What if Social Security Income, SSI, were reduced.

I live primarily on my Social Security,  If SS was in trouble why didn't it get a "Bailout" like GM and all the banks got ?

Bill N said:

But Paul - the question is ---- Is there any actual money in the 'Trust Fund'?

Bill

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Money taken in by the Social Security Trust fund is used to buy US government bonds, and these bonds pay interest which also goes into the Trust Fund. So no, there is not a pile of cash in the Trust Fund, but there is US government bonds.

Paul 1950 said:

Money taken in by the Social Security Trust fund is used to buy US government bonds, and these bonds pay interest which also goes into the Trust Fund. So no, there is not a pile of cash in the Trust Fund, but there is US government bonds.

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Nearly all of the money coming in goes out immediately, and it is predicted that there will be a negative flow soon.  The poll is a good one, because we may be adjusted downward in the future.  The income leveling aspect may rear its ugly head even more at that time.

at the point where the GDP is no longer capable of paying the interest on these bonds  (or national debt),

aren't we officially "Bankrupt" ?

Paul 1950 said:

Money taken in by the Social Security Trust fund is used to buy US government bonds, and these bonds pay interest which also goes into the Trust Fund. So no, there is not a pile of cash in the Trust Fund, but there is US government bonds.

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But isn't it true that US govenment bonds are government speak for IOUs.  But with the national debt at 20 trillion I really have to question the true value of those 'bonds' or IOUs or whatever.  JMHO.


Bill

naw, the will just print more greenbacks.

Ed

Well some of the information is partially correct.
THe "Fund" is an investment fund administrated by the US Treasure. Doing some checking.

THe SSA says it is fully invested in US-GOvernment backed Securities.

But still the record shows that funds have been "Borrowed" by Congress roughly half the trust in fact. SO if the funds are already US bonds thus invested in the General Fund. How can Congress "Borrow it"? 

Something smells of dead pices

I believe that the government's SS obligations are not officially counted as part of the National Debt.

not acknowledging state retirement obligations is how some state governors come up with a balanced budgets

lynnmor said:

Nearly all of the money coming in goes out immediately, and it is predicted that there will be a negative flow soon.  The poll is a good one, because we may be adjusted downward in the future.  The income leveling aspect may rear its ugly head even more at that time.

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Balance of the SS Trust Fund at the end of 2017  2,891,789(in millions of dollars)

https://www.ssa.gov/oact/STATS/table4a3.html

Paul 1950 said:

So no, there is not a pile of cash in the Trust Fund, but there is US government bonds.

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because of interest on the massive national debt,  if (or when) the Fed ever raises the interest rate because of the growing economy  it's possible US Bonds could become down graded (devalued) and or even rated as 'Junk bonds',  Just like some state bonds did ?

the only real answer is a huge increase in personal income tax revenue,  and reduce the national debt.

sightseers said:

because of interest on the massive national debt,  if (or when) the Fed ever raises the interest rate because of the growing economy  it's possible US Bonds could become down graded (devalued) and or even rated as 'Junk bonds',  Just like some state bonds did ?

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If memory serves, the US has already been downgraded. 

the only real answer is a huge increase in personal income tax revenue,  and reduce the national debt.

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Increased taxes are inevitable.  Only question in my mind is how much and who gets to pay them.  Unless of course we reduce spending.  Then the question is which services get cut back.  Heath and welfare, military, infrastructure. 

Regarding the National Debt, there are two ways to reduce it.  First, reduce spending while maintaining the current level of tax revenue.  Second, continue spending at current level and increase taxes.  There's no free ride.  There is going to be pain.  The only question is who is going to feel the pain the most.  If we continue spending without increasing taxes, the National Debt is going to grow.  If we can grow the economy, that will help.  But it will not grow substantially unless the shrinking middle class comes back to life and starts earning a living wage.  Until then, the rich will get richer, the poor will get poorer and RVing may become nothing more than a fond memory.   

garyb1st said:

the poor will get poorer and RVing may become nothing more than a fond memory. 

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And if the tax burden is put on corporations they just move headquarters out of the U.S.    Us regular Americans still have to pay the bill to live here.

All true except for the last part   

IMO,  if it all goes south (and it may),  RV's may become the standard living quarters of lower income American familys.

sadly, In the future RV living (and RVing) may be looked at as basically just another form of low income existence,  and I guess I own that.

sightseers said:

...sadly, In the future RV living (and RVing) may be looked at as basically just another form of low income existence,  and I guess I own that.

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It is becoming more and more like that everyday. 

As bad as it may, or may not get I do not foreseen  America becoming a nation of Bedouins or Gypsies (Roma).  However, I do think that the Trade War just begun will negatively impact the middle and lower class of both of our countries.  So, let's hope it ends quickly, or no one will be able to afford RVing.

Ed

Paul 1950 said:

Balance of the SS Trust Fund at the end of 2017  2,891,789(in millions of dollars)

https://www.ssa.gov/oact/STATS/table4a3.html

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Note that on your chart that in 2017, 996581 came in and 952478 went out.  Not also that the increase has been going down for the past 9 years.  That is why I said "Nearly all of the money coming in goes out immediately, and it is predicted that there will be a negative flow soon."

Bill N said:

But isn't it true that US govenment bonds are government speak for IOUs.  But with the national debt at 20 trillion I really have to question the true value of those 'bonds' or IOUs or whatever.  JMHO.


Bill

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You want to know the really scary part? That is what is known as the funded debt; the unfunded debt estimates range from $70-100 trillion?! Funny how nobody in the media nor the government ever wants to talk about that (and by funny, I mean not funny at all.)


This is a debt load that has been racked up by both political parties, and at some point, the chickens will come home to roost. The question then will be whether anyone will actually care, or just be willing to throw anything and anyone under the bus as long as they 'keep getting mine'...?

The issue with Social Security is directly related to the question of government debt in general. The problem is that the social security trust fund was loaned to ourselves. It was a little like taking out a loan on your retirement account.  Now the payments are coming due and the money to repay those loans from the social security trust fund has to come from somewhere.  Either other expenses need to be cut, revenue (aka taxes) needs to be increased or the money needs to be borrowed elsewhere.

As with all US government bonds, the issue is not really whether we can afford to pay.  The real issues is whether we will choose to pay. The economy generates more than enough revenue to service government debt. But that economic value is increasingly concentrated in the hands of people who are quite detached from the lives of everyday Americans.  Their willingness to pay is declining rapidly and their political influence is growing dramatically. 

Twenty years ago I would have said the possibility that congress would cut social security off in order to save money was political suicide. I am not sure that is true any longer. All you need to do is build a media firestorm dividing people into two camps, those that get social security and those that have to pay for it. For instance, "why should those selfish old baby boomers that created the problem be able to live at the expense of millennials who are struggling to just get by?" The notion that social security won't be there for them is widely believed by many young people. The idea has taken hold despite there being no evidence for it even being remotely possible under current law. That is not an accident. It is part of a determined effort to undermine political support for Social Security.

For many people, the RV lifestyle is already a low cost retirement alternative. For now, it is mostly by choice. But our retirement system is broken and  there may come a time when it is just another way of describing homelessness. I have never understood why people hear "you can't retire on social security alone" and don't ask themselves "why not?" Why do we have a government mandated retirement system that doesn't provide enough for people to retire?

sightseers said:

I believe that the government's SS obligations are not officially counted as part of the National Debt.

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That might be because the SS Trust is not in debt. In fact Congress is in debt to the SS Trust.

If you are fed up with our Congress, 

Don't vote for an incumbent.

Even if everyone did that, the divide in the country will still remain the same.