tag:blogger.com,1999:blog-4900303239154048192.post4077170077441420820..comments2024-03-06T06:34:42.881-05:00Comments on EconoSpeak: Robert Samuelson's Comments On Debt Panel Besmirch His Name Yet AgainUnknownnoreply@blogger.comBlogger39125tag:blogger.com,1999:blog-4900303239154048192.post-66148202063955199112010-12-13T14:38:56.570-05:002010-12-13T14:38:56.570-05:00Brenda:
Thanks so much for providing the link to H...Brenda:<br />Thanks so much for providing the link to Hatch's very interesting paper.<br />Some interesting excerpts:<br />Page 1 "The use of reserve-sweep programs, which started in 1994, has allowed banks to reduce the effective reserve requirement on transaction deposits, freeing up high-powered money for other purposes. This activity has effectively lowered the reserve ratio of banks."<br />Page 5 "Banks love savings deposits. Like Certificates of Deposit, they don't have to maintain a reserve like they do for demand deposits. Banking regulations require the banks to keep reserves, no more than ten percent, now.<br />In 1994, banks discovered that they could "sweep" the "unused" parts of transaction deposits into a special type of account called a Money Market Deposit Account , or MMDA. The MMDA accounts are classified as savings deposits. They still have to follow rules concerning the number of transfers that can be made from savings deposits back into demand deposits. To do this, the banks have sophisticated software that analyzes every depositor's activity and figures out how much can be swept into an MMDA without getting into a situation where the bank has to transfer money back to the demand deposit more than the maximum allowed number of times. If the bank exceeds this amount, they have to reclassify the MMDA back to a demand deposit."<br />Page 6 "The portion swept is really part of a demand deposit , but after sweeping, it is a savings deposit and can be reserved as such, which is to say not reserved at all.<br />Because MMDA sweep accounts are included in total savings deposits, the amount of savings deposits is artificially inflated by the amount that demand deposits are understated."<br />Page 12 "As short-term interest rates rise and/or price inflation increases, people are going to be less willing to carry large zero-interest checking account balances. The excess money will be diverted to other investments that have a non-zero return, and the percentage of "unused" money in all demand-deposit accounts will decline. The amount available for sweeping will drop, but more importantly, banks will see an increase in their effective reserve requirements."<br />Don LevitDon Levithttps://www.blogger.com/profile/02497731736648561272noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-79719048161702286022010-12-12T20:21:40.268-05:002010-12-12T20:21:40.268-05:00Don: "When you say there is no shortage of mo...Don: "When you say there is no shortage of money, ever, I assume you mean that to be a moral hazard, if used ad infinitum."<br /><br />No. I meant that our current economic context is such that the global supply of currency bears no relation to the measure of real wealth on the planet. There is a long history of how this came about. For example the new and unregulated form of 'high power money' (in 1994). <br /><br />I refer to money created through what has been referred to as "arcane procedures and instruments"; like 'zero-reserve sweeps'. These novel banking processes resulted in an enormous expansion of the money base that was largely concealed from public scrutiny. More on this topic here:<br />http://mises.org/journals/scholar/hatch.pdf<br /><br />In pension funds the supply of capital is artificially increased. [There is evidence that the pension contributions in Australia resulted in far lower levels of household savings.] This phenomenon, of compulsory capital formation by the general public, provides incentives to artificially increase what is termed 'investment'. For example, new forms of ‘financial innovation’ where new ‘financial instruments’ are created to ‘repackage risk’ and on-sell to gullible or uninformed investors.<br /><br />What is investment?? It's all very well to take our money, but what is done with it after we're fleeced?Myrtle Blackwoodhttps://www.blogger.com/profile/07427043367624101075noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-68648901819094916562010-12-12T16:37:51.189-05:002010-12-12T16:37:51.189-05:00Brenda:
