive repayment effort as Social Security runs deficits in the tens, then hundreds of billions. #2, no, I don’t think Uncle Sam will repudiate the debt, though the possibility exists, and there are people who think that the IOUs have some kind of escape clause in them (I personally doubt it).

My second-last sentence at the column assumes that they can’t repudiate it, but that that the rest of the government will be required to undertake a massive repayment effort as Social Security runs deficits in the tens, then hundreds of billions.

]]> By: TBlumer http://www.bizzyblog.com/2008/04/05/social-security-to-cause-fiscal-headaches-within-just-two-years/comment-page-1/#comment-121618 TBlumer Sat, 05 Apr 2008 19:19:08 +0000 http://www.bizzyblog.com/2008/04/05/social-security-to-cause-fiscal-headaches-within-just-two-years/#comment-121618 Mark, I think it's about 20%-25%. Mark, I think it’s about 20%-25%.

]]> By: Kurt Brouwer http://www.bizzyblog.com/2008/04/05/social-security-to-cause-fiscal-headaches-within-just-two-years/comment-page-1/#comment-121617 Kurt Brouwer Sat, 05 Apr 2008 19:02:30 +0000 http://www.bizzyblog.com/2008/04/05/social-security-to-cause-fiscal-headaches-within-just-two-years/#comment-121617 Tom--I agree with much of what you say here, but there is a contradiction that Mark alluded to above. You say the Social Security Trust Fund is nothing but a bunch of IOUs and you also say the government is over $9.4 trillion in debt. A substantial amount of that $9.4 trillion is owed to Social Security. Do you really think the Treasury will repudiate debt owed to Social Security? I don't. If you do, then you have to cut back the debt total of $9.4 trillion by the trillions owed to Social Security. Tom–I agree with much of what you say here, but there is a contradiction that Mark alluded to above. You say the Social Security Trust Fund is nothing but a bunch of IOUs and you also say the government is over $9.4 trillion in debt. A substantial amount of that $9.4 trillion is owed to Social Security. Do you really think the Treasury will repudiate debt owed to Social Security? I don’t. If you do, then you have to cut back the debt total of $9.4 trillion by the trillions owed to Social Security.

]]> By: Mark McNally http://www.bizzyblog.com/2008/04/05/social-security-to-cause-fiscal-headaches-within-just-two-years/comment-page-1/#comment-121612 Mark McNally Sat, 05 Apr 2008 15:45:08 +0000 http://www.bizzyblog.com/2008/04/05/social-security-to-cause-fiscal-headaches-within-just-two-years/#comment-121612 Tom, Correct me if I'm wrong but after reading this I wonder. Is it true that almost half our national debt is debt the fed gov owes Social Security. In otherwords, pocket A owes pocket B? Not that that thought is of any comfort, because it isn't. Tom,

Correct me if I’m wrong but after reading this I wonder. Is it true that almost half our national debt is debt the fed gov owes Social Security. In otherwords, pocket A owes pocket B?

Not that that thought is of any comfort, because it isn’t.

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