Originally Posted by Guest

Really?
So loaning private funds to a general fund account is backed by IOU's??

What private funds?
IOU's backed by "the full faith and credit" of the United States.

Originally Posted by Guest

What private funds?
IOU's backed by "the full faith and credit" of the United States.

Call it whatever is correct in the parlance of government accounting or practice. However, my reference is to those funds contributed by individuals that will be expecting to get that (their) money back at an appropriate time.

As opposed to the genral fund with is not designated toward individual tax payers and thus available to squander.

No different than contributing to a retirement fund in a corporation. That money is not to be used by the corporation and replaced with an IOU.

I am aware of companies that do siphon off what they have decided are excess funds and used for other than the individuals retirement. Excess is/was the amount of $$ over and above the amount needed to satisfy all retirement payouts. Much different than an IOU as the basic contribution plus earnings is still intact. Making use of the excess....a legal accounting tactic.
I did not say right...just legal tactic.

The government could just as well have had an excess if they monies taken from SS were invested and not squandered......replaced with an IOU!!!
Borrowing money to fund IOU's. How long would that be tolerated in corporate America? Banking America?

From the perspective of the Government, the excess SS funds have been "tucked away" in special Treasury bills till such time as they are needed. As I stated earlier, this is essentially an accounting trick to legally allow Treasury to go out on the global market to borrow the money when the IOUs are cashed in by SS. Is this mismanagement by SS? I don't think so. SS does what they are told by Congress. There is other legal way to "invest" the excess taxes that were collected in the name of SS. Essentially, Treasury borrowed money from SS to help pay for deficit budgets. You can certainly argue that they should have adjusted SS taxes on an annual basis to exactly match benefits paid - that would have left more money in my pocket. In that case, Treasury would have borrowed even more money. If you want to argue that Congress has mismanaged something then point to the entire Government - I wouldn't pick just on SS.

Originally Posted by Guest

Is the highlighted above intended to infer that SS funds have not been used for anything other than SS benfit?

The Federal Government is not allowed to invest the excess SS taxes, that were collected, in anything other than Treasury Bills. They are, as I understand, a special form of Treasury Bill. They collected more SS tax then need to pay benefits for a long period of time. Treasury put the SS taxes (including the excess) in the general fund, spent it (including paying SS benefits), and issued special Treasury Bills to SS (I call them IOUs) for the excess that was collected. That is how the Government operates.

Originally Posted by Guest

Really?
So loaning private funds to a general fund account is backed by IOU's??

How many investments would the general public make based on being given an IOU? With a company that can only profess to be able to borrow money to pay back the investor?!?!?!

I do not know the answer, but where is it written that there is no place to go except Treasury bills?

Two issues. First off, the Government makes up their own rules. Secondly, SS is not like a 401(k) or IRA. The money you contributed does not have your name on it. SS is a pay as you go program. When you work, you pay for those getting SS benefits. When you retire, your SS benefits are paid by those working.

The Government cannot invest the excess SS taxes that were collected in the same way that you or a private company can. By law, the money can only be "invested" in Treasury Bills. The actual excess money that was collected was indeed spent since we have always, with just a few exceptions, had deficit budgets. SS has earned a fair amount of interest on those Treasury Bills (on paper). What most people fail to realize is the cashing in of those "investments" when SS taxes can't cover benefits that are due (this is where we are now), requires taking on additional real debt on the global markets to get real money to pay those benefits since we continue to run deficit budgets. Before that point, it is a zero sum game as one Government Department wrote an IOU to another Government Department.

Originally Posted by Guest

Call it whatever is correct in the parlance of government accounting or practice. However, my reference is to those funds contributed by individuals that will be expecting to get that (their) money back at an appropriate time.

As opposed to the genral fund with is not designated toward individual tax payers and thus available to squander.

No different than contributing to a retirement fund in a corporation. That money is not to be used by the corporation and replaced with an IOU.

I am aware of companies that do siphon off what they have decided are excess funds and used for other than the individuals retirement. Excess is/was the amount of $$ over and above the amount needed to satisfy all retirement payouts. Much different than an IOU as the basic contribution plus earnings is still intact. Making use of the excess....a legal accounting tactic.
I did not say right...just legal tactic.

The government could just as well have had an excess if they monies taken from SS were invested and not squandered......replaced with an IOU!!!
Borrowing money to fund IOU's. How long would that be tolerated in corporate America? Banking America?

That works as long as somebody is willing to buy Treasury Bills.

Originally Posted by Guest

What private funds?
IOU's backed by "the full faith and credit" of the United States.