When you say there is no shortage of money...Brenda:<br />When you say there is no shortage of money, ever, I assume you mean that to be a moral hazard, if used ad infinitum.<br />Thus, the replacement of socialism over capitalism?<br />Only God can create something out of nothing.<br />Maybe that's why we have "In God We Trust" printed on dollar bills.<br />Don LevitDon Levithttps://www.blogger.com/profile/02497731736648561272noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-54962841838070723852010-12-12T09:27:05.511-05:002010-12-12T09:27:05.511-05:00Don Levit: "In order to pay $1,000,000 to ben...Don Levit: "In order to pay $1,000,000 to beneficiaries out of the trust fund, is it any easier, financially, to do so than paying for $1,000,000 of battleships..."<br /><br />Yes. This points out precisely the con associated with getting the public to contribute part of their earning for their old-age rainy day.<br /><br />Money is not a store of wealth for very long at all. Certainly not 10, 20, 30, 40 years. Money retains its value only as long as the national and global financial system is kept in working order. And it hasn't been.<br /><br />There is no shortage of money, EVER. I reiterate (for those unfamiliar with the fact) that money can be created electronically out of nothing. It is observable that there was no shortage of money for the state of permanent war that the US (in particular) has engaged in now since 1940. Nor for the many trillions of dollars of corporate bailouts (many of which were without any oversight). And the bailouts have continued in long succession since the 1970s.<br /><br />The privatisation of pensions is merely the means to socialise risk, as Henry CK Liu warned in 2001. "<i>The growth of pension and retirement funds can be viewed as a process in the socialization of capital formation. This process has brought about a corresponding growth in professional asset management based on competitive performance measured by short term market value, placing distorted emphasis on technical trends rather than fundamentals. The quest to socialize risk has led to indexation which works better in rising market to capture optimal systemic returns, but can also cause the categorical downgrade of entire families of debt instruments and their issuers without regard for individual strength. This can cause unnecessary and violent systemic damage, as it did in Asia in 1997. This socialization of risk associated with the socialization of capital formation means that a financial collapse will affect not merely the rich investors who may be able to afford the loss, but the entire population who can ill afford to lose their pension. The "too big to fail" notion then comes directly into play and government is forced to step in, putting an end to the myth of the free market. Moral hazard will be in full bloom as the nature of the beast. The Fed has been repeatedly held hostage to the "too big to fail" syndrome since 1930 and will again and again until its becomes the main agent to herald socialism to America, as Schumpeter predicted. Creative Destruction, of which Greenspan is so fond, will eventually destroy capitalism. </i>"<br /><br />Americanism and the "Too Big To Fail" Syndrome<br />Henry C.K. Liu<br />January 2001<br />..\..\Economists\HenryCKLiu\92.docMyrtle Blackwoodhttps://www.blogger.com/profile/07427043367624101075noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-32544634033937078972010-12-09T22:59:03.243-05:002010-12-09T22:59:03.243-05:00Jack:
All I asked you was for a yes or no answer, ...Jack:<br />All I asked you was for a yes or no answer, and to include the links abd excerpts.<br />Since I got no answer, I assume you agree with me, by default.<br />I guess you, like Bruce, are not stronhg enough to admit the answer directly.<br />Don LevitDon Levithttps://www.blogger.com/profile/02497731736648561272noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-44300248831282522102010-12-09T20:50:04.307-05:002010-12-09T20:50:04.307-05:00Don,
As Bruce has implied on a more recent thread,...Don,<br />As Bruce has implied on a more recent thread, but is too polite to be more direct, you are wasting our time and the site's band width. You ignore anything said to you regardless of its factual basis. You completely ignore links and references that are provided and simply ask that they be provided in spite of they're having been provided. Go play your silly games else where.Jackhttps://www.blogger.com/profile/12971442888151627894noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-22677377236169081502010-12-09T18:54:37.070-05:002010-12-09T18:54:37.070-05:00Jack:
