Thursday, October 18, 2007

Where's The Beef? (My Social Security Money!)

One of the greatest mysteries of our time, for most of us....myself, "Where is ALL that SS money collected each year from your check and mine (& our employers)?"

One can picture this huge pot of money that has been growing for decades as we worked our way through life. As one on the cusp of the "Baby Boomers" (I'm going to be 65 January 1st....which for some strange reason the government considers as December!) I have thus far chosen to not delve into SS monies. I am retired, but did not need to take the monies, and as I am still on contract to my former employer for some part time work would find myself making more than allowed without some penalty. Instead to this point I have allowed my SS to grow. January 1st I begin taking from the pot....which actually places me alongside the boomers who are opting out at 62!

So, now I began to look beyond the smoke-and-mirrors issued by ALL our politicians to find out how to locate "MY" money!

It is not easy to do. Probably, on purpose.

However, here is a real simplification of what I found....and please fellow-SSers who perhaps better understand, let me know of any errors in this.

It appears to me that as of 1997 (latest figures available) the fund should have had $636 BILLION. That ain't hay folks. It also is not there!

You see, Uncle Sam (DEM & GOP & IND) has utilized OUR money for other government programs while giving us Government Securities which earn interest. As of 1997 The interest earned was $43.8 BILLION. HOWEVER, in 1997 (a typical year?) the Government also took out another $90 BILLION by issuing another set of Government Securities.

NOTHING is being repaid into the fund in terms of the actual funds taken for other programs! Nothing! Only interest on those funds.

Now comes the crunch.

The boomers are arriving and taking their first returns on a lifetime of investing in SS. They are, however, arriving at a rate faster than the existing monies and interest will be able to pay them!

The logical answer to me would appear to be.....Government begins to repay the initial amount taken in Government Securities back to the fund. BUT Whoa! That is H-U-G-E!

Just to STOP taking out the money coming in would short the government's operation by that $90 BILLION they took in 1997 (probably much higher now!). That is $90 BILLION which would have to be compensated by a) cutting programs, or, b) raising taxes.

& That is without even beginning to pay back the monies already used.

To begin to pay back the initial monies taken and used will be a completely separate set of a) cutting programs, or, b) raising taxes.

You will see most politicians commenting that we are "Good" until 2030 to 2070, depending on whose figures you use, before we have a real crunch. Not by what I see. It appears to me that that floating point in time is actually the point of disaster. That seems to be the point where the money is gone....and still flying out the window....while the combination of stopping the siphon & raising taxes a reasonable amount will NOT BE ENOUGH!

The reason the pols want to make SS appear secure to the future point is obvious. No one wants to be responsible for "biting the bullet" and beginning the cure. GWB tried with his personal investment fund. DEMs, ever wanting ALL monies to flow through government coffers, find the idea abhorrent. In addition, most pols now in office will be gone at crunch time, thus "What, Me Worry?" is the theme.

Whatever the choices to be made for the future.....I am sure I'll be settling in for my long nap prior to the demise of the system. I worry for the kids of today. Those in their 20s-30s-40s, etc.
They are paying into a system that will either not be there, or will be taxed at a huge increase, and the returns to them will be cut.

Anyone today in that 20-40 group planning for their retirement had better find a solid 2nd source. SS, which always has been a SUPPLEMENT, not a primary retirement income...may not even be there for them in an amount which means much to retirees.

A sad situation created by the hungry pols in Washington....of both parties. It is tolerated by we voters through use of the smoke-and-mirrors I mentioned earlier. Until the general public has a clear view of this, and is motivated to elect those who will deal with it, the situation continues down a slippery slope.

& Hillary expects us to believe Health Care can be successfully run by Government? Ha!


ONE of my sources for figures used!