Is the stock market going to tank?

[J. Barron DeJong]

I love all this bleating about entitlement spending when most of our current deficits are the highly inefficient GW and Trump tax cuts. Drop those and you don't have much growth impact while saving an absurd amount as they were handouts to rich people who don't spend their money.

All it takes to make Social Security soluble indefinitely is to increase the upper salary limit to capture 90% of income - as was the original intent of the cap - and increase the payroll tax by about 1%.

Medicaid/Medicare is more complex, but a good start would be to use their pricing leverage much more aggressively.

And of course those tax cuts should be rolled back, probably for everyone, but especially for upper income.

[skaredshtles]

All it takes to make Social Security soluble indefinitely is to increase the upper salary limit to capture 90% of income - as was the original intent of the cap - and increase the payroll tax by about 1%.

Medicaid/Medicare is more complex, but a good start would be to use their pricing leverage much more aggressively.

And of course those tax cuts should be rolled back, probably for everyone, but especially for upper income.

tAxAtIoN Is tHeFt!!

[J. Barron DeJong]

tAxAtIoN Is tHeFt!!

Not just theft, literally the same as slavery.

[skaredshtles]

Not just theft, literally the same as slavery.

LITERALLY.

[Danno]

All it takes to make Social Security soluble indefinitely is to increase the upper salary limit to capture 90% of income - as was the original intent of the cap - and increase the payroll tax by about 1%.

Medicaid/Medicare is more complex, but a good start would be to use their pricing leverage much more aggressively.

And of course those tax cuts should be rolled back, probably for everyone, but especially for upper income.

SS was made solvent back in the 1980s; it was made to run a surplus for many years so that there would be money for the boomers. But Congress couldn't keep its grubby little hands off that surplus, so now we're fed a line that SS is not solvent.

[J. Barron DeJong]

SS was made solvent back in the 1980s; it was made to run a surplus for many years so that there would be money for the boomers. But Congress couldn't keep its grubby little hands off that surplus, so now we're fed a line that SS is not solvent.

I thought the issue wasn’t that the money was used for anything else but just that the funding/surplus was set based on the current projections in the 80’s, but those projections turned out to be a bit off (which isn’t really surprising). But instead of adjusting the funding to accommodate the discrepancy from projection, one party decided to use the shortfall as a reason to try and roll back the welfare state.

Edit: Sounds like borrowing/theft claims are just a misinterpretation of the accounting structure of Social Security bonds:

How Congress borrows from Social Security

Congress requires the US Treasury to invest Social Security income in securities guaranteed as to both principal and interest by the federal government. The Treasury issues special issue securities specifically for Social Security as it does for US Treasury bonds.
However, special issue securities vary from US treasury bonds in several ways- they are not tradable, they are only purchased with payroll taxes, and they are only made available to the Trust Funds. When the special-issue securities mature, the treasury redeems the bonds and uses the proceeds to pay Social Security benefits.
When the US Treasury creates the bonds, it sends payroll taxes collected from American workers into the General Fund. The federal government uses the funds in the general fund to pay for government expenditures- this is how presidents have borrowed from Social Security over the years.
When the Treasury needs to pay for benefits, it uses the General Fund to redeem the special-issue bonds, plus the corresponding interest. The principal amount of the special issues redeemed and the interest income are enough to pay the required cost.

https://meetbeagle.com/resources/pos...-security-fund

[Peruvian]

SS was made solvent back in the 1980s; it was made to run a surplus for many years so that there would be money for the boomers. But Congress couldn't keep its grubby little hands off that surplus, so now we're fed a line that SS is not solvent.

Bush grabbed $1.37 trillion from SS to go to war in Iraq and give a tax cut simultaneously.

[skaredshtles]

Bush grabbed $1.37 trillion from SS to go to war in Iraq and give a tax cut simultaneously.

Ya see? Now THAT'S how you do it.

