"Washington Post Discards All Journalistic Standards In Attack on Social Security"

[sabrina 1]

Dean Baker deconstructs the lies told in the Washington Post's article attacking Social Security which you can read HERE

Washington Post Discards All Journalistic Standards In Attack on Social Security

Saturday, 29 October 2011 23:53

News outlets generally like to claim a separation between their editorial pages and their news pages. The Washington Post has long ignored this distinction in pursuing its agenda for cutting Social Security, however it took a big step further in tearing down this barrier with a lead front page story that would have been excluded from most opinion pages because of all the inaccuracies it contained.

The basic premise of the story, as expressed in the headline "the debt fallout: how Social Security went 'cash negative' earlier than expected" and the first paragraph "Last year, as a debate over the runaway national debt gathered steam in Washington, Social Security passed a treacherous milestone. It went 'cash negative.'" is that Social Security faces some sort of crisis because it is paying out more in benefits than it collects in taxes. The "runaway national debt" is also a Washington Post invention. The deficits have soared in recent years because of the economic downturn following the collapse of the housing bubble. No responsible newspaper would discuss this as problem of the budget as opposed to a problem with a horribly underemployed economy.



This "treacherous milestone" is entirely the Post's invention, it has absolutely nothing to do with the law that governs Social Security benefit payments. Under the law, as long as their is money in the trust fund, then Social Security is able to pay full benefiits. There is literally no other possible interpretation of the law.

As the article notes the trust fund currently holds $2.6 trillion in government bonds, so it is nowhere close to being unable to pay benefits. The whole point of building up the trust fund was to help cover costs at a future date when taxes would not be sufficient to cover full benefits. Rather than posing any sort of crisis, this is exactly what had been planned when Congress last made major changes to the program in 1983 based on the recommendations of the Greenspan commission.

He goes on to say that the Washington Post article goes out of its way to try to confuse readers by claiming that there is nothing left in the Trust Fund, because the Government spent it all. And then he explains why that is false.

He explains clearly why even over the past two years, the Social Security fund had a surplus since it does not depend only its SS Security Tax Revenues, which did have a shortfall because of unemployment. But SS also makes money from the interest on its Govt Bonds which are backed by the full and credit of the US Govt. The US Govt has never defaulted on those interest payments. The WAPO article never mentioned SS's other sources of revenue.


Anyone who needs to refute these same old anti-Social Security, formerly Rightwing lies, should read Dean Baker's entire article. And maybe bookmark it as it gives the FACTS, rather than the FICTION on how the Social Security program works and why it is NOT in any Crisis. The Federal Government has a crisis, which has nothing to do with Social Security!

Paul Krugman also weighs in on the Washington Post distortions:

Social Security Bait And Switch, A Continuing Series"

Dean Baker is angry at the Washington Post for spreading disinformation about Social Security. He’s right, of course — and it’s shocking that a well-known fallacy is the subject of a “news analysis” that purports to inform readers.

You see, the WaPo makes a big deal of the fact that Social Security is currently taking in less in payroll taxes than it’s paying out in benefits. Yet this means nothing, except as a favorite point used to create confusion by those who want to kill the program.

I’ve written about this repeatedly in the past, but here it is again: Social Security is a program that is part of the federal budget, but is by law supported by a dedicated source of revenue. This means that there are two ways to look at the program’s finances: in legal terms, or as part of the broader budget picture.

In legal terms, the program is funded not just by today’s payroll taxes, but by accumulated past surpluses — the trust fund. If there’s a year when payroll receipts fall short of benefits, but there are still trillions of dollars in the trust fund, what happens is, precisely, nothing — the program has the funds it needs to operate, without need for any Congressional action.

All emphasis in both articles is mine

They can't be this stupid, so the only other alternative is that the Washington Post like the rest of the MSM represents Corporate Interests and not the American people.

The only way to fight back is to keep telling the truth because we know they will not.

Any politician who is looking for cover from the lies told in the MSM should discard that idea. The People have been educating themselves and the lies will not work.

Any politician who even mentions cuts to these programs should start worrying about their political careers.

How many times do we have to tell them. Stop the lies and:

HANDS OFF SOCIAL SECURITY

[dkf]

1. Well you can do that at the expense of everything else.

It's all priorities and choices.

[sabrina 1]

5. Can you explain what you mean by 'at the expense of

everything else'? How does an independently funded, by the workers of this country, in any way affect the Federal Budget, the Deficit, the Debt?

[dkf]

10. Maybe you didn't notice how we almost weren't able to pay SS benefits

when they wouldn't raise the debt ceiling?

Great independently funded system we have.

[nashville_brook]

13. you're incredibly misinformed. remarkably so.

