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Response to eniwetok (Reply #19)

Mon Mar 28, 2016, 02:42 PM

34. Apologies... but you still don't get it.

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.

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eniwetok Mar 2016 OP
TrueDemVA Mar 2016 #1
eniwetok Mar 2016 #4
OnlinePoker Mar 2016 #6
eniwetok Mar 2016 #11
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OnlinePoker Mar 2016 #57
Recursion Mar 2016 #38
1939 Mar 2016 #48
jeff47 Mar 2016 #2
eniwetok Mar 2016 #12
Major Nikon Mar 2016 #14
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Fuddnik Mar 2016 #3
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eniwetok Mar 2016 #37
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eniwetok Mar 2016 #52
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eniwetok Mar 2016 #55
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FBaggins Mar 2016 #7
eniwetok Mar 2016 #10
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eniwetok Mar 2016 #19
LineLineLineLineLineReply Apologies... but you still don't get it.
FBaggins Mar 2016 #34
eniwetok Mar 2016 #42
eniwetok Mar 2016 #22
Hoyt Mar 2016 #28
eniwetok Mar 2016 #43
FBaggins Mar 2016 #33
eniwetok Mar 2016 #21
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eniwetok Mar 2016 #44
Wounded Bear Mar 2016 #16
eniwetok Mar 2016 #20
Wounded Bear Mar 2016 #27
Hoyt Mar 2016 #29
jeff47 Mar 2016 #31
eniwetok Mar 2016 #45
strategery blunder Mar 2016 #47
Omaha Steve Mar 2016 #18
WhiteTara Mar 2016 #26
eniwetok Mar 2016 #36
Wounded Bear Mar 2016 #46
sendero Mar 2016 #49
GoneFishin Mar 2016 #51
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