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FBaggins

(26,681 posts)
34. Apologies... but you still don't get it.
Mon Mar 28, 2016, 03:42 PM
Mar 2016

No. The Fed only sets short-term treasury rates. The longer-term rates that drive "returns" on the SS portfolio are entirely market-driven based on future expectations of inflation. The Fed can "twist" and impact that market, but they can't set it by fiat. Just compare 10-year treasury rates to the Fed Funds rate over the last decade.

should tolerate getting interest that's below inflation?


The expected "return" net of inflation for the trust fund is, and always has been, zero. This is not an investment account.

Why should we be involuntarily taxed for a specific purpose... then have no floor on how low interest rates can sink?

You're acting as though your payments were supposed to go into an account in your name that would earn interest. That's the right-wing's spin in order to support privatizing the program.

You keep missing the math. It's entirely irrelevant what interest rate is paid because there isn't any money there... just debt. If they artificially declare that SS will be paid 5% above market rates, then the impact on the amount that they must pay out over the coming decades is entirely unchanged. It would make the fund look solvent by one measure... but would not change at all the changes that would need to be made (tax increases, cuts to other programs, or retirement age changes) in order to pay out the promised benefits.

A start TrueDemVA Mar 2016 #1
they will pay it back eniwetok Mar 2016 #4
So double taxation for the same benefits. OnlinePoker Mar 2016 #6
some canadian money is invested OUTSIDE the country eniwetok Mar 2016 #11
regressive vs progressive eniwetok Mar 2016 #54
It's not just taxation to pay back the interest OnlinePoker Mar 2016 #57
That's still a dumb idea Recursion Mar 2016 #38
LBJ and the "unified budget" NT 1939 Mar 2016 #48
It isn't raising alarm bells because the trust fund is supposed to be spent. jeff47 Mar 2016 #2
no guarantee the GOP will implode eniwetok Mar 2016 #12
There's no guarantee the sun will rise tomorrow Major Nikon Mar 2016 #14
it's untenable if the only new revenue is from eniwetok Mar 2016 #23
I'm speaking about the GOP, and not SS Major Nikon Mar 2016 #25
There's only so long the Democratic party can keep the Republican party alive. jeff47 Mar 2016 #17
where did you get 30 years from? eniwetok Mar 2016 #24
The 2034 claim started in about 2004. jeff47 Mar 2016 #30
I don't know where you got those numbers eniwetok Mar 2016 #40
From previous reports. Just because they're not online does not mean they do not exist. jeff47 Mar 2016 #41
*Applause* Recursion Mar 2016 #39
Is that you Pete Peterson? Fuddnik Mar 2016 #3
hardly eniwetok Mar 2016 #8
There it is! -none Mar 2016 #35
The rate that the government lends to itself is inherently trivial Taitertots Mar 2016 #5
2.8 trillion is trivial? eniwetok Mar 2016 #9
You're missing the point FBaggins Mar 2016 #15
of course... eniwetok Mar 2016 #37
"Lent and spent". It's gone. Every penny comes from increased taxes Taitertots Mar 2016 #50
shifting the tax burden... eniwetok Mar 2016 #52
The obligations are independent of the income stream. Taitertots Mar 2016 #53
see post above eniwetok Mar 2016 #55
of course interest payments come from the same source... somewhat. eniwetok Mar 2016 #56
Sorry... untrue FBaggins Mar 2016 #7
what's "untrue"? eniwetok Mar 2016 #10
The entire premise of the article. FBaggins Mar 2016 #13
sorry... you're incorrect eniwetok Mar 2016 #19
Apologies... but you still don't get it. FBaggins Mar 2016 #34
missing the math? eniwetok Mar 2016 #42
interest rates are set by Congress eniwetok Mar 2016 #22
Well, yeah Congress can always amend the SS Act. But until they do that, it's pretty much a market Hoyt Mar 2016 #28
comparable interest paid eniwetok Mar 2016 #43
Nope. They're tied to market rates FBaggins Mar 2016 #33
so you want to cut benefits? eniwetok Mar 2016 #21
Lol... nope FBaggins Mar 2016 #32
when you eniwetok Mar 2016 #44
Ultra low interest rates are not healthy for the economy in general... Wounded Bear Mar 2016 #16
nope... I don't favor privatization eniwetok Mar 2016 #20
In general, I agree.... Wounded Bear Mar 2016 #27
I think they have driven rates down in the hopes of spurring job creating business. Hoyt Mar 2016 #29
Low interest rates also reduce unemployment and generally boost the economy. jeff47 Mar 2016 #31
low interest rates eniwetok Mar 2016 #45
And it hasn't worked well because of other issues that only Congress, not the Fed, can address. strategery blunder Mar 2016 #47
And NO privatization Omaha Steve Mar 2016 #18
Raise the cap. nt WhiteTara Mar 2016 #26
or stop exempting capital gains eniwetok Mar 2016 #36
and, not or... Wounded Bear Mar 2016 #46
Ultra low interest rates... sendero Mar 2016 #49
Agreed. Allowing giant banks to borrow money for free from the taxpayers without no requirement GoneFishin Mar 2016 #51
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