Senator Paul rejects Republican doctrine, says cuts in military spending are necessary

[I AM NOT THAT GUY 5,715]

Let's say you have some money in your bank account. Instead of spending the money (because

that would be irresponsible, right), you decide to "borrow" it from yourself and promise to

pay it back with interest. You use the money to finance your lavish lifestyle and feel

good about it because you haven't really spent it - after all, you *will* pay it back with

interest, so you're actually "making money" on your investment. You keep doing it for about

20 years and now the money is gone. What's worse, you just got a pay cut and don't make

as much as you did 10 years ago. Still, when asked, you brag about a "surplus" in your bank

account. And of course you still intend to pay it back.

See the problem with that line of thinking?

If you do that with other people's money, that would be embezzlement.

[Mr. Big Dog 10,747]

Let's say you have some money in your bank account. Instead of spending the money (because that would be irresponsible, right), you decide to "borrow" it from yourself and promise to pay it back with interest. You use the money to finance your lavish lifestyle and feel good about it because you haven't really spent it - after all, you *will* pay it back with interest, so you're atually "making money" on your investment. You keep doing it for about 20 years and now the money is gone. What's worse, you just got a pay cut and don't make as much as you did 10 years ago. Still, when asked, you brag about a "surplus" in your bank account. And of course you still intend to pay it back.

See the problem with that line of thinking?

Sure, we're really on the same page here. It's the situation where I won't go to an external lender to borrow funds to pay for things that I really cannot afford on my current income. But I will tap into my savings thinking that I'll make more money down the road and will be able to put it back. Problem comes in where I continue to live beyond my means or where I take a lower paying job (cut taxes) despite knowing good and well that I need the higher pay because I do not intent to make any changes to my lifestyle to adjust for the reduced income.

The question then becomes, are we really "investing" the funds we borrow from the SSF (in which case there should be a return on that investment down the road with which the loans can be repaid) and are we currently at our "earning" potential - i.e. are we at an optimal point in terms of taxation? Both sides of the equation are in need to be looked at and that is what's not happening. The election results last Tuesday won't change that. The can will be kicked further down the road and that is what's scary.

[scandal 951]

I don't think that's necessarily true. After all, the Social Security trust fund has a

$2.5 trillion surplus. Where is it, you ask? Gone, poof. Still, the program can

operate in the black for some time, if we can put a real lock on the lock box (i.e. no

"investments" in US government debt.)

The surplus isn't enough. Even if you assume that the entire Social Security surplus is available to fund the program, that still won't be enough.

SS projections, which include the built-up surplus and all future worker contributions expect that we'll have exhausted all money in the trust fund by ~ 2040-2050. Meaning that something will have to give. Either benefits will be reduced/eliminated, or taxes will be raised, or eligibility age will be increased to > 67, or some combination of all of these.

According to most projections, the Social Security trust fund will begin drawing on its Treasury Notes toward the end of the next decade (around 2018 or 2019), at which time the repayment of these notes will have to be financed from the general fund. At some time thereafter, variously estimated as 2041 (by the Social Security Administration[84]) or 2052 (by the Congressional Budget Office[85]), the Social Security Trust Fund will have exhausted the claim on general revenues that had been built up during the years of surplus - at current levels of taxation. At that point, current Social Security tax receipts would be sufficient to fund 74 or 78% of the promised benefits, according to the two respective projections. The Social Security Trustees suggest that either the payroll tax could increase to 16.41 percent in 2041 and steadily increased to 17.60 percent in 2081 or a cut in benefits by 25 percent in 2041 and steadily increased to an overall cut of 30 percent in 2081.

In 2009 the Office of the Chief Actuary of the Social Security Administration calculated an unfunded obligation of $15.1 trillion for the Social Security program. The unfunded obligation is the difference between the present value of the cost of Social Security and the present value of the assets in the Trust Fund and the future scheduled tax income of the program. In the Actuarial Note explaining the calculation, the Office of the Chief Actuary wrote that "The term obligation is used in lieu of the term liability, because liability generally indicates a contractual obligation (as in the case of private pensions and insurance) that cannot be altered by the plan sponsor without the agreement of the plan participants."

[^_^ 5,021]

Either benefits will be reduced/eliminated, or taxes will be raised, or eligibility age will be increased to > 67, or some combination of all of these.

This is probably covered under reduction of benefits, but mean-testing of benefits is something I hear is very much "on the table".

[I AM NOT THAT GUY 5,715]

This is probably covered under reduction of benefits, but mean-testing of benefits is something I hear is very much "on the table".

There is a silly argument for not means testing, that it would make Social Security more of a measured benefit, rather than insurance, but, at this point, who cares. Seniors are all already hording most of the wealth in this country, so whatever they are stealing from their children and grandchildren, should at least go to those seniors that actually need the money.

[^_^ 5,021]

... should at least go to those seniors that actually need the money.

I will admit it pisses me off when I see those busses leave the senior citizen centers here for Atlantic City once a month. Seniors tell me that's what they do with their social security checks. I'd also rather see more of the money go to those who need it.