No, the SS T-bill transactions are not legit. They are highway robbery. They are what sent Bernie Madoff to prison (though his scam was minisculse by comparison).

When you say "the federal government is obligated to repay SS," that only means TAXPAYERS are obligated to repay SS, after already paying those funds in payroll taxes the first time (thus the highway robbery). The taxpayers ARE the federal government in the financial sense.

I don't equate all taxation with theft (though a good bit of it is theft), but the government spending the SS excess revenues and then writing IOU's for future taxpayers to pay….there is no other word for that than theft (or scam, or ripoff, etc).

If you can't understand this after the numerous attempts I've made to explain it, so be it. I give up. I can only keep repeating the same thing over and over, and I'm tired of doing that. Stay stuck on stupid (no disrespect intended, but that's exactly what you're doing).

Yes, it's all bookkeeping. No piles of money or bullion or anything else changing hands. But as someone who has worked in a bank surely you have to accept those transactions as legit. I would imagine whatever your job at the bank, you had more transactions on paper than with legal tender. All it means is that the federal government is obligated to repay SS. I would think that since the money will tend to stay in this country and tend to stimulate the economy, repayment to SS would be of less concern than repayment to foreign debt holders.

I've never really considered this a partisan issue. It seems to be one of those things that politicians don't want to address. However, my friend, if you can equate taxation with theft, I think you already know the way to partisan hell.

"the government continues to pay enough on its debt to not default"

Whether the government defaults or not is dependent ON FOREIGN COUNTRIES. The ONLY reason we haven't defaulted yet is because those countries KEEP BUYING OUR DEBT, because it would hurt them as well as us if they didn't. That doesn't make is wise.

"The SS surplus was not stolen. It was placed in T-bills, the world's safest investment. "

I'm godd*mned speechless, frank. Especially when combined with your previous statement. T-bills are only safe because THE GOVERNMENT CAN STEAL THE MONEY FROM IT'S CITIZENS, no matter how dishonest the government's scam is. WTF.

Are you really that far gone into partisan hell ????

Mr. King,
As you know, we are in agreement about the unsustainability of deficit spending. But the government continues to pay enough on its debt to not default. The SS surplus was not stolen. It was placed in T-bills, the world's safest investment. The problem is not with SS, it is with the federal government. Unless the government defaults, or somehow classifies the T-bills differently from the T-bills the rest of the world holds, SS will remain solvent long past when the demogaphic anomaly known as the baby boom is history and relative balance between SS payees and recipients is once again the norm.

"Those T-bills subsidized the federal government allowing the federal government to lessen its need for revenue from income tax"

This is incorrect. The T-bills didn't subsidize the federal government. The stolen SS surplus funds (annual SS revenues above retiree payouts) subsidized the federal government. The T-bills were the IOU's written back to SS for the stolen money. Those T-bills are not real assets. They are claims against future taxpayers. Do you see the scam yet ???????????????????

"When the federal government stops (or is unable) to repay its debt, we'll have much bigger problems than the collapse of SS."

Those problems are already here. Since when does the federal government pay it's debts ? It's almost $12 trillion in debt, and it just keeps borrowing and borrowing, like the debt energizer bunny. And, of course, by saying "federal government pay it's debts," that just means future taxpayers will have to pay those debts. The path we're on ends in the complete destruction of the U.S. economy (and liberals keep clamoring for more and more spending. Go figure).

Reagan AND EVERY OTHER PRESIDENT BEFORE AND AFTER him has taken the SS surplus funds, put them in the general fund, and spent them.

"If one follows King's and larry's "logic", none of our creditors will ever be paid back……simply because those T-bill-IOU's are worthless…..except when conservatives say they're not."

I never said our creditors will never be paid back. Way to build that straw man. What I did say was that the SS T-bills are nothing but a claim against future taxpayers. The SS T-bills are not real assets, and that comes from the OMB as well as myself.

You literally can no longer comprehend plain english. I think you have some kind of mental problem brought on by excessive partisanship, and I'm not kidding.