[dkf]

17. Obama: Social Security Checks Threatened If Debt Ceiling Deal Isn't Reached

http://www.huffingtonpost.com/mobileweb/2011/07/12/obama-social-security-checks-debt-ceiling_n_895831.html

Does anyone remember this?

[PSPS]

20. Yes, and he later said it was because nobody could mail checks. Nothing to do with funds.

You need to find a better source for your information than the "Huffington Post" tabloid.

[dkf]

26. Nope. It was because of a lack of funding.

The Bipartisan Policy Center studied Treasury Department receipts and spending for August 2009 and 2010 and found that the government likely would not have enough revenue to make the full $23 billion payment to Social Security recipients due Aug. 3. That's the first Wednesday of the month, when a majority of Social Security and Supplemental Security Income checks go out.

http://www.usatoday.com/news/washington/2011-06-28-debt-limit-impasse-Congress-Obama-Social-Security_n.htm

[sabrina 1]

28. You haven't answered my question.

What does this have to do with the Fed Govt's CREDITORS?? We are not responsible for their debt. Did that article say what they were going to do about China's debt? Any suggestions about cutting services to China? No? Why not? If their ludicrous and totally unacceptable solution to THEIR problems is to take from their CREDITORS, steal is a better word, then why just ONE Creditor?

[dkf]

31. Good question...

The difference between China and the SS fund is that we can't change when we pay the Chinese because that is set in maturity and rate of the bonds.

But the amounts that need to be redeemed from the SS system are set dependent on legislation. We are obligated to pay back those funds, but to which individual and how much is subject to ever changing law.

[sabrina 1]

34. Well, I think the creditors have something to say about these

matters, and the general consensus appears to be that they are not in the mood to be told about the problems they got themselves into. They owe us money and we want to be paid. And if this crowd won't do it, then we will throw them out of office for even suggesting what they are suggesting. What do you do when your creditors aren't accepting your excuses?

[ooglymoogly]

35. Pure unadulterated sophistry.

The real question is why.

[fasttense]

62. Well actually the amount that is paid back to China does change.

It depends on interest rates, dollar values and confidence. It changes as the market for those funds/debt changes.

Do you know who actually buys more government notes than China? Very rich American citizens.

Now let's suppose we decide to default on our Social Security notes. Why not default on those other notes held by very rich Americans too? They are citizens after all, and we can just decide not to pay them back just like we decided not to pay back the poor and middle class notes held in Social Security. I really think rich greedy pigs like Pete Peterson, who want to not pay back the debt to Social Security, better think twice. Because if our political class can decide not to pay back and default on the Social Security debt, then the political class can decided not to pay back and default on the notes these rich pigs hold too.

[Laluchacontinua]

96. SS securities have maturity dates & set rates.

The rate of interest on special issues is determined by a formula enacted in 1960. The rate is determined at the end of each month and applies to new investments in the following month.

The numeric average of the 12 monthly interest rates for 2010 was 2.760 percent. The annual effective interest rate (the average rate of return on all investments over a one-year period) for the OASI and DI Trust Funds, combined, was 4.642 percent in 2010. This higher effective rate resulted because the funds hold special-issue bonds acquired in past years when interest rates were higher.

Far from being "worthless IOUs," the investments held by the trust funds are backed by the full faith and credit of the U. S. Government. The government has always repaid Social Security, with interest. The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the Federal government.

http://www.ssa.gov/oact/progdata/fundFAQ.html#n6

There are two types of special issues: short-term certificates of indebtedness and long-term bonds.

* The certificates of indebtedness are issued on a daily basis for the investment of receipts not required to meet current expenditures, and they mature on the next June 30 following the date of issue.
* Special-issue bonds are normally acquired only when special issues of either type mature on June 30. The bonds have maturities ranging from one to fifteen years.

http://www.ssa.gov/oact/progdata/specialissues.html

http://www.ssa.gov/cgi-bin/transactions.cgi


Seriously, why are you spreading false information?

[Laluchacontinua]

51. In 2010 Social Security (OASDI) income was $781.1 Billion, & outgo was $712.6 Billion,

leaving a surplus of $68.5 BILLION. Of that $781.1 BILLION, $661.3 BILLION came in from DEDICATED OASDI payroll taxes & DEDICATED taxation of OASDI benefits.

Those DEDICATED taxes covered all but $51.3 billion of the checks mailed to SS recipients. The remainder was covered by:

1) Yearly interest payment of $117.5 billion on the approximately TWO TRILLION DOLLARS in the Trust Fund. Which represents THIRTY YEARS OF OVERPAYMENT OF PAYROLL TAXES.

2) Scheduled redemption of Trust Fund bonds = $2.4 BILLION.

http://www.ssa.gov/oact/trsum/index.html

Divide the 2010 cost of $712 billion by 12 and you get $59 billion a month. 15% of that (the portion of total SS income coming from interest & bond redemptions) = $8.85 billion, a piddling amount.