Actually, I think my question is pretty impo...Jack:<br />Actually, I think my question is pretty important.<br />With all the emphasis on building up the trust fund "reserves," so it doesn't become exhausted, many of the "solutions" center around tax increases or benefit cuts.<br />In order to pay $1,000,000 to beneficiaries out of the trust fund, is it any easier, financially, to do so than paying for $1,000,000 of battleships.<br />I have already provided excerpts and links saying it is no easier, other than the trust fund needs no appropriation while battleships do.<br />I will be happy to provide them again, if others are interested.<br />I am still waiting for your excerpt and link to my "inane" question.<br />Don LevitDon Levithttps://www.blogger.com/profile/02497731736648561272noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-69917521174797792692010-12-09T18:22:54.810-05:002010-12-09T18:22:54.810-05:00Don,
Your question is so innane that your request ...Don,<br />Your question is so innane that your request for a "reputable excerpt" is a joke. Can an entity pay its bills when income falls short if it has no savings? Why does any financial organization keep reserves? The Trust Fund is the plan for current workers to fund SS sufficiently so that future3 workers will not be over burdened by the disproportionate numbers of beneficiaries. The government has bills to pay and financial obligations to honor. The Special Treasuries are just another of those financial obligations, no different from T-Bills held by the public. <br /><br />Maybe you should devote more of your time and efforts to the concept of the rich paying taxes in an equal proportion to their wealth. The wealthiest citizens benefit the most from all government policies and regualtions and expenditures. Their debt to their government needs to be acknowledged. The Trust Fund assets made it easier to cover up the huge expense of the Bush tax cuts and the outrageoous expense of the wars in the middle east. General taxes have to now make up for those poor policy decisions.Jackhttps://www.blogger.com/profile/12971442888151627894noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-10377516692360036542010-12-09T18:03:51.040-05:002010-12-09T18:03:51.040-05:00Coberly and Jack:
Does the trust fund make it any ...Coberly and Jack:<br />Does the trust fund make it any easier to pay benefits than if it did not exist?<br />Please provide at least one reputable excerpt and link to support your answer.<br />Don LevitDon Levithttps://www.blogger.com/profile/02497731736648561272noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-1551530523720300972010-12-09T17:44:35.794-05:002010-12-09T17:44:35.794-05:00"I am curious where in the law the trust fund..."I am curious where in the law the trust fund had the right to lend money to the Treasury to pay for current expenses, and to keep the deficit lower." Don Levit<br /><br />Don,<br />I can't do your homework for you. The Trust Fund isn't a bank. The SSA doesn't hold the incomeing FICA taxes directly. By law the Treasury Dept collects all incoming funds. Those funds are not comingled in accounting their sources. The various Funds are administered by Treasury and accounted for by "book entries," so to speak. Special Treasury bonds represent the value of the SS Trust Fund. What do you think that Treasury does with funds that come in? General taxes go directly to the general budget. FICA goes to the Trust Fund and are lent to the general budget. That's what Treasury is suppposed to do.Jackhttps://www.blogger.com/profile/12971442888151627894noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-78861579997529428272010-12-09T17:27:15.335-05:002010-12-09T17:27:15.335-05:00Look, Levit
is just confused. he will cite and ca...Look, Levit<br /><br />is just confused. he will cite and call for cites, but he doesn't understand the words.<br /><br />in fact paying back SS is exactly the same as paying back the bonds that were used to buy battleships. that's how money works.<br /><br />SS was designed to be pay as you go, but there was always a Trust Fund to tide the pay as you go system over inevitable mismatches between taxes in and benefits out... some very small monthly things, some larger related to recessions, and some larger still related to the baby boom. but the lending and borrowing really has nothing to do with SS proper... it is just using its Trust Fund to smooth its cash flow... and that was always in the bill.<br /><br />you can keep arguing with Levit, he likes it. but don't expect him to understand anything, and i don't think there is much worry he will mislead anyone on this blog.coberlyhttps://www.blogger.com/profile/15975038783813831953noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-62826110735949620802010-12-09T15:21:39.274-05:002010-12-09T15:21:39.274-05:00Jack:
I understand the process you mentioned.
