where i agree with the dems

Prior to Johnson, the SS taxes were /benefit payments were not included in the consolidated Federal budget. He changed that so that the SS Trust fund was consolidated with the rest of the budget for financial reporting purposes. This had no effect on solvency or anything else. It was just window dressing to make his (and subsequent) deficits appear smaller.

The SS Trust fund, such as it is still exists. In reality, it is nothing more than a set of file cabinets that contain a lot of treasury bonds. By law, SS can only invest its "surpluses" in government bonds -- not real assets. This is kind of like my left pocket borrowing money from my right pocket.

A little history. In 1968, in order to pay for the war in Vietnam and pretty up the numbers of a surging budget deficit, President Johnson arbitrarily decided to include Social Security in the budget. Social Security was then, as now, taking in more money every year from workers than it pays out to old folks. It helped LBJ produce balanced books Originally Posted by WTF

Unfortunately your little history doesn't make sense. It's actually the "history" as developed by the Republican Party in the late 80's to smack down rising support for spending on social programs.

Here's why the theory doesn't hold up:

1. The timing is all wrong.

Johnson took office in 1963. The first unified budget, however, did not take hold until 1969 - the year Johnson left.

Johnson submitted the first unified budget to Congress in January of 1968. That was after all of the big social programs had already been introduced. It was also just six weeks before he announced his retirement from office. By the time Johnson submitted the first unified budget the gross federal debt had actually declined under his administration. The deficits from the Great Society programs were still years down the road. Johnson literally had nothing to hide.

If Johnson was really just trying to hide the deficit then he also did it at exactly the wrong time. Johnson only served under the '69 unified budget for four months. He gained nothing from it. None of his earlier budgets was affected by the change. It was actually Richard Nixon who was the big winner of this practice. The deficits really took off under Nixon and Ford, not Johnson. It was the Republicans who followed him that benefited from the new practice.

So Johnson didn't even start talking about a unified budget until more than four years into his presidency and he gained zilch by putting it into effect. He got nothing out of the deal. The timing just doesn't add up.

2. Nobody bothered to change things.

Johnson's switch to a unified budget was an executive action, not a legislative one. There was never any law passed that said the President has to submit a unified budget to Congress or that Congress has to follow one. Johnson just started doing it.

That means that all the presidents who followed him also had a choice about it and, surprise surprise, all of them kept doing it to.

Nixon, Ford, Carter, Reagan *gasp*, and Bush the 1st all submitted unified budgets in one form or another. Any one of these presidents could have simply snapped his fingers and the great scourge of the unified budget would have instantly disappeared from the backs of the oppressed American people.

I think it's pretty telling that this didn't happen.

In fact, as I noted above, you really didn't hear anything at all about this topic until the Republicans started making a political issue out of Johnson during the Reagan years. It was only then that the great evil of the unified budget rose to the conversation list.

So I'm really left wondering how all of this is Johnson's fault. You had two Democratic presidents submit 6 unified budget. You had four Republican presidents submit 22 of them. And yet Johnson is the big, bad, boogey man who gets the blame for all our ills.

Again, it doesn't make sense, now does it?

3. There was a damn good reason besides the deficit to use a unified budget.

One thing that people today don't appreciate is that 1968 was still the Age of the Slide Rule. There were no PC's back then. No hand-held calculators. No personal color printers.

If you want to analyze the budget today you whip out your laptop, download a spreadsheet off the web, and pump out a graph in less that two minutes just like I did earlier in this thread.

Back in 1968 that process involved ordering the proper budget book from the Treasury, waiting two or three week for it to arrive by mail, sorting through hundreds of sheets to find what you wanted, working the analysis in pencil on a ledger-sized accounts book, and then running up the numbers on a 25 pound mechanical adding machine. If you wanted a visual you dug out the graph paper and a ruler and drew the thing yourself.

This led to huge problems trying to keep track of the numbers.

Every one who tried to analyze the effect of the trust funds ended up with a different set of figures depending on which accounting and actuarial rules they applied to reconcile and unify the separate general and trust fund accounts. Even the government itself didn't have a standardized way of looking at the numbers. There were at least three "official" accounting summaries of the federal budget generated each year that were often off from each other by a factor of ten. Congress spent so much time arguing about which set of numbers to use that it almost never got the budget out on schedule each year.

The unified budget solved this problem. Putting the trust funds on the ledger meant standardized accounting practices and the ability to see the numbers in their entirety for the first time in fifty years. The '69 budget was the first time people really knew for certain what the United States - and it's debt obligations - were actually worth. As I'll describe below, that was something necessary to the growth of the country after that point.