The article you posted is designed to scare and confuse people. The idea that a $134 billion dollar shortfall would necessitate cuts to Social Security, Medicare, Medicaid, etc. (all of which are self-funding but for Medicaid) -- or that if those programs weren't cut, nothing else the government does would happen -- for want of $134 billion -- is ridiculous.

The 2010 US budget excluding SS & Medicare, was about 1.8 TRILLION. To run a headline stating that SS checks won't be mailed out if the debt ceiling isn't raised, to focus on self-funded social programs when there is a DEDICATED income stream for those programs and only a miniscule part comes from general revenues -- is pure propaganda.

1) SS is self-funding.
2) There were nearly $2 trillion worth of things which could be cut that are NOT SS and were NOT self-funding. To wit:

The portion of SS coming from general revenues (as interest) for one month is slightly more than the cost of one Tomahawk missle (at $6.8 billion a pop.)

Why didn't the headline read: "Government contractors' pay will have to be cut..."

Because THAT, & interest payments to rich people, are the biggest items in the ACTUAL federal budget. SOCIAL SECURITY IS SELF-FUNDED.

[Major Hogwash]

52. That doesn't add up to a negative cash flow.

Maybe they did something fuzzy with the numbers over at Washington Post.

[Laluchacontinua]

61. They ignored the interest. As per usual. As they will ignore Obama's tax holiday,

which will make their scare story sound even worse to the ill-informed this year.

The way you can tell that something is on the agenda of the real rulers of america is that they never quit. Even with the majority of the population against them, they just keep spinning and spinning & making incremental changes to get what they want.

[sabrina 1]

81. They failed to mention that SS has other sources of revenue

such as the interest on the Treasury Bonds. They also think most people are dumb and are unaware of these things. They lied by omission hoping to scare people.

They also made it seem as if this never happened before. But it has, at least eight times since SS was established. This time, the past two years when it happened, SS still showed a surplus for each of those years.

It's harder now for them to fool people as most people have learned a lot more about these issues. All they do is embarrass themselves when they lie like this.

[PSPS]

15. That wasn't because of the debt ceiling

The mailing of monthly social security checks might have been affected only because the personnel required to print and mail the checks at the Treasury would have been furloughed. In fact, the direct deposit of benefits were never in jeopardy and would have continued uninterrupted and on time even if the debt ceiling were never raised.

Social Security is not part of the federal general fund. In contributes nothing at all to the deficit. It has trillions in surplus and can pay full benefits for decades to come, at least. Absent any changes, benefits after that point might be reduced 10 - 15% in perpetuity, but minor changes to the system now (like raising the cap) would insure full benefits forever.

[sabrina 1]

19. Thank you!

The propaganda from the right has seeped into the left consciousness including it seems, our elected Democrats, like Nancy Pelosi.

[dkf]

21. No no no. Social security runs through the general fund.

It's invested in non negotiable treasury bonds so they can't sell it in the market. In order to redeem it they need to find funding from the same place they fund the rest of the government. That is where social security is the same as any other program...it all depends on tax collection, payroll and income, and sales of bonds etc.

[PSPS]

25. Your knowledge of how bonds and financing works is flawed.

The trust fund is held in special bonds which pay interest, which also accrues to the trust fund. Beyond that, your knowledge of how bonds are handled and redeemed is seriously flawed. They aren't funded "from the same place they fund the rest of the government," whatever that means. The Social Security Act was written specifically to avoid it being "the same as any other program." The only funds ever used are those collected specifically for it -- the payroll tax. It is not, and never has been, funded by income tax or whatever "sales of bonds" means.

I won't bother debating the point with you as you apparently have some kind of anti-Social Security agenda. If I'm wrong, please spend some time learning how Social Security really works.

[dkf]

29. But the payroll tax flows in to the same general account as the rest of the funds.

The Bipartisan Policy Center studied Treasury Department receipts and spending for August 2009 and 2010 and found that the government likely would not have enough revenue to make the full $23 billion payment to Social Security recipients due Aug. 3. That's the first Wednesday of the month, when a majority of Social Security and Supplemental Security Income checks go out.

Things wouldn't improve much as the days pass. The first major interest payment to creditors would be due Aug. 15 — $29 billion, more than the $22 billion due to arrive in revenue.

On that day, Treasury would have to roll over nearly $500 billion in maturing debt — necessitating an auction which, by that time, might have fewer takers than usual. If demand declines, interest rates would rise.

http://www.usatoday.com/news/washington/2011-06-28-debt-limit-impasse-Congress-Obama-Social-Security_n.htm

--see it all flows into and out of the same account.

