Friday, September 18, 2009

Shell Game

Here is a good example of how to contradict yourself. It is also a good example of why no one should take financial advice from cable news shows. As if you needed another one after the last 18 months. Anyway:
Can I count on Social Security to be there?

You can. Despite what you may hear about the system going broke, the funds from workers' payroll taxes will cover all retirees' payments until 2016 even if no changes are made to the current program. After that the Social Security Administration can cover full benefits until 2037 by cashing in its Treasury bonds from the Social Security trust fund. And when the bonds run out, income from payroll taxes would be enough to cover about 75% of payments for decades.

Let's translate this. I have a $1,000 "surplus" in my wallet because the rent isn't due until the end of the month. I take that $1,000 out of my wallet, put it in my left front pocket, and place a piece of paper in my wallet with "I owe me $1,000" written on it. Then I head down to the local Best Buy, take the $1,000 "surplus" out of my pocket and buy one of those cool new LED flatscreen TV's. When Debbie demands to know how I plan to pay the rent in two weeks, I proudly pull the piece of paper out of my wallet and declare that she has no need to worry; we'll pay the rent by cashing in the bonds in our trust fund!!

We all know how you can tell a politician is lying. That includes their puppets at CNN as well.

1 comment:

Anonymous said...

Rick, the combination of the US Treasury and Federal Reserve can create any number of "dollars" they choose to. So, all will get the promised number of dollars from SS. The real question is "what will those dollars buy?".