Social Fund News

Social Security is in trouble!

According to the Social Security Trustees report, the Social Security program $ 7.7 T in a hole on 1 January 2009. This means that Washington would be $ 7.7 t need at this time, has invested at prevailing prices, to provide for the next 75 years, promises that the federal government has done.

But we need many more to keep Social Security sound, because the deficit is larger sense, both in the near future and over the horizon accounting seventy-five. From 1 January 2009, that number – the amount we need to invest would ensure the sustainability of the program for 75 years and over – was $ 15.1 T.

How much of this amount of money we now have real-time cash and invested transferable – that is, how much real money? Zero, zip, nada, nothing!

The truth is that the state guarantee of social security is a large unmet promises. How can it be?

All income tax is levied forwarded to the federal government and credited to the trust fund for Social Security. It would be logical to assume that the funds would be hard assets that could have been saved and invested to cover future costs of the program.

But instead of saving money and investing in a diversified pool of assets and readily marketable, the government spends and gives “special” back bonds.

Just consider what happens in this fund. First there are the figures in the balance of public finance reports.

According to these figures, Washington had issued about $ 2.4 T in the special issue, U.S. government bonds, which the European social security trust to 1 had booked January 2009.

The computer records the documentation of these securities are held in a locked filing cabinet in West Virginia. But there is a reason they are called special issue securities, and is not good.

Unlike normal bonds that people like us and the Chinese government can buy these bonds special issue, can not be sold, in other words, they pay the government that the government has given itself, must be repaid later – with interest.

Imagine that you or I could sit down to write notes, that we had something of value … What to make for a great way to make a living!

These accounting tricks could never have been allowed in the real world, where trust funds are subject to strict accounting rules and fiduciary standards. In essence, Washington is a huge game – collect Social security, the money for their purposes, and that in trust funds, which are largely a fiction.

A more accurate description would be “trust fund-the-government” or as some say, “You can not trust them and not financed.” Just another example of how the words in Washington do not use the same meaning in the Webster dictionary.

Soon, the Social Security program begin to pay more than take and this will probably happen in 2010 or 2011. This occurs because the income decreased during the recession – and at the same time, more and more people in retirement.

If the federal government has to begin to collect the special bonds to achieve pay the trust fund is cut taxes, increase benefits and / or sold to the public to raise money for the pensioners to obtain the actual performance. If the government issues more debt – to attract more foreign investors to part – that will lead to decades of debt and the cop dollars.

The results of these funds will soon be with confidence and many baby boomers are looking in the face.

In addition, several recent reports of the working poor than expected places in the official unemployment rate to a hair below the 10% … highest in 26 years. If we add those who are unemployed for more than six months, working part-time, but that a full-time job, and those seeking a full time job, but do have stopped us, the unemployment rate rises to 17% or almost 30 million people.

Many baby boomers are that the implementation, because of the recent turmoil in financial markets, they did not get where in the last 30-40 years with their investments, leaving them with no nest egg and the question of whether it found no safety net provided by his Social Security.

Soon after is the recognition that work longer have to come.

Unemployed conventional, baby boomers are turning many business and online business is based on establishing a number of good practices, tools, Internet software, training and support in a community of colleagues gifting whereby in the middle ‘in the New Economy 2.0: The Rise and entrepreneurs.

They are pursuing an approach which is essentially a copy of the successful community leaders. You can click on the shoulders of giants, you went and you may start as a successful home based business and make money in a reasonable amount of time to climb.

As you put the pieces of the joint together, you work on your personal training and continuing education. Like anything else, no one truly understands Internet marketing from the beginning. One reason is that there is much to know.

If you start to examine you, “Reengineering You” that includes the mastery of new skills, define your brand, and ensure that you have high energy and commitment to success.

Why you do not need much capital (as is often required in other business opportunities), one of the generate the best ROI (return on investment), how to manage a business of Internet marketing. The time is ripe to get started today. Around the slogan of a famous manufacturer of sports goods, “Just do it!”