[Laluchacontinua]

54. The article is claptrap & citing claptrap as a reference is not compelling.

[ooglymoogly]

36. +1 And that nails the coffin shut on some of the inane claptrap

drivel posing as fact....for what reason I can only guess.

[Laluchacontinua]

53. That's completely false. 1) SS is funded through DEDICATED OASDI taxes, which currently

pay about 90% of SS checks. That is a pass-through. The TF has nothing to do with it.

2) The rest is paid through the TF, which represents $2.6 TRILLION in taxes + interest taken from workers over the last 30 years. Yearly interest payments ALONE more than cover the last 10%. This is a KNOWN quantity, not something UNKNOWN that they need to "find funding" for.

3) SS bonds are REGULARLY redeemed/rolled over on their scheduled dates. Last year they redeemed $2.4 billion in SS bonds.

Social Security runs on DEDICATED TAXATION OF WORKERS' PAYCHECKS, NOT INCOME TAX. It is not part of the general budget as it is NOT FUNDED VIA THE INCOME TAX.

The only point at which income tax comes into the picture is to make interest payments & redeem bonds representing THE MONEY THE GENERAL FUND BORROWED FROM WORKERS -- which currently equals about $2.6 TRILLION DOLLARS including the interest paid.

Being able to sell bonds in the market is meaningless. There are other dedicated funds which involve bonds that aren't sold in the market. That's an irrelevant talking point, and if you think it's so important, you're going to have to explain why.

[sabrina 1]

82. Thank you for your posts. They have been scaring people for

a long time because people are not informed about how these programs work. However, I think people are generally more informed now than they were just a few years ago, making it a bit more difficult for them to continue the lies they tell.

[sabrina 1]

16. What has that got to do with SOCIAL SECURITY??

If someone robs a bank, is the BANK the problem?? They 'borrowed' from the trust fund, they borrowed from China, same thing. What do you propose they do about China? Make THEM pay for the corruption of Wall Street also? The US Government has ASSETS. And like any other borrower when they run out of money because they couldn't stop shopping, they have to cash in their assets. They are desperately trying to not do that.

Asset #1 ~ Hundreds of millions of $$$ a DAY on our useless wars. END THEM NOW.

Asset #2 ~ Eliminate the Cap on SS so that all those now working who are earning above the cut off start paying into the system.

Asset #3 ~ Create JOBS instead of Bailouts.

Asset #4 ~ Raise Social Security Benefits to stimulate the economy instead of spending money on WAR!

Asset #5 ~ End the Bush tax cuts in an emergency session of congress or by Executive Order if we are in this much of a crisis. Declare WAR on the Federal Debt and act like it's a WAR rather than what it is, a transparent attempt to get the thieves off the hook from having to pay their gambling debts.

You're not making sense. You are acting as if the American People have been saving all this money all these years just so they could bail out the biggest thieves in our history so far. This is not an option.

[ooglymoogly]

38. The right question. nt

[eridani]

43. That had to do with the salaries of the government clerks, not any SocSec shortfall n/t

[Hissyspit]

47. "Great independently funded system we have."

You think we should get rid of it?

[sabrina 1]

49. We almost weren't able to pay anything at that point. Again

what does that have to do with the solvency of the program? Great

[dkf]

50. The Social Security fund can be solvent without any ability to pay benefits.

The ability to pay benefits comes from the ability of the SS system to redeem the treasury bonds.

[Laluchacontinua]

55. Actually I just noticed the lying articles making that claim, like the one you posted.

[Rex]

99. Wrong.

[alp227]

2. I posted that article on Editorials/others yesterday now I realize it's flawed

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x635382

My apologies.

[sabrina 1]

7. No need to apologize, it was written with the intention of

mis-leading people. I had to read it twice to find all the false statements in the article. They are getting better at their attempts to deceive the public since they know people are not falling for the 'there's nothing left in the SS Fund' scare tactic. Not your fault at all. :-)

[CarmanK]

3. SS had enough in the trust fund to grant a COLA this year!!

There are 50 mn members of AARP which is openly opposed to the republican challenges to SS and of course the dems threat to cave to demands of the GOP. The GOP even considered them such a threat, they want their tax exempt status because of their opposition to SS and medicare changes. What does it profit a man to gain the whole world and lose his soul?? These so called christians don't really believe in a just GOD or they would not be doing the things they are trying to attach to GOD and HIS judgment. If there ever was proof that one man can make a difference, look at the destruction wrought by Karl Rove, W, Luntz, Reagan, the KOCHROACHES, Norquist, Rick Perry and their ilk. As soon as decent people just let the "freak lose" and didn't curtail them, the freaks and loons took over. We are now in trouble in this country because a few have to "have it all", while the rest of the people are made to suffer and succumb to the powers that be. OWS we need you. OH, oh how we need you.

