Social Security - your thoughts?

[dovervolz]

Good to see you back on your meds. You're making some good points today.

 

[jmacvols1]

 

[Thunder Good-Oil]

I don’t agree that it’s a Ponzi scheme. IMO it’s a horribly inefficient government bureaucracy when considering the tax is 12.4% of the payrolls of average working people and about $10k annually (x2 with the employer match) of high earners.

The SS trust fund has also been a piggy bank for politicians that spend money we don’t have. But the fund is still owed what’s been borrowed to pay other, non retirement obligations.

I don’t see why there couldn’t be an option when new participants sign up to choose between keeping the traditional, defined benefit type of plan or to take a lump sum that goes into a regulated IRA type of defined contribution account. Limit the amount of withdrawals based on actuarial tables. Let participants elect to self manage all or part of the account or offer a professional option for the usual 1% +/- fee with SS accredited investment advisors managing the accounts. The government will benefit by shifting the risk to SS “beneficiaries”.

The downsides are that the government can no longer keep the lifelong accumulated contributions of those that die before the break even age point of beneficiaries. Another drawback is that monthly Medicare payments would no longer be deducted from monthly social security payments - however those payments could come from the IRA type of accounts.

Since citizens must already decide between traditional Medicare or adding Medicare supplemental insurance or gap insurance and they also have to decide when to start drawing SS between age 62 and age 70, the citizenry must be competent enough to select between the traditional defined benefit SS plan or a new option for a lump sum defined contribution type of plan.

 

[Wireless1]

I don’t agree that it’s a Ponzi scheme. IMO it’s a horribly inefficient government bureaucracy when considering the tax is 12.4% of the payrolls of average working people and about $10k annually (x2 with the employer match) of high earners.

The SS trust fund has also been a piggy bank for politicians that spend money we don’t have. But the fund is still owed what’s been borrowed to pay other, non retirement obligations.

I don’t see why there couldn’t be an option when new participants sign up to choose between keeping the traditional, defined benefit type of plan or to take a lump sum that goes into a regulated IRA type of defined contribution account. Limit the amount of withdrawals based on actuarial tables. Let participants elect to self manage all or part of the account or offer a professional option for the usual 1% +/- fee with SS accredited investment advisors managing the accounts. The government will benefit by shifting the risk to SS “beneficiaries”.

The downsides are that the government can no longer keep the lifelong accumulated contributions of those that die before the break even age point of beneficiaries. Another drawback is that monthly Medicare payments would no longer be deducted from monthly social security payments - however those payments could come from the IRA type of accounts.

Since citizens must already decide between traditional Medicare or adding Medicare supplemental insurance or gap insurance and they also have to decide when to start drawing SS between age 62 and age 70, the citizenry must be competent enough to select between the traditional defined benefit SS plan or a new option for a lump sum defined contribution type of plan.

The one unintended consequence of your plan is where would all that one time investment be invested? One of the reasons housing prices across the US have skyrocketed is because the large investors are getting into residential real estate. Why, because there is a shortage of other growth areas to invest. One of the reasons the market continues to grow at the pace it does, is because we're all investing in our retirements each month and that money has to go somewhere.

 

[Thunder Good-Oil]

The one unintended consequence of your plan is where would all that one time investment be invested? One of the reasons housing prices across the US have skyrocketed is because the large investors are getting into residential real estate. Why, because there is a shortage of other growth areas to invest. One of the reasons the market continues to grow at the pace it does, is because we're all investing in our retirements each month and that money has to go somewhere.

If it is an issue then require the investment to be exclusively in government notes for the first 5-10 years.

 

[jmacvols1]

I don’t agree that it’s a Ponzi scheme. IMO it’s a horribly inefficient government bureaucracy when considering the tax is 12.4% of the payrolls of average working people and about $10k annually (x2 with the employer match) of high earners.

The SS trust fund has also been a piggy bank for politicians that spend money we don’t have. But the fund is still owed what’s been borrowed to pay other, non retirement obligations.

I don’t see why there couldn’t be an option when new participants sign up to choose between keeping the traditional, defined benefit type of plan or to take a lump sum that goes into a regulated IRA type of defined contribution account. Limit the amount of withdrawals based on actuarial tables. Let participants elect to self manage all or part of the account or offer a professional option for the usual 1% +/- fee with SS accredited investment advisors managing the accounts. The government will benefit by shifting the risk to SS “beneficiaries”.

The downsides are that the government can no longer keep the lifelong accumulated contributions of those that die before the break even age point of beneficiaries. Another drawback is that monthly Medicare payments would no longer be deducted from monthly social security payments - however those payments could come from the IRA type of accounts.