I am...Jack:<br />I understand the process you mentioned.<br />I am curious where in the law the trust fund had the right to lend money to the Treasury to pay for current expenses, and to keep the deficit lower.<br />Even if the plan went according to the law, the design itself is flawed.<br />When you pay beneficiaries years into the future just like you pay for battleships, I don't call that a pension plan.<br />Similar words were used by the FASAB in regards to the federal retirees' pension plan.<br />Do you really think that Roosevelt's vision of a self supporting plan, with no utilization of general revenues, is what we have now?<br />I can provide links and excerpts for those who are interested.<br />Don LevitDon Levithttps://www.blogger.com/profile/02497731736648561272noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-43978096285621964272010-12-09T14:58:27.997-05:002010-12-09T14:58:27.997-05:00"Social Security needs to exist, but, in my o..."Social Security needs to exist, but, in my opinion, it is not sustainable in its current form."<br />Your opinion is weighed against the success of a program that has ben running successfully for the past 70 years. That success is in spite of the efforts of people with opinions like yours that have been grinding the same axe for all that time. <br /><br />"That is not the case with Social Security. Those assets were lent and spent, they are gone."<br />Your half right this time. Lent yes, but spent by the borrower and owed back to the Fund. What do you think Treasury does with the procedes of all those T-Bill sales?<br />Did the purchasers of Treasury securities "spend" that money. Or did they invest their money in the USA? The borrower spends the money lent by the buyer of the bonds. The bond holder is due back interest and priciple. Don, these are the most elementary of investment concepts. Every pension plan inn the world lends and invests its assets. Those plans must make such investments of the original funds inorder to grow the priciple and meet future demands to pay benefits. You are trying too hard to confuse the issue. <br /><br />"The federal retiree plan is run similarly, so at least we can say the government is "consistent." Trustees for such a plan would be put in jail."<br />As noted abov e, this is the process used by every pension plan and required of them by law. What on Earth is your point? I ask because you are now obviously making intentionally false and misleading comments. Or you are an idiot who cannot be reasoned with.Jackhttps://www.blogger.com/profile/12971442888151627894noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-37259396965388119732010-12-09T12:06:15.533-05:002010-12-09T12:06:15.533-05:00Coberly:
The interest that is in the trust fund is...Coberly:<br />The interest that is in the trust fund is not paid in cash. It is interest "paid" in Treasury securities (debt).<br />You must not think too highly of how Americans plan for their retirement.<br />Don LevitDon Levithttps://www.blogger.com/profile/02497731736648561272noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-84059236594845632172010-12-09T12:01:47.843-05:002010-12-09T12:01:47.843-05:00Coberly:
Can you provide a citation which attestS ...Coberly:<br />Can you provide a citation which attestS to the fact that redeeming Treasury securities is different from paying for any other expenditure - such as battleships.<br />For if it is no different, then having the trust fund makes it no easier to pay beneficiaries than if the trust fund did not exist.<br />Don LevitDon Levithttps://www.blogger.com/profile/02497731736648561272noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-18032962080173985022010-12-09T11:57:55.440-05:002010-12-09T11:57:55.440-05:00Levit
quotes a "fact" that is designed ...Levit<br /><br />quotes a "fact" that is designed to confuse. The huge amount that SS etc plus interest will make up of the federal budget... is mstly the interest owed because of borrowing that has nothing to do with SS, HI or even the rest of Medicare that was deliberately designed to increase the debt and weaken the program.<br /><br />SS will be easily paid for, and there is no other way that workers can buy "retirement INSURANCE". shouting about unrelated expenses, or confusing people about the need and affordability of SS itself is stupid or dishonest or both.coberlyhttps://www.blogger.com/profile/15975038783813831953noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-75855224706287050882010-12-09T11:56:02.974-05:002010-12-09T11:56:02.974-05:00Brenda:
I support your theory that our government&...Brenda:<br />I support your theory that our government's support is largely skewed toward the financial elites.<br />This whole program of bailing out the banks and AIG is testament to that.<br />Our leaders are more concerned about the stock market rising than our incomes falling.<br />Median household incomes have stagnated or been reduced over the last 30 years.<br />Social Security needs to exist, but, in my opinion, it is not sustainable in its current form.<br />A retirement/savings plan as Roosevelt envisioned has to be properly run, so the assets are fully funded when they are cashed in to pay benefits.<br />That is not the case with Social Security. Those assets were lent and spent, they are gone.<br />When it is time to cash in to pay benefits from the trust fund, the same process occurs as paying for battleships - benefits are paid out of current revenue and debt.<br />The federal retiree plan is run similarly, so at least we can say the government is "consistent." Trustees for such a plan would be put in jail.<br />I can provide citations to support my statements for all those who are interested.<br />Don LevitDon Levithttps://www.blogger.com/profile/02497731736648561272noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-9201988933436688952010-12-09T11:50:48.919-05:002010-12-09T11:50:48.919-05:00Most of the arguments on this thread are based on ...Most of the arguments on this thread are based on an inadequate understanding not only of Social Security, but the nature of money. It's not worth arguing with Levit... I don't even know what his game is... beyond proving that his idee fixe is god's truth.<br /><br />But even Brenda does not seem to realize that Social Security is the worker's own money.. set aside and protected for them by the government... but their own money just exactly as if it was put in the bank at interest. It is not a case of "us" supporting the old and unproductive. It is a case of "us" protecting their savings in a program that will protect our savings in turn.<br /><br />The Trust Fund bonds ARE money. That's what money is. Sure it was lent to and spent by the government. That's what you do with "saved" money. Yes it needs to be paid back. But paying it back is not paying again for Social Security, it is paying the first time for whatever the borrowed money was used for. Arguing that the government has to tax or borrow more money to pay back the Trust Fund is exactly the same as going to the bank who lent you the money for your house and complaining that you will have to get a job to pay them back.coberlyhttps://www.blogger.com/profile/15975038783813831953noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-80326487626022557552010-12-08T20:02:38.524-05:002010-12-08T20:02:38.524-05:00Don Levit: "In 10 years, a government agency,...Don Levit: "<i>In 10 years, a government agency, I believe it is the CbO or GAO, estimates that Medicaid, Medicare, Social Security, and interest on the debt will consume the entire budget.That seems pretty scary, don't you think?</i><br /><br />It sounds very scary and the statement appears to have the intent of frightening people into submission. Give up the funds you've put aside for a rainy day, you say. To provide for whom exactly? <br /><br />Meanwhile: $9 trillion of government financial commitments (<b>government as investor</b>) "<i>Includes direct investments in financial institutions, purchases of high-grade corporate debt and purchases of mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae. </i>" Another $1.7 trillion (<b>government as insurer</b>) includes insuring debt issued by financial institutions and guaranteeing poorly performing assets owned by banks and Fannie Mae and Freddie Mac. <br /><br />Another $1.4 trillion govt commitment (<b>government as lender</b>) represents "<i>A significant expansion of the government's traditional overnight lending to banks, including extending terms to as many as 90 days and allowing borrowing by other financial institutions. </i>"<br /><br />http://www.nytimes.com/interactive/2009/02/04/business/20090205-bailout-totals-graphic.html<br /><br />Something and someone has to give. It's certainly not the big financial institutions nor their investors.<br /><br />I have a friend living in the comfortable certainty that comes with a million dollars a year in income. He is a major bank investor and is terribly grateful for the government's bailout, depositi guarantee and ongoing unquestioned support of his (and his ilk's) household finances.<br /><br />A major difference between welfare for the rich and welfare for the poor is that there are far fewer strings attached to the former.<br /><br />The unanswered question posed to Mr Levit:<br /><br />BR: <i>Perhaps it's an attempt to try to address the frail fiscal position of the federal government by targetting the poor rather than the 10,000 individuals who take in 30% of the nation's income?