"Gunner Asch" wrote in message
...
On Tue, 12 Jul 2011 07:33:55 -0700, "." wrote:

On 7/12/2011 5:54 AM, Greg Cookson wrote:
Who are the thieves robbing Social Security blind?

It's easy to check out, if you don't believe it. Be sure and
show it to your family and friends.. They need a little history
lesson on what's what and it doesn't matter whether you are
Democrat or Republican. Facts are Facts.

Social Security Cards up until the 1980s expressly stated the
number and card were not to be used for identification purposes.

Since nearly everyone in the United States now has a number, it
became convenient to use it anyway and the message, NOT FOR

IDENTIFICATION, was removed.

An old Social Security card with the "NOT FOR IDENTIFICATION"
message.

Franklin Roosevelt, a Democrat, introduced the Social Security
(FICA) Program. He promised:

1.) That participation in the Program would be Completely
voluntary,

No longer Voluntary

2.) That the participants would only have to pay 1% of the first
$1,400 of their annual Incomes into the Program,

Now 7.65% on the first $90,000

3.) That the money the participants elected to put into the
Program would be deductible from their income for tax purposes
each year,

No longer tax deductible

4.) That the money the participants put into the independent
'Trust Fund' rather than into the general operating fund, and
therefore, would only be used to fund the Social Security
Retirement Program, and no other Government program, and, Under
Johnson the money was moved to The General Fund and Spent

5.) That the annuity payments to the retirees would never be
taxed as income.

Under Clinton& Gore Up to 85% of your Social Security can be
Taxed

Since many of us have paid into FICA for years and are now
receiving a Social Security check every month --


and then finding that we are getting taxed on 85% of the money
we paid to the Federal government to 'put away' -- you may be
interested in the following:

------------ --------- --------- --------- --------- --------- --
--

Q: Which Political Party took Social Security from the
independent 'Trust Fund' and put it into the general fund so
that Congress could spend it?

A: It was Lyndon Johnson and the democratically controlled House
and Senate.

------------ --------- --------- --------- --------- --------- --
------- --

Q: Which Political Party eliminated the income tax deduction for
Social Security (FICA) withholding?

A: The Democratic Party.

------------ --------- --------- --------- --------- --------- --
------- -----

Q: Which Political Party started taxing Social Security
annuities?

A: The Democratic Party, with Al Gore casting the 'tie-breaking'
deciding vote as President of the Senate, while he was Vice
President of the US

------------ --------- --------- --------- --------- --------- --
------- -

Q: Which Political Party decided to start giving annuity
payments to immigrants?

AND MY FAVORITE:

A: That's right!

Jimmy Carter and the Democratic Party. Immigrants moved into
this country, and at age 65, began to receive Social Security
payments! The Democratic Party gave these payments to them, even
though they never paid a dime into it!

------------ -- ------------ --------- ----- ------------ -------
-- ---------

Then, after violating the original contract (FICA), the
Democrats turn around and tell you that the Republicans want to
take your Social Security away!

And the worst part about it is uninformed citizens believe it!



I think it's great that the republicans want to take "our" social
security away. Anyone who couldn't save up enough during their working
life to live a comfortable retirement and pay the three million dollars
their end of life care will cost deserves to be homeless, in the street
and eating dog food. It will be great for this country when the
republicans succeed in eliminating this evil program so those of us with
vast wealth can enjoy it without those pesky old folks using up our
resources and making us pay higher taxes.

And Ill bet you love having 20 million illegal aliens lined up for their
piece of the pie to!!

Your header information was forwarded to those keeping the List.

You'd better consult with your team of lawyers, Gunner. You just admitted to
conspiracy to commit...whatever you're threatening....and accessory.

Fortunately for you, you're full of ****. Otherwise, you would have just
crossed over the line.

--
Ed Huntress

On Tue, 12 Jul 2011 13:34:31 -0400, "Ed Huntress"
wrote:


"Gunner Asch" wrote in message



Your header information was forwarded to those keeping the List.

You'd better consult with your team of lawyers, Gunner. You just admitted to
conspiracy to commit...whatever you're threatening....and accessory.

Fortunately for you, you're full of ****. Otherwise, you would have just
crossed over the line.

Is it a crime to conspire with a delusion?

--
Ned Simmons

"Ned Simmons" wrote in message
...
On Tue, 12 Jul 2011 13:34:31 -0400, "Ed Huntress"
wrote:


"Gunner Asch" wrote in message



Your header information was forwarded to those keeping the List.

You'd better consult with your team of lawyers, Gunner. You just admitted
to
conspiracy to commit...whatever you're threatening....and accessory.

Fortunately for you, you're full of ****. Otherwise, you would have just
crossed over the line.

Is it a crime to conspire with a delusion?

Damn good question, Ned. Maybe it depends on how hungry your lawyer is...or
how delusional you are.

--
Ed Huntress



--
Ned Simmons

"Ed Huntress" wrote in message
...


I think it's great that the republicans want to take "our" social
security away. Anyone who couldn't save up enough during their working
life to live a comfortable retirement and pay the three million dollars
their end of life care will cost deserves to be homeless, in the street
and eating dog food. It will be great for this country when the
republicans succeed in eliminating this evil program so those of us with
vast wealth can enjoy it without those pesky old folks using up our
resources and making us pay higher taxes.


Don't forget that at least from what I gather, it was Reagon that's allowed
the government to "borrow and spend" the surplus social security reciepts
over the last 30 years or so....

Of course, it was *supposed to be paid back, with interest*...from tax
revenues..

--not surprisingly, now not only do the republicans want to weasel out, they
also want to cut benefits...

The bottom line is that where there could have accumulated a huge surplus,
instead there's now a huge liability.


And Ill bet you love having 20 million illegal aliens lined up for their
piece of the pie to!!

Your header information was forwarded to those keeping the List.

You'd better consult with your team of lawyers, Gunner. You just admitted
to conspiracy to commit...whatever you're threatening....and accessory.

Fortunately for you, you're full of ****. Otherwise, you would have just
crossed over the line.

"PrecisionmachinisT" wrote in message
news:YYmdneDWGLucIIHTnZ2dnUVZ_vCdnZ2d@scnresearch. com...

"Ed Huntress" wrote in message
...


I think it's great that the republicans want to take "our" social
security away. Anyone who couldn't save up enough during their working
life to live a comfortable retirement and pay the three million dollars
their end of life care will cost deserves to be homeless, in the street
and eating dog food. It will be great for this country when the
republicans succeed in eliminating this evil program so those of us with
vast wealth can enjoy it without those pesky old folks using up our
resources and making us pay higher taxes.


Uh, I don't know who wrote that, but it wasn't me. It's pretty good, though.
d8-)


Don't forget that at least from what I gather, it was Reagon that's
allowed the government to "borrow and spend" the surplus social security
reciepts over the last 30 years or so....

I'm not sure. I'd have to go back and look. There was a projected SS
shortfall in the '80s, but I don't know if the SS fund actually went
negative at that time. I think that Greenspan pushed a plan that saved it
from happening.


Of course, it was *supposed to be paid back, with interest*...from tax
revenues..

--not surprisingly, now not only do the republicans want to weasel out,
they also want to cut benefits...

The bottom line is that where there could have accumulated a huge surplus,
instead there's now a huge liability.

This is a tricky one. There isn't now, and there never was, a means to
*accumulate* a surplus. The idea was that Congress would be aware of the
accounting situation and budget accordingly, but that SS actually would
always be paid out of current revenues, in a pay-as-you-go plan.

We have no way to create a significant savings account at the federal level.
It is possible to create one, but it probably would cause more trouble than
it would be worth. You can't take money out of the economy without
consequences. Dollar bills do not constitute a savings account if you're the
federal government. Even if you stick it under the mattress, all you're
doing is subtracting from and then adding to the money supply. You aren't
actually saving something with asset value.



And Ill bet you love having 20 million illegal aliens lined up for their
piece of the pie to!!

Your header information was forwarded to those keeping the List.

You'd better consult with your team of lawyers, Gunner. You just admitted
to conspiracy to commit...whatever you're threatening....and accessory.

Fortunately for you, you're full of ****. Otherwise, you would have just
crossed over the line.

Those last two paragraphs are the part that I wrote, FWIW.

--
Ed Huntress

Ed Huntress wrote:
Dollar bills do not constitute a savings account if you're the
federal government. Even if you stick it under the mattress, all you're
doing is subtracting from and then adding to the money supply. You aren't
actually saving something with asset value.

This must be incorrect because as soon as you transfer the dollar bills
they have undeniable asset value!

Bill

"Bill" wrote in message
...
Ed Huntress wrote:
Dollar bills do not constitute a savings account if you're the
federal government. Even if you stick it under the mattress, all you're
doing is subtracting from and then adding to the money supply. You aren't
actually saving something with asset value.