[sabrina 1]

9. Excellent post, thank you.

'What does it profit a man' ~ I keep thinking of that question and what answer any of them give. They will all die eventually having accomplished nothing other than an accumulation of wealth, which after a certain point, should be sufficient. I think I have finally concluded that they are very sick people. They are hoarders, only their kind of hoarding has become 'respectable' in this soulless society they have created. But yes, we so much needed OWS. It seems to be the only hope left to stop them.

[ooglymoogly]

40. AARP will change the moment the wind gusts.

Imo they are just seeing what they can get out of this, they pay no attention to their members when the chips are on the table. Watch them fold when the price is right as they have done before. The only hope we have is us and the next election will tell the tale, crooked elections, dirty tricks and all. The best hope we have is leaders like Alan Grayson, Elizabeth Warren, Bernie Sanders and just a bare few others....and alas, not to be underestimated, OWS.

[libinnyandia]

4. Post equals Times

Did the Post merge with the Washington Times?

[xchrom]

6. Recommend

[senseandsensibility]

8. KICK! Keep up the good fight, people.

We are going to have a fight on our hands. I hope OWS specifically takes up the BS being served up by this "deficit" committee, as well as the corporate propaganda giving them cover.

[sabrina 1]

11. Maxine Waters, I think it was Maxine,

introduced a bill last week to disband that Committee. We should support that bill as this Super Committee seems unconstitutional and appears to be set up to trap Congress into not having much choice in what they can do about these issues.

[senseandsensibility]

14. Yes! It was Maxine!

I'd like to see OWS specifically endorse it.

[sabrina 1]

18. Thanks, I thought she was the one. She has been very angry

about the failure of the government to deal with the economic problems caused by the gamblers on Wall Street.

It will be interesting to see who supports her in Congress.

Don't know if OWS will support something that is so political, but they could talk about the needs of the elderly and the disabled and the effect Wall St has had on influencing elected officials not to help them such as the attacks on SS, while bailing out Wall Street.

[Autumn]

12. K/R

Thank you

[SteveM]

22. WaPo has never been liberal, and has moved further to the right...

And for some reason people think it is progressive -- maybe because they ran 74 consecutive days of editorial/news reports favoring gun-control.

[Exilednight]

23. Technically, the Post is right. If SS is paying out more than it takes in, then it is cash negative

but being cash negative has nothing to do with solvency.

Just something to think about, I bet if Obama did not grant all these "payroll tax holidays", then we would still be collecting more than we are paying out.

[sabrina 1]

24. It is NOT paying out more than it takes in.

It is still taking in a surplus. SS has more than one source of revenue. Even when the payroll tax has a shortfall, such as now in a bad economy, it still receives the interest on the Treasury Bonds, money that is fully guaranteed by the Fed. Govt and has always been paid.

As a result, the Social Security Fund STILL had a SURPLUS over the past two years.

The Post Article led people to believe that SS has NO sources of income now and has run out of money. That is false.

And that won't happen, even if the economy stays the way it is, until at least 12 years from now. And if we are not out of this mess by then, then this country will have a lot more problems than the SS fund.

[Exilednight]

27. Technically, the bonds are not surplus. I'm not defending everything in the

article is accurate, but I will on this point. The bonds are the surplus, and not part of the actual take in of SS monies to be paid out, they've already been collected.

[sabrina 1]

30. Well, the bonds were a good investment for the people

until the government decided to start wars and bailout crooks and give tax breaks to the wealthy, using the SS Fund to do so. But even with that, if you invest money in bonds and then you lose your job, but still receive the interest payments on you investment, you are not destitute.

The interest is enough to not only pay out all of SS's obligations, but to still show a surplus. If an individual is in that situation they are not, as the Post tried to claim, destitute and will be fine as they look for another job.

The solution to the current situation is to create jobs and to stop exporting them by taxing those who do so. There are several other solutions also, so it's not like there is a crisis with SS. The crisis is with the Fed Budget, but even there, there are solutions.

The problem is the Government is trying to impose the IMF/World Bank solution that failed so spectacularly in Europe. It is designed to benefit the Banks and as a bonus, to use the crisis to accomplish a long-held dream of the far right, to attack Social Programs. There is absolutely no need for that. So, no one should allow them to even try it. This is 'Shock Doctrine' tactics. And we should not fall for it.

[suffragette]

33. Exactly so.

K&R

[sabrina 1]

39. Hi suffragette!

:hi:

[suffragette]

46. Hi sabrina

:hug:

[woo me with science]

42. "This is 'Shock Doctrine' tactics. And we should not fall for it."

Thank you. We need to label this loudly each and every time they try to do it.

