Payroll Tax Cut Debaucle

Well, SS and Medicare are already intragovernmental holdings. However, you are ignoring the fact that SS and Medicare are experiencing debt. The government is making more payments than they are taking in.

 

I'm not ignoring that at all. That is why the question of solvency is coming up because it is currently taking in a shortfall each year. The policy has it where if they use up all the trust fund they are by law not allowed to use any other money to make payments on shortfalls. So they would have to pay like .75 on the dollar or whatever.

My point is get rid of the Trust Fund add it to the general fund as a budget item and just pay people regardless of there being a shortage or not. That way there would be no threat of solvency and you wouldn't have to deal with this whole paranoia over the trust fund AND you eliminate $4.5 trillion of "debt".

The problem is the people who paid in to SS/Medicare would not be happy when the Govt just crosses out $4.5 trillion since people take comfort in knowing that the Govt has "invested" their money.

And you will notice all that happens when the Govt spends more than it receives is intragovernmental debt decreases and debt held by the public increases. Which even further validates my point.

 

You don't eliminate that debt. It becomes part of annual budget deficits. Sure, you eliminate the issue of solvency. However, you create a keynesian disaster.

 

You eliminate intragovernmental debt. It will become debt as the days go by and there is more and more going out than coming in. Either way it's not just going to stop when the Trust Fund is depleted. They will come up with some policy to keep it going.

The problem is people believe that money actually exists... and would not be very excited when the Govt told them it is nothing more than IOU's they wrote to themselves.

 

I think you are disregarding that the intragovernmental debt will become a part of the budget deficit. If you attempt to eliminate the trust fund in one big swoop, $4.5 trillion in intragovernmental holdings will automatically be added to the budget deficit of said fiscal year. You are not really solving the problem with Social Security, you are just bringing out a small flaw in designating entitlements as intragovernmental holdings.

The issue of solvency will no longer be a problem, but what will still exist is past deficits, which will now be considered part of the budget, and new deficits. Therefore, reform and spending cuts will still be necessary.

 

No it won't. Why would debt the Govt owes to themselves become debt held by public. Who would hold this debt and where would the money come to buy this debt. I don't think you fully are grasping what is happening here. There is no money. Eliminating the trust fund would have no effect what so ever on the debt held by the public. It is literally just for the Government and has no bearing on the public.

 

Wow, you don't give up with that magic fiscal policy huh? The Social Security liabilties can't just be rolled over, that 2.5 Trillion has to actually be paid out to recipents in the next 20 years. And that money has to come from somewhere. Those "assets" for SS are really liabilities for the US government.

The debt remains.

 

Lol, "magic fiscal policies". I'm one of the very few in this forum that actually understands how our system works. The fact that there are so many people like you out there is scary!!

Those "assets" for SS are really assets for the US government also. Have you not read a single thing I wrote?

The Govt doesn't owe themselves money. That is illogical. They owe people SS payments when they credit their accounts. If they credit more accounts then they debit then they will have to "borrow" regardless of the trust fund or not.

You have to be able to understand accounting and logic to understand how the system works and what I'm saying.

 

I suppose the silver linning is that SS and medicare/medicaid are where we primarily need to cut spending, so these temporary cuts bring us closer to permanent cuts to entitlements.

 

If you give yourself $100 in return for a piece of paper which says you owe yourself $100. Are you in debt?

 

Since we've gone over this before, I understand the futility of attempting to educate you on this issue.

That's the wrong question. If you borrow $100 from your 401k and blow it on the ponies, you still have to pay back your 401k account. So you are down $100.

 

What I'm saying is 100% backed by mathematics and logic. The fact that you are trying to attempt to educate me that math does not exist will not work, lol.

Why would I have to pay back my 401k account? You obviously have never taken an accounting class in your entire life. This is embarrassing that I can go through exact detail of how it works and you still can't understand it. Do you want me to draw you a picture... will that make it easier for you?

 

When you make a loan from your 401k, you are required to pay it back. Otherwise it's considered a tax penalty withdrawl.

It's occurred to me, (and (*)(*)(*)(*) it, it should have occurred to me earlier) that you are not merely some misinformed liberal, you are just a troll. Your view of economics and accounting are so incorrect that you couldn't have just picked it up from The Nation or even Think Progress. This just has to be a tug to see how far you could distract people with your nonsense.

I'm ashamed to say, pretty far.

 

It's mostly bs. The unemployment extension for 99 weeks is more of the bigger deal. Thats another 2 years if I am counting right. He's playing games with numbers-
1. The payroll tax numbers seem more than it is

2-He knows the number of families impacted by unemployment is high so he just gave them a reason to vote for him until after the election.

Just my opinion.

 

Lol, when you take money out of your 401k you have to pay a tax penalty on it, which is like 30%. You can still take money out of your 401k. What in the world are you talking about?

I just speak the truth. The fact it makes so many of you get all irritated is hilarious. Everything I say is completely backed by facts and logic and is why the USA does what I say and not what you say. Because what you believe is what idiots believe.

 

He's right. If you are still working for the employer where you have a 401k, you can make a loan, but have to pay yourself back.

FYI

 

You can take out a loan against your 401k or you can withdraw from your 401k. I read his statement as withdrawing from your 401k. Of course if you take a loan out you have to repay it back.

But his point was that was equivalent to the Government owing themselves back for intragovernmental debt. Which is entirely not true. The Government does not have to pay themselves back.

 

I don't think you can 'withdraw' from an active 401k. It has to be a loan. You also can't take a 'loan' from an inactive 401k... you have to withdraw and pay a penalty.

The govt has a hard time paying back their creditors... much less themselves.

 

The Govt paid back over $3.8 trillion to their "creditors" this year alone. They don't have any problem at all. You are just making that up.

As for the 401k... you are correct in the fact that it is hard to withdraw 401k funds as long as you are working for the company providing the 401k. Once you stop working, you can withdraw whatever you want at ~30% tax penalty.

 

If we keep passing bills that put $20 in our pockets while costing taxpayers $27 billion (of borrowed money) per quarter, it won't be long before we can't pay anybody back.

 

Another completely made up comment. We will never not be able to pay people back. It is a mathematical impossibility.

 

You are still incorrect and still a troll.

I gotcher number!

 

I am 100% correct. The Govt does not need to pay themselves back and they didn't loan themselves any money. The fact that you don't understand accounting and logic is not my problem!

 

LOL!

You're killin'!

 

Thanks! You are packing some serious intelligence with these come backs!