financial 'experts'

[callmeslick]

....I know, the web has brought more information, yet more disinformation on all fronts. Still, I had to laugh when, within 48 hours, I read about oil going to $10 per barrel, and another saying $70 per barrel was right around the corner. Yeesh.

[Will Robinson]

At some point in every month following the start of a new quarter the previous quarter economic numbers, unemployment numbers, etc are revised. This announcement is preceded by a statement something like this: "Experts were surprised by..."

I'm thinking, if you have to constantly revise your numbers because conditions surprised you, then you are only an expert at recording history.

'Experts' often publish reports because they are paid to, not because they have integrity.

[callmeslick]

yup, I'm with you on that one. Far too many 'experts' are shilling for themselves. It's no wonder that most folks, who understandably have other stuff to do in life but study finance and economics, get confused and lost. Now, consider THAT and wonder if making Social Security a personal investment vehicle for the citizenry is going to work out well for most people. Note the link that TC posted earlier about how badly 401k accounts are doing for folks who used to just work for 35 years and get a pension. That is the same issue, there, coupled with an unwillingness to put the money aside voluntarily when society urges a person to consume 'things'

[Will Robinson]

It is hard to get unhappy with the option to privatize some SS savings...and that was the only version that was ever pushed...when the promise of government managed accounts is looking to be such a lousy alternative.

My children are likely paying into an account that will be used and spent before they get a chance to claim any of it.

At least the discussion has shined some additional light onto the dismal future of SS.

[callmeslick]

I've never understood how anyone can characterize Social Security as a 'miserable failure' when it has worked, and worked rather well, for over 70 years. The ONLY issue that needs resolution for your kids and mine to be just fine is to raise the ceiling for salary takeout by about 100K. Problem solved, with all demographic projections, for at least another 75 years.

[Will Robinson]

I've never understood how anyone can characterize Social Security as a 'miserable failure' when it has worked, and worked rather well, for over 70 years. The ONLY issue that needs resolution for your kids and mine to be just fine is to raise the ceiling for salary takeout by about 100K. Problem solved, with all demographic projections, for at least another 75 years.

Well solving problems is easy...if you get to alter reality.
Here, I'll cure cancer: All you need is the right medicine. There, done.

Seriously slick, you aren't the first one to identify a lack of funds for the program is the problem and also know that pouring more money into it will make it solvent. Yet in spite of people knowing that for decades it is not on track for being fully funded. So you haven't really solved anything.

[Vander]

Social Security deserves to be insolvent.

[callmeslick]

elaborate, Vander

[Spidey]

Social Security was designed in a time when there were many working people in relation to the people collecting…that was the failure in my opinion (lack of foresight) now we see constant cooking of the books to make a failing system look solvent, but with the aging population and the declining workforce…you can pretty much bet your bottom dollar, there will be a crisis at some point.

And that whole “getting past the baby boomers” thing won’t make a damn bit of difference, because the demographics are going to swamp out all of that.

I have looked into this issue several times over the past few years, and there is no legitimate predictions that say there will be more than a few workers per retiree, at any future point.

If Social Security is not changed from an “insurance” program to a general fund entitlement…it is doomed.

[Vander]

elaborate, Vander

The policies proposed and produced by our elected representatives throughout the years have left Social Security's solvency, rightly or wrongly, it doubt. These same elected representatives win reelection about 90% of the time. One would have to conclude that Americans either don't care enough about Social Security, or lack the awareness and fortitude necessary to produce responsive government. We deserve the government we get. If that puts Social Security is in peril, well, we asked for it.

[callmeslick]

Social Security was designed in a time when there were many working people in relation to the people collecting…that was the failure in my opinion (lack of foresight) now we see constant cooking of the books to make a failing system look solvent, but with the aging population and the declining workforce…you can pretty much bet your bottom dollar, there will be a crisis at some point.

the only 'cooking' of the books is that several Congresses have raided the money, but the cash flow is working just fine, from any economic analysis worth squat that I've ever read.