So, you see, the unified budget wasn't about hiding the numbers, it was about exposing the numbers. Maybe it did have the side effect of fooling a bunch of not-to-bright bulbs that the deficit was going down, but that was a side effect. The real point was to make the budget understandable again.

Now days, of course, nobody gives a shit if the budget is unified. By the time they forced the trust funds completely off ledger in 1990 everybody had a PC on their desk, a calculator in their drawer, and the budget came on a floppy disc instead of half a tree of paper. Nobody cares today if the budget is unified or not. Technology has solved that problem for us. It's a complete non-issue.

Back then, though, Johnson needed a unified, transparent budget. BUT, he didn't need it to "hide his deficits".

And that brings me to my next point:

4. The change to a unified budget fueled expansive government growth by stabilizing the US treasuries market.

On this point I realize that I hold a minority view and I perfectly respect others who disagree. However, I think time will tell on this one.

Before the introduction of the unified budget US Treasury Notes were effectively restricted to a small, specialized market. Before 1971 the treasury did not auction the notes and bonds as it does today. Instead, it published a set rate of return for each bond series and sold them by subscription to a fairly constant group of buyers.

That all changed in '71 with the introduction of the cash auction. After that point the market, rather than the Treasury, set the price and yield for each bond series and the yield curve across the maturities began to float. Once this happened the market for US debt exploded. Everybody got into the game. It was no longer a few stuffy old bankers buying a set amount every twelve weeks. From '71 forward the US had no shortage of people lining up to happily purchase US debt at any size or maturity.

Why is this significant to the unified budget issue?

Because without the introduction of the unified budget you could never have moved to the cash auction system and opened up the bond market the way we did.

If there's one thing that the bond markets hate it's uncertainty. They can live with risk - they do that every day. What they can't stand is not knowing what the risk is.

Not being able to evaluate the risk of US treasuries was a significant problem before the unified budget. As I explained above, nobody could properly calculate back then exactly what the long-term obligations of the government were so long as the trust fund data remained on a separate ledger. Even the government didn't know what the correct figures were. There was no way for somebody investing in US securities to know what kind of risk they were truly taking before the first unified budget in '69.

Unifying the budget changed all that by bringing greater transparency and certainty to the whole budget process. That took the lid off the treasuries market and allowed the US - starting with Nixon in '71 - to borrow to its heart's content from anybody who could show up at a treasury auction with a cashier's check and smile. It's at that point that government growth really took off. Once we handed the government a treasury auction credit card with no set limit there was no stopping what it would fdo with it.

So, you see, it wasn't Johnson trying to "hide the deficit" that led us down the road to ruin, it was his unhiding the true status of the federal coffers that did it.

I don't know anybody outside of Alabama who's dumb enough to have fallen for what you claim Johnson tried to do. I do know lot's of people, however, who aren't anywhere smart enough to predict just how massive the growth in federal spending would become once the bond market was opened to auction. Accessing that borrowing power with the cash auction was the true reason we moved to unification. Once we got there, though, we just couldn't hang on to the spending genie once it was out of the bottle.

In a way I guess it may be correct to say that Johnson's policies did eventually lead to massive spending in future administrations. I think it's also correct to say that he never intended that to happen and assumed - as we all do every election cycle - that each new group of bozos we elect will actually be able to keep the credit card in their wallet for a change. I guess none of us ever learn.

It's unfair, though, to accuse Johnson of subterfuge in trying to hide the federal debt. He wasn't trying to pull one over on anybody as the conservatives like to claim. He was just doing what he thought was right for the country and failed through the same dumb-ass faith in the fiscal responsibility of politicians that we all have. To vilify him for the changes he made is just wrong. He wasn't a faker. He just didn't see the potential consequence of what he started.

And that's the way I see it.

Cheers,
Mazo.

Jeezus. I'm about to have to say this for the 10,000th time in my life. Why can't people get this straight?

THERE WAS NEVER A "GRAB" OF THE SOCIAL SECURITY TRUST FUNDS UNDER JOHNSON OR ANY OTHER PRESIDENT. THE TRUST FUNDS WERE NEVER ADDED TO THE GENERAL OPERATING FUND. THEY ARE NOW, AND ALWAYS WERE, SEPARATE AND INDEPENDENT FROM THE GENERAL BUDGET. THEY WERE NEVER ADDED TO THE GENERAL FUND OR USED TO PAY FOR NON-PROGRAM EXPENSES IN THE MAIN BUDGET. THE TRUST FUNDS OPERATE TODAY JUST AS THEY DID WHEN THE ORIGINAL LAW WAS PASSED.

