MyGovCost News & Blog

Don Levit says:

The U.S. Military and Civil Service Retirement Funds’ surpluses are used similarly to the surpluses of Social Security and Medicare. Surprisingly, however, the federal employees’ retirement fund surpluses get little media attention.

From a paper entitled “Analytical Perspectives, Budget of the U.S. Government, Fiscal Year 2009,” Page 345 “Pay-as-you-go financing was replaced in the 1980s by full or partial advance funding for some of the larger trust funds. In 1984, a new system was set up to finance military retirement benefits on a full accrual basis. In 1986, full accrual funding of retirement benefits was mandated for federal civilian employees hired after Dec. 31, 1983. The latter two changes require Federal agencies and their employees to make annual transfer payments to the Federal employees’ retirement trust funds in an amount equal to their retirement benefits earned by employees. Since many years will pass between the time when benefits are earned and when they are paid, the trust funds will accumulate substantial balances over time. These balances are available to finance future benefit payments, but only in a bookkeeping sense. These funds are not set up to be pension funds, like the funds of private pension plans. The holdings of the trust funds are not assets of the government as a whole that can be drawn down in the future to fund benefits. Instead, they are claims on the treasury. When trust fund holdings are redeemed to authorize the payment of benefits, the department of the treasury will have to finance the expenditure in the same way as any other federal expenditure: by using then current receipts, by borrowing from the public, or by reducing benefits or other expenditures. The existence of large trust fund balances, therefore, does not, by itself, increase the government’s ability to pay benefits.

These last 2 sentences tell me the trust funds make it no easier to pay beneficiaries than if the trust funds didn’t exist. This is because the surplus has been loaned to the Treasury, paid for current expenses, and (artificially) lowered the deficits. See here.

Catherine Beers says:

First – What is the “Hope Debt?”
Second – Why is the gov’t so worried about obesity? I know this drives the cost of health care up. Whatever happened to parental responsibility? Parents need to set the example! If not, they should have to bear the financial burden, FULLY. Their responsible for they way they & their kids are. The word, “NO!” needs to be in their vocabulary.
Third – Why are our D.C. reps allowed to overdraw their bank accounts until they, if it were us, owe, OMG, so much in NSF fees we’d never get out of debt?
Fourth – Why do we pay a “misc” tax on our phone bills that the phone company has no idea what it is? And, where does it go?
Fifth – How do so many STUPID pet projects get passed, i.e. a Tea Pot Museum somewhere in the Mid-Atlantic states a senator got lots of money for that and no one seemed to bat an eye?
Sixth – Why, when our gov’t is looking at bills to pass, they don’t bother to look at the ones that have been ‘tacked on?”
Seventh – How can they look their fellow Americans directly in the eye and say, “I know just how you feel?” Are they so stupid as to think that we buy that B.S.? Are they having to make the decision between buying meds & food? Have they ever walked a mile in our shoes? Lived a week trying to support a family when the plant they’d worked at for 30 years shut down and all their health & retirement bennies went with their job? NO!!! And they never will because they’d have to admit that they can’t do it.

A final thought on the gov’t debt; the Fed does what is always has done and will always continue to do – just print more money!!! I’ve never quite figured out how that helps the economy.

Lastly – If I had, what’s called, “my share of the federal debt,” what would I do with it? I’m disabled. I’d be able to move out of HUD housing and get off Medicaid. They need to try living on SSI at $674.00/mo.

The rest of us MUST live within our means—why doesn’t our government? I would love an answer to this one.