Now, where you might see an issue down the line is when you have fewer workers just due to economic trends and mechanization. That will be an issue that society as a whole will have to address.

[Will Robinson]

Social Security was designed in a time when there were many working people in relation to the people collecting…that was the failure in my opinion (lack of foresight) now we see constant cooking of the books to make a failing system look solvent, but with the aging population and the declining workforce…you can pretty much bet your bottom dollar, there will be a crisis at some point.

the only 'cooking' of the books is that several Congresses have raided the money,

Lol! "the only"? As if it is insignificant ... that amount of gross negligence?!?

...but the cash flow is working just fine, from any economic analysis worth squat that I've ever read.

For vanders sake, since he might not know how to read 'slick talk', when slick said: "any economic analysis worth squat that I've ever read." ...you should read: 'any analysis you cite that refutes my bold unsupported assertions will be dismissed as unreliable.'

This will include all the projections from the Obama administration and the SS entity itself that show slick to be wrong. He will dismiss that as 'just necessary politics, not real numbers'...

In the 2014 annual report to Congress, the Trustees reported that the combined trust fund reserves are still growing and will continue to grow through 2019. Beginning with 2020, though, the cost of the program is projected to exceed income. And, as projected, when the combined trust fund reserves become depleted in 2033, there will be sufficient income coming in to pay 77% of scheduled benefits. Once exhausted, the report stated, the annual revenues from the dedicated payroll tax will be sufficient to fund three-quarters of scheduled benefits through 2088.

(so,even the most optimistically spun report ^ looks like it runs out of funds...)

And from the OAB:

Social Security has two primary sources of tax revenues: payroll taxes and income taxes on benefits. About 97 percent of those revenues derive from a payroll tax—generally, 12.4 percent of earnings—that is split evenly between workers and their employers; self-employed people pay the entire tax. The payroll tax applies only to taxable earnings—earnings up to a maximum annual amount ($117,000 in 2014). The remaining share of tax revenues—3 percent—is collected from income taxes that higher-income beneficiaries pay on their benefits. Tax revenues credited to the program totaled $777 billion in fiscal year 2014.

Those tax revenues are credited to Social Security's two trust funds—one for OASI and one for DI—along with intragovernmental interest payments on the Treasury securities held by those funds. In turn, the program's benefits and administrative costs are paid from those funds. Although legally separate, the funds often are described collectively as the OASDI trust funds. In a given year, the sum of receipts to each of the funds, along with the interest that is credited on balances, minus spending for benefits and administrative costs, constitutes that fund's surplus or deficit.

In calendar year 2010, for the first time since the enactment of the Social Security Amendments of 1983, annual outlays for the program exceeded annual tax revenues (that is, outlays exceeded totalrevenues excluding interest credited to the trust funds). In 2013, outlays exceeded noninterest income by about 9 percent, and CBO projects that the gap will average about 17 percent of tax revenues over the next decade. As more members of the baby-boom generation retire, outlays will increase relative to the size of the economy, whereas tax revenues will remain at an almost constant share of the economy. As a result, the gap will grow larger in the 2020s and will exceed 30 percent of revenues by the late 2020s.

CBO projects that under current law, the DI trust fund will be exhausted in fiscal year 2017, and the OASI trust fund will be exhausted in 2032. If a trust fund's balance fell to zero and current revenues were insufficient to cover the benefits specified in law, the Social Security Administration would no longer have legal authority to pay full benefits when they were due. In 1994, legislation redirected revenues from the OASI trust fund to prevent the imminent exhaustion of the DI trust fund. In part because of that experience, it is a common analytical convention to consider the DI and OASI trust funds as combined. Thus, CBO projects, if some future legislation shifted resources from the OASI trust fund to the DI trust fund, the combined OASDI trust funds would be exhausted in 2030.

You have entered slicks-world now and everything is up for him to re-define. Your tour guide will be along shortly, we recommend a preventive maximum dose of dramamine if excessive spinning makes you sick.

