Thread: They chose to fail.

Originally Posted by smurf

The "surplus" claimers are counting the excess Social Security (and Medicare) taxes twice.

Once as straight general fund receipts with no strings attached, and again as an asset of the Social Security Trust Fund that was invested into Treasury bonds.

Those funds can't be both.

No, we only count the receipts once.
Then we count the outlays.
The difference is the surplus.

The Debt held by the Public goes down, it's all there.

Originally Posted by goober

No, we only count the receipts once.
Then we count the outlays.
The difference is the surplus.

The Debt held by the Public goes down, it's all there.

I keep wavering back and forth. I can't decide whether you are smart enough to understand this and are just too stubborn to admit it, or whether you really don't have the brain power to understand.

If the excess Social Security taxes are simply receipts like all other taxes, then they cannot be used by the Social Security Trust Fund to invest in Treasury bonds. That means that there was a surplus, but Social Security has no assets and is insolvent.

If the excess Social Security taxes were invested by the Social Security Trust Fund into Treasury bonds, then the proceeds of the bonds were used to pay outlays, and there was never a surplus.

One or the other happened, but it is mathematically impossible for both to have occurred.

Originally Posted by smurf

I keep wavering back and forth. I can't decide whether you are smart enough to understand this and are just too stubborn to admit it, or whether you really don't have the brain power to understand.

If the excess Social Security taxes are simply receipts like all other taxes, then they cannot be used by the Social Security Trust Fund to invest in Treasury bonds. That means that there was a surplus, but Social Security has no assets and is insolvent.

If the excess Social Security taxes were invested by the Social Security Trust Fund into Treasury bonds, then the proceeds of the bonds were used to pay outlays, and there was never a surplus.

One or the other happened, but it is mathematically impossible for both to have occurred.

OK that explains it.

I took accounting and you didn't.

You draw the boundary around the federal government, only money that crosses the boundary is counted.

You have receipts coming in.
You have outlays going out.
You have redemption of debt held by the public.
Those are the three flows that are relevant to the surplus/deficit calculation.

That's it, those are the only relevant numbers for surplus/deficit calculations.
All that trust fund stuff happens inside the boundary, it's not relevant to the surplus/deficit calculation.

Originally Posted by goober

OK that explains it.

I took accounting and you didn't, case closed....

An appeal to (supposed) authority - why am I not surprised.

Study my posts, goober. I have explained it very clearly, but you don't like the truth.

Originally Posted by goober

OK that explains it.

I took accounting and you didn't.

You draw the boundary around the federal government, only money that crosses the boundary is counted.

You have receipts coming in.
You have outlays going out.
You have redemption of debt held by the public.
Those are the three flows that are relevant to the surplus/deficit calculation.

That's it, those are the only relevant numbers for surplus/deficit calculations.
All that trust fund stuff happens inside the boundary, it's not relevant to the surplus/deficit calculation.

So what you are admitting to is that excess payroll taxes are just general fund receipts, and Social Security has no assets, and is completely insolvent.

Say it, goober.

Say that Social Security is insolvent.

Originally Posted by smurf

So what you are admitting to is that excess payroll taxes are just general fund receipts, and Social Security has no assets, and is completely insolvent.

Say it, goober.

Say that Social Security is insolvent.

I'm saying that that is how you calculate a surplus.
It has nothing to do with the trust fund.
Social Security has one thing backing it, the congress.
They are going to send out those checks no matter what.
The trust fund is just a gimmick Reagan used to raise taxes on the middle class.
The money will come from payroll taxes, and the general fund, because they are not shutting down Social Security.
Like Eisenhower said, Anyone who thinks they can shut down Social Security is stupid.

Originally Posted by goober

OK, then tell me why it says there was a surplus.
It's ok, I took accounting, you can get as technical as you want.

You don't have to get technical at all. You simply stopped counting outlays when it was convenient to be able to claim a "surplus".

Which rather obviously didn't happen, hence the question.

Gross Federal Debt

1999 5.6055 Trillion
2000 5.6287 Trillion

Which number is higher?

