SLUDGE: "US TRIPLE-A CREDIT RATING UNDER THREAT FROM SOARING WELFARE COSTS..."

[sjdnb]

Of course, the part of the article I can read (sub req'd) http://www.ft.com/cms/s/fcc631cc-bfe6-11dc-8052-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Ffcc631cc-bfe6-11dc-8052-0000779fd2ac.html%3Fnclick_check%3D1&_i_referer=http%3A%2F%2Fwww.drudgereport.com%2F&nclick_check=1
cites healthcare and Social Security ... Man, I hate Drudge. Besides having no talent/skill, he's a grade A #1 horse's behind.

Sorry, if the caps are a no-no, I left them for the SLUDGE EFFECT.

[marmar]

1. Yeah, corporate welfare costs.

:argh:

[Viva_La_Revolution]

5. Well, of course it's not the Trillion dollar quagmire in Iraq!

:sarcasm:

[Art_from_Ark]

6. No doubt these are some of the same guys

who credit Reagan with single-handedly bringing down the Soviet Union by making them spend too much on their military

[Fresh_Start]

2. better title US triple A rating threatened by GOP administration

incompetence

[musette_sf]

3. that should be

"soaring WARFARE costs"

[Steven_S]

4. This is from the Financial Times..

Moody’s says spending threatens US rating


By Francesco Guerrera, Aline van Duyn and Daniel Pimlott in New York

Published: January 10 2008 18:36 | Last updated: January 10 2008 18:36

The US is at risk of losing its top-notch triple-A credit rating within a decade unless it takes radical action to curb soaring healthcare and social security spending, Moody’s, the credit rating agency, said on Thursday.

The warning over the future of the triple-A rating – granted to US government debt since it was first assessed in 1917 – reflects growing concerns over the country’s ability to retain its financial and economic supremacy.

It could also put further pressure on candidates from both the Republican and Democratic parties to sharpen their focus on healthcare and pensions in the run-up to November’s presidential elections.

Most analysts expect future governments to deal with the costs of healthcare and social security and there is no reflection of any long-term concern about the US financial health in the value of its debt.

But Moody’s warning comes at a time when US confidence in its economic prowess has been challenged by the rising threat of a recession, a weak dollar and the credit crunch.




Moody's obvious agenda is to serve the Robber Barons and one (of many) ways is to float crap like this. Part of this agenda is to end Social Security. Plain as day.

[happyslug]

7. Reflects expectation that the Social Security tax will NO longer be in surplus by 2018.

That has been expected since the last time Social Security was "reformed" in the early 1980s. Notice I did NOT say when Social Security goes back to congress and say "You know all that surplus Social Security Taxes we collected from 1983 till 2018 and gave to you? Sorry we NO LONGER HAVE A SURPLUS, so you have to borrow the money from someone else."

Please note 2018 is the current expected date for this to occur, in earlier decades 2012 was used. The reason for the difference is 2012 was based on a "Conservative" model for the economy, not what really happened.

When economist look into the future, they tend to develop three models. First is the "High" model, high income, low expenditures. Second is the "low" or "Conservative" model, low income, high expenditures. This is called the "Conservative" model for the economy is expected to do it OR better, while the "high" model is on the overly optimistic end of what will happen. In the middle is the "Middle Model" drawn half-way between the "high" and "low" models.

The problem is the economy tends to go along the lines of the middle model NOT the two extremes. Thus as we near the date when expenditures exceed income, we see that the best model was the middle model not the "high" or "low" models (i.e. the economy did BETTER than the "conservative" model). The main affect of always citing the "Conservative" model, when the economy tend to go to the middle model is that the "Date of Reckoning" is always being pushed back. Thus in the 1980s, the year where Social Security Expenditures exceeded income looked like it would be 2012, but today it looks like it will be 2018. I suspect it will be further pushed into the future as we near 2018, I believe the middle model says 2025 for the year Expenditures exceed Income from Social Security Taxes, but people are still using the "Conservative" model, updated and thus 2018 is cited TODAY as the "Date of Reckoning".

While the Day of Reckoning has been pushed back, Social Security expenditures have been increasing while Social Security income had been decreasing since at least 2000. This has just added to the deficient built up under Bush as he was (and is) President.

Note, 2018 is NOT when Social Security goes back to Congress and say "You know all that money we collected and gave to you, we need it now please pay us back?" That is in the more distant future (Conservative estimate about 2025, middle estimate 2040). The problem is Congress and the President has to come up with some other source of income to off-set the fact Social Security has been collecting roughly the same as it did in 2000, but with increase outputs, so less money for the Treasury.

Right now 2025 is the year Congress will have to raise Income taxes to pay back Social Security taxes spent on Reagan's military buildup of the 1980s and other things since 1980, 2018 is the year Congress has to raise Taxes to offset the complete loss of Social Security Surplus. Furthermore as we near 2010, Congress may have to raise Taxes to offset the DROP in Social Security surplus the Treasury is getting (and this is the big fear of the GOP, for in 2010 Bush's tax cut to the rich ENDS and has to be renewed to be made permanent, but the DROP in Social Security Surplus will make that increasingly unlikely as we get nearer 2010).

Basically Moody is looking at a drop in Revenue for the US Government AND no political will to undo that damage. I suspect Moody is looking at Chinese option of NOT buying US Treasury bonds, which has been a huge source of Revenue for Bush and Company. What will Bush and Company do to offset the drop in Social Security surplus? The same thing he had done in the past, nothing and Moody seeing that has to re-view the Federal Government's ability to pay back its debts (and maybe even REDUCE its rating).

AARP On the problem:
http://www.aarpmagazine.org/money/Articles/myths_and_truths_about_social_security.html

SSA own site on the Surplus:
http://www.ssa.gov/OACT/TRSUM/trsummary.html

This site say 2017, and SS is gone by 2041, but that is considered worse case scenario and unlikely to happen by most observers of SS:
http://www.house.gov/ryan/issuepapers/socialsecurityissuepaper.html

[Hannah Bell]

8. The SS Trustees make 3 forecasts every year:

The numbers in the press are based on the middle forecast (not optimistic, not pessimistic).

But in fact, actual results have followed the "optimistic" forecast most closely. Not surprising when "optimism" = 2.6% growth & the middle forecast is based on 1.8% growth (= average growth 1929-1940, i.e. Depression-era).

Under the "optimistic" forecast, SS never goes into deficit at all.

The huge servings of bullshit being dished up to the public on this issue are Orwellian. Mark my words, the nice Democrats will be the ones to pull the plug on SS, particularly if the economy tanks badly. "Crisis, crisis!" Shock Doctrine scenario.

The reality is, SS is fine, & will continue to be fine unless the whole economy melts down. If that happens, no private retirement accounts will do any better.