Sunday, November 10, 2013
social security
The Bush commission's report said the key date was 2016. That is when payroll
tax revenues flowing into Social Security from workers and employers will fall
short of benefit payments for the first time. At that point, the system will
begin relying in part on interest payments from its vast holdings of government
bonds - the Social Security trust fund.
But the bonds and the interest on them are nothing more than commitments by the
government to help pay future benefits out of general tax revenues, meaning that
Social Security will begin to impinge on the rest of the budget.
http://www.nytimes.com/2001/07/20/politics/20SOCI.html
Now if those "trust funds" were invested in other than IOU's from the Government
to the Government they could earn more and be real. Individual accounts are much
more complex - alternative investments could include foreign bonds which would
help the balance of payments - Bank CD would add to domestic savings and lower
interest rates , index funds are not the only investment alternative.
http://www.wiredbrain.com/public-policy.htm suggests a Federal Assets
Management Agency - like other pension funds. If the surplus now coming into the
trust funds over the next 10 years were used to create a real reserve fund -
several trillion dollars would be in the fund. It would remove the temptation to
spend theses funds and have real earning (compound interest) added to them.
tax revenues flowing into Social Security from workers and employers will fall
short of benefit payments for the first time. At that point, the system will
begin relying in part on interest payments from its vast holdings of government
bonds - the Social Security trust fund.
But the bonds and the interest on them are nothing more than commitments by the
government to help pay future benefits out of general tax revenues, meaning that
Social Security will begin to impinge on the rest of the budget.
http://www.nytimes.com/2001/07/20/politics/20SOCI.html
Now if those "trust funds" were invested in other than IOU's from the Government
to the Government they could earn more and be real. Individual accounts are much
more complex - alternative investments could include foreign bonds which would
help the balance of payments - Bank CD would add to domestic savings and lower
interest rates , index funds are not the only investment alternative.
http://www.wiredbrain.com/public-policy.htm suggests a Federal Assets
Management Agency - like other pension funds. If the surplus now coming into the
trust funds over the next 10 years were used to create a real reserve fund -
several trillion dollars would be in the fund. It would remove the temptation to
spend theses funds and have real earning (compound interest) added to them.
