So what happens if they touch the third rail?

If they actually go on and slice Social Security, what happens with all the voting grey panthers and their anger?

I know of no plans to cut off old folks from SS, other than the usual fear mongering.
There is discussion of means testing (Bill Gates and Warren Buffet probably don't "need" SS), and giving options to younger folks since most of them know there is no money in the mythical SS "lockbox".

Here's one plan that was so successful that they outlawed it:
Social Security Vs The Galveston County, Tx. Retirement Plan ...

The original Social Security Act looks nothing like the version we now live under. The original program was only supposed to tax the first $3,000 in earnings with employers and employees both paying 1% of this figure into the program. And with 16 payees to every recipient the program was viable and effective for a generation, perhaps two.
But in the late 1970's the birth rate had plummeted, life expectancy had soared and Social Security taxes were inadequate for the demand placed on the system by benefits recipients. So Congress did what they do in such situations--they raised taxes!

In 1980 the County officially opted out of SSA and the new plan went live on January 1, 1981. Today, current County Judge James Yarbrough says, "We like our system a lot!" Ray Holbrook says, "County retirees 2-3 times what the SSA pays and participants are able to leave their assets in the plan to survivors. They also receive disability and life insurance under the plan. In fact, the surviving spouse of one Commissioner who passed away in the late 1990's received over $250,000 between her husband's plan contributions and his life insurance benefits.
So promising was this plan that Matagorda and Brazoria Counties south of Houston also opted out of Social Security, and many other Counties including Houston's Harris County began looking into joining this system or at least creating their own. However, in 1983 Congress voted to eliminate the opt out option and increased Social Security tax rates.

The SS System is a slush fund for politicians and makes Bernie Made-off look like a choir boy.

Personally I basically "opted out" in the 1980's by incorporating through a Sub-S corp and began receiving most of the business profits as dividends, not subject to the SS Ponzi scheme.
I invested that new found money in real estate and began collecting "benefits" at 40 years of age.
Sure, I'm not going to get as much SS retirement, but the $250,000+ already received from just the first year's investment, plus continued monthly "benefits" plus appreciation plus the continued savings received each year since will get me by.
(And my heirs will benefit too. SHHHH!)

Edited by Rogerdodger, 22 July 2011 - 07:47 PM.

Is this some sort of political posturing? or a calculated move?!? This is absurd, US will default now... These people rushed to bail out the bankers, but they could not save their own govt?!? Heck! Perhaps this is better now, we needed this for a long time...

Is this some sort of political posturing? or a calculated move?!?

This is absurd, US will default now...

These people rushed to bail out the bankers, but they could not save their own govt?!?

Heck! Perhaps this is better now, we needed this for a long time...

I think you are right, Arb. They either default-or do something so little and so late we get downgraded anyway. Unbelievable, really! You hear the morons we have elected speak about how a downgrade doesn't matter-yada yada yada-and you can't help but feel no one could actually be that ignorant....it must be planned. Truly sad.

Hey, they tried to get you that high this week, afterall-nice call.

I really hope and think that this is just political posturing because Democratic Senate voted down their Republican House's initial proposal. I really do hope that they come back with a "done deal" by Monday's opening, the markets will not be forgiving, imho.

Arbman, I don't understand why technical traders are wasting time on these "deals". Nothing happened with Greece crisis nor Italy crisis. Corrections happen because they should, not because of news. Many people said Greece is sell the news, I didn't see anything of that sort. If the technicals are forward, then these jolts give you buying opportunities. If the technicals are pointing south, the "sell the news" events provide selling opportunities.

Well, hmmm... Not sure how I should respond... There are times, it is like turning points, change of paradigm, the assumptions are broken, this is such a situation. Until now, we had a default possibility and it was just a symbolic event, it all of a sudden became a certainty. From a T/A perspective, this was not predictable for me, nothing really reflected this level of political incompetence in my analysis. The assumption was about the existing trends to continue and within the existing trends, the news about a default probability was just noise, I guess this may trigger a big rapture now unless they really come out with something final by the markets open on Monday morning... Not sure this will be convincing for you, or whether it will mean much going forward, but my model was unsure about certain aspects of the break out attempt, except for a swift move, so I opened a straddle and posted as such...

If they actually go on and slice Social Security, what happens with all the voting grey panthers and their anger?

Neither party has a single proposal out there to cut social security for people 55 and over.
For younger than 45 folks, they (congress+president) better make changes otherwise there
will be ZERO social security benefits left for the young folks.

Well, hmmm... Not sure how I should respond... There are times, it is like turning points, change of paradigm, the assumptions are broken, this is such a situation. Until now, we had a default possibility and it was just a symbolic event, it all of a sudden became a certainty.

From a T/A perspective, this was not predictable for me, nothing really reflected this level of political incompetence in my analysis. The assumption was about the existing trends to continue and within the existing trends, the news about a default probability was just noise, I guess this may trigger a big rapture now unless they really come out with something final by the markets open on Monday morning...

Not sure this will be convincing for you, or whether it will mean much going forward, but my model was unsure about certain aspects of the break out attempt, except for a swift move, so I opened a straddle and posted as such...

Arbman, You said we will go up like 1998 http://www.traders-t...?...st&p=585804

So, which technical pattern prompted you to say we are going to go up?

I thought USD was breaking down and it may still continue to break down, but for the default reasons this time and it would not be bullish. The breadth held up so far in 2011, so when you get an influx of hot money, usually the prices rally well and they keep those gains month after month. From T/A perspective, we have a double monthly pump over 1250 zone in 2011 and if the prices break above the July highs next, it is sufficient to zoom at least to 1400, from June lows with AB=CD.

So now what has really changed? None of the above matter if your credit rating is cut though, there is a new risk premium that must be priced, it is a rapture. Yes, the stocks can continue to rush higher, but perhaps from 30% lower. This is an fairly uncertain situation now and it happened at a time when USD was weak and I may now shoot lower and prompt Fed to RAISE short term rates. Treasuries may be also decimated and force US into a recession overnight.

There are a few such periods in US history. Check out the plunge of USD in either late '70s or early '80s...