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  • #31996
    Profile photo of Vep
    Vep
    Survivalist
    member4

    <div class=”d4p-bbp-quote-title”>MountainBiker wrote:</div>Just a #’s correction here. There is no way that if 100% of individual and corporate income was $9 Trillion that SS & medicare could be $7 Trillion. I think the correct SS/Medicare spending is more along the lines of $1.3 Trillion, still a very big number. For $7 Trillion to be correct pretty much everyone in the country would have to be a retiree.

    Those numbers came from the Wall Street Journal. It’s being funded with enormous debt. Google ‘unfunded liabilities’. The ‘official’ debt, which is now about $18 Trillion is barely scratching the surface on the true scope of the problem.

    http://townhall.com/tipsheet/guybenson/2012/11/28/americas_true_national_debt_87_trillion

    Here is from that link where they are quoting the Wall Street Journal:


    The actual liabilities of the federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—already exceed $86.8 trillion, or 550% of GDP. For the year ending Dec. 31, 2011, the annual accrued expense of Medicare and Social Security was $7 trillion. Nothing like that figure is used in calculating the deficit. In reality, the reported budget deficit is less than one-fifth of the more accurate figure.

    Why haven’t Americans heard about the titanic $86.8 trillion liability from these programs?

    One reason: The actual figures do not appear in black and white on any balance sheet. But it is possible to discover them. Included in the annual Medicare Trustees’ report are separate actuarial estimates of the unfunded liability for Medicare Part A (the hospital portion), Part B (medical insurance) and Part D (prescription drug coverage). As of the most recent Trustees’ report in April, the net present value of the unfunded liability of Medicare was $42.8 trillion. The comparable balance sheet liability for Social Security is $20.5 trillion.

    #32002
    Profile photo of MountainBiker
    MountainBiker
    Survivalist
    member10

    Vep, what they are talking about is what Medicare and SS will cost going out multiple generations, something like 75 years out if I recall correctly. They are not spending $7 Trillion a year currently. Someday they will, but when that day comes tax revenues will be far greater than they are currently. It is a huge problem right here today but the $7 trillion to $9 trillion comparative is apples and oranges.

    There are two key problems with SS & Medicare. One is the aging population where fewer and fewer workers are supporting more and more retirees. The other is that most recipients receive far more in benefits than they ever paid in. The Medicare side of that equation is many times worse than the SS side. A typical person making $50,000 a year pays in $725 towards medicare a year which becomes $1,450 with the employer match. Decades ago they didn’t make anywhere near $50,000 and so paid in even less. Now in their retirement years if they have any major health issue they will incur hundreds of thousands in expense before they die. Multiply that by millions of people in the same situation. The SS side of the equation at that $50,000 income is $3,100 paid in each year with the additional $3,100 paid by the employer. That’s not enough to cover the eventual SS payouts across several decades, but it isn’t as bad off as Medicare.

    This is why when you hear folks say they are entitled to their SS, Medicare, or SSDI because they paid taxes, it is wishful thinking. Few people even remotely pay in what they will take out in benefits. Mathematically it was all a big ponzi.

    #32003
    Profile photo of Vep
    Vep
    Survivalist
    member4

    That is not what the Wall Street Journal was saying. Here is the original Wall Street Journal article.

    http://www.wsj.com/news/articles/SB10001424127887323353204578127374039087636?mod=rss_opinion_main&mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424127887323353204578127374039087636.html%3Fmod%3Drss_opinion_main

    What they are saying is that the $7 Trillion number was simply the annual accrued expense for 2011 for those two programs, Social Security and Medicare combined.

    This is what the Wall Street Journal said about the actual cost of these programs:

    The actual liabilities of the federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—already exceed $86.8 trillion, or 550% of GDP.

    This is why the Wall Street Journal was saying that the real annual deficit is more than 5x what is being openly promoted to the public as the actual deficit.

    This is what the Wall Street Journal said about the $7 Trillion figure:

    For the year ending Dec. 31, 2011, the annual accrued expense of Medicare and Social Security was $7 trillion.