This must be incorrect because as soon as you transfer the dollar bills
they have undeniable asset value!

Bill

Transfer whose dollar bills, from where to where, Bill?

--
Ed Huntress

Ed Huntress wrote:
wrote in message
...
Ed Huntress wrote:
Dollar bills do not constitute a savings account if you're the
federal government. Even if you stick it under the mattress, all you're
doing is subtracting from and then adding to the money supply. You aren't
actually saving something with asset value.

This must be incorrect because as soon as you transfer the dollar bills
they have undeniable asset value!

Bill

Transfer whose dollar bills, from where to where, Bill?


As soon as you transfer the dollar bills from the "government savings
account" to another spending entity (you, me, GM, or China).

The gist of my comment is that (government) fiscal restraint is a good
thing. Excess inflation is not a good thing--at least, not for savers.

"Bill" wrote in message
...
Ed Huntress wrote:
wrote in message
...
Ed Huntress wrote:
Dollar bills do not constitute a savings account if you're the
federal government. Even if you stick it under the mattress, all you're
doing is subtracting from and then adding to the money supply. You
aren't
actually saving something with asset value.

This must be incorrect because as soon as you transfer the dollar bills
they have undeniable asset value!

Bill

Transfer whose dollar bills, from where to where, Bill?


As soon as you transfer the dollar bills from the "government savings
account" to another spending entity (you, me, GM, or China).

There's more to it than that. If you really, really want to get into it,
I'll try to hold up my end. But it's a mind-bender.

Hint: Taking dollars, or their equivalent, out of circulation has negative
effects. You can ameliorate them. But recovering from your "amelioration"
when you give the dollars back to SS recipients causes a double-barreled
problem.

The net effect is the same as putting the excess into the general fund, only
with different timing. And the different timing raises real hell.

As I said, only if you really, really want to get into it. d8-)


The gist of my comment is that (government) fiscal restraint is a good
thing. Excess inflation is not a good thing--at least, not for savers.

Good points, and I agree, in general.

--
Ed Huntress

Ed Huntress wrote:
wrote in message
...
Ed Huntress wrote:
wrote in message
...
Ed Huntress wrote:
Dollar bills do not constitute a savings account if you're the
federal government. Even if you stick it under the mattress, all you're
doing is subtracting from and then adding to the money supply. You
aren't
actually saving something with asset value.

This must be incorrect because as soon as you transfer the dollar bills
they have undeniable asset value!

Bill

Transfer whose dollar bills, from where to where, Bill?


As soon as you transfer the dollar bills from the "government savings
account" to another spending entity (you, me, GM, or China).

There's more to it than that. If you really, really want to get into it,
I'll try to hold up my end. But it's a mind-bender.

Hint: Taking dollars, or their equivalent, out of circulation has negative
effects. You can ameliorate them. But recovering from your "amelioration"
when you give the dollars back to SS recipients causes a double-barreled
problem.

The net effect is the same as putting the excess into the general fund, only
with different timing. And the different timing raises real hell.

As I said, only if you really, really want to get into it. d8-)

Ed, All I was saying (earlier) was that I disagreed with your comment
that "if the government took dollars out of circulation that they
wouldn't be saving something of value". The money supply is significant.
You seem to have backed away from that and instead noted that it could
cause "timing problems" (and I understand your concerns). I would
merely suggest that such problems would be far less worrisome to
everyone concerned than the sort of debt issues the government faces now.

There is little point in seeing how well we both understand basic
economics. You've translated the problem to a (subjective) fiscal one
and I am more interested in economics than politics. I'm still here if
you want to keep the ball rolling.

Bill

"Bill" wrote in message
...
Ed Huntress wrote:
wrote in message
...
Ed Huntress wrote:
wrote in message
...
Ed Huntress wrote:
Dollar bills do not constitute a savings account if you're the
federal government. Even if you stick it under the mattress, all
you're
doing is subtracting from and then adding to the money supply. You
aren't
actually saving something with asset value.

This must be incorrect because as soon as you transfer the dollar
bills
they have undeniable asset value!

Bill

Transfer whose dollar bills, from where to where, Bill?


As soon as you transfer the dollar bills from the "government savings
account" to another spending entity (you, me, GM, or China).

There's more to it than that. If you really, really want to get into it,
I'll try to hold up my end. But it's a mind-bender.

Hint: Taking dollars, or their equivalent, out of circulation has
negative
effects. You can ameliorate them. But recovering from your "amelioration"
when you give the dollars back to SS recipients causes a double-barreled
problem.

The net effect is the same as putting the excess into the general fund,
only
with different timing. And the different timing raises real hell.

As I said, only if you really, really want to get into it. d8-)

Ed, All I was saying (earlier) was that I disagreed with your comment that
"if the government took dollars out of circulation that they wouldn't be
saving something of value". The money supply is significant. You seem to
have backed away from that and instead noted that it could cause "timing
problems" (and I understand your concerns). I would merely suggest that
such problems would be far less worrisome to everyone concerned than the
sort of debt issues the government faces now.

There is little point in seeing how well we both understand basic
economics. You've translated the problem to a (subjective) fiscal one and
I am more interested in economics than politics. I'm still here if you
want to keep the ball rolling.

Bill

Ok, maybe it's worth getting into it. It provides some good insights into
the nature of money, the Treasury, and, if you want to complicate it
further, the Fed. But we don't need the Fed to deal with the simple version.

This is easier if you think of bundles of dollar bills, but you brought up
accounts, so let's do it with accounts at Treasury, which is not exactly the
real situation, but it's closer to reality. I'll make assertions and you can
challenge them, and then we'll explore your challenges. d8-)

Hypothetical: SS revenues this year are larger than outlays. So Treasury
takes in the extra SS money from individuals and puts it into an account.
You might think of it as an escrow account -- only it can't be, actually,
because there is no higher bank or other place they can deposit that money
to assure it's going to stay there. So they just put it in something like a
federal banking reserve account (let's not get the Fed involved here unless
you really want to). Treasury itself is keeping the account.

What has actually happened? The account is not a demand account -- it
doesn't "belong" to any individual or institution. Any claims against it are
theoretical; they occur in the future, and ONLY if the actuarial guesswork
was right. No one can withdraw from it on demand or use it as collateral.
It's no longer part of the money supply. It's dead numbers on a page.

Let's assume the actuarials are about right. The money, in the meantime, is
more or less in escrow. It's currency that's been *withdrawn* from the money
supply. It's not like an ordinary trust fund because no bank holding the
fund can use it as a reserve margin against which to make other loans. The
money has just been extracted from the US economy and can perform no
economic function at all. Thus, it has no asset value of any kind. It's just
ciphers in a ledger, and a promise that it won't be spent.

Extracting money from the money supply, if it's a significant amount (and SS
is significant) and if the economy is performing normally, is deflationary.
That might result in a pinch in the arm to the economy, or, if the economy
is slumping at the time, a kick in the groin. This is half of what I meant
by the timing issue. It could be a very bad time to be reducing the money
supply. But we're locked into it.

Treasury could ameliorate that by simultaneously increasing the money
supply. To do that, it buys bonds. Let's not go there for now. It just leads
in another circle, with more potentially bad timing. And it gets worse when
Treasury has to *decrease* the money supply to compensate, at some time in
the future.

Five years later, there is a SS shortfall, and Treasury has to pay some SS
claims from the "trust fund." The actuarial guesses came out right. Now,
where does that money come from?

Treasury has to expand the money supply to pay it out. For this example, say
they pay out the same amount as the excess they took in, five years ago.
There was no higher bank in which it was deposited; Treasury didn't buy
assets with it and store them somewhere. They just withdrew some part of the
bank balances of people paying into SS and wrote the numbers down. In other
words, they withdrew some of the money supply but there was nothing they
could do with it except to keep the numbers in a ledger.

So now Treasury has to expand base money, and, again, the timing could be
bad. If inflation is above the target rate (around 1% - 2%), the expansion
makes it worse. Bad news. There was no asset in the "trust fund" to sell, so
there is nothing else to do.

The money goes around in the same circle as it would if Treasury simply took
the excess revenue and put it into the general fund in the first place.
You're engaging in monetary maneuvers, not real deposits and withdrawals.
Your money isn't providing its normal function of enabling transactions in
the economy; it's dead numbers. Only now, what's happening is that monetary
policy is being dictated by the statutory requirements of the SS fund.
That's like feeding your dog by throwing foodballs at his dish. The poor dog
only eats when you score a hit. gg

Not wanting to complicate the issue by involving the Fed, and such things as
open-market operations, quantitative easing, and so on, my hypothetical
example isn't very real. But it keeps the focus on what the money actually
represents, where it comes from, and how a real "trust fund" would screw up
the timing of real monetary policy.