Originally Posted by goober

I'm saying that that is how you calculate a surplus.
It has nothing to do with the trust fund.
Social Security has one thing backing it, the congress.
They are going to send out those checks no matter what.
The trust fund is just a gimmick Reagan used to raise taxes on the middle class.
The money will come from payroll taxes, and the general fund, because they are not shutting down Social Security.
Like Eisenhower said, Anyone who thinks they can shut down Social Security is stupid.

So you're saying there was no surplus, and any debt incurred doesn't matter because congress is going to send out checks whether they're worthless or not.

Originally Posted by goober

OK that explains it.

I took accounting and you didn't.

You draw the boundary around the federal government, only money that crosses the boundary is counted.

You have receipts coming in.
You have outlays going out.
You have redemption of debt held by the public.
Those are the three flows that are relevant to the surplus/deficit calculation.

That's it, those are the only relevant numbers for surplus/deficit calculations.
All that trust fund stuff happens inside the boundary, it's not relevant to the surplus/deficit calculation.

You need to take a refresher of those accounting classes you're supposed to have taken.

There's one number that matters. When the books are reconciled, what's the number?

Treasury says...no surplus. ftp://ftp.publicdebt.treas.gov/opd/opds092000.pdf

You can't beat the monthly financial statement (for year end btw) from treasury. No blog, no opinion piece, nothing will save you.

In the end, the math always wins.

Originally Posted by 9aces

You need to take a refresher of those accounting classes you're supposed to have taken.

There's one number that matters. When the books are reconciled, what's the number?

Treasury says...no surplus. ftp://ftp.publicdebt.treas.gov/opd/opds092000.pdf

You can't beat the monthly financial statement (for year end btw) from treasury. No blog, no opinion piece, nothing will save you.

In the end, the math always wins.

In your world, maybe.

Originally Posted by Forplay

That's as far as I got when you said it's to hard to put it in your own words.

Do you want my own words? Is that the only excuse you can produce for ignoring the volume of historic and authoritative evidence that I have posted?

What would you like "in my own words" that hasn't already been said by economists throughout the ages?

Steve

Originally Posted by 9aces

He doesn't understand the material he posts. Which we all knew from his 2nd post.

You didn't understand my first post. From there on it went down hill. Isn't it intellectually stimulating exchanging insults? You learn so much from it.

Steve

Originally Posted by goober

I'm saying that that is how you calculate a surplus.
It has nothing to do with the trust fund.
Social Security has one thing backing it, the congress.
They are going to send out those checks no matter what.
The trust fund is just a gimmick Reagan used to raise taxes on the middle class.
The money will come from payroll taxes, and the general fund, because they are not shutting down Social Security.
Like Eisenhower said, Anyone who thinks they can shut down Social Security is stupid.

No, goober.

Just because you don't understand, or won't admit to understanding, does not mean that the Trust Fund "has nothing to do with" it.

If there is indeed a Trust Fund, then those excess Social Security taxes went into that Trust Fund, and then flowed to the Treasury via bond purchases. If that is the case, then those funds were not receipts, and instead were the proceeds of debt issuance. Ergo, there was no surplus.

If, however, the accounting gimmick was not the surplus, and instead is the Trust Fund, then that would mean that the Social Security taxes were nothing more than general fund receipts, and there was indeed, a surplus. Of course, by extension, that means that Social Security has no assets in the Trust Fund, and is insolvent.

You seem to be of the belief that the Trust Fund is fictitious. Since Social Security began this year to pay out more than it takes in, that would mean that the program is currently insolvent, and will only become significantly more insolvent as the Baby Boomers continue to retire. That would be a fitting end to fdr's crowning achievement: the bankrupting of the country.

I fully understand that willfully ending Social Security would be political suicide, and have never argued otherwise, your red herring notwithstanding. However, though you are not financially astute enough to realize it, there is a limit as to how much debt the U.S. can amass before the rest of the world refuses to accept dollars. As the deficits continue to run over a $trillion annually, and the debt continues to grow, that day may be closer than anyone realizes.