[Laluchacontinua]

57. In 2010 SS ran a surplus. FICA taxes + taxation of benefits + interest

were about $90 billion in excess of outgo.

[eridani]

44. That is SUPPOSED to happen!

The surplus was deliberately generated starting in the 80s to PREPAY the boomers' retirement, making us the first generation to do that and also pay for our parents at the same time. The trust fund was designed to be empty by the time that the last boomers die off, whereupon it is to go back to pay as you go.

[sabrina 1]

45. Good point, thank you for making it.

[Laluchacontinua]

56. No, they're wrong because they spun it to make people think it was something "bad"

instead of a PLANNED & EXPECTED event:

"Social Security passed a treacherous milestone. It went 'cash negative.'"

It wasn't "treacherous". It was exactly what the Congress voted for back in 1983 when they said they were "saving" Social Security.

The WAPO can bite me.

And so can Warren Buffett, its largest shareholder.

[Exilednight]

59. Anytime you pay out more than you take in, you're cash negative. The bonds don't count as

cash in, that is money that has already been collected.

As I stated earlier, I am not defending everything in the article, but the headline is correct, SS is cash negative if it is paying out more than it is collecting from the FICA tax alone.

[Laluchacontinua]

60. In 2010 SS collected about $70 billion more than it spent. The headline was wrong

& the slant was wrong as well.

Income $781 billion, outgo $712 billion. Link to Trustees report here:

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=439&topic_id=2214387&mesg_id=2216244

They just flat-out lied and spun.

[Exilednight]

77. If they did collect $781 billion in FICA tax alone, then yes, the headline is wrong. But it's only

wrong if they collected that much strictly off of FICA.

[Laluchacontinua]

78. The TF INCREASED last year. It didn't decrease. The headline is only "right" if you think the

interest is fake money.

Which you apparently do.

[Hassin Bin Sober]

64. You keep ignoring the INCOME on those held bonds. WHY?

[Exilednight]

76. I'm ignoring them because they don't count as income. Slice it anyway you want, but

the bonds are not income. Technically, for accounting purposes, bonds are counted as liabilities.

[Laluchacontinua]

79. Interest doesn't count as income? Since when? By whose accounting principles?

The bonds are not the interest. You appear to be confused.

[Exilednight]

84. Go back and re-read what i posted.

By every accounting principle, bonds are considered a liability. There's no guarantee they are going to pay out.

[sabrina 1]

86. When the interest is paid, as it has been to SS without fail

every year, it is called INCOME. I can't believe some of the stuff people come up with sometimes. It is only a liability when it does NOT get paid. Why are you giving more weight to something that has never happened with those Bonds than the actual facts??

SS had a surplus this year and last year. That is a fact and the WAPO lied about it. That is also a fact.

People's salaries are a 'liability' by your logic. There is no guarantee they will be there next week. In fact the interest on those Bonds is far more certain than the average worker's salary these these days.

[Exilednight]

91. Only cash coming in from revenue is ever considered income, everything else is

broken down into two categories: liabilities and assets.

[Laluchacontinua]

94. Interest income is income. I'm not sure what motivates the denial of that fact.

[Exilednight]

98. By government accounting rules, interest earned off of bonds does not count as income. Seriously,

read the government accounting rules, I put the link in another post.

[Laluchacontinua]

102. could you direct me to that post? there are a lot of posts up & you can find your post quicker than

i can.

[sabrina 1]

95. All income is an asset. All assets are income.

The WAPO, if you want to get hung up on words, should have stated that the SS Fund has other 'assets' in the form of interest on the Treasury Bonds and that is not their only other source of revenue, btw.

The point is the WAPO lied. SS had a surplus this year and last year and had no problem meeting its obligations. As Dean Baker said, there is not even an iota of journalistic standards in that piece of blatant propaganda.

[Exilednight]

100. Here's the problem people are having with this.

BONDS ARE A LIABILITY IN GOVERNMENT ACCOUNTING PRACTICES.

The government is the lender of last resort. If the government fails to pay the bonds, then the whole things falls apart.

I'm not defending the entire WAPO piece, but if SS paid out more to individuals than it collected in FICA taxes alone, then that is technically a cash negative.

It's actually quite simple.

What's so hard to understand?

[Laluchacontinua]

103. A bond can't be a liability both in the general budget and the SS TF.

It's a liability in one and an asset in the other.

And interest income is real income to the TF, not a liability.

And interest income is not the same thing as the bond itself.

What's so hard to understand?

Still looking for the link you said you posted somewhere in the thread, btw. Hoping you can link me to your link.

[Exilednight]

104. Keep looking, it's there. n/t

[Laluchacontinua]

106. LOL. Yes, it's there, but it doesn't say what you say it does.

18.Intragovernmental assets and liabilities arise from transactions among federal entities.
Intragovernmental assets are claims of a federal entity against other federal entities. Intragovernmental liabilities are claims against the entity by other federal entities.