It makes the point, I hope, that money in any such escrow account has no
asset value. The whole thing is just a game of reducing and adding to the
money supply. When there is no higher bank to appeal to, and to which one
can make deposits and withdrawals, the buck stops at Treasury (and the Fed,
in reality).

You could, with some imagination and careful thought, come up with ways for
Treasury to turn those deposits into real assets. But you're likely to run
into a series of unintended consequences if you do. You need a seller, and,
when you want to cash in, a buyer. Good luck. You're manipulating a sizeable
portion of the world's assets in this game, and the world may not want to
play. Then you're screwed.

Now, it's your turn to attack. g

--
Ed Huntress

Ed Huntress wrote:
wrote in message
...
Ed Huntress wrote:
wrote in message
...
Ed Huntress wrote:
wrote in message
...
Ed Huntress wrote:
Dollar bills do not constitute a savings account if you're the
federal government. Even if you stick it under the mattress, all
you're
doing is subtracting from and then adding to the money supply. You
aren't
actually saving something with asset value.

This must be incorrect because as soon as you transfer the dollar
bills
they have undeniable asset value!

Bill

Transfer whose dollar bills, from where to where, Bill?


As soon as you transfer the dollar bills from the "government savings
account" to another spending entity (you, me, GM, or China).

There's more to it than that. If you really, really want to get into it,
I'll try to hold up my end. But it's a mind-bender.

Hint: Taking dollars, or their equivalent, out of circulation has
negative
effects. You can ameliorate them. But recovering from your "amelioration"
when you give the dollars back to SS recipients causes a double-barreled
problem.

The net effect is the same as putting the excess into the general fund,
only
with different timing. And the different timing raises real hell.

As I said, only if you really, really want to get into it. d8-)

Ed, All I was saying (earlier) was that I disagreed with your comment that
"if the government took dollars out of circulation that they wouldn't be
saving something of value". The money supply is significant. You seem to
have backed away from that and instead noted that it could cause "timing
problems" (and I understand your concerns). I would merely suggest that
such problems would be far less worrisome to everyone concerned than the
sort of debt issues the government faces now.

There is little point in seeing how well we both understand basic
economics. You've translated the problem to a (subjective) fiscal one and
I am more interested in economics than politics. I'm still here if you
want to keep the ball rolling.

Bill

Ok, maybe it's worth getting into it. It provides some good insights into
the nature of money, the Treasury, and, if you want to complicate it
further, the Fed. But we don't need the Fed to deal with the simple version.

This is easier if you think of bundles of dollar bills, but you brought up
accounts, so let's do it with accounts at Treasury, which is not exactly the
real situation, but it's closer to reality. I'll make assertions and you can
challenge them, and then we'll explore your challenges. d8-)

Hypothetical: SS revenues this year are larger than outlays. So Treasury
takes in the extra SS money from individuals and puts it into an account.
You might think of it as an escrow account -- only it can't be, actually,
because there is no higher bank or other place they can deposit that money
to assure it's going to stay there. So they just put it in something like a
federal banking reserve account (let's not get the Fed involved here unless
you really want to). Treasury itself is keeping the account.

What has actually happened? The account is not a demand account -- it
doesn't "belong" to any individual or institution. Any claims against it are
theoretical; they occur in the future, and ONLY if the actuarial guesswork
was right. No one can withdraw from it on demand or use it as collateral.
It's no longer part of the money supply. It's dead numbers on a page.

Let's assume the actuarials are about right. The money, in the meantime, is
more or less in escrow. It's currency that's been *withdrawn* from the money
supply. It's not like an ordinary trust fund because no bank holding the
fund can use it as a reserve margin against which to make other loans. The
money has just been extracted from the US economy and can perform no
economic function at all. Thus, it has no asset value of any kind. It's just
ciphers in a ledger, and a promise that it won't be spent.

Extracting money from the money supply, if it's a significant amount (and SS
is significant) and if the economy is performing normally, is deflationary.
That might result in a pinch in the arm to the economy, or, if the economy
is slumping at the time, a kick in the groin. This is half of what I meant
by the timing issue. It could be a very bad time to be reducing the money
supply. But we're locked into it.

Treasury could ameliorate that by simultaneously increasing the money
supply. To do that, it buys bonds. Let's not go there for now. It just leads
in another circle, with more potentially bad timing. And it gets worse when
Treasury has to *decrease* the money supply to compensate, at some time in
the future.

Five years later, there is a SS shortfall, and Treasury has to pay some SS
claims from the "trust fund." The actuarial guesses came out right. Now,
where does that money come from?

Treasury has to expand the money supply to pay it out. For this example, say
they pay out the same amount as the excess they took in, five years ago.
There was no higher bank in which it was deposited; Treasury didn't buy
assets with it and store them somewhere. They just withdrew some part of the
bank balances of people paying into SS and wrote the numbers down. In other
words, they withdrew some of the money supply but there was nothing they
could do with it except to keep the numbers in a ledger.

So now Treasury has to expand base money, and, again, the timing could be
bad. If inflation is above the target rate (around 1% - 2%), the expansion
makes it worse. Bad news. There was no asset in the "trust fund" to sell, so
there is nothing else to do.

The money goes around in the same circle as it would if Treasury simply took
the excess revenue and put it into the general fund in the first place.
You're engaging in monetary maneuvers, not real deposits and withdrawals.
Your money isn't providing its normal function of enabling transactions in
the economy; it's dead numbers. Only now, what's happening is that monetary
policy is being dictated by the statutory requirements of the SS fund.
That's like feeding your dog by throwing foodballs at his dish. The poor dog
only eats when you score a hit.gg

Not wanting to complicate the issue by involving the Fed, and such things as
open-market operations, quantitative easing, and so on, my hypothetical
example isn't very real. But it keeps the focus on what the money actually
represents, where it comes from, and how a real "trust fund" would screw up
the timing of real monetary policy.

It makes the point, I hope, that money in any such escrow account has no
asset value. The whole thing is just a game of reducing and adding to the
money supply. When there is no higher bank to appeal to, and to which one
can make deposits and withdrawals, the buck stops at Treasury (and the Fed,
in reality).

Oops..here we are again! Do you think the ability to spend from this
"escrow account" has no value to an elected official and his or her
constituents? Adding to the money supply is a little like playing Robin
Hood. Roughly stated: Price = M/(Available Goods & Services).
Hence an increase in M, the money supply, raises prices for everyone.
I regard that as theft. The value of the escrow account is the
difference between the amount of goods and services that people could
purchase before the transfer and after the transfer. Prices go up and
everyone holding dollars or having a fixed salary incurs a loss. Some
people will now be priced out of their planned purchases (seems pretty
unfair to me).

You could introduce various multiplier effects but I think the simple
model above expresses my point. The value to spend money you don't have
is valuable. Whether is has "asset value" is a little like asking
whether being a member of congress has asset value. Surely both have
value. Always measuring in dollars just obscures the issue.

Bill



You could, with some imagination and careful thought, come up with ways for
Treasury to turn those deposits into real assets. But you're likely to run
into a series of unintended consequences if you do. You need a seller, and,
when you want to cash in, a buyer. Good luck. You're manipulating a sizeable
portion of the world's assets in this game, and the world may not want to
play. Then you're screwed.

Now, it's your turn to attack.g

"Bill" wrote in message
...
Ed Huntress wrote:
wrote in message
...
Ed Huntress wrote:
wrote in message
...
Ed Huntress wrote:
wrote in message
...
Ed Huntress wrote:
Dollar bills do not constitute a savings account if you're the
federal government. Even if you stick it under the mattress, all
you're
doing is subtracting from and then adding to the money supply. You
aren't
actually saving something with asset value.

This must be incorrect because as soon as you transfer the dollar
bills
they have undeniable asset value!

Bill

Transfer whose dollar bills, from where to where, Bill?


As soon as you transfer the dollar bills from the "government savings
account" to another spending entity (you, me, GM, or China).

There's more to it than that. If you really, really want to get into
it,
I'll try to hold up my end. But it's a mind-bender.

Hint: Taking dollars, or their equivalent, out of circulation has
negative
effects. You can ameliorate them. But recovering from your
"amelioration"
when you give the dollars back to SS recipients causes a
double-barreled
problem.

The net effect is the same as putting the excess into the general fund,
only
with different timing. And the different timing raises real hell.

As I said, only if you really, really want to get into it. d8-)

Ed, All I was saying (earlier) was that I disagreed with your comment
that
"if the government took dollars out of circulation that they wouldn't be
saving something of value". The money supply is significant. You seem to
have backed away from that and instead noted that it could cause "timing
problems" (and I understand your concerns). I would merely suggest that
such problems would be far less worrisome to everyone concerned than the
sort of debt issues the government faces now.