Since citizens must already decide between traditional Medicare or adding Medicare supplemental insurance or gap insurance and they also have to decide when to start drawing SS between age 62 and age 70, the citizenry must be competent enough to select between the traditional defined benefit SS plan or a new option for a lump sum defined contribution type of plan.

Ponzi schemes work by taking money from one person and giving it to another and that is how SS works...by taking (taxing) money from one person who currently works and giving it to another who is currently retired. Hence it is a "pay-as-you-go" (current taxpayers pay for current beneficiaries) Ponzi scheme, meaning there is no SS trust fund. This so called SS trust fund is just an accounting gimick to make people think there is a trust fund. SS is a tax and nothing more than a tax..it is not a pension plan, it is not insurance...it is nothing but a tax. IIRC Obama once said never let a crisis go to waste and Roosevelt used the depression as an excuse "crisis" to tax money away from younger working people setting up another source of gov't revenue for politicians to spend money. SS is simply taking money from young workers to provide a universal basic income for old people....socialism...socialized retirement hence the name SOCIAL Security.

FICA that is deducted from your paycheck is not earmarked for anything...it just gets mixed in with other taxes the gov't collects, FICA gets mixed in with corporate taxes, tariffs (foreign taxes) and other taxes the Fed gov't collects,,,, it all is mixed together in one big pile and the gov't spends that pile of money on whatever they choose to spend that money on. Meaning trillions of dollars of FICA taxes has been spent on things that have nothing to do with SS just as Roosevelt and the Dems planned back in 1930's. So again, there is no trust fund for politicians to raid, when politicians spend SS taxes on whatever they want to spend it on, they are doing exactly what SS was set up to do.

Pres W Bush wanted to privatize part of SS but was viciously attacked by the left. From a speech Bush gave on SS.....

President George W. Bush made that clear on a little-remembered visit to Parkersburg in April 2005:

"A lot of people in America (Merica) think there's a trust, in this sense -- that we take your money through payroll taxes and then we hold it for you, and then when you retire, we give it back to you. But that's not the way it works.

There is no 'trust fund,' just IOUs that I saw firsthand, that future generations will pay -- will pay for either in higher taxes, or reduced benefits, or cuts to other critical government programs.
The office here in Parkersburg stores those IOUs. They're stacked in a filing cabinet. Imagine -- the retirement security for future generations is sitting in a filing cabinet."

So the so called SS "trust fund" is just worthless pieces of papers, worthless IOUs being kept in loose leaf binders in filing cabinets in WV at the "Bureau of Public Debt" building.

Even Clinton said of SS:


"The Social Security Trust Fund does not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims (worthless IOUs meaning there is no real trust fund) on the Treasury that, when redeemed, will have to be financed by raising taxes, (redeemed by taxing money from current tax payers to pay current beneficiaries, i.e., pay-as-you-go Ponzi scheme) borrowing from the public, or reducing benefits or other expenditures."

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moneymorning.com

SS has been over generous in the benefits it hands out. A REAL solution is to cut those overly generous benefits in half or more. Current and past generations have bankrupted the system so they must cut benefits else future generations are the ones who are going to have to pay dearly (as Pres W Bush said in his speech above) in much higher taxes taken out of their pay check to pay current beneficiaries (Ponzi scheme).

 

[Thunder Good-Oil]

Ponzi schemes work by taking money from one person and giving it to another and that is how SS works...by taking (taxing) money from one person who currently works and giving it to another who is currently retired. Hence it is a "pay-as-you-go" (current taxpayers pay for current beneficiaries) Ponzi scheme, meaning there is no SS trust fund. This so called SS trust fund is just an accounting gimick to make people think there is a trust fund. SS is a tax and nothing more than a tax..it is not a pension plan, it is not insurance...it is nothing but a tax. IIRC Obama once said never let a crisis go to waste and Roosevelt used the depression as an excuse "crisis" to tax money away from younger working people setting up another source of gov't revenue for politicians to spend money. SS is simply taking money from young workers to provide a universal basic income for old people....socialism...socialized retirement hence the name SOCIAL Security.

FICA that is deducted from your paycheck is not earmarked for anything...it just gets mixed in with other taxes the gov't collects, FICA gets mixed in with corporate taxes, tariffs (foreign taxes) and other taxes the Fed gov't collects,,,, it all is mixed together in one big pile and the gov't spends that pile of money on whatever they choose to spend that money on. Meaning trillions of dollars of FICA taxes has been spent on things that have nothing to do with SS just as Roosevelt and the Dems planned back in 1930's. So again, there is no trust fund for politicians to raid, when politicians spend SS taxes on whatever they want to spend it on, they are doing exactly what SS was set up to do.

Pres W Bush wanted to privatize part of SS but was viciously attacked by the left. From a speech Bush gave on SS.....