19.Among the assets covered by this Statement, intragovernmental assets include an entity’s fund balance with Treasury, investments in Treasury securities, accounts and interest receivable from federal entities, and advances and prepayments to federal entities.


17.The word “entity” refers to a unit within the federal government, such as a department, agency, bureau, or program, for which a set of financial statements will be prepared. The word entity also encompasses a group of related or unrelated commercial functions, revolving funds, trust funds, and/or other accounts for which financial statements are prepared in accordance with OMB guidance on the form and content of financial statements.

The following terms are used in chart 1:

•total inflow includes payroll taxes, income tax on certain OASDI benefits, interest income, and miscellaneous reimbursement from the general fund;
•cash inflow excluding interest is income exclusive of interest on trust fund assets (assets = TF bonds, as that's all that's in the TF)
•total outflow includes benefit payments, administrative expenses, net transfers to the Railroad Retirement program, and vocational rehabilitation expenses for disabled beneficiaries.



As I said, the bond is a liability to the government but an asset to the TF. And interest income is income.

[sabrina 1]

107. And Bonds have proven to be an asset to the American People.

The Fed Govt's accounting language is not the issue. The issue is that the WAPO led people to believe that SS had to take money from tax payers to meet its obligations when clearly it did not. That was a lie.

What is so hard to understand about that?

Just out of interest, no pun intended, what would be calling those bonds if they had FAILED to pay out interest to the SS Fund?

[Laluchacontinua]

89. The interest is not the bonds. Interest payments ARE income, by all accounting principles.

That's why you pay taxes on interest payments.

And bonds are considered an ASSET to the bondholder. The fact that they "might" not be paid doesn't enter into any calculation unless they are NOT paid.

Don't know where you took accounting.

[Exilednight]

92. They're never considered an asset in the banking industry. n/t

[Laluchacontinua]

93. got a link for that?

Asset Allocation

Asset allocation describes the percentage of total assets invested in different investment categories, also known as asset classes. The most common broad financial asset classes are stocks (or equity), bonds (fixed income) and cash. Real estate, precious metals and “alternative investments” such as hedge funds and commodities can also be viewed as asset classes.

http://www.investinginbonds.com/learnmore.asp?catid=3&id=60

[Exilednight]

97. Yep, here ya go.

http://www.fasab.gov/pdffiles/codification_report2010.pdf

[Laluchacontinua]

105. Ah, found it. Now if you could point me to the relevant section in those 2037 pages.

Specifically, the section dealing with trust fund assets and interest income.

[sabrina 1]

85. You are ignoring the fact that the SS Fund showed a SURPLUS

last year and the year before, and that they had no problem covering their obligations and that the POST outright lied about that.

Either the Post is so ignorant they do not know that the SS Fund had a surplus, and is therefore NOT in a crisis, nor is it in any way connected to the deficit, the debt or the Fed. Budget since its revenue is funded by the PEOPLE and the INTEREST they make on their investment, or the Post is outright lying. I'm betting on the second option.

'Income' means 'money coming in'. Of course the interest on the Treasury Bonds is income.

[Exilednight]

101. The interest off the T Bonds are not income. Basic government accoutning practice. Here's a link

the rules.

http://www.fasab.gov/pdffiles/codification_report2010.pdf

[Hassin Bin Sober]

65. You keep ignoring the INCOME on those held bonds. WHY?

[Ganja Ninja]

69. So what if it is cash negative?

The social Security program was never intended to be an endless line of credit the federal government would never have to pay back. If the number of future retirees is going to drop 30 years out from now then paying down the trust fund within the limits of the law would only be right and proper.

[Laluchacontinua]

80. +1.

[Doremus]

32. K&R&Bookmarked for later reference.

Which is no doubt a source of irritation for the writer of the first reply to this thread.

Disinformation is the name of his game and FACTS are the natural antidote thereof.

[sabrina 1]

37. Lol, I love that disgruntled baby!

Your sigline, I mean! :-)

[RainDog]

41. k&r n/t

[woo me with science]

48. K&R

a million times.

[reformist2]

58. The key fact is that SS has $2.6 trillion in bonds that are every bit as good as the bonds China own

The SS bonds may not be "marketable," but they are backed by the "full faith and credit" of the US all the same. Even Alan Greenspan himself said they were not just IOUs or mere accounting entries, but legitimate "ultimate claims on real resources."

If WaPo and the GOP want to ignore all this, they are on record as saying they'd rather default on our own senior citizens and other SS beneficiaries before they'd default on the Chinese.