There is little point in seeing how well we both understand basic
economics. You've translated the problem to a (subjective) fiscal one
and
I am more interested in economics than politics. I'm still here if you
want to keep the ball rolling.

Bill

Ok, maybe it's worth getting into it. It provides some good insights into
the nature of money, the Treasury, and, if you want to complicate it
further, the Fed. But we don't need the Fed to deal with the simple
version.

This is easier if you think of bundles of dollar bills, but you brought
up
accounts, so let's do it with accounts at Treasury, which is not exactly
the
real situation, but it's closer to reality. I'll make assertions and you
can
challenge them, and then we'll explore your challenges. d8-)

Hypothetical: SS revenues this year are larger than outlays. So Treasury
takes in the extra SS money from individuals and puts it into an account.
You might think of it as an escrow account -- only it can't be, actually,
because there is no higher bank or other place they can deposit that
money
to assure it's going to stay there. So they just put it in something like
a
federal banking reserve account (let's not get the Fed involved here
unless
you really want to). Treasury itself is keeping the account.

What has actually happened? The account is not a demand account -- it
doesn't "belong" to any individual or institution. Any claims against it
are
theoretical; they occur in the future, and ONLY if the actuarial
guesswork
was right. No one can withdraw from it on demand or use it as collateral.
It's no longer part of the money supply. It's dead numbers on a page.

Let's assume the actuarials are about right. The money, in the meantime,
is
more or less in escrow. It's currency that's been *withdrawn* from the
money
supply. It's not like an ordinary trust fund because no bank holding the
fund can use it as a reserve margin against which to make other loans.
The
money has just been extracted from the US economy and can perform no
economic function at all. Thus, it has no asset value of any kind. It's
just
ciphers in a ledger, and a promise that it won't be spent.

Extracting money from the money supply, if it's a significant amount (and
SS
is significant) and if the economy is performing normally, is
deflationary.
That might result in a pinch in the arm to the economy, or, if the
economy
is slumping at the time, a kick in the groin. This is half of what I
meant
by the timing issue. It could be a very bad time to be reducing the money
supply. But we're locked into it.

Treasury could ameliorate that by simultaneously increasing the money
supply. To do that, it buys bonds. Let's not go there for now. It just
leads
in another circle, with more potentially bad timing. And it gets worse
when
Treasury has to *decrease* the money supply to compensate, at some time
in
the future.

Five years later, there is a SS shortfall, and Treasury has to pay some
SS
claims from the "trust fund." The actuarial guesses came out right. Now,
where does that money come from?

Treasury has to expand the money supply to pay it out. For this example,
say
they pay out the same amount as the excess they took in, five years ago.
There was no higher bank in which it was deposited; Treasury didn't buy
assets with it and store them somewhere. They just withdrew some part of
the
bank balances of people paying into SS and wrote the numbers down. In
other
words, they withdrew some of the money supply but there was nothing they
could do with it except to keep the numbers in a ledger.

So now Treasury has to expand base money, and, again, the timing could be
bad. If inflation is above the target rate (around 1% - 2%), the
expansion
makes it worse. Bad news. There was no asset in the "trust fund" to sell,
so
there is nothing else to do.

The money goes around in the same circle as it would if Treasury simply
took
the excess revenue and put it into the general fund in the first place.
You're engaging in monetary maneuvers, not real deposits and withdrawals.
Your money isn't providing its normal function of enabling transactions
in
the economy; it's dead numbers. Only now, what's happening is that
monetary
policy is being dictated by the statutory requirements of the SS fund.
That's like feeding your dog by throwing foodballs at his dish. The poor
dog
only eats when you score a hit.gg

Not wanting to complicate the issue by involving the Fed, and such things
as
open-market operations, quantitative easing, and so on, my hypothetical
example isn't very real. But it keeps the focus on what the money
actually
represents, where it comes from, and how a real "trust fund" would screw
up
the timing of real monetary policy.

It makes the point, I hope, that money in any such escrow account has no
asset value. The whole thing is just a game of reducing and adding to the
money supply. When there is no higher bank to appeal to, and to which one
can make deposits and withdrawals, the buck stops at Treasury (and the
Fed,
in reality).

Oops..here we are again! Do you think the ability to spend from this
"escrow account" has no value to an elected official and his or her
constituents?

I thought you wanted to talk about the economics, not the politics.

First, it's not an escrow account under present law. That was part of the
hypothetical. Second, yes, the money has value if it is NOT escrowed, and if
it either is left in the economy or returned to it. If it is escrowed, it
has no value.

Adding to the money supply is a little like playing Robin Hood. Roughly
stated: Price = M/(Available Goods & Services).
Hence an increase in M, the money supply, raises prices for everyone.

You missed an important factor: money velocity. But even so, your equation
assumes that there is no growth in goods and services over time. In other
words, that you have a static economy. We don't.

You have to add to the money supply as the volume of goods and services
grows, or you have deflation -- and trouble.

I regard that as theft.

Good grief. Are we talking economics, or philosophy?

The value of the escrow account is the difference between the amount of
goods and services that people could purchase before the transfer and
after the transfer Prices go up and everyone holding dollars or having a
fixed salary incurs a loss. Some people will now be priced out of their
planned purchases (seems pretty unfair to me).

Whoops, you have it backwards. Taking money out of an economy drives prices
DOWN, not up. Everyone on a fixed income gets an unearned but happy
surprise.

That's deflation, and one way to create it is to take money out of the money
supply. Every dollar is then worth more.


You could introduce various multiplier effects but I think the simple
model above expresses my point. The value to spend money you don't have is
valuable.

In a political sense, perhaps. But if you have it to spend, then it's not
escrowed. So you're not talking about a situation in which the money is
somehow held aside and not used, versus one in which excess SS revenue goes
into the general fund. In the latter case, there is no change to the money
supply. That's what we have.

Whether is has "asset value" is a little like asking whether being a
member of congress has asset value. Surely both have value. Always
measuring in dollars just obscures the issue.

Again, you're the one who said "I am more interested in economics than
politics." The politics of this is something entirely different. The
economics of it, within the limits of these gross simplifications, is
basically what I said.

At present, we have no mechanism that would allow Treasury to actually hold
money aside, year after year. And we wouldn't want one. If you're going to
operate with a fiat currency, you need to be able to control monetary
policy, or it gets out of hand. Making it servile to Social Security
statutes would create a mess, and would be a serious danger.

--
Ed Huntress



Bill



You could, with some imagination and careful thought, come up with ways
for
Treasury to turn those deposits into real assets. But you're likely to
run
into a series of unintended consequences if you do. You need a seller,
and,
when you want to cash in, a buyer. Good luck. You're manipulating a
sizeable
portion of the world's assets in this game, and the world may not want to
play. Then you're screwed.

Now, it's your turn to attack.g

Ed Huntress wrote:

Sorry Ed. I think we both know what we're talking about.
I think we understand the technicalities better than most.
I think you can start fires faster quicker than I can put them out.
You seem to prefer to get hung up on my use of a word rather than try to
understand what I am trying to say, so I don't find it easy to
communicate with you. Some people know everything and some know
nothing--is that how it is?

Bill

"Bill" wrote in message
...
Ed Huntress wrote:

Sorry Ed. I think we both know what we're talking about.
I think we understand the technicalities better than most.
I think you can start fires faster quicker than I can put them out.

That's not intentional. I wanted to avoid the entire issue, remember? g

You seem to prefer to get hung up on my use of a word rather than try to
understand what I am trying to say, so I don't find it easy to communicate
with you.

I'm not sure what word you're talking about. "Assets"?

As I said, I agree with your key points, that fiscal restraint is a good
thing, and that excess inflation is not. When you introduced the idea that
transferring dollar bills to someone who spends them implies asset value,
the problem is that those who don't understand these accounts would take
that to mean that the government can just sit on the SS excess, putting it
in some kind of account, and then hand it out, without other consequences.
There are plenty of consequences. The first is that the money can't be used
for anything and therefore it's worth nothing, unless it's let out of that
purgatory -- which it may never be.

That leads a lot of people to assume the whole "trust fund" setup is a ruse
to allow Congress to spend that money. It's not, and it's exactly the kind
of misunderstanding that leads to the general economic malcontentedness we
hear on this NG and elsewhere. Most people assume there's a government
conspiracy to screw them, when the truth of this situation is that there's
hardly a way to do anything different. There's no screwing. And nothing
about it is hidden. It's all in the open.

I'm not trying to pick nits with you, Bill. This is a difficult but very
important point that most people do not understand. Once the government sits
on a really large lump of revenue like the excess SS payments, pulling that
money out of circulation for years at a time, bad things happen. That's why
they don't do it. And if they wanted to, we have no mechanism to do it. If
we tried to create one, hardly anyone would like the choices. It would just
start another political firestorm. And it wouldn't cure the problem that
what you're really screwing with is the money supply, not some kind of
savings account that's equivalent to what we do as individuals. There just
is nobody higher than the Treasury who can hold the money.