President George W. Bush made that clear on a little-remembered visit to Parkersburg in April 2005:

"A lot of people in America (Merica) think there's a trust, in this sense -- that we take your money through payroll taxes and then we hold it for you, and then when you retire, we give it back to you. But that's not the way it works.

There is no 'trust fund,' just IOUs that I saw firsthand, that future generations will pay -- will pay for either in higher taxes, or reduced benefits, or cuts to other critical government programs.
The office here in Parkersburg stores those IOUs. They're stacked in a filing cabinet. Imagine -- the retirement security for future generations is sitting in a filing cabinet."

So the so called SS "trust fund" is just worthless pieces of papers, worthless IOUs being kept in loose leaf binders in filing cabinets in WV at the "Bureau of Public Debt" building.

Even Clinton said of SS:


"The Social Security Trust Fund does not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims (worthless IOUs meaning there is no real trust fund) on the Treasury that, when redeemed, will have to be financed by raising taxes, (redeemed by taxing money from current tax payers to pay current beneficiaries, i.e., pay-as-you-go Ponzi scheme) borrowing from the public, or reducing benefits or other expenditures."

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moneymorning.com

SS has been over generous in the benefits it hands out. A REAL solution is to cut those overly generous benefits in half or more. Current and past generations have bankrupted the system so they must cut benefits else future generations are the ones who are going to have to pay dearly (as Pres W Bush said in his speech above) in much higher taxes taken out of their pay check to pay current beneficiaries (Ponzi scheme).

Rant all you want about whether it’s been properly managed, but Social Security is in fact a trust fund. Actually 2. The old age fund is projected to have a deficit balance in less than 10 years - but as of today it still has a surplus.

The disability insurance trust fund is projected to maintain a positive balance until the 2050s.

Social Security isn’t a Ponzi scheme. It isn’t an investment. The record keeping is transparent. There isn’t a fraud being committed by promoters that are stealing the funds.

 

[LouderVol]

Rant all you want about whether it’s been properly managed, but Social Security is in fact a trust fund. Actually 2. The old age fund is projected to have a deficit balance in less than 10 years - but as of today it still has a surplus.

The disability insurance trust fund is projected to maintain a positive balance until the 2050s.

Social Security isn’t a Ponzi scheme. It isn’t an investment. The record keeping is transparent. There isn’t a fraud being committed by promoters that are stealing the funds.

I don't think SS being a trust precludes it from being a Ponzi scheme.

to use non-financial terms the "trust" is just how the Ponzi scheme is structured. the money taken from people had to go somewhere, so the government put it in a trust.

now the people who put money in generally don't get their money back even 1:1, and many more people who don't contribute get money. maybe there is some other more semantically correct term, but just because the government is the one doing it doesn't keep it from being a Ponzi Scheme. especially as the government is able to manipulate the money and keep the participants in the scheme on the hook while they profit.

 

[Thunder Good-Oil]

I don't think SS being a trust precludes it from being a Ponzi scheme.

to use non-financial terms the "trust" is just how the Ponzi scheme is structured. the money taken from people had to go somewhere, so the government put it in a trust.

now the people who put money in generally don't get their money back even 1:1, and many more people who don't contribute get money. maybe there is some other more semantically correct term, but just because the government is the one doing it doesn't keep it from being a Ponzi Scheme. especially as the government is able to manipulate the money and keep the participants in the scheme on the hook while they profit.

It’s a social program, not an investment vehicle. Defense spending isn’t a Ponzi scheme either. Whenever taxes are taken, the program being funded isn’t going to ever return benefits equitably.

It’s an odd program because the tax revenues are being collected regressively. The lowest end of the economic spectrum pays a higher rate than those at the top. The very top pays the lowest rate. Somebody with earned income of a million dollars pays around 1% while minimum wage workers pay 6.2%.

 

[LouderVol]

It’s a social program, not an investment vehicle. Defense spending isn’t a Ponzi scheme either. Whenever taxes are taken, the program being funded isn’t going to ever return benefits equitably.

It’s an odd program because the tax revenues are being collected regressively. The lowest end of the economic spectrum pays a higher rate than those at the top. The very top pays the lowest rate. Somebody with earned income of a million dollars pays around 1% while minimum wage workers pay 6.2%.

I don't think you could take most of what the government does, yet alone defense, and compare it to what is going on with SS.

SS is entirely sold as a Ponzi scheme. we are told to pay in now so that later we can get our money back at retirement. except absolutely none of that is what actually happens. we don't get OUR money back, we get someone else's. and depending on where you fall you probably aren't getting the same absolute dollar amount back yet alone what inflation does to the money.

and the end is going to look eerily similar to a Ponzi scheme. the last generation of "investors" is going to be screwed when there isn't as much coming in to replace it. SS is a bad deal right now, for someone in my generation not retiring for another 30 years, its going to be even worse.

