Social Security 2011 – Another Bad Year - News and Current Events | futures io social day trading
futures io futures trading


Social Security 2011 – Another Bad Year
Updated: Views / Replies:234 / 0
Created: by Quick Summary Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors – all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you don’t need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 
Thread Tools Search this Thread
 

Social Security 2011 – Another Bad Year

  #1 (permalink)
Quick Summary
Social Security 2011 – Another Bad Year

Full calendar year 2011 numbers are now available to calculate the results for the Social Security Trust Fund. Here's a look at the key numbers that will be reported to Congress in four months:

Payroll Tax Revenue: $669B ($642B - 2010)

Benefit payments: $726B ($702B - 2010)



Primary Deficit: $57B ($60B - 2010)

Other cash components at SSA:

Tax on benefits: $23B (2010 - $24b)

Payments to R.R. Retirement: $4.6B ($4.4B - 2010)

Overhead: $7.0B ($6.5B - 2010)



Net 2011 cash drain: $46B ($49B - 2010)

Non cash items

Interest: $116B ($117.5B - 2010)

Paper surplus: $70.0B ($68.5B - 2010)

The reported numbers will show a very small improvement ($3B ) in the net cash drain. This may cause some to look at the 2011 results and say, “See! Things are stabilizing and even getting better!” Let me try to blunt any enthusiasm in advance.

SSA measures (A) actual monthly cash receipts and then (B) makes assumptions about what additional amounts are coming in based on a series of macro assumptions (GDP, employment/unemployment, etc.). The Treasury Department pays SSA the sum of A+B. Ultimately all of the money is accounted for and any adjustments (plus or minus) are reflected in the next year's results.

This system works pretty well as the annual adjustments have been fairly modest and the adjustments have been both positive and negative. That was not the case in 2009. The models that SSA uses significantly overestimated tax revenues in that year. As a result, there were very significant downward revisions to the actual receipts that were reported in 2009. Following is a slide of SSA’s monthly 2010 revenues. Note that the revisions to FICA and SECA from the prior years totaled $28B. (2009 and 2011 also have significant prior year adjustments.)



Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


To regularize the data for the big accounting changes it is necessary to add/subtract the adjustment from the prior year and then look forward to what overstatements/understatements were made in the then current year. When the ins and outs are made, the results for the regularized FICA/SECA revenue numbers are as follows:



2005....$521B
2006....$553B
2007....$585B
2008....$615B
2009....$676B
2010....$702B
2011....$726B
The following chart shows adjusted Payroll Tax revenues minus Benefit Payments:



Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


Looking at the data on this basis, you'll see the actual deterioration that took place in 2011. 2012 will be worse than 2011. Benefits are going to jump by $50B+ next year. 10,000 new people are signing up for checks every day of the week. Add the fact that every one of the 55mm beneficiaries will be getting 3.6% more in their checks (COLA adjustment). The revenue side is a wild card. What will GDP be? If it's around the 2% that is currently anticipated, revenues at SSA will fall well below plan. A flat economy (+2%) would translate into a $100B 2012 primary deficit (payroll receipts minus benefits). A number like that is not on anyone’s radar today.

The following is a chart used by the House Finance Committee. It plots the expectations for net cash drains at SSA. While there is plenty of red ink in the chart, there is not nearly enough to describe what is going to happen. Note that the expectation is for some improvement in 2011 and relative stability until 2018 when the red ink explodes. On the chart, I think today we are really at the 2017 level. 2012 will bring us the results depicted in the chart for 2018.



Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


The 2011 numbers for SSA indicate that we are at least five years ahead of existing thinking on the SSA deficits. When this realization sinks in, it will break the hearts of the SS defenders. If we are, as I contend, five to six years ahead of “schedule” with cash deficits at SSA, there is no alternative besides cutting scheduled benefits. Raising taxes to fill a hole this big is not an option. Nor is it an option to maintain the status quo and allow for a very rapid rundown of the SS Trust Fund.

If we are going to experience what I believe we will, then the cumulative SS cash shortfall over the next decade will add ANOTHER $1.5 trillion onto Public Sector Borrowing ("PSB"). (A shift from the Intergovernmental account into the PSB account; AKA the Chinese). This increase in PSB more than offsets the $1.2 T of cuts that the congressional super committee failure has just mandated.

The consequences of SS (and similarly the other government retirement funds) on PSB over the coming years is not now being considered by those looking at America’s debt profile. It will be soon enough. The current thinking is that SS is a problem that can be worried about in another ten years or so. That's simply not true.

.



Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


More on ZeroHedge...

Reply to share your thoughts on this current event.


Reply



futures io > > > > Social Security 2011 – Another Bad Year

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Jigsaw Trading: TBA

Elite only

FuturesTrader71: TBA

Elite only

NinjaTrader: TBA

Jan 18

RandBots: TBA

Jan 23

GFF Brokers & CME Group: Futures & Bitcoin

Elite only

Adam Grimes: TBA

Elite only

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
10 million could pay more Social Security tax kbit News and Current Events 0 October 19th, 2011 04:19 PM
Federal Retirement Plans Cost Almost as Much as Social Security kbit News and Current Events 0 October 3rd, 2011 06:55 PM
Would Obama’s Payroll Tax Cut Hurt Social Security? Quick Summary News and Current Events 0 September 10th, 2011 09:50 PM
Social Security disability on verge of insolvency kbit News and Current Events 0 August 22nd, 2011 05:13 PM
Obama says he cannot guarantee Social Security checks will go out on August 3 GridKing News and Current Events 7 July 14th, 2011 08:27 AM


All times are GMT -4. The time now is 10:43 PM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-13 in 0.08 seconds with 19 queries on phoenix via your IP 54.226.113.250