Some people know everything and some know nothing--is that how it is?

Most know something and make assumptions about the rest. When the rest is
federal accounts and our money, they're mostly wrong assumptions. It's not
easy.

I don't doubt that you understand it, despite getting the deflation issue
backwards. g But this point is not one in which I'm going to accept a
misrepresentation with my name on a post that accedes to it.

--
Ed Huntress


Bill

Ed Huntress wrote:
wrote in message
...
Ed Huntress wrote:

Sorry Ed. I think we both know what we're talking about.
I think we understand the technicalities better than most.
I think you can start fires faster quicker than I can put them out.

That's not intentional. I wanted to avoid the entire issue, remember?g

You seem to prefer to get hung up on my use of a word rather than try to
understand what I am trying to say, so I don't find it easy to communicate
with you.

I'm not sure what word you're talking about. "Assets"?

As I said, I agree with your key points, that fiscal restraint is a good
thing, and that excess inflation is not. When you introduced the idea that
transferring dollar bills to someone who spends them implies asset value,
the problem is that those who don't understand these accounts would take
that to mean that the government can just sit on the SS excess, putting it
in some kind of account, and then hand it out, without other consequences.
There are plenty of consequences. The first is that the money can't be used
for anything and therefore it's worth nothing, unless it's let out of that
purgatory -- which it may never be.

That leads a lot of people to assume the whole "trust fund" setup is a ruse
to allow Congress to spend that money. It's not, and it's exactly the kind
of misunderstanding that leads to the general economic malcontentedness we
hear on this NG and elsewhere. Most people assume there's a government
conspiracy to screw them, when the truth of this situation is that there's
hardly a way to do anything different. There's no screwing. And nothing
about it is hidden. It's all in the open.

I'm not trying to pick nits with you, Bill. This is a difficult but very
important point that most people do not understand. Once the government sits
on a really large lump of revenue like the excess SS payments, pulling that
money out of circulation for years at a time, bad things happen. That's why
they don't do it. And if they wanted to, we have no mechanism to do it. If
we tried to create one, hardly anyone would like the choices. It would just
start another political firestorm. And it wouldn't cure the problem that
what you're really screwing with is the money supply, not some kind of
savings account that's equivalent to what we do as individuals. There just
is nobody higher than the Treasury who can hold the money.

Some people know everything and some know nothing--is that how it is?

Most know something and make assumptions about the rest. When the rest is
federal accounts and our money, they're mostly wrong assumptions. It's not
easy.

I don't doubt that you understand it, despite getting the deflation issue
backwards.g

No, you misunderstood the direction of the transfer. I was thinking
transfer-out, and you were thinking transfer-in. I'll revisit your post
later. I have some work to attend to in the meantime.

Bill


But this point is not one in which I'm going to accept a
misrepresentation with my name on a post that accedes to it.

On Jul 12, 12:34*pm, "Ed Huntress" wrote:
"Gunner Asch" wrote in message

...





On Tue, 12 Jul 2011 07:33:55 -0700, "." wrote:

On 7/12/2011 5:54 AM, Greg Cookson wrote:
Who are the thieves robbing Social Security blind?

It's easy to check out, if you don't believe it. *Be sure and
show it to your family and friends.. They need a little history
lesson on what's what and it doesn't matter whether you are
Democrat or Republican. Facts are Facts.

Social Security Cards up until the 1980s expressly stated the
number and card were not to be used for identification purposes.

Since nearly everyone in the United States now has a number, it
became convenient to use it anyway and the message, NOT FOR

IDENTIFICATION, was removed.

An old Social Security card with the "NOT FOR IDENTIFICATION"
message.

Franklin Roosevelt, a Democrat, introduced the Social Security
(FICA) Program. He promised:

1.) That participation in the Program would be Completely
voluntary,

No longer Voluntary

2.) That the participants would only have to pay 1% of the first
$1,400 of their annual Incomes into the Program,

Now 7.65% on the first $90,000

3.) That the money the participants elected to put into the
Program would be deductible from their income for tax purposes
each year,

No longer tax deductible

4.) That the money the participants put into the independent
'Trust Fund' rather than into the general operating fund, and
therefore, would only be used to fund the Social Security
Retirement Program, and no other Government program, and, Under
Johnson the money was moved to The General Fund and Spent

5.) That the annuity payments to the retirees would never be
taxed as income.

Under Clinton& *Gore Up to 85% of your Social Security can be
Taxed

Since many of us have paid into FICA for years and are now
receiving a Social Security check every month --

and then finding that we are getting taxed on 85% of the money
we paid to the Federal government to 'put away' -- you may be
interested in the following:

------------ --------- --------- --------- --------- --------- --
--

Q: Which Political Party took Social Security from the
independent 'Trust Fund' and put it into the general fund so
that Congress could spend it?

A: It was Lyndon Johnson and the democratically controlled House
and Senate.

------------ --------- --------- --------- --------- --------- --
------- --

Q: Which Political Party eliminated the income tax deduction for
Social Security (FICA) withholding?

A: The Democratic Party.

------------ --------- --------- --------- --------- --------- --
------- -----

Q: Which Political Party started taxing Social Security
annuities?

A: The Democratic Party, with Al Gore casting the 'tie-breaking'
deciding vote as President of the Senate, while he was Vice
President of the *US

------------ --------- --------- --------- --------- --------- --
------- -

Q: Which Political Party decided to start giving annuity
payments to immigrants?

AND MY FAVORITE:

A: That's right!

Jimmy Carter and the Democratic Party. Immigrants moved into
this country, and at age 65, began to receive Social Security
payments! The Democratic Party gave these payments to them, even
though they never paid a dime into it!

------------ -- ------------ --------- ----- ------------ -------
-- ---------

Then, after violating the original contract (FICA), the
Democrats turn around and tell you that the Republicans want to
take your Social Security away!

And the worst part about it is uninformed citizens believe it!

I think it's great that the republicans want to take "our" social
security away. *Anyone who couldn't save up enough during their working
life to live a comfortable retirement and pay the three million dollars
their end of life care will cost deserves to be homeless, in the street
and eating dog food. *It will be great for this country when the
republicans succeed in eliminating this evil program so those of us with
vast wealth can enjoy it without those pesky old folks using up our
resources and making us pay higher taxes.

And Ill bet you love having 20 million illegal aliens lined up for their
piece of the pie to!!

Your header information was forwarded to those keeping the List.

You'd better consult with your team of lawyers, Gunner. You just admitted to
conspiracy to commit...whatever you're threatening....and accessory.

Fortunately for you, you're full of ****. Otherwise, you would have just
crossed over the line.

--
Ed Huntress- Hide quoted text -

- Show quoted text -

Meanwhile Usenet...and the Government...logs another death threat from
Gummer.

TMT

Hypothetical: SS revenues this year are larger than outlays. So Treasury
takes in the extra SS money from individuals and puts it into an account.
You might think of it as an escrow account -- only it can't be, actually,
because there is no higher bank or other place they can deposit that money
to assure it's going to stay there. So they just put it in something like a
federal banking reserve account (let's not get the Fed involved here unless
you really want to). Treasury itself is keeping the account.

What has actually happened? The account is not a demand account -- it
doesn't "belong" to any individual or institution. Any claims against it are
theoretical; they occur in the future, and ONLY if the actuarial guesswork
was right. No one can withdraw from it on demand or use it as collateral.
It's no longer part of the money supply. It's dead numbers on a page.

Ed. As a hypothetical, because it's never going to happen in our
lifetime. What would happen if that enormous sum of money were
invested by buying stocks and bonds of US companies, or all over the
world if the amount of money were too large for the US economy?

I haven't been reading on this, so there may be a downside that I
don't know about, but my intuition is that it would put the money to
useful purpose by allowing business to expand.

RWL

GeoLane at PTD dot NET wrote in message
...

Hypothetical: SS revenues this year are larger than outlays. So Treasury
takes in the extra SS money from individuals and puts it into an account.
You might think of it as an escrow account -- only it can't be, actually,
because there is no higher bank or other place they can deposit that money
to assure it's going to stay there. So they just put it in something like
a
federal banking reserve account (let's not get the Fed involved here
unless
you really want to). Treasury itself is keeping the account.

What has actually happened? The account is not a demand account -- it
doesn't "belong" to any individual or institution. Any claims against it
are
theoretical; they occur in the future, and ONLY if the actuarial guesswork
was right. No one can withdraw from it on demand or use it as collateral.
It's no longer part of the money supply. It's dead numbers on a page.