<br /><br />Why would this not be the case, Don?</i>Myrtle Blackwoodhttps://www.blogger.com/profile/07427043367624101075noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-39657653062629301602010-12-08T20:01:53.972-05:002010-12-08T20:01:53.972-05:00Don Levit: "In 10 years, a government agency,...Don Levit: "<i>In 10 years, a government agency, I believe it is the CbO or GAO, estimates that Medicaid, Medicare, Social Security, and interest on the debt will consume the entire budget.That seems pretty scary, don't you think?</i><br /><br />It sounds very scary and the statement appears to have the intent of frightening people into submission. Give up the funds you've put aside for a rainy day, you say. To provide for whom exactly? <br /><br />Meanwhile: $9 trillion of government financial commitments (<b>government as investor</b>) "<i>Includes direct investments in financial institutions, purchases of high-grade corporate debt and purchases of mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae. </i>" Another $1.7 trillion (<b>government as insurer</b>) includes insuring debt issued by financial institutions and guaranteeing poorly performing assets owned by banks and Fannie Mae and Freddie Mac. <br /><br />Another $1.4 trillion govt commitment (<b>government as lender</b>) represents "<i>A significant expansion of the government's traditional overnight lending to banks, including extending terms to as many as 90 days and allowing borrowing by other financial institutions. </i>"<br /><br />http://www.nytimes.com/interactive/2009/02/04/business/20090205-bailout-totals-graphic.html<br /><br />Something and someone has to give. It's certainly not the big financial institutions nor their investors.<br /><br />I have a friend living in the comfortable certainty that comes with a million dollars a year in income. He is a major bank investor and is terribly grateful for the government's bailout, depositi guarantee and ongoing unquestioned support of his (and his ilk's) household finances.<br /><br />A major difference between welfare for the rich and welfare for the poor is that there are far fewer strings attached to the former.<br /><br />The unanswered question posed to Mr Levit:<br /><br />BR: <i>Perhaps it's an attempt to try to address the frail fiscal position of the federal government by targetting the poor rather than the 10,000 individuals who take in 30% of the nation's income?<br /><br />Why would this not be the case, Don?</i>Myrtle Blackwoodhttps://www.blogger.com/profile/07427043367624101075noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-66397238548673350732010-12-08T16:39:45.690-05:002010-12-08T16:39:45.690-05:00"Why don't you cite which particular prov..."Why don't you cite which particular provision of the law differs with one of my excerpts?"<br /><br />I've already done that and you had chosen to ignore it and to continue to put forth opinion pieces as though they had some weight in the discussion. If I've been harsh in my characterization of the content of your comments it is because I have serious concerns about your intention in being so persistently misleading in those comments.Jackhttps://www.blogger.com/profile/12971442888151627894noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-30236435613810832032010-12-08T16:03:20.906-05:002010-12-08T16:03:20.906-05:00Jack:
You are correct about one particular person&...Jack:<br />You are correct about one particular person's opinion.<br />But many of my excerpts have been repeated over time, over many governmental agencies.<br />Why don't you cite which particular provision of the law differs with one of my excerpts?<br />Do you think the excerpts have insufficient validity for you to reply to?<br />Do you think you're smarter than the various agencies I have cited?<br />When your back is against the wall, you resort to personal attacks on me or the various governmental agencies.<br />Until you learn how to constructively argue, neither you nor I will learn anything new.<br />Don LevitDon Levithttps://www.blogger.com/profile/02497731736648561272noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-43245017919761437262010-12-08T15:46:40.841-05:002010-12-08T15:46:40.841-05:00It's not a debate between any two or three or ...It's not a debate between any two or three or more entities. It is a matter of legislation on the books. The opinions expressed by any office of the government are only good for the length of that governments term in office. Such opinions are intended to creaqte an impression that allows for the revision of legislatively mandated actions. Regarding the objectivity of such opinions one should be aware of the revolving door nature of such individuals who publish reports containing such opinions. That door swings persistently between positions in t=such government agencies and the financial industry. Peter Orzag is but one recent example and a review of the resumes of virtually every senior executive in a government budget or accounting office would further elucidate the point.