[El Chupacabra]

SS was made solvent back in the 1980s; it was made to run a surplus for many years so that there would be money for the boomers. But Congress couldn't keep its grubby little hands off that surplus, so now we're fed a line that SS is not solvent.

Define solvent as you use it here.

AFAIK SS is currently forecast to be unable to meet full payouts around 2034.

[skaredshtles]

Current debt: ~$32 trillion
Current wealth held by Boomers: ~$70 trillion

Seems like the solution to the SS (as well as U.S. debt) problem is obvious.

[californiagrown]

Define solvent as you use it here.

AFAIK SS is currently forecast to be unable to meet full payouts around 2034.

So a decade. right around the time when boomers will be on year 20 of their retirement (likely planned when their life expectancy only made it to 20 yrs post retirement). Great. So millenials will have to take on that burden of privately making up the SS shortfall to their parents.

[J. Barron DeJong]

Reposting this since I think it got lost:

Sounds like borrowing/theft claims are just a misinterpretation of the accounting structure of Social Security bonds:

How Congress borrows from Social Security

Congress requires the US Treasury to invest Social Security income in securities guaranteed as to both principal and interest by the federal government. The Treasury issues special issue securities specifically for Social Security as it does for US Treasury bonds.
However, special issue securities vary from US treasury bonds in several ways- they are not tradable, they are only purchased with payroll taxes, and they are only made available to the Trust Funds. When the special-issue securities mature, the treasury redeems the bonds and uses the proceeds to pay Social Security benefits.
When the US Treasury creates the bonds, it sends payroll taxes collected from American workers into the General Fund. The federal government uses the funds in the general fund to pay for government expenditures- this is how presidents have borrowed from Social Security over the years.
When the Treasury needs to pay for benefits, it uses the General Fund to redeem the special-issue bonds, plus the corresponding interest. The principal amount of the special issues redeemed and the interest income are enough to pay the required cost.

https://meetbeagle.com/resources/pos...-security-fund

[mcphee]

Bush grabbed $1.37 trillion from SS to go to war in Iraq and give a tax cut simultaneously.

Not entirely true https://www.politifact.com/factcheck...ity-fund-war-/

Can’t remember where I read it but it was an article about debunking the insolvency of SS in a decade (I’ve heard this since HS in the 90s and people are still getting their checks). It’s true that SS will be insolvent in a decade…..if we stop funding it now. As long as people are entering the workforce, SS will remain viable.

[Danno]

Go back and look at the claimed deficits in the late 80s and tell me that the SS surplus was not used in those numbers. That's what I am talking about when I say Congress used teh surplus.

[J. Barron DeJong]

Define solvent as you use it here.

AFAIK SS is currently forecast to be unable to meet full payouts around 2034.

It was made solvent based on projections of economic and population growth back in the 80’s. The projections were off, but not drastically, so something needs to be done to correct for that.

[skaredshtles]

Not entirely true https://www.politifact.com/factcheck...ity-fund-war-/

Can’t remember where I read it but it was an article about debunking the insolvency of SS in a decade (I’ve heard this since HS in the 90s and people are still getting their checks). It’s true that SS will be insolvent in a decade…..if we stop funding it now. As long as people are entering the workforce, SS will remain viable.

I've been hearing it since I was in HS in the 80's. It's a tired old trope...

[J. Barron DeJong]

Go back and look at the claimed deficits in the late 80s and tell me that the SS surplus was not used in those numbers. That's what I am talking about when I say Congress used teh surplus.

Is there any evidence that the money from the Social Security Trust Fund was used for anything other than to buy the specific securities it’s required to?

I’m pretty sure the whole thing is just an issue of complicated accounting.

[Dantheman]

I love all this bleating about entitlement spending when most of our current deficits are the highly inefficient GW and Trump tax cuts. Drop those and you don't have much growth impact while saving an absurd amount as they were handouts to rich people who don't spend their money.