Ed. As a hypothetical, because it's never going to happen in our
lifetime. What would happen if that enormous sum of money were
invested by buying stocks and bonds of US companies, or all over the
world if the amount of money were too large for the US economy?

I haven't been reading on this, so there may be a downside that I
don't know about, but my intuition is that it would put the money to
useful purpose by allowing business to expand.

RWL

It's an interesting thought, and it's come up in some previous discussions.
I do see some downsides.

1) Obviously, you couldn't pick stocks or you'd be picking winners and
losers. So you invest in some kind of index funds. If the Dow or S&P crashes
across the board, like they did a few years ago, and if you were in charge
of the program at the time, senior citizens would cut your nuts off and the
head of AARP would use them for a hood ornament.

2) When you had to cash some of the fund shares in to pay for a Social
Security revenue shortfall, the whole world will know it beforehand and you
will crash the market, or the part of it covered by your index fund. Betty
White will cut your nose off and wear it as a brooch.

3) When you have excess revenue coming in and you're going to make an
index-fund buy, the whole world will know it in advance, the stocks in your
fund will become inflated beyond all recognition, and the seniors will send
the ghost of Lawrence Welk to blow champagne bubbles up the butts of you and
your offspring, for eternity.

4) You will distort markets all to hell because of the size and the
predictability of your purchases and sales.

5) Because of the above, you will always be buying high and selling low. You
will lose money rather than making it.

Otherwise, it's a great idea. d8-)

This is not to say that there isn't some kind of solution buried within your
general idea. I just can't imagine what it would be. Maybe someone else can
see an angle by which it would work.

--
Ed Huntress

"Ed Huntress" wrote in message
...

GeoLane at PTD dot NET wrote in message
...

Hypothetical: SS revenues this year are larger than outlays. So Treasury
takes in the extra SS money from individuals and puts it into an account.
You might think of it as an escrow account -- only it can't be, actually,
because there is no higher bank or other place they can deposit that
money
to assure it's going to stay there. So they just put it in something like
a
federal banking reserve account (let's not get the Fed involved here
unless
you really want to). Treasury itself is keeping the account.

What has actually happened? The account is not a demand account -- it
doesn't "belong" to any individual or institution. Any claims against it
are
theoretical; they occur in the future, and ONLY if the actuarial
guesswork
was right. No one can withdraw from it on demand or use it as collateral.
It's no longer part of the money supply. It's dead numbers on a page.

Ed. As a hypothetical, because it's never going to happen in our
lifetime. What would happen if that enormous sum of money were
invested by buying stocks and bonds of US companies, or all over the
world if the amount of money were too large for the US economy?

I haven't been reading on this, so there may be a downside that I
don't know about, but my intuition is that it would put the money to
useful purpose by allowing business to expand.

RWL

It's an interesting thought, and it's come up in some previous
discussions. I do see some downsides.

1) Obviously, you couldn't pick stocks or you'd be picking winners and
losers. So you invest in some kind of index funds. If the Dow or S&P
crashes across the board, like they did a few years ago, and if you were
in charge of the program at the time, senior citizens would cut your nuts
off and the head of AARP would use them for a hood ornament.

2) When you had to cash some of the fund shares in to pay for a Social
Security revenue shortfall, the whole world will know it beforehand and
you will crash the market, or the part of it covered by your index fund.
Betty White will cut your nose off and wear it as a brooch.

3) When you have excess revenue coming in and you're going to make an
index-fund buy, the whole world will know it in advance, the stocks in
your fund will become inflated beyond all recognition, and the seniors
will send the ghost of Lawrence Welk to blow champagne bubbles up the
butts of you and your offspring, for eternity.

4) You will distort markets all to hell because of the size and the
predictability of your purchases and sales.

5) Because of the above, you will always be buying high and selling low.
You will lose money rather than making it.

Otherwise, it's a great idea. d8-)

This is not to say that there isn't some kind of solution buried within
your general idea. I just can't imagine what it would be. Maybe someone
else can see an angle by which it would work.


Loan it out to the public, albeit at a very modest fractional reserve
rate--much the same as the treasury is already doing with bonds except in
this instance the money wasn't initially borrowed from the
fed....effectively, this cuts the burden of interest owed ( by the
government ) to the fed out of the entire loop.

--

"PrecisionmachinisT" wrote in message
news:eZOdnQfF0okOFoPTnZ2dnUVZ_tydnZ2d@scnresearch. com...

"Ed Huntress" wrote in message
...

GeoLane at PTD dot NET wrote in message
...

Hypothetical: SS revenues this year are larger than outlays. So Treasury
takes in the extra SS money from individuals and puts it into an
account.
You might think of it as an escrow account -- only it can't be,
actually,
because there is no higher bank or other place they can deposit that
money
to assure it's going to stay there. So they just put it in something
like a
federal banking reserve account (let's not get the Fed involved here
unless
you really want to). Treasury itself is keeping the account.

What has actually happened? The account is not a demand account -- it
doesn't "belong" to any individual or institution. Any claims against it
are
theoretical; they occur in the future, and ONLY if the actuarial
guesswork
was right. No one can withdraw from it on demand or use it as
collateral.
It's no longer part of the money supply. It's dead numbers on a page.

Ed. As a hypothetical, because it's never going to happen in our
lifetime. What would happen if that enormous sum of money were
invested by buying stocks and bonds of US companies, or all over the
world if the amount of money were too large for the US economy?

I haven't been reading on this, so there may be a downside that I
don't know about, but my intuition is that it would put the money to
useful purpose by allowing business to expand.

RWL

It's an interesting thought, and it's come up in some previous
discussions. I do see some downsides.

1) Obviously, you couldn't pick stocks or you'd be picking winners and
losers. So you invest in some kind of index funds. If the Dow or S&P
crashes across the board, like they did a few years ago, and if you were
in charge of the program at the time, senior citizens would cut your nuts
off and the head of AARP would use them for a hood ornament.

2) When you had to cash some of the fund shares in to pay for a Social
Security revenue shortfall, the whole world will know it beforehand and
you will crash the market, or the part of it covered by your index fund.
Betty White will cut your nose off and wear it as a brooch.

3) When you have excess revenue coming in and you're going to make an
index-fund buy, the whole world will know it in advance, the stocks in
your fund will become inflated beyond all recognition, and the seniors
will send the ghost of Lawrence Welk to blow champagne bubbles up the
butts of you and your offspring, for eternity.

4) You will distort markets all to hell because of the size and the
predictability of your purchases and sales.

5) Because of the above, you will always be buying high and selling low.
You will lose money rather than making it.

Otherwise, it's a great idea. d8-)

This is not to say that there isn't some kind of solution buried within
your general idea. I just can't imagine what it would be. Maybe someone
else can see an angle by which it would work.


Loan it out to the public, albeit at a very modest fractional reserve
rate--much the same as the treasury is already doing with bonds except in
this instance the money wasn't initially borrowed from the
fed....effectively, this cuts the burden of interest owed ( by the
government ) to the fed out of the entire loop.

Uh, people would just *love* the idea of having taxes collected and then
having to borrow it back from the government with interest. I think they'd
have your nuts hanging from their rear-view mirror. g

Other problems: You're distorting the hell out of the lending market. You'd
tank the banks.

You're multiplying the money supply because of your fractional-reserve
operation. That's Ok if the economy needs a money-supply boost, in which
case it would be counter-deflationary, but it would be inflationary
otherwise. Without the Fed running the show, nobody would be in control, and
your economy would be put on a roller-coaster.

One key problem to the whole thing is the question of how the government
could get involved with private investments, without distorting markets and
driving big changes in the money supply, with no one at the wheel. Another
is, when the bills come due and the money has to be returned to SS
recipients, how do you know where you will stand at the time in the business
cycle? Because there is still a business cycle, Alan Greenspan's fantasies
notwithstanding.

[Yes, I'm looking for negative outcomes of all of these suggestions. That's
my job here. d8-)]

--
Ed Huntress

On Thu, 14 Jul 2011 01:28:14 -0400, "Ed Huntress"
wrote:


GeoLane at PTD dot NET wrote in message
.. .

Hypothetical: SS revenues this year are larger than outlays. So Treasury
takes in the extra SS money from individuals and puts it into an account.
You might think of it as an escrow account -- only it can't be, actually,
because there is no higher bank or other place they can deposit that money
to assure it's going to stay there. So they just put it in something like
a
federal banking reserve account (let's not get the Fed involved here
unless
you really want to). Treasury itself is keeping the account.

What has actually happened? The account is not a demand account -- it
doesn't "belong" to any individual or institution. Any claims against it
are
theoretical; they occur in the future, and ONLY if the actuarial guesswork
was right. No one can withdraw from it on demand or use it as collateral.
It's no longer part of the money supply. It's dead numbers on a page.