<br /><br />The one thing that is objective is the letter of the law, That seems to be a letter that you would rather ignore. Every aspect of the Social Security system is described by law from FICA receipts<br />to the Trust Fund purpose to the use of and repayment of Trust Fund funds to the method for calculating benefits. A matter of law. Not some functionary's opinion written with his eye to his personal professional future,Jackhttps://www.blogger.com/profile/12971442888151627894noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-63270197620362318262010-12-08T13:11:49.279-05:002010-12-08T13:11:49.279-05:00Jack:
The federal government does consider public ...Jack:<br />The federal government does consider public debt to be superior to Intragovernmental Holdings debt.<br />Your lumping all Treasury debt into one pot, as the same obligation, is incorrect, at least according to the GAO.<br />In a paper entitled "Federal Debt, Answers to Frequently Asked Questions, An Update:"<br />Page 66 "Explicit Liabilities (strongest level of federal government committment, level 1) Publicly Held Debt."<br />"Exposures Implied by current policies or the public's expectations about the role of Government - level 4, the weakest level of federal government commitment - "Future Social Security benefit payments, Future Medicare Part A benefit payments, Future Medicare Part B benefit poayments, Future Medicare Part D benefit payments, .<br />http://www.gao.gov/new.items/d04485sp.pdf.<br />From a paper entitled "Accounting for Revenue and Other Financing Sources and Concepts for Reconciling Budgetary and Financial Information,SFFAS7," published by the FASAB, the accounting advisor for the federal government:<br />Page 109 "Taxes are levied through the exercise of the power of the Government to compel payment. The relatioinship between the tax paid and the value received is too indirect and disproportionate to relate the revenue that is received from any identifiable taxpayer to the cost that is incurred for providing the identifiable taxpayer with benefits. This is especially the case when the benefits are of a collective or public in nature where the benefits are designed to redistribute income from one group of people to another. Therefore, tax revenue is nonexchange revenue."<br />http://www.fasab.gov/pdffiles/sffas-7.pdf.<br />This is not a debate between Don and Jack.<br />This is a discussion between Jack's opinions and the statements of the GAO and FASAB.<br />Who is more credible?<br />Don LevitDon Levithttps://www.blogger.com/profile/02497731736648561272noreply@blogger.comtag:blogger.com,1999:blog-4900303239154048192.post-2794646140171923072010-12-08T12:23:35.476-05:002010-12-08T12:23:35.476-05:00"In 10 years, a government agency, I believe ..."In 10 years, a government agency, I believe it is the CbO or GAO, estimates that Medicaid, Medicare, Social Security, and interest on the debt will consume the entire budget.<br />Don the Obfuscator<br /><br />Nice try Don. I admire your resilience, but I'm concerned about your inclination to grossly distort information. You've lumped together three entirely separate budget categories. You fail to point out that Social Security, which is separately funded, is and will be in the black for the next 25 years by all estimates provided by the Trustee's Report. That is a very long term projection and even if true can be fixed by minor adjustments to the FICA contribution rates in ten or fifteen years from now. And even if nothing is done the worst case scenario has beneficiaries collecting about 75% which will be a bigger benefit than is now available. On top of which who can tell what improvements may occur in our economy between now and then. We might even get a legislature and President that may finally ask and require the very wealthy to begin paying their fair share of government expenses. We might even see a more equitable distribution of earnings and unemployment may recede to a more reasonable level. How knows? <br /><br />What we do know is that if people like yourself continue to accept the distortions that you make so readily available to others our government will feel no obligation to deal with our economic issues in an equitable fashion. This may not be until "...the rich and the government stop bribing treacherous pens and tongues to deceive them[the people]..."Jackhttps://www.blogger.com/profile/12971442888151627894noreply@blogger.com