Scott Burns: The Disappearing $2.7 Trillion Security Blanket

Ted

FYI: According to last year’s Social Security trustees report, the program’s trust fund would end 2014 with a stunning balance of $2.784 trillion. Unfortunately, the trustees also projected that 2014 would be the high-water mark. They expect the combined old age and disability income fund will close 2015 with a slightly lower balance, $2.758 trillion. Every year after that, the trust fund shrinks, as does its interest income.

And that’s a problem, right?
Regards,
Ted
http://assetbuilder.com/scott_burns/the_disappearing_$27_trillion_security_blanket

davidrmoran

Restores my faith in Burns, to see him understanding and properly describing the details of what national debt is, signifies, how it all works.

Old_Joe

Yes, that's nice, but it would seem that at some time in the distant future the US will be in the same position as Greece-

a) if there would be any lenders left with major financial assets
b) and who would desire to loan those assets to the US so that those lazy US workers can retire early at 85, if the ability of the US to repay was entirely based on the ability to borrow yet more so as to repay what we couldn't otherwise repay.

This pyramid scheme will only be exacerbated as the various financial forces now active continue to destroy the earnings power of the middle and lower classes, resulting in an ever-diminishing tax base to help pay for the future retirees.

Old_Joe

Ted said: "for their own selfish interests a tiny few think this is a social site where anything goes including tabloid material, politics, religion, or whatever. That just drives away folks who come here for mutual fund news, commentary, and fund views."

@Ted: hey there- so where does this topic fit into your "mutual fund news, commentary, and fund views" grouping? Seems to me more like a "selfish interest" politics or whatever category. Shame on you!

Ted

@Old_Joe: Any first year Econ. graduate student knows that 000-00-0000 payments are an income stream that can be considered as party of your overall fixed-income asset allocation. Therefore, any changes in the ability of the government to pay benefits can have a direct impact on your retirement fixed-income. asset allocation. I suggest that in the future Old-Joe you lead, follow, or get out of the way.

PRESSmUP

Old_Joe said:

This pyramid scheme will only be exacerbated as the various financial forces now active continue to destroy the earnings power of the middle and lower classes, resulting in an ever-diminishing tax base to help pay for the future retirees.

Yes...that is the rub. It seems clear to me that increased middle class disposable income creates increased spending, and thus demand, which then drives corporate revenue, and thus corporate earnings. If the middle class erodes, all sorts of problems follow. But that is just my thought.

SS can easily be fixed by raising the age slightly while bumping the earnings ceiling to $250K.

Problem solved.

Old_Joe

@Ted: You are correct, and my point made, thanks. Valid subject, but certainly not MUTUAL FUND related.