Ed. As a hypothetical, because it's never going to happen in our
lifetime. What would happen if that enormous sum of money were
invested by buying stocks and bonds of US companies, or all over the
world if the amount of money were too large for the US economy?

I haven't been reading on this, so there may be a downside that I
don't know about, but my intuition is that it would put the money to
useful purpose by allowing business to expand.

RWL

....................

It's an interesting thought, and it's come up in some previous discussions.
I do see some downsides.

.....snip
.......
4) You will distort markets all to hell because of the size and the
predictability of your purchases and sales.

5) Because of the above, you will always be buying high and selling low. You
will lose money rather than making it.

Otherwise, it's a great idea. d8-)

This is not to say that there isn't some kind of solution buried within your
general idea. I just can't imagine what it would be. Maybe someone else can
see an angle by which it would work.

...............................

The potential for political favoritism is high, so it would have to be
spread in a diversified fashion - i.e. an index. The distortion to
the markets is also very valid. Ideally it would be spread worldwide,
but our political system would never allow that. It was a
hypothetical. Just curious to see if any of the ecnomists had
proposed that and what the pluses and minuses were.

RWL

GeoLane at PTD dot NET wrote in message
...
On Thu, 14 Jul 2011 01:28:14 -0400, "Ed Huntress"
wrote:


GeoLane at PTD dot NET wrote in message
. ..

Hypothetical: SS revenues this year are larger than outlays. So Treasury
takes in the extra SS money from individuals and puts it into an
account.
You might think of it as an escrow account -- only it can't be,
actually,
because there is no higher bank or other place they can deposit that
money
to assure it's going to stay there. So they just put it in something
like
a
federal banking reserve account (let's not get the Fed involved here
unless
you really want to). Treasury itself is keeping the account.

What has actually happened? The account is not a demand account -- it
doesn't "belong" to any individual or institution. Any claims against it
are
theoretical; they occur in the future, and ONLY if the actuarial
guesswork
was right. No one can withdraw from it on demand or use it as
collateral.
It's no longer part of the money supply. It's dead numbers on a page.

Ed. As a hypothetical, because it's never going to happen in our
lifetime. What would happen if that enormous sum of money were
invested by buying stocks and bonds of US companies, or all over the
world if the amount of money were too large for the US economy?

I haven't been reading on this, so there may be a downside that I
don't know about, but my intuition is that it would put the money to
useful purpose by allowing business to expand.

RWL

...................

It's an interesting thought, and it's come up in some previous
discussions.
I do see some downsides.

....snip
......
4) You will distort markets all to hell because of the size and the
predictability of your purchases and sales.

5) Because of the above, you will always be buying high and selling low.
You
will lose money rather than making it.

Otherwise, it's a great idea. d8-)

This is not to say that there isn't some kind of solution buried within
your
general idea. I just can't imagine what it would be. Maybe someone else
can
see an angle by which it would work.

..............................

The potential for political favoritism is high, so it would have to be
spread in a diversified fashion - i.e. an index. The distortion to
the markets is also very valid. Ideally it would be spread worldwide,
but our political system would never allow that. It was a
hypothetical. Just curious to see if any of the ecnomists had
proposed that and what the pluses and minuses were.

They probably have, but I haven't read about it. I'll bet there is plenty of
discussion about it in the professional economics literature.

Having the government invested in private business is something that makes
me edgy. I'm in favor of our involvement with GM and Chrysler, but only with
the understanding we'll get out of it as soon as it makes sense to do so.
Setting up some permanent investment system for Social Security doesn't make
much sense to me. If we were going to do that, it would be better to
partially privatize the system.

But that would upend the idea that Social Security is *secure*. Investment
in business is always a risk. Philosophically, I'm not in favor of adding
risk to the system. When you're ready to retire, it's too late to be rolling
dice. To the degree that the government is involved with the real economy,
my feeling is that their primary job is to encourage growth.

--
Ed Huntress


RWL

On Jul 14, 10:57*pm, "Ed Huntress" wrote:

But that would upend the idea that Social Security is *secure*. Investment
in business is always a risk. Philosophically, I'm not in favor of adding
risk to the system. When you're ready to retire, it's too late to be rolling
dice. To the degree that the government is involved with the real economy,
my feeling is that their primary job is to encourage growth.

--
Ed Huntress


Mutual fund managers believe there is also a risk of not being
invested. That is the risk Social Security is now taking. It is not
invested and it is not providing any return. A diversified investment
is safer than one that is not diversified.


Dan

wrote in message
...
On Jul 14, 10:57 pm, "Ed Huntress" wrote:

But that would upend the idea that Social Security is *secure*. Investment
in business is always a risk. Philosophically, I'm not in favor of adding
risk to the system. When you're ready to retire, it's too late to be
rolling
dice. To the degree that the government is involved with the real economy,
my feeling is that their primary job is to encourage growth.

--
Ed Huntress


Mutual fund managers believe there is also a risk of not being
invested.

And what is the nature of that risk?

That is the risk Social Security is now taking. It is not
invested and it is not providing any return. A diversified investment
is safer than one that is not diversified.

Of course. How about one diversified across all revenue sources to the
United States government?

--
Ed Huntress



Dan

On Jul 15, 10:15*am, "Ed Huntress" wrote:
wrote in message

...
On Jul 14, 10:57 pm, "Ed Huntress" wrote:

But that would upend the idea that Social Security is *secure*. Investment
in business is always a risk. Philosophically, I'm not in favor of adding
risk to the system. When you're ready to retire, it's too late to be
rolling
dice. To the degree that the government is involved with the real economy,
my feeling is that their primary job is to encourage growth.

--
Ed Huntress

Mutual fund managers believe there is also a risk of not being
invested.

And what is the nature of that risk?

You do not make any money and run out of money when you are retired.
If you do not make more money than the rate of inflation, you are
losing wealth.

That is the risk Social Security is now taking. *It is not
invested and it is not providing any return. *A diversified investment
is safer than one that is not diversified.

Of course. How about one diversified across all revenue sources to the
United States government?

Not well diversified. That is essentially only one source so it does
not count as being diversified at all. If the U.S. government
defaults on its loans, you have nothing else to fall back on.

Dan
--
Ed Huntress

wrote:
On Jul 14, 10:57 pm, "Ed wrote:

But that would upend the idea that Social Security is *secure*. Investment
in business is always a risk. Philosophically, I'm not in favor of adding
risk to the system. When you're ready to retire, it's too late to be rolling
dice. To the degree that the government is involved with the real economy,
my feeling is that their primary job is to encourage growth.

--
Ed Huntress


Mutual fund managers believe there is also a risk of not being
invested. That is the risk Social Security is now taking. It is not
invested and it is not providing any return.


A diversified investment
is safer than one that is not diversified.

What does "safer" mean? You may do better thinking in terms of
"expected value" and "standard deviation". I agree with you: I think
the bottom line is to be *diversified*. However, following any
assumption comes with a risk. So does driving your car.

Bill




Dan

wrote in message
...
On Jul 15, 10:15 am, "Ed Huntress" wrote:
wrote in message

...
On Jul 14, 10:57 pm, "Ed Huntress" wrote:

But that would upend the idea that Social Security is *secure*.
Investment
in business is always a risk. Philosophically, I'm not in favor of
adding
risk to the system. When you're ready to retire, it's too late to be
rolling
dice. To the degree that the government is involved with the real
economy,
my feeling is that their primary job is to encourage growth.

--
Ed Huntress

Mutual fund managers believe there is also a risk of not being
invested.

And what is the nature of that risk?


You do not make any money and run out of money when you are retired.
If you do not make more money than the rate of inflation, you are
losing wealth.

That's not a risk. You know the situation going in. The risk is that your
investment doesn't perform, and it's all a big surprise.


That is the risk Social Security is now taking. It is not
invested and it is not providing any return. A diversified investment
is safer than one that is not diversified.

Of course. How about one diversified across all revenue sources to the
United States government?


Not well diversified. That is essentially only one source so it does
not count as being diversified at all. If the U.S. government
defaults on its loans, you have nothing else to fall back on.

Dan

It's basically diversified across the entire economy. If the government
defaults, we're all screwed, and your other investments probably will go
with it.

As risks go, a government default is pretty well hedged -- not by a
guarentee of performance, but by a near guarentee that everything else would
go with it, anyway.

If you're worried about that, buy gold. You can always use it to weight down
your shoes when you drown yourself. d8-)

--
Ed Huntress
--
Ed Huntress

Ed Huntress wrote:
wrote in message
...
On Jul 15, 10:15 am, "Ed wrote:
wrote in message

...
On Jul 14, 10:57 pm, "Ed wrote:

But that would upend the idea that Social Security is *secure*.
Investment
in business is always a risk. Philosophically, I'm not in favor of
adding
risk to the system. When you're ready to retire, it's too late to be
rolling
dice. To the degree that the government is involved with the real
economy,
my feeling is that their primary job is to encourage growth.