Until next time, I invite you more about me and my various activities to learn later in my review of the link. Have a great day and later
Mike Farrell

On 30 September (about 2010), America still start a generational change. This is the last day of the fiscal year 2010, the government, and therefore a very important day for the Social Security (SS). 30. September is the last day, maybe for a long time that social security may be operating with a surplus.

Back in March, the Congressional Budget Office (CBO) has acknowledged that most of the financing of Social Security projections have been gradually, and sometimes in 2010, the program could begin to pay more than they are taking a. In August, the Social Security Board of Trustees similar, and they had also drastically revise earlier projections of solvency, said. A year ago, predicting the two agencies, the Social Security Trust Fund from the red would be left by 2016. This year they have changed their forecasts for 2010 and said it’s likely to happen already.

Following this year’s FICA / SECA tax revenues and social contributions, there is no reason to believe that the social security deficit already crashed in February 2010. But as there are no “official” government mandate on social security has officially entered the red, the end of the year will have to do now.

While there is a debate over when the SS began to lose money in 2010, there will be no discussion, as in 2011 or the year after or the year after, or maybe never again. Despite the 2009 projected fully on the contrary, expect the CBO and Social Security Trustees now that the fund suffered deficits indefinitely. There may be two or three years of the surplus, if the U.S. economy can avoid a recession double dip, but in the long run, in the words of the Board of Trustees of the SS, “cost of the program permanently exceed the revenue.”

In summarizing the results of the CBO, the credit crisis and the subsequent “major correction” moved to a future crisis in Social Security in the present. In fact, the whole thing just got worse. Crash of the stock market and unemployment misery, as we have recently suffered long-term, potentially irreversible effects on wages, income inequality, pensions and tax revenues. All these negative pole on the social security in a time which is already bearing a heavy load.

But as you may recall, we have been here. A bout the not so different from high unemployment and lousy economic growth in the 70 years the Social Security brought to a sudden crisis in the early 80s. Until 1982 the powers that rubbed not only on the deficit orientation program, they had every reason to believe that social security would be the money in less than a year.

. The solution Reagan administration was a bipartisan working group “National Commission on Social Security reform (NCSSR) cause order, the Commission presented Washington a man who is considered one of the most successful monetary and fiscal policy planners in American history must: Alan Greenspan .

In short, it was the Greenspan Commission “the end of social security as we know, or at least as we have known in 1983. This year the Commission published its conclusions and recommendations, most of which were gradually being put next to the decade.

Here are some key elements of their reform:
- Social Security tax rates (including Medicare taxes) increased from 9.35% in 1983 to over 15% in 1990.
- The minimum age for services file was slowly increased from 65 to 67.
- The cost of living adjustment (COLA) has been due to wage increases or inflation redesigned, the lower. So far, only COLA increase with inflation.
- The taxable wage base has increased dramatically. In 1983, all individual income over $ 32,400 not subject to social security, free. Now that the basic level is $ 106,800.
- Plan for Greenspan offered a social protection to more employees and federal tax exemption that were previously excluded.
- Basically, Greenspan was Fix for Social Security, to take more money and pay less than they at a later date.

And with the help of an American economic boom through most of the 80s and 90s, it worked until I did. As mentioned above, we are almost back to square one.

The irony is true that there is no reason to believe that there is no long-term solution Greenspan, in the first place. The committee consisted of Chairman Greenspan, Reagan Chief of Staff Jim Baker and a secret key goal of the Baker was just about Social Security not an issue for the elections 1984th Like most administrations, was the real crisis in the next person will be treated next.

The current generation of leadership is now “the guy”. Worse, the crisis of social security is larger than what we faced in 1982, which was a combination of a cyclical downturn and the economic rules of the SS and the mechanisms that need reform. Today we are facing a structural crisis, they are called baby boomers.

