"Max Sawicky" <[email protected]> wrote:
> SS benefits are set by law, there is no automatic connection with whatever is > in the trust fund. I fail to see how what's in the trust fund makes cuts more > or less likely. No, once the Trust Fund is depleted, SS can only payout at the rate that money comes in unless Congress authorizes the use of general revenues to make up the shortfall. IIRC, the Trust Fund was depleted in 1982. > ... They are no more or less fictitious than any other Gov bond, and arguably > less fictitious than corporate bonds. > The safer the investment, the less fictitious, and almost nothing is safer > than US Gov securities, as far as default goes. I was using the term fictitious capital as Marx used it. That is a stream of payments imputes a market value depending on current interest rates. For instance, if a corporation has $20.00 of capital for each share of stock and the stock is valued at $40.00 then the stock has $20.00 of fictitious capital. > The interest rate earned by the bonds does in fact depend on market > conditions, hence indirectly on quantitative easing. Bonds issued this month will receive 1.5% interest which reduces the remaining life of the Trust Fund. I would hope that the Trust Fund would be able to purchase bonds at a more reasonable minimum 8% rate corresponding to the return that private investors make. > http://www.ssa.gov/oact/progdata/intrateformula.html Good site. Other links from there were informative. The SS Trust Fund has $ 2,609,668 million worth of bonds, and revenues are greater than disbursements, so future SS recipients shouldn't have to worry in the near term. Somebody didn't have to pay part their reasonable tax load because of the SS Trust Fund, but as the SS Trust Fund is depleted taxes will have to go up to keep the debt at the same level. -- Ron
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