--
Ed Huntress

Mutual fund managers believe there is also a risk of not being
invested.

And what is the nature of that risk?


You do not make any money and run out of money when you are retired.
If you do not make more money than the rate of inflation, you are
losing wealth.

That's not a risk. You know the situation going in. The risk is that your
investment doesn't perform, and it's all a big surprise.


That is the risk Social Security is now taking. It is not
invested and it is not providing any return. A diversified investment
is safer than one that is not diversified.

Of course. How about one diversified across all revenue sources to the
United States government?


Not well diversified. That is essentially only one source so it does
not count as being diversified at all. If the U.S. government
defaults on its loans, you have nothing else to fall back on.

Dan

It's basically diversified across the entire economy. If the government
defaults, we're all screwed,

Some probably more than others. Land is surely to hold some value
(whether you measure its "asset value" as 0 or 1 zillion dollars. )

Other commodities and international investments should hold some value.


and your other investments probably will go
with it.

See my comments above. --and slow down! : )

Bill





As risks go, a government default is pretty well hedged -- not by a
guarentee of performance, but by a near guarentee that everything else would
go with it, anyway.

If you're worried about that, buy gold. You can always use it to weight down
your shoes when you drown yourself. d8-)

"Bill" wrote in message
...
Ed Huntress wrote:
wrote in message
...
On Jul 15, 10:15 am, "Ed wrote:
wrote in message

...
On Jul 14, 10:57 pm, "Ed wrote:

But that would upend the idea that Social Security is *secure*.
Investment
in business is always a risk. Philosophically, I'm not in favor of
adding
risk to the system. When you're ready to retire, it's too late to be
rolling
dice. To the degree that the government is involved with the real
economy,
my feeling is that their primary job is to encourage growth.

--
Ed Huntress

Mutual fund managers believe there is also a risk of not being
invested.

And what is the nature of that risk?


You do not make any money and run out of money when you are retired.
If you do not make more money than the rate of inflation, you are
losing wealth.

That's not a risk. You know the situation going in. The risk is that your
investment doesn't perform, and it's all a big surprise.


That is the risk Social Security is now taking. It is not
invested and it is not providing any return. A diversified investment
is safer than one that is not diversified.

Of course. How about one diversified across all revenue sources to the
United States government?


Not well diversified. That is essentially only one source so it does
not count as being diversified at all. If the U.S. government
defaults on its loans, you have nothing else to fall back on.

Dan

It's basically diversified across the entire economy. If the government
defaults, we're all screwed,

Some probably more than others. Land is surely to hold some value
(whether you measure its "asset value" as 0 or 1 zillion dollars. )

Maybe, but the performance of the economy after a default is unknown,
including land values. Also unknown is how SS will be handled after a
default. It won't just collapse, or the seniors will descend on Washington
with torches and pitchforks.

It's unlikely, IMO, that SS will do worse than land values. Of course, we
won't be buying much imported caviar either way, but that's not the kind of
hardship that would be in the works if there is much of a default.


Other commodities and international investments should hold some value.

Maybe. Some economists say that a default crisis in the US would result in
an international domino effect. I don't think that anyone really knows what
would happen, anymore than they knew what a real estate crisis would do to
the broad financial markets a few years ago.

The quants sure didn't know.




and your other investments probably will go
with it.

See my comments above. --and slow down! : )

Bill





As risks go, a government default is pretty well hedged -- not by a
guarentee of performance, but by a near guarentee that everything else
would
go with it, anyway.

If you're worried about that, buy gold. You can always use it to weight
down
your shoes when you drown yourself. d8-)

On Jul 15, 2:32*pm, "Ed Huntress" wrote:

It's basically diversified across the entire economy. If the government
defaults, we're all screwed, and your other investments probably will go
with it.

May be true for you, but not for me.


As risks go, a government default is pretty well hedged -- not by a
guarentee of performance, but by a near guarentee that everything else would
go with it, anyway.

If you're worried about that, buy gold. You can always use it to weight down
your shoes when you drown yourself. d8-)


I do not think gold is a good investment. I am not expecting a
government default, but think it is nice that if it does I will still
have investments that will not sink as much as most U.S. based
investments.

Dan
--
Ed Huntress

On Jul 15, 1:33*pm, Bill wrote:


What does "safer" mean? *You may do better thinking in terms of
"expected value" and "standard deviation". *I agree with you: I think
the bottom line is to be *diversified*. However, following any
assumption comes with a risk. *So does driving your car.

Bill

There is some risk with anything. I have some low risk investments
and some fairly risky investments. By fairly risky, I mean
investments where I could lose all of my investment, but would lose
more than I invested. But I have more than one risky investment. So
if several go bust, but several do real well I come out ahead. And a
lot more fun than investing in government bonds.

Dan

On Jul 15, 2:32*pm, "Ed Huntress" wrote:



And what is the nature of that risk?

You do not make any money and run out of money when you are retired.
If you do not make more money than the rate of inflation, you are
losing wealth.

That's not a risk. You know the situation going in. The risk is that your
investment doesn't perform, and it's all a big surprise.



Ed Huntress

Wrong.

Dan

wrote in message
...
On Jul 15, 2:32 pm, "Ed Huntress" wrote:

It's basically diversified across the entire economy. If the government
defaults, we're all screwed, and your other investments probably will go
with it.


May be true for you, but not for me.

Good for you. Maybe you're even right. Chances are, though, you're not.

As risks go, a government default is pretty well hedged -- not by a
guarentee of performance, but by a near guarentee that everything else
would
go with it, anyway.

If you're worried about that, buy gold. You can always use it to weight
down
your shoes when you drown yourself. d8-)


I do not think gold is a good investment. I am not expecting a
government default, but think it is nice that if it does I will still
have investments that will not sink as much as most U.S. based
investments.

I used to have lunch with an amateur stock-market ghoul. He gave me the
creeps. d8-)

I'll bet on the US. You bet on whatever you want.

Dan

--
Ed Huntress

wrote in message
...
On Jul 15, 2:32 pm, "Ed Huntress" wrote:



And what is the nature of that risk?

You do not make any money and run out of money when you are retired.
If you do not make more money than the rate of inflation, you are
losing wealth.

That's not a risk. You know the situation going in. The risk is that your
investment doesn't perform, and it's all a big surprise.



Ed Huntress

Wrong.

Right. What you described is not risk. It's pretty much guaranteed. What is
at risk is your private investments.

--
Ed Huntress

wrote:
On Jul 15, 1:33 pm, wrote:


What does "safer" mean? You may do better thinking in terms of
"expected value" and "standard deviation". I agree with you: I think
the bottom line is to be *diversified*. However, following any
assumption comes with a risk. So does driving your car.

Bill

There is some risk with anything. I have some low risk investments
and some fairly risky investments. By fairly risky, I mean
investments where I could lose all of my investment, but would lose
more than I invested. But I have more than one risky investment. So
if several go bust, but several do real well I come out ahead. And a
lot more fun than investing in government bonds.

Dan

It's my point of view that it's a better hedge against inflation too.
I think I'd rather be invested in MMM (3M) than $$$.

Bill

On Jul 15, 5:57*pm, "Ed Huntress" wrote:

Good for you. Maybe you're even right. Chances are, though, you're not.

I think I am right. if I am not, I sure pity the average person.


I'll bet on the US. You bet on whatever you want.

And I have. A lot of U.S. investments but not much in the Finance
sector or the Media Sector. Betting everything on the U.S. is not a
good idea.

* * * * * * * * * * * * * * * * * * * * * * * * * Dan

On Jul 15, 5:58*pm, "Ed Huntress" wrote:


Right. What you described is not risk. It's pretty much guaranteed. What is
at risk is your private investments.

--
Ed Huntress

I can not conceive of my running out of money during retirement.

Dan

wrote in message
...
On Jul 15, 5:58 pm, "Ed Huntress" wrote:


Right. What you described is not risk. It's pretty much guaranteed. What
is
at risk is your private investments.

--
Ed Huntress

I can not conceive of my running out of money during retirement.

That may or may not relate to what we were talking about. If you mean you
can't conceive of your private investments tanking, then you're assuming
that well-crafted investment portfolios don't have risk. They do. A lot of
people got big surprises just a few years ago.

If you mean that the money you have in retirement doesn't depend on your
investments, well, that's good for you. But it wasn't the subject.

--
Ed Huntress

On Jul 15, 6:59*pm, "Ed Huntress" wrote:

I could not figure out what you were referring to when you said "
Right. What you described is not risk. It's pretty much guaranteed."

Dan