    That was the annual accrued expense of those two programs only for 2011. Now, lets look at what the definition is of an ‘accrued expense’.

    http://www.aipb.org/pdf/AdjustingEntries.pdf

    ACCRUED EXPENSES (ACCRUED LIABILITIES)

    Accrued expenses are expenses that have been incurred, but not yet paid for.
    To put it another way, an accrued expense is paid after being recorded on
    the books. Every adjusting entry for accrued expenses debits an expense
    account, increasing expenses on the income statement and reducing net
    income, and credits a payable account, increasing liabilities on the balance
    sheet.

    #32024
    Profile photo of MountainBiker
    MountainBiker
    Survivalist
    member10

    What they are doing when they accrue expenses is recognize a future liability that they expect to have to pay out at a future date. In the business world, for financial reporting and tax purposes the accrual is taken as a real expense in the current year, though the cash hasn’t yet been paid out. Businesses like to accrue all sort of things so as to reduce current earnings and in turn reduce their current tax liability so as to retain more cash. I was a CFO and did it all the time. In the case of SS & Medicare, I believe they are forecasting expense out for something like the next 75years, and so each year they need to add a year and drop a year from the calcs to move it forward. In this example, my guess is that the the $7 trillion is the difference between the approx. $1.3 trillion in current expenditures and a projected $8.3 trillion 75 years or so in the future, hence recognizing an additional $7 trillion in SS/Medicare obligations in this annual drop a year, add a year exercise. While businesses accrue future expenses, they do not accrue future income that will generate the cash to pay those expenses. Same goes for govt. They try to recognize their future obligations for SS & Medicare but they don’t recognize the future tax stream that will be received to fund it. The value they derive from this process is that it informs them of how high the SS & Medicare taxes will have to rise to in order to pay for those future obligations, and/or how much deficit spending they will incur if they don’t raise taxes.

    The bottom line is that on an actuarial basis, the feds screwed up big time decades ago in setting the tax rates that current retirees paid relative to the benefits they were promised, especially as concerns Medicare. The future obligations are vast and the tax stream to fund it is not even in the ballpark. There are limits to how high they can raise taxes, and so future generations can expect cuts in the benefits. They are already doing it by understating the inflation rate. In the future they won’t be able to be as subtle as that.

    #32033
    Profile photo of undeRGRönd
    undeRGRönd
    Survivalist
    member8

    foodforthought wrote:
    Who’s behind it?<br>
    Satan, ultimately. But what do the puppets gain from it? Power, for a while? They have all the money they need, so at this point their motivation must be glee from controlling other people’s lives.

    Ding! Ding! DING!!!
    Winner, Winner, Chicken Dinner!

    "ROGUE ELECTRICIAN" Hoping to be around to re-energize the New World.....

    Cogito, ergo armatus sum

    #32037
    Profile photo of Vep
    Vep
    Survivalist
    member4

    Mountain Biker, you need to read that 2012 WSJ article.

    The article title is, “Cox and Archer: Why $16 Trillion Only Hints at the True U.S. Debt”

    http://www.wsj.com/news/articles/SB10001424127887323353204578127374039087636

    The article is about how the numbers the Feds have been leading everyone to believe are the actual figures are not the real numbers, and by a huge amount. The Feds have been using devious accounting methods to camouflage how big the numbers really are. The numbers from the Federal Government that everyone has been fed by the media are way too low.

    This is why the WSJ is saying that the reported annual deficit is less than 1/5th what it really is.

    If that greater than 5x increase in the real deficit numbers were applied directly to that $1.3T Social Security and Medicare number you were using, it would start getting close to $7T. That is a rough way of looking at it, but it illustrates the scope of how inaccurately low many of the numbers are that everyone has been playing with.

    Here is a quote:

    When the accrued expenses of the government’s entitlement programs are counted, it becomes clear that to collect enough tax revenue just to avoid going deeper into debt would require over $8 trillion in tax collections annually. That is the total of the average annual accrued liabilities of just the two largest entitlement programs, plus the annual cash deficit.

    Here is another quote:

    The actual liabilities of the federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—already exceed $86.8 trillion, or 550% of GDP. For the year ending Dec. 31, 2011, the annual accrued expense of Medicare and Social Security was $7 trillion. Nothing like that figure is used in calculating the deficit. In reality, the reported budget deficit is less than one-fifth of the more accurate figure.

    Why haven’t Americans heard about the titanic $86.8 trillion liability from these programs? One reason: The actual figures do not appear in black and white on any balance sheet. But it is possible to discover them. Included in the annual Medicare Trustees’ report are separate actuarial estimates of the unfunded liability for Medicare Part A (the hospital portion), Part B (medical insurance) and Part D (prescription drug coverage).