Mr. King,
I didn't say that SS money comes from income tax. Half comes from employer, half comes from employee as a percentage of income. Income tax is an entirely different thing, going only to the federal government. Although the federal government administers SS, it is fiscally separate and distinct from the federal government. As a separate entity, it used it's surpluses to purchase T-bills. Those T-bills subsidized the federal government allowing the federal government to lessen its need for revenue from income tax, while Reagan cut the top income tax rate by 60%. All I am saying, is that SS is still solvent, and will stay so, as long as the federal government honors its financial committments. When the federal government stops (or is unable) to repay its debt, we'll have much bigger problems than the collapse of SS.

Shorthand for Dummies…..Reagan ran up a deficit. With me so far? I won't go too fast.

Reagan ran up a deficit, which he partially cloaked by using SS surpluses. Still with me, or is that just too difficult to follow?

Every president followed Reagan's lead…..cloaked deficits by spending all the cash from the SS surpluses, replacing them with T-bills…..known only to conservatives as IOU's…..unless China is holding them, then they're not IOU's……I don't know what the hell they are, but they ain't IOU's if China or Japan is holding them. It's only if SS recipients are counting on them, then they're only worthless IOU's.

If one follows King's and larry's "logic", none of our creditors will ever be paid back……simply because those T-bill-IOU's are worthless…..except when conservatives say they're not.

Hope that helps to explain why it is that a calm, deliberate and systematic overview of facts or empirical date, like frank always seeks to do,……means absolutely nothing to conservatives. Facts DO NOT matter because, by definition, conservatives are right.

Frank says, "The T-bills purchased with SS surpluses replaced funds lost to the Federal government through income tax cuts"

Wrong again. SS funds come from a payroll tax, not from income taxes. The SS payroll tax has never been cut. It has only been raised time and again to cover up the SS scam.

For about the 30th time – The government spends ALL excess SS funds (payroll taxes) not paid to retirees and creates T-bills with it. Until you understand this, there is no reason to have any further discussion. I will only be repeating myself ad nauseum.

But I agree with you about the stubborn part.

I think the nub of our disagreement is twofold. First, I think you see SS and the Federal government as a single entity. To me, since they have separate revenue sources, and separate expenditures, they are separate entities, at least fiscally.

You also seem to think that since there is no pile of money to be physically transferred, there is no transaction. It seems to me that if that were true, then almost all of our financial transactions would be void. For example, I never saw nor had access to the money withheld from my paychecks for SS. Does that mean that no money went to SS? Does that mean my wage is less than my paycheck say it is?

The T-bills purchased with SS surpluses replaced funds lost to the Federal government through income tax cuts. They are as valid as the ones held by foreign governments, private investors, or anyone else, and should be repaid from the same source, the general revenues of the Federal government. In this way, the burden of repayment would roughly parallel the benefits of the income tax cuts. Those who benefitted more from the tax cuts would also repay more due to the graduated nature of income tax. Those who received less benefit would also repay less.

I won't be surprised if Congress tries to engineer another "reform" of SS in order to shift the burden of repayment back on those who have for the last 27 years been providing this hidden subsidy. I hope you will join in opposing such a move.

Here's where you started going wrong – " After 1982, a huge surplus was collected for paying future benefits"

Nope. No surplus ever existed. SS receipts either paid retirees or went into the general fund and were spent. You can't create a surplus and spend the money at the same time. That's impossible. You are still under the illusion that those T-bills are real assets. They aren't. They are just claims on future taxpayers.

Your comparison of SS to banks is completely invalid. When you give your money to the bank, they invest your money and earn a return. They don't just give it away. With SS there is no investment. The money is just spent. The "interest" earned on the T-bills is an illusion. The payback to SS comes from the taxpayers, who already payed for the original SS funds the first time. The fact that the second time the taxpayers have to pay for the same SS funds, only this time with interest (by redeeming the T-bills), only makes the scam even more egregious.

C'mon, frank. You seem like a smart enough guy. How can you not understand this ? It's elementary.