There. Now it's in bold and maybe people will listen this time.

Go look it up for yourself: http://www.ssa.gov/history/InternetMyths.html

I am so sick of hearing about how Johnson and evil Democrats "raided" Social Security that I'm ready to puke on the next person who says it. This was nothing but a bullshit lie put out to steal the votes of people too dumb to know better. Apparently it's still working. A sad comment on the state of US politics, isn't it?

Not too many cheers,
Mazo. Originally Posted by Mazomaniac

From the NY Times

Stephen C. Goss, chief actuary of the Social Security Administration, said that while the Congressional projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual.

The problem, he said, is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program’s revenue has fallen sharply, because there are fewer paychecks to tax.

Charlotte Observer

Starting in January, more than 10,000 baby boomers per day will turn 65, a pattern that will continue for the next 19 years, as those born between 1946 and 1964 reach the once-traditional retirement age.

Do you honestly think this isn't going to have an affect on the benefits. Have you noticed or seen that payroll deductions just went down to the OASDI taxes? I have, as my paychecks are a little larger this month over last month.

Prior to Johnson, the SS taxes were /benefit payments were not included in the consolidated Federal budget. He changed that so that the SS Trust fund was consolidated with the rest of the budget for financial reporting purposes. This had no effect on solvency or anything else. It was just window dressing to make his (and subsequent) deficits appear smaller.

The SS Trust fund, such as it is still exists. In reality, it is nothing more than a set of file cabinets that contain a lot of treasury bonds. By law, SS can only invest its "surpluses" in government bonds -- not real assets. This is kind of like my left pocket borrowing money from my right pocket. Originally Posted by pjorourke

For Mazo... The "Trust Fund" is being held as bonds in lew of govt IOU's.

PARKERSBURG, West Virginia - The retirement nest egg of an entire generation is stashed away in this small town along the Ohio River: $2.5 trillion in IOUs from the federal government, payable to the Social Security Administration.

From the NY Times Originally Posted by DFW5Traveler

What does this have to do with anything we're discussing here?

For Mazo... The "Trust Fund" is being held as bonds in lew of govt IOU's. Originally Posted by DFW5Traveler

Again, there is nothing in that article that is even remotely related to Johnson, the unified budget change, the alleged "raid" on the trust funds in 1968, or anything else that's been discussed in this thread.

And as you obviously haven't noticed, the fact that the trust fund is held in the form of government bonds has been hashed over by me and several other people here quite thoroughly already.

I don't know, as is usually the case, exactly what you're driving at or what these two articles are supposed to add to the discussion. Perhaps you could enlighten us further?

Cheers,
Mazo.

The following article appeared today stating that SS will run out of money by 2037:

My Questions are:

1. Is SS really going to run out of money? Will the pols find another way to fund it?
2. If SS runs out of money, what will those retirees live on? Will they be kicked to the curb?

From http://news.yahoo.com/s/ap/20110127/...ocial_security

WASHINGTON – Social Security will post nearly $600 billion in deficits over the next decade as the economy struggles to recover and millions of baby boomers stand at the brink of retirement, according to new congressional projections.

This year alone, Social Security is projected to collect $45 billion less in payroll taxes than it pays out in retirement, disability and [COLOR=#366388 ! important][COLOR=#366388 ! important]survivor [COLOR=#366388 ! important]benefits[/color][/color][/color], the nonpartisan Congressional Budget Office said Wednesday. That figure swells to $130 billion when a new one-year cut in payroll taxes is included, though Congress has promised to repay any lost revenue from the tax cut.
Last year, Social Security posted its first deficit since the program was last overhauled in the 1980s. The CBO said at the time that Social Security would post surpluses for a few more years before permanently slipping into deficits in 2016.

But the new projections show nothing but red ink until the Social Security trust funds are exhausted in 2037.

The outlook has grown bleaker as the nation struggles to recover from its worst economic crisis since Social Security was enacted during the Great Depression. In the short term, Social Security is suffering from a weak economy that has payroll taxes lagging and applications for benefits rising. In the long term, Social Security will be strained by the growing number of baby boomers retiring and applying for benefits.

More than 54 million people receive retirement, disability or survivor benefits from Social Security. Monthly payments average $1,076.
The deficits add a sense of urgency to efforts to improve [COLOR=#366388 ! important][COLOR=#366388 ! important]Social [COLOR=#366388 ! important]Security's [/color][COLOR=#366388 ! important]finances[/color][/color][/color]. For much of the past 30 years, Social Security has run big surpluses, which the government has borrowed to spend on other programs. Now that the program is running deficits, the federal government will have to find money elsewhere to pay back Social Security, so it continue to issue benefits.