    As of the most recent Trustees’ report in April, the net present value of the unfunded liability of Medicare was $42.8 trillion. The comparable balance sheet liability for Social Security is $20.5 trillion.

    #32049
    Profile photo of hillbilly chic
    hillbilly chic
    Survivalist
    member2

    Freedom I have been watching and wondering the same thing why aren’t folks more concerned about this but there’s been a lot of bait and switch stuff going on of late its like the shell game you see con artist carrieng on in streets,I been watching this awhile now listening to supposed experts their saying if you see it fall below 15000 its crashing,I think were in for a bumpy ride on many fronts,monetarily,these civil disobedience riots,terrorists,food shortages world wide,funny money (fiat) the country’s been printing for some time,all the mideastern problems unrest ,seems like its all boiling down,to global economic collapse,can’t see how it can’t happen soon,this is great for every power hungry leader in the world,esoically here ,civil disobedience, declare martial law,world war declair martial law,elections stop ,there are some seriously sneaky bad things on the horizon and I think in the works for us ,thank god for the knowledge and foresight to be able to look down the pike and know we’ve prepared all we know how to ,prayed as often as we can ,looked not blindly but from history’s view point and knowledge from gods word and common sense.

    #32051
    Lone Eagle
    Lone Eagle
    Prepper
    member3

    Hate to say it, but most people are more concerned with The Kardashians, Survivor, or the latest Hollywierd dirt than the evil right in front of their faces. They had a term for it back in Rome: bread and circuses.

    Never challenge a man who has nothing left to lose.

    #32081
    Profile photo of MountainBiker
    MountainBiker
    Survivalist
    member10

    The bottom line is that given they aren’t taking in enough tax revenue to support the current $1.3 trillion in actually SS & Medicare payments, they will never be able to afford the tens of trillions of future payments currently obligated that they are recognizing through those accruals. They will change the rules because that is the only option they have. They’ve already manipulated the inflation stats so as to reduce the annual increases to something below real inflation. Each year they already quietly increase at a faster rate than inflation the level of wages SS tax is applied against. One of these days they will add a means test to reduce or eliminate SS for those with high assets, and then they will slowly lower the bar to where they are reducing SS for middle class people. Look at the Alternative Minimum Tax as an example. It started out for high earners and now it hits middle class people. In doing so, they will use the word “fair” as often as they can. They will keep raising the age for full SS from the current 67 for younger people until it gets to 70 (my guess), and I wouldn’t be surprised if they eliminate the reduced SS people can start at 62. The current breakeven for starting SS at 62 vs 66 (which is what I have to be be to collect full SS) is 12 years. They’ll change that one of these days so as to make the breakeven 20 or 30 years in an effort to discourage early retirements. Medicare eligible will rise from the current 65 to equal whatever the age requirement is for full SS. Those tens of trillions being accrued are on paper only. They will not be paid because they can’t.

    #32139
    Profile photo of undeRGRönd
    undeRGRönd
    Survivalist
    member8

    Lone Eagle wrote:
    Hate to say it, but most people are more concerned with The Kardashians, Survivor, or the latest Hollyweird dirt than the evil right in front of their faces. They had a term for it back in Rome: bread and circuses.

    @Lone Eagle
    I’m GLAD you said it, it’s TRUE! :D

    @MTB, I’ma gonna retire waaaay early anyway, so I can extract my funds from the shaky markets. I will likely have to keep doing SOMETHING for a paycheck regardless, so I guess I will keep paying into SS until I can draw from it. If it survives that long ;)

    "ROGUE ELECTRICIAN" Hoping to be around to re-energize the New World.....

    Cogito, ergo armatus sum

    #32384
    Profile photo of Brulen
    Brulen
    Survivalist
    member9

    Ashes Ashes, the bankers all fall down. They were expendable anyway. Remember that in the future when there is no money. You won’t need to feed them. Accounting trickery shall be punishable by witholding food. Do unto others as they have done unto you.

    #32393
    Profile photo of MountainBiker
    MountainBiker
    Survivalist
    member10

    I have a vision of a post-SHTF world where the Wall Street gang has made their way to their 2nd homes in the countryside and deny having been banksters and Wall Street manipulators and instead represent themselves as having been something else entirely.

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