The fucking gall to call SS and Medicare "entitlements" when they are actually universal insurance programs all of us have paid into throughout our entire working lives. JFC.

[Danno]

Is there any evidence that the money from the Social Security Trust Fund was used for anything other than to buy the specific securities it’s required to?

I’m pretty sure the whole thing is just an issue of complicated accounting.

I'm not saying they literally spent the money, I am saying that they used it in the way they talked about and accounted for the deficit.

[liv2ski]

Guys, my wife is a retired teacher in CA. She receives her pension and has $200k in a deferred annuity. Her advisor asked when does she want to start taking the annuity payments. At this point she could withdraw the money and put it elsewhere or start receiving the annuity payments. She likes the idea of receiving income, but I explained to her it is my understanding that once she takes the annuity income she can no longer cash out into something else. Is there a better place to put her $$$. Heck buying a T Bond could safely get her 5%. There must be other funds out there that do a bit better.

[Bunion 2020]

So a decade. right around the time when boomers will be on year 20 of their retirement (likely planned when their life expectancy only made it to 20 yrs post retirement). Great. So millenials will have to take on that burden of privately making up the SS shortfall to their parents.

Well millennials have reaped all the rewards of the GOP tax cuts.
:fmicon

Guys, my wife is a retired teacher in CA. She receives her pension and has $200k in a deferred annuity. Her advisor asked when does she want to start taking the annuity payments. At this point she could withdraw the money and put it elsewhere or start receiving the annuity payments. She likes the idea of receiving income, but I explained to her it is my understanding that once she takes the annuity income she can no longer cash out into something else. Is there a better place to put her $$$. Heck buying a T Bond could safely get her 5%. There must be other funds out there that do a bit better.

Not a Dentist but an annuity did not make sense for me but results vary and depending on the policy it may be a good way to go, got a financial advisor? How is that for a non-answer.

[4matic]

Rieder talking yield the last 1/3. 7% in $BINC and how that’s achieved. It’s a good time for a managed credit strategy.

https://www.bloomberg.com/news/video...eled-recession

[Toadman]

Time to revise the economic model. It's the new, NEW normal, until it's the same old same old.

American consumers continued to open their wallets to increase their spending, with credit card indebtedness reaching a record $1.03 trillion in Q2, according to the New York Federal Reserve Bank. Total household debt exceeds $17 trillion, with 72.4% of that coming from mortgages and home equity lines of credit.
Interestingly, a separate report from the Federal Reserve said that revolving credit—including credit cards and other credit lines—declined 0.6% in June, the first decrease since April 2021. With that said, U.S. consumer credit outstanding rose 4.3% at the annual rate in June, boosted by 6.0% growth in nonrevolving credit—including auto and student loans. Year-over-year, revolving and nonrevolving credit increased 11.2% and 4.0%, respectively.

[4matic]

Fidelity gave me a credit card with $25k limit and zero interest through March 24 plus cash back monthly into my account. Interest on investment plus cash back will be a good sum by then.

They also gave me $200 for charging a prescribed amount and another $150 for opening a cash management account. All together will be close to $1k bonus all said and done.

Point is how much consumer credit is getting rolled these days?

[Tips^Up]

Guys, my wife is a retired teacher in CA. She receives her pension and has $200k in a deferred annuity. Her advisor asked when does she want to start taking the annuity payments. At this point she could withdraw the money and put it elsewhere or start receiving the annuity payments. She likes the idea of receiving income, but I explained to her it is my understanding that once she takes the annuity income she can no longer cash out into something else. Is there a better place to put her $$$. Heck buying a T Bond could safely get her 5%. There must be other funds out there that do a bit better.

We'll need naked pictures to make any real recommendation, but my vanguard settlement fund is in VMFXX, currently yielding 5.26%. I have some other short-term cash in VMRXX, yielding 5.27%. Not bad to beat the mortgage rate by 150 bp.