It was NOT, as you claim, a pay-as-you-go-system until 1982. It's still a pay-as-you-go system. SS still takes in more than it pays out. That's pay-as-you-go, but that won't last much longer without more tax increases and/or benefit reductions (to cover up the scam, as has been done about 18 times in the past). Soon, SS will go into the red, and that's when the gigantic scam will be uncovered for all to see, i.e., THERE IS NO SS TRUST FUND. There isn't one because the government spent all the excess SS funds that were not paid out to retirees. They wrote IOU's back to the Fund in the form of T-bonds, but who cares ? Those are not real assets. Because I know you won't believe me, here's the US Office of Management and Budget (OMB) to describe it:

"These (Trust Fund) balances are available to finance future benefit payments and other Trust Fund expenditures — but only in a bookkeeping sense… They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. The existence of large Trust Fund balances, therefore, does not, by itself, have any impact on the Government's ability to pay benefits." (from FY 2000 Budget, Analytical Perspectives, p. 337).

That's how the politicians have robbed us blind with SS for decades.

Are we finally clear on this ? I certainly hope so.

The immigration E-Verify program to have employers check the status of immigrants was brought about almost entirely by Republicans (with an assist from Clinton in 1997). It's run out of the Dept. of Homeland Security, created by Bush. The pro-immigration groups who oppose it all come from the left.

"Before the 1982 reform, SS was a pay as you go system"

ARRRRRRRGGGGHHHH ! Nothing but lies, but I'm tired of explaining it to you.

Ok, on to SS again. Before the 1982 reform, SS was a pay as you go system (what you describe as a ponzi scheme), and the government tweaked witholding rates and the cap to ensure that revenues matched receipts as closely as possible. Whatever surpluses that were generated were relatively small. The 1982 reform changed SS into a system that created huge surpluses by doubling the witholding rate and raising the cap drastically. In fact, it still generates surpluses. This substantial tax increase occured at roughly the same time as the Reagan income tax cut that reduced the top rate by 60%. The SS witholding increase masked the true size of Reagan's deficit and more than negated any middle class benefit of Reagan's "tax reform". Believe it or not, none of this came from a liberal website. I lived through it and recognized it for what it was 27 years ago.

Yes, Frank. that spending of SS surplus began with the Democrats in control of Congress. I remember those days quite vividly since I was a 22 year old, left leaning Democrat and just couldn't understand them doing that because they didn't have the guts to raise taxes to buy our friends with. Of course, we the people are more to blame for the spending of nearly $3 trillion of Social Security surplus funds because we kept sending the same people back to DC to continue perpetrating that crime.

I know what all mean talking about a Ponzi scheme but wonder how much money would be in the Social Security fund today getting ready for the Baby Boomers to retire if it had been invested all those years. Why I think that even Obama would be amazed at the number that would be staring him in the face.

All the presidents since Eisenhower, when this policy was established, are guilty of taking part because none of them tried to stop it. Every time I see someone crying about the fact that there won't be any money left when they reach the age of retirement I wonder how many of them know how badly the Congress screwed us and abused FDR's well planned Ponzi scheme that never lived to fruition because of the greed of Congressmen and the stupidity of the voters in this nation. We crapped on ourselves and you people who won't get any money SHOULD be mad as hell and trying to rectify the wrong with some action instead of blaming the whole thing on the "scheme".

frank says, "The war on poverty ended with LBJ's presidency."

Really ? When were LBJ's policies revoked ? Medicare, Medicaid, food stamps, Head Start…those are all gone now ? I must have missed the press release.

frank says, "The Immigration bill failed because conservatives blocked enforcement of employer sanctions"

Okay, now you're just trying to make me laugh, right ???? Yes, as everyone knows, it's conservatives who are FOR illegal immigration, lol. Where do you get this stuff ? From The Onion ?

Perhaps you notice a common thread in all of this. It is the conservative faction (Democrats and Republicans) which has stymied, abused, and tried to render these programs ineffective. They have succeeded. When they can't kill a program, they water it down and then say, see how incompetent g0vernment is.

Our government should be aware of the full extent of what idealism is going to get private citizen and the government into. I see a giant, hungry black hole now when I think of universal health care. Believe it or not, I was open to the idea before I began getting informed on the subject.