"I've received the lash from those who say, 'Well, you shouldn't have to cut Social Security because there are trillions of dollars of assets,'" said Sen. Kent Conrad, D-N.D., chairman of the Senate Budget Committee. "It is true there are trillions of dollars of assets. It is true that they're backed by the full faith and credit of the United States. It is also true that the only way those bonds get redeemed is out of the current income of the United States."

Other lawmakers said Social Security's financial problems are not that urgent.

"In the last 75 years, in good times and in bad times, Social Security has paid out every nickel owed to every eligible beneficiary at a relatively modest administrative cost," said Sen. Bernie Sanders, who organized the first meeting of the Senate Social Security caucus Thursday.
"We are getting very tired about hearing our Republican and right wing friends telling us about how Social Security is collapsing when the reality is, Social Security today has a surplus of $2.6 trillion," Sanders said. "Social Security can pay out every benefit owed to every eligible American, for the next 27 years."

Social Security has built up a $2.5 trillion surplus since the [COLOR=#366388 ! important][COLOR=#366388 ! important]retirement [COLOR=#366388 ! important]program[/color][/color][/color] was last overhauled in the 1980s. Benefits will be safe until that money runs out. That is projected to happen in 2037 — unless Congress acts in the meantime. At that point, Social Security would collect enough in payroll taxes to pay out about 78 percent of benefits, according to the [COLOR=#366388 ! important][COLOR=#366388 ! important]Social [COLOR=#366388 ! important]Security [/color][COLOR=#366388 ! important]Administration[/color][/color][/color].

The $2.5 trillion surplus, however, has been borrowed over the years by the federal government and spent on other programs. In return, the Treasury Department has issued bonds to Social Security, guaranteeing repayment with interest.

It's a bad time for the nation to be hit with more financial obligations. The federal budget deficit will surge to a record $1.5 trillion flood of red ink this year, congressional budget experts estimated Wednesday, blaming the slow economic recovery and a tax cut law enacted in December.
Lawmakers from both parties have vowed to address the nation's financial problems, including such contentious issues as Social Security and Medicare. The political climate, however, has made it difficult. Some Democrats have criticized plans to cut Social Security benefits as secret plots to destroy the program. Many Republicans have refused to consider tax increases.

"We need to get past the politics of the past and deal with this issue, making the hard decisions that have to be made," Sen. Mike Crapo, R-Idaho, said Thursday at a Senate hearing on the budget deficit. "As we move forward in that context, I personally believe strongly that all aspects of the spending and revenue side of the equation must be on the table."
Sen. Chuck Schumer, D-N.Y., accused congressional Republicans of wanting to end Social Security by privatizing it.

"Privatize means end," Schumer said Thursday after the meeting of the Senate Social Security Caucus.

Schumer was referring to a widely distributed plan by Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee. Ryan's plan would offer workers under 55 the option of investing over a third of their current Social Security taxes into personal retirement accounts.

Social Security has been supported by a 6.2 percent payroll tax paid by both workers and employers. In December, Congress passed a one-year tax cut for workers, to 4.2 percent. The lost revenue is to be repaid to Social Security from general revenue funds, meaning it will add to the growing national debt.

Unfortunately your little history doesn't make sense. It's actually the "history" as developed by the Republican Party in the late 80's to smack down rising support for spending on social programs. ... Originally Posted by Mazomaniac

It seems the only revisionist history that is being reported is by you.

What does this have to do with anything we're discussing here?

The point is that the money was borrowed from the SSA Trust fund and replaced with Bonds. Now the question of the day is, where in the hell do you think the money will be coming from when they start cashing those bonds to pay benefits? It should be commone sense there maz.

Again, there is nothing in that article that is even remotely related to Johnson, the unified budget change, the alleged "raid" on the trust funds in 1968, or anything else that's been discussed in this thread.

And as you obviously haven't noticed, the fact that the trust fund is held in the form of government bonds has been hashed over by me and several other people here quite thoroughly already.

I don't know, as is usually the case, exactly what you're driving at or what these two articles are supposed to add to the discussion. Perhaps you could enlighten us further?

Cheers,
Mazo. Originally Posted by Mazomaniac

I never suggested who stole the money from the Trust Fund, whether it was FDR himself or a little bit here and there from every president since doesn't matter. And yes it was stolen from the generations of people who have already contributed. The point is that it is currently heading for insolvancy with 10K people retiring per day and a whole lot of people not paying into the system anymore (unemployment rates, remember) and you can't handle the truth of that matter. The dems have stated that SS needs to be fixed, but where is their plan? Kicking it down the road to our future generations seems to be working real well...

