"I would NOT want to be reliant on a government handout at this point. They are going to default like crazy on your ass."

Is there anything one can be reliant on, anymore? Someone created a 600 trillion dollar derivatives bubble.

Wages can be dramatically cut.
The FDIC could be dropped and depositors left on their own.
The money supply can be dramatically inflated, destroying the value of savings.
Gold profits can be taxed at 90%.
You can be screwed any which way you can turn, no matter how well you IMAGINE you have protected yourself from whatever is coming.

The endgame will be in the Fed getting Treasury to hold the bag.

Figure out the mechanism for that and trade accordingly

Awells:

then the payroll tax cut makes it necessary that SSA redeems some current bonds from the trust fund and spends it,

there are no "bonds" in the trust fund. Show me a CUSIP. It's "non-marketable" debt, which is a fancy way of saying its an IOU. To cover the gap between SS revenues and expenditures, treasury has to borrow by issuing good old US treasury bonds.

Now treasury has been apparently paying interest on the money they've "borrowed" from SS. What Publius has uncovered is that they missed an interest payment.

You can argue about whether or not this is a default (I'd say not), but the more interesting thing to me is that it shows how the US Gov will handle things in a crisis. They will prioritize and give seniority to bondholders (in this case treasury holders) over intra-governmental obligations, which can be weaseled out of in a pinch.

If you are under the age of, say 65 and were counting on seeing any money from SS, plan accordingly.

Fellow Travelers:

The flashes of light and other visual and audible artifacts you are experiencing are evidence that we have passed the event horizon and are now entering the actual vortex.

I've been waiting for this for the past twenty years, ever since I began reading and understanding the Austrian School. It makes perfect sense. The status quo will do everything you can imagine, and lots of things you can't, to preserve the status quo. They have all the power, but they are out of money. When the power structure that supports the status quo comes to grips with the fact that there is no solution, the power structure will abandon them and so the power will evaporate. That is our moment. Until then, got popcorn?

When I first learned of the SS Trust funds scam back in the early 80's, I pointed this out to our local congresscritter and suggested that a viable alternative to this fiction would be to fold Fannie and Freddie into the SS Administration and then use SS taxes as a capital base for home ownership.

The funds would earn a real rate of return, The taxpayers would recieve an immediate benefit for their contributions and the portfolio would grow with leverage in proportion to population.

Of couse, this was before I fully understood the predatory nature of the Fed and the whole banking system. They don't want answers. They want desperate people who are willing debt slaves.

Do people really forget why SS was put in place? Were all of those who were poor and hungry during the GD just getting what they deserved?

When people in power loot the system, it is the people who have just been trying to get by whose get hit the hardest.

It should have been run as safety-net/insurance type of program. SS should have been to provide a basic income, for those who needed it.

You buy all sorts of insurance and don't expect to recover the cost of your premium.

This **** is so fascinating.
It's way above my head, but I can almost grasp this convoluted accounting crap....

I appreciate when you guys boil it down to a 8th grade level.

If you can strip it down to a 5th grade level, I just might get it.

OK, that's easy.

Treasury owed a coupon payment to the trust fund on the 30th.
They didn't make the payment.

Kinda like not paying your car payment, yanno, except that the retirees haven't (yet) shown up to repossess the Treasury building.

For those who find the thought of the elderly eating pet food so funny...

I read a lot of bluster about how no one feels sorry for those depending on the system. Do you feel the same way about all of the hard-working people who will have no job when the money those on SS spend goes away?

How funny will it be when these people, young and old, healthy and sick are on the streets begging for food?

Maybe you can cheer them up with the knowledge that they are being kept "safe"...by the War on Drugs, War on Terrorism, War in Iraq, War in Afghanistan, War in Pakistan, War in Libya.

After all, a nation must have priorities and the Constitution is OK with Billions each month for war.

The fact of the matter is that no one should be cheering any of this because it is just plain SAD!! For all!!

My question.........how does SS payments compare in total payments to the welfare state? If you add SS, SSI, etc. to welfare monthly payments, food stamps, section 8 housing, etc. it would seem that welfare is the greater outlay. Somehow it seems wrong to deny SS and pay all these "slugs" who are 3rd generation welfare.

The U.S. should simply issue $4 trillion in dollars to repay the intergovernmental debt. The money could be used to redeem the lousy "non-marketable" securities. The money could be issued debt free.

So did Timmy just prove Social Security is not subject to 14th Amendment?

He's has put the validity of the public debt in question by not paying the coupon due on Social Security because doing so would have caused us to breach the debt ceiling.

(Yes, I am Captain Obvious)

They did the same **** with Obamacare: it wasn't a tax until it was.

Could someone make this come back to bite them in the ass?

I mean they HAVE opened this door.....

Wartelle6, you know why SS was put into place? So FDR could add a new tax onto the people and not call it a tax.

Snooze, That is a good idea - it would have solved and prevented so many problems. Guys on GS scale running a public utility may have some political pressure but no personal interest in blowing a bubble to garner a giant paydays.

It would have avoided the problems with investing that stuff in equities and so on.

Snooze for Congress!

If they get the $2.4 Trillion increase in the debt ceiling we might make it through the election cycle (which is their intent in all likelihood). . But the big cuts ARE coming.

Quote:

The endgame will be in the Fed getting Treasury to hold the bag.

FigThe endgame will be in the Fed getting Treasury to hold the bag.

That's what I think as well.

Wart wrote..

When people in power loot the system, it is the people who have just been trying to get by whose get hit the hardest.

For many, "just trying to get by" can be translated to "living one notch above their means for their entire lives"... Which is to say, they blew their money on things they wanted and didn't save a ****ing cent for retirement.

I grew up watching my folks do it. Almost every damn friend I have watched their folks do it. Hell, my generation started off doing it but we're in the midst of learning a pretty valuable lesson about living that way.

Seems to me, many folks retiring now drawing SS as their only means of survival didn't bother to do the damn math on the ponzi.

Is there any way they could have paid and have it not be reflected on that balance sheet? Is there any sort of accounting tricks they could have done to not go over the debt ceiling? Is there any way to verify if payment actually occurred or not, regardless of what the sheet says?

Quote:

The fact of the matter is that no one should be cheering any of this because it is just plain SAD!! For all!!

It's less sad in the long run than a continuation of the present state of affairs. Everyone should be cheering the end of a corrupt system no matter the pain it brings, because without it there can be no rebirth and no positive future to look forward to.

What is sad is how we got here and the fact that 95% of the people have no clue what is going on. I agree the sooner the better, but it is going to be much worse than what I beleive most think even those who get it. Think of Greece with the avg person owning two guns like we have here.

Quote:

Think of Greece with the avg person owning two guns like we have here.

lol. ya, disarm law-abiding citizens... That'll make things go much smoother.

Have you considered that this is a scheme to get congress to raise the debt ceiling? "if you don't play my way, I'll take my marbles and go home!" That'll show you!

A bunch of spoiled brats we are.

Look at the liberal hacks that wandered over from HuffPo:

Wartelle6 wrote..

Maybe you can cheer them up with the knowledge that they are being kept "safe"...by the War on Drugs, War on Terrorism, War in Iraq, War in Afghanistan, War in Pakistan, War in Libya.

Straw man much?

Signas wrote..

As long as there is plenty of money for war, bombs spreading DU over large portions of the earth, killing and the Crusade on brown people.

Another victory against no one!