76 million Americans between 1946 and 1964, the so-called Baby Boomers born. On 1 January 2011, the oldest member of that demographic – the biggest America has ever seen – will turn 65th At present there are about one-third of the total U.S. workforce. In its place is Generation X, about 46 million people strong. With a quick, back of the envelope calculations appear, this € 30 million less in contributions to fund social security and millions of new beneficiaries.

When the idea of social security first brought to the table, again in the post-FDR, the Great Depression, there were 16 participants for each beneficiary a Social Security number Social Security. Today the ratio is closer to 4:1. By 2030, when America bears the full weight of the baby boomers retire, that ratio is 2:1. To accommodate such a relationship, whether the recipients have fewer or more workers must pay. The current method of financing is simply not true.

And there’s a whole other “problem” with the current or soon-Social Security beneficiaries are likely to be much longer (and expensive) to live the lives of their parents. In 1935 the average life expectancy was 65 years, so that the minimum age to collect nearly a death sentence cruel irony SS. Today the average American who has about 77, but the minimum age to collect benefits only increased by 2 years. And if you think that people are technically savvy, we are on the point of generation medical innovations that can extend our life expectancy in three digits.

So what happens when America’s largest demographic ever known taps into a fund already a deficit? And what will we do if … well … not die in time?

You can complain, “in Social Security each month to pay for the last 40 years and I earn every penny” until the cows come home, but it’s simple math cool. If you’ve been in the job that long, now is the difference between what is right and what is the reality.

The reality of the moment is this: you must be willing to pay more Social Security taxes and prepare to receive fewer benefits. As it stands now, there is only enough money to finance the social security program, as we know it. 2500000000000 $ links with Warchest in SS, there is no immediate threat to the status quo. But, as the Board of Trustees SS weather in August, “Over [a] period of 75 years need the trust fund additional revenue equivalent to 5.4 trillion U.S. dollars in present value dollars to pay all scheduled benefits.” This gap is by borrowing from abroad, taxation at home, or cutting the benefits of these be filled out in retirement. In both cases it is difficult to imagine a happy ending for Social Security. E ‘in your best interest to build a substantial retirement fund of their own, and most importantly, for your children.

I hope this article gives an overview of some “more insurmountable demographics, bumbling bureaucrats, and touch the infamous Greenspan. I am in favor of a quote from Steve Forbes … Forbes says that the pursuit of further financial education and the resulting increase in our knowledge of the financial mechanisms, our eyes are accustomed to dealing with our money and wealth with the creation of alternative strategies, which opened its key to solving our financial crisis.

To the necessary financial education, it is best to follow along with the access and membership in a community of wealth creation. As a result, look for information on alternative strategies and the creation of wealth for investment in non-dollar … perhaps emerging … perhaps energy assets inherently suitable as oil rigs, hydro, or methanol plants are … perhaps precious metals, rare earth, water rights, oil, natural gas, potash mines or the gold mines … difficult things to build to replace difficult and expensive to replace … certainly not financial stocks, retail stocks certainly not least of all commercial real estate.

For those who want to protect the purchasing power of gold, there are several ways that are adapted to to receive such protection. This includes direct ownership in coins, the use of gold exchange-traded funds, mutual funds, gold and junior gold stocks. Many of them have the investigation IRAs are gold, silver, precious metals and currencies denominated in dollars.

In addition, for those who really believe country risk is the greatest danger is particularly, it has to be found useful as a strategy for the flag to spread the risk or protection against higher taxes, capital controls, hyperinflation, implement unrest civilians, the erosion of personal freedom and the birth of a police state. With a system of several flag is willing to buy similar, but not limited to, a foreign bank account, real estate abroad, in search of alternative sources of income, dual nationality and the implementation of several passes.

I will continue to examples of things we need to learn the secrets of the professionals, as part of the type to be good with our money, and bring in the wealth creation of alternative strategies in future articles and updates on my blog for the next weeks.