Social Security has been a very hot topic lately. I have been hearing that Social Security was in the red for the first time since it was overhauled in 1983. I found a few articles from August 5th 2010 about it.
http://www.washingtontimes.com/news/...rst-time-ever/
http://money.cnn.com/2010/08/05/news...port/index.htm

Also I read that each day this month there will be 10,000 Baby Boomers turning 65 years old, meaning that the U.S. population will be adding a retiree candidate on the average of one every 13 seconds. And, so the writer claimed, this pace will continue 24 hours daily for the next 18 years.

There are reports that Social Security may be insolvent by 2037.

I am not really worried about it for myself. I have been paying into SS since I was a teenager and have seen the writing on the wall for some time. I have a 401K that is doing very well. I also have savings, an IRA and some stocks. If it is there, Great ! If it's not, I have other alternatives. I would even be willing to forfeit the SS payments I have made to date, if I could opt out of SS moving forward so I could use that money for other investments of my choosing. I am not an economist by any means and don't claim to know much about the inner workings of the Government machine. Just a simple man that does not have much faith in the system. Just my .02 cents.

It seems the only revisionist history that is being reported is by you. Originally Posted by DFW5Traveler

Ah, yet another fact-filled, well reason retort. How will I get up from this smack-down?

The point is that the money was borrowed from the SSA Trust fund and replaced with Bonds. Now the question of the day is, where in the hell do you think the money will be coming from when they start cashing those bonds to pay benefits? Originally Posted by DFW5Traveler

36 previous post in this thread and you didn't read a single one of them, did ya DFW? Unbelievable.

Honestly, you're like a death blossom of irrelevance. You don't even bother to see what people are talking about before spouting off on some tangent. I'm glad I've never been standing beside you in a fire fight. How many fratricide incidents were you involved in? How many of those were in peace time or out of theater?

Your point was stated and restated ad nauseum in the posts above yours. Thank you for summing it up for us. Glad you came.

Cheers,
Mazo.

Mazo, your arrogance neither inspires nor educates. IMHO, you are a parrot spouting liberal talking points. You have not validated any points that haven't been wasted on ink or in bytes of the liberal media. When you can come up with your own ideas based on fact maybe then and only then will someone take notice. Welcome to a free society where people have the right to have their own opinions that can be researched for fact.

I'll tell you like I've said to other socialist thinking people. This, the United States of America, is a free country that does not have a majority that leans in your general direction. It is a capitalist, inspirational, innovative, country founded on a belief that people can and will think for themselves. If you aspire to social engineering and sheep mentality, it's a free country and you are free to leave. Have a pleasant evening.

IMHO, you are a parrot spouting liberal talking points. Originally Posted by DFW5Traveler

Uh, you forgot to attach a link to an completely unrelated article on a neocon website or copy and paste somebody's Tea Party blog in your post to prove how I'm the one parroting someone else's ideas.

You go girl!!!!

Cheers,
Mazo.

The following article appeared today stating that SS will run out of money by 2037:

My Questions are:

1. Is SS really going to run out of money? Will the pols find another way to fund it?
2. If SS runs out of money, what will those retirees live on? Will they be kicked to the curb?

From http://news.yahoo.com/s/ap/20110127/...ocial_security Originally Posted by charlestudor2005

CT2K5, haven't you been reading the posts? ITS SOLVENT. Look I even bolded, italicized and underlined it for you. The IOUs have been placed in lock box has been placed inside another lock box which I buried in an undisclosed location on the lunar surface and gave Pawnstars Chumlee both keys.

To answer your questions:
1) Its called the printing press.
2) I'm sure the Chinese have nice retirement labor camps.

CT2K5, haven't you been reading the posts? ITS SOLVENT. Look I even bolded, italicized and underlined it for you. The IOUs have been placed in lock box has been placed inside another lock box which I buried in an undisclosed location on the lunar surface and gave Pawnstars Chumlee both keys.

To answer your questions:
1) Its called the printing press.
2) I'm sure the Chinese have nice retirement labor camps. Originally Posted by gnadfly

Yeah, they are called ghost cities atm...

10K people retiring per day Originally Posted by DFW5Traveler

Can you support this figure with actual data from a reliable source???

That's nearly 1 million retired in three months. Just askin'.

I depends on what you mean by 'reliable source.' Just google 10000 people retiring a day. Seems it is based on 77 million people being born from 1946 to 1966. The basic math checks out.

http://www.cbsnews.com/stories/2010/...n7199116.shtml