[Tunnelcat]

Hey, remember, at first they said coffee was bad for you, then they said it was good for you. Tells you something about the "experts" doesn't' it? Especially financial experts, who have track records worse than seers. Seers probably have a better hit rate too.

[callmeslick]

nothing in those scary links that doesn't suggest that simply raising the income ceiling wouldn't fix it. And the level doesn't have to rise all that much.

[Will Robinson]

nothing in those scary links that doesn't suggest that simply raising the income ceiling wouldn't fix it. And the level doesn't have to rise all that much.

I seem to remember we already established that adding enough money to the system could make it solvent.
What we have now, also established, is your assertion that the "cash flow is working just fine," is in fact an economic analysis worth diddly squat.

[callmeslick]

nothing in those scary links that doesn't suggest that simply raising the income ceiling wouldn't fix it. And the level doesn't have to rise all that much.

I seem to remember we already established that adding enough money to the system could make it solvent.
What we have now, also established, is your assertion that the "cash flow is working just fine," is in fact an economic analysis worth diddly squat.

by that, I meant the design is working, and not requiring subsidies beyond income, yet. I've never seen one analysis that didn't conclude that upping the limit by 100,000 dollars wouldn't maintain adequate cash to make it through the baby boomers, and then be covered by future demographics. That the prior income has been raided from time to time makes SS look bad, but that isn't the real problem. Some folks would have you think it was, just like they would like to blame an overmandated postal service for failure, etc, etc. Like I said, Social Security has done what it was designed to do, and even been widely expanded for disabilities and the like, without a true problem with design. What would you suggest for any working person in the coming decades to rely upon?

[Will Robinson]

...
What would you suggest for any working person in the coming decades to rely upon?

Not anyone in currently in Congress nor anyone else who will say what they have done is working well out of one side of their face and, when some one points out it actually isn't, they agree out of the other side of their face.... but insist, because anything is possible, they should get credit for it working anyway....like you just did.

[callmeslick]

well, the folks who set it up in the 1936-65 timeframe should get credit.

[Will Robinson]

well, the folks who set it up in the 1936-65 timeframe should get credit.

OK, and you get credit for the nonsensical contribution that the system is currently working to provide for all those who are paying into it, as designed, by saying: "the cash flow is working just fine, from any economic analysis worth squat that I've ever read" followed by 'it just needs more cash flow than the systems design calls for'.

Using your logic people that are poor are not poor, they just need more money. The system is working just fine according to our resident worth-squat expert. They will be thrilled to hear it I'm sure.

[callmeslick]

could you point out to me, Will, who is currently in the benefit system that is NOT being served properly, NOT receiving full amount due?

[Spidey]

So I guess “in the system” is carefully worded to exclude those who have had to call a lawyer to get help.

[Will Robinson]

typical slick, the discussion revolves around the fact that the funds are running out because of mis-management, Congress using the cash for other purposes and leaving IOU's in the place of the money they spent....(and they count that debt as an asset, an illegal bookkeeping trick which will get us normal citizens/businesses thrown in jail).
Also, it is failing due to a bad structure of revenue versus outlays changing because of the ratio of number of people on the receiving end to people on the paying in end has changed (baby boomers, etc.)

So in light of that reality, people currently paying in that will be on the receiving end of a shortfall will either have their share cut and/or have to pay taxes elsewhere to make up for the shortfall.

But, in a lame attempt to save face, slick wants to play the game where the airline pilot of a plane running out of fuel out long before it finishes crossing the ocean says No! We aren't crashing! Show me where any part of the plane has touched the water.'

[callmeslick]

So I guess “in the system” is carefully worded to exclude those who have had to call a lawyer to get help.

generally, those are disability claims, which are an add-on to the system, and can you imagine the expense if every single applicant got approved? Yes, sometimes folks have to fight for those things. Is that enough to condemn the whole thing?

