The Social Security Trust Fund Is So Broke.

http://www.ssa.gov/qa.htm

Q. Does Social Security have dedicated assets invested for my
retirement?

A. Social Security is largely a "pay-as-you-go" system with today's
taxpayers paying for the benefits of today's retirees. Money not needed
to pay today's benefits is invested in special-issue Treasury bonds.

PB:  Special issue Treasury bonds, eh?   Gee, I wonder what those are?
Notice the word "invested" in there.  Very important.  Governments use
language differently that you and I.   More on this later.

Q. Is there really a Social Security trust fund?

A. Yes. Presently, Social Security collects more in taxes than it pays
in benefits. The excess is borrowed by the U.S. Treasury, which in turn
issues special-issue Treasury bonds to Social Security. These bonds
totaled $1.9 trillion at the beginning of 2006. Social Security
received $94 billion in interest from bonds in 2005. However, Social
Security is still basically a "pay-as-you-go" system as the $1.9
trillion is a small percent of benefit obligations.

PB: "Borrowed by the US Treasury."   There you have it folks.   Let me
translate that for you.   The Govt. took the money that was in the
Trust Fund, spent it, then replaced it with IOUs.   So, where's the
money coming from to pay off those IOUs?    Wait for it...

Q. I hear that Social Security has a big financial problem? Why?

A. Social Security's financing problems are long term and will not
affect today's retirees and near-retirees, but they are very large and
serious. People are living longer, the first baby boomers are nearing
retirement, and the birth rate is low. The result is that the
worker-to-beneficiary ratio has fallen from 16.5-to-1 in 1950 to
3.3-to-1 today. Within 40 years it will be 2-to-1. At this ratio there
will not be enough workers to pay scheduled benefits at current tax
rates.

PB:  At current tax rates?   Oh oh... this is starting to sound
ominous.

Q. What will happen if Social Security is not changed?

A. If Social Security is not changed, payroll taxes will have to be
increased, the benefits of today's younger workers will have to be cut,
or massive transfers from general revenues will be required. Social
Security's Trustees state, "If no action were taken until the combined
trust funds become exhausted in 2040, much larger changes would be
required. For example, payroll taxes could be raised to finance
scheduled benefits fully in every year starting in 2040. In this case,
the payroll tax would be increased to 16.65 percent at the point of
trust fund exhaustion in 2040 and continue rising to 17.78 percent in
2080. Similarly, benefits could be reduced to the level that is payable
with scheduled tax rates in every year beginning in 2040. Under this
scenario, benefits would be reduced 26 percent at the point of trust
fund exhaustion in 2040, with reductions reaching 30 percent in
2080." See the 2006 Trustees Report.


PB:  I posted this mainly because someone who imagines he knows
something challenged me that social security was funded until 2041.  In
short, that person believes what the govt. is telling him, but if you
read between their own lines, you can see it just ain't so.   The SSTF
is effectively empty.    They took the money, spent it as general
revenue, and replaced it with zero coupon bonds, the first of which is
due in 2012.  So, where's the money coming from to pay off those bonds?
Have you guessed yet?  Right, well it's coming out of YOUR pocket in
the form of taxes.

So, how is this is an "investment?"

Here's the definition of investment, for anyone not familiar with the
term:
http://www.investorwords.com/2599/investment.html

Definition 1
In finance, the purchase of a financial product or other item of value
with an expectation of favorable future returns. In general terms,
investment means the use of money in the hope of making more money.

Definition 2
In business, the purchase by a producer of a physical good, such as
durable equipment or inventory, in the hope of improving future
business.

So, how does a govt. issuing bonds then buying them back later with
your taxes constitute an investment?  They taxed you once already when
you paid into the damn fund, then they "borrow" the money, spend it as
general revenue, then pay back the loan by taxing you again?  Huh?

This is the kind of stuff that sent Enron executives to the slammer,
but the govt. does it with impunity, even calls it an "investment" and
you people believe them.  Well, not all of you, hopefully, but at least
one, and as far as I'm concerned, one is ONE TOO MANY!  That person
just better not get on my escape saucer is all.  If he does, I'll smack
him upside the the head with a fire extinguisher and toss him out the
door at 30,000 ft.