[sabrina 1]

63. Exactly, we are creditors just like China but they seem to

think they can do whatever they like to the American people. The media never raises this point, re China or points out that we are creditors not 'welfare' cases when it comes to SS. No one asks them if the US Gov. is planning on defaulting on the American people.

[Harmony Blue]

68. Sadly

we know which way the Capitalists would want to go on this.

[redqueen]

66. Glad I saw this in time to Rec it. (nt)

[Ganja Ninja]

67. Ooooooo "Cash Negative"!!! Be afraid! Be very afraid!

Since when did Social Security become a never ending line of credit for the federal government? Of course at some point you're going to have to pay down the trust fund. If the time has come to do that it is still no reason to scrap the whole program and fuck all the people that have paid into it their whole lives. A plan can easily be put in place that would pay down the trust fund over the next 50 years by a small amount every year until the minimum level required by law is achieved.

[Uncle Joe]

70. Kicked and recommended with one caveat,

there is no MSM, it's just the corporate media.

De Facto, the mega wealthy and major corporations are their primary "clients," the American People are just "consumers" or "customers" to be sold a product, candidate or down the river.

There is a subtle and yet major difference in fiduciary responsibly owed to a "client" over that of a "customer" or "consumer," and the Washington Post just like the vast majority of the corporate media is looking out for corporate interests first, last and in the middle, that's why I call them the corporate media.

Thanks for the thread, sabrina.:thumbsup:

[sabrina 1]

90. Hi Uncle Joe, you are absolutely right. I keep forgetting to use

Corporate Media rather than MSM, probably out of habit. Thanks for the reminder.

[bvar22]

71. "They" are coming for our Social Security/Medicare,

...and "they" are going to get it too.

The first nails have already been driven in the SS coffin
with the Payroll Tax "Holiday".
Payroll Tax Holiday Directly Connects Social Security to The Deficit

The Super CONgress will do the rest of the Dirty Work.
Comprehensive Package. Closed Doors. Up or Down Vote. No Amendments.
This is the perfect set up for another Kabuki Theater Hostage Situation.

No "Democrats" will be voting to cut Social Security.
They will be voting FOR a "Comprehensive Package" that "Saves the Economy"
that contains some unfortunate minor "adjustments" to Social Security/Medicare.
...but don't worry, because
"We'll Fix It later!"

The Plan is In Place and Running.
The "Deals" have already been made.
Americans have been Softened Up with Trial Balloons and continuous bi-partisan Marketing
that denigrates and marginalizes Social Security as an "entitlement".
Carefully designed Wedges have been driven to split the Elderly and The Young.
All that is left is for the Kabuki Theater to play out
to foster the illusion that America had a choice.


"There was nothing we could do."
"We didn't have the votes."
"Look at this great crumb we got."
"We saved the economy."
"This is actually a BIG WIN!"
"It was ALL Joe Lieberman's fault!" :cry:


You will know them by their WORKS,
not by their excuses.
Solidarity99!
--------------------------------------------------------------------------------------------------------------------------------

[sabrina 1]

74. And some people 'on the left' will defend it and excuse it

and try to explain it away with that list of excuses you posted.

But this may be a step too far as nearly everyone in the country knows someone who depends on these programs. They think they are smart, that the people can be fooled still, but they are wrong imo.

Good post as always, bvar22

[Martin Eden]

72. REAL Redistribution of Wealth

Payroll taxes were raised on working Americans in 1983 precisely because it was anticipated the trust fund needed to built built up for when revenues would be less than payouts.

Later, budget deficits skyrocketed when income tax rates were lowered for the rich, when we engaged in two unfunded wars, and when Wall Street tanked the economy and was bailed out by taxpayers.

Rather than offset the budget deficits by increasing taxes on the rich or on war profiteers or hedge fund managers, the powers-that-be have their eye on the Social Secirity trust fund built up over decades by the people who've already gotten screwed by the one percenters.

If we let this happen, it will be a massive redistribution of wealth from working Americans into the pockets of those who have benefitted from the policies that drove the deficits through the roof.

[Laluchacontinua]

83. Exactly. So much for the "53% of the population doesn't pay income tax" meme.

Depending on benefits cuts it could mean that a decent chunk of the population is paying at higher rates than the super-rich.

[jtown1123]

73. This quote pretty much sums everything up:

And, no, sensible liberals, there is no way to make this "debate" go away with some "grand compromise." Fake news articles like this should make that clear. The rich want that Social Security money, it's how they guarantee themselves a lovely tax cut.

Link: http://www.eschatonblog.com/2011/10/con.html

[swilton]

75. 1,000 K&R

Thanks, Sabrina!

[unkachuck]

87. Kick....n/t

[Quantess]

88. Too late to recommend.

Kick

[KoKo]

108. K&R....!