[callmeslick]

typical slick, the discussion revolves around the fact that the funds are running out because of mis-management, Congress using the cash for other purposes and leaving IOU's in the place of the money they spent....(and they count that debt as an asset, an illegal bookkeeping trick which will get us normal citizens/businesses thrown in jail).
Also, it is failing due to a bad structure of revenue versus outlays changing because of the ratio of number of people on the receiving end to people on the paying in end has changed (baby boomers, etc.)

So in light of that reality, people currently paying in that will be on the receiving end of a shortfall will either have their share cut and/or have to pay taxes elsewhere to make up for the shortfall.

But, in a lame attempt to save face, slick wants to play the game where the airline pilot of a plane running out of fuel out long before it finishes crossing the ocean says No! We aren't crashing! Show me where any part of the plane has touched the water.'

keep repeating the lies. They are still lies(the parts about future insolvency without a chance of resolution, the part about IOUs negating the program itself,etc) you are serving your masters well. Of course, those folks won't be needing Social Security. Will you?

[woodchip]

could you point out to me, Will, who is currently in the benefit system that is NOT being served properly, NOT receiving full amount due?

Up until Detroit went into bankruptcy, the pensions for the retired city workers was also being "served" properly. Now the pensioners have seen their retirement checks cut. Wonder how we will all fare when the feds are faced with bankruptcy.

[callmeslick]

that's an entirely bogus comparison, Woodchip, and I suspect you know it at heart. Pensions, consistently underfunded mandates upon local governments(and state governments), with no real income to the system past what the government kicked in were, in essence, Ponzi schemes. As a Dem, I have been railing against such plans for years, because there was no fiscal basis to support them. Social security was designed differently, isn't much past a subsistence income(as was intended) and has ongoing dedicated funding(until the pols 'borrow' against it). We keep returning, by the way to the Congressional use of SS money as a rainy day fund. That is NOT part of the design, and I'd be in complete favor of keeping that, by law, from ever happening. As noted, it's been used to keep the illusion of lower deficit spending, and that is wrong. What isn't wrong, is the entire Social Security concept.

[Will Robinson]

..
keep repeating the lies. They are still lies(the parts about future insolvency without a chance of resolution,

There you go again!
You had to fabricate an assertion and assign it to me to make the truth that I wrote into a 'lie' so you could then have something to dispute.

I never said there is 'no chance of resolution'.
Quite the opposite I ridiculed your suggesting the system isn't on a path to insolvency simply because there is always the possibility to pour more money into the hole Congress is digging!

Do you think no one sees what you are doing?
You are the most desperate and dishonest person I've ever had a discussion with. And I've dealt with some pretty desperate liars in my time.

...the part about IOUs negating the program itself,etc) you are serving your masters well. Of course, those folks won't be needing Social Security. Will you?

I never said the IOU's I referenced had ANYTHING to do with the SS program being NEGATED. That is just another of your fabrications.

I said the Congress routinely takes from the fund and leaves in it's place an IOU. It was simply an aside to illustrate their hypocrisy since they write the laws that punish others for doing the same thing.
You can't count your debt as an asset when you do your books. It is illegal. Unless you are Congress. They count it as an asset BECAUSE taxpayers will be forced to generate extra revenue for Congress to pay back the fund....so in their twisted logic the IOU is simply future 'money' that they can spend...

So, do you want to tell any more lies and try to project them on to me?

And to think all this work you are doing, this blatant dishonest nonsense is so you can pretend the SS fund isn't running in the red! Why?!? Why do you need to hide that truth? It isn't like Obama did this or even just Democrats!
You are such a knee-jerk partisan that you are on a jihad to oppose any thing a conservative does or says no matter how ridiculous you have to be to hold that line.

Here, take the last word, call me anything you want, declare your view to be the correct one and I won't reply at all. I'm literally feeling sorry for you now because it occurs to me you are far too invested in your rhetoric to be healthy and I'm just beating up on you to no good end.

Have fun slick, live well and chill out.

[Spidey]

Is that enough to condemn the whole thing?

I don’t recall saying anything of the sort.