I don't think calling it a "social program" makes it any better either because there are multitudes of ways to achieve the stated end result that would at least give the chance of providing better ROIs while maintaining a social net for those with less. I don't think it being a wealth redistribution tool via a social program really changes it away from a Ponzi Scheme; its just better Government mandated marketing of a Ponzi Scheme.

 

[Thunder Good-Oil]

I don't think you could take most of what the government does, yet alone defense, and compare it to what is going on with SS.

SS is entirely sold as a Ponzi scheme. we are told to pay in now so that later we can get our money back at retirement. except absolutely none of that is what actually happens. we don't get OUR money back, we get someone else's. and depending on where you fall you probably aren't getting the same absolute dollar amount back yet alone what inflation does to the money.

and the end is going to look eerily similar to a Ponzi scheme. the last generation of "investors" is going to be screwed when there isn't as much coming in to replace it. SS is a bad deal right now, for someone in my generation not retiring for another 30 years, its going to be even worse.

I don't think calling it a "social program" makes it any better either because there are multitudes of ways to achieve the stated end result that would at least give the chance of providing better ROIs while maintaining a social net for those with less. I don't think it being a wealth redistribution tool via a social program really changes it away from a Ponzi Scheme; its just better Government mandated marketing of a Ponzi Scheme.

It’s not an investment vehicle, it’s transparent, and there isn’t fraud. Those are elements of Ponzi schemes.

It’s an underfunded social program. The shortfall can be made up by taking from the pool of general tax revenues, reducing or delaying benefits, or by raising the SS tax rates (or by killing off participants at younger ages (COVID?)).

There have already been some adjustments. The base age has been slowly raised. Beneficiaries have been taxed or penalized to incentivize not taking benefits as early as possible. The rate has possibly been bumped at some point - I don’t know if it has always been 6.2% x 2 or not.

The trust fund doesn’t mean those that have paid in are specific beneficiaries. It might have that appearance since the government publishes tables with calculations of what the benefits woud be using different variables, but the recipients don’t own those income streams. The trust fund structure simply more formally sets aside the program’s funds separate from other government spending and the trust fund(s) are overseen by their own trustees.

 

[LouderVol]

It’s not an investment vehicle, it’s transparent, and there isn’t fraud. Those are elements of Ponzi schemes.

It’s an underfunded social program. The shortfall can be made up by taking from the pool of general tax revenues, reducing or delaying benefits, or by raising the SS tax rates (or by killing off participants at younger ages (COVID?)).

There have already been some adjustments. The base age has been slowly raised. Beneficiaries have been taxed or penalized to incentivize not taking benefits as early as possible. The rate has possibly been bumped at some point - I don’t know if it has always been 6.2% x 2 or not.

The trust fund doesn’t mean those that have paid in are specific beneficiaries. It might have that appearance since the government publishes tables with calculations of what the benefits woud be using different variables, but the recipients don’t own those income streams. The trust fund structure simply more formally sets aside the program’s funds separate from other government spending and the trust fund(s) are overseen by their own trustees.

if a corporation announced an investor funded project, with the stated purpose that that project would be successful under whatever definition they set. and then they had investors jump into that support that project to help fund it with the promises of a set return. but turned around and spent that money elsewhere, and had to fund the payments to older investors off of dollars allotted to other projects, while knowing that the project never had a chance in hades of achieving its stated goals, that would most certainly be fraud. even if that project produced some temporary results adjacent to stated goals. just because fraud successfully runs for a while and fools people with FRADULENT results doesn't mean it isn't fraud.

and I am not sure what you mean by transparent. the vast majority of this nation has no idea what SS is, how it is funded, what is going on with it, or how it works, what the government has done with that money, understands the underfunding problem. And even if it was transparent I don't think that really makes it acceptable to take money from some people to redistribute it to others while selling it as a self funded social retirement program.

the fact that there are adjustments shows that it is a bad program, and seeing as how that bad program is required by the government, its pretty easy to see how it is morally wrong. especially with better options out there.

 

[Thunder Good-Oil]

if a corporation announced an investor funded project, with the stated purpose that that project would be successful under whatever definition they set. and then they had investors jump into that support that project to help fund it with the promises of a set return. but turned around and spent that money elsewhere, and had to fund the payments to older investors off of dollars allotted to other projects, while knowing that the project never had a chance in hades of achieving its stated goals, that would most certainly be fraud. even if that project produced some temporary results adjacent to stated goals. just because fraud successfully runs for a while and fools people with FRADULENT results doesn't mean it isn't fraud.

and I am not sure what you mean by transparent. the vast majority of this nation has no idea what SS is, how it is funded, what is going on with it, or how it works, what the government has done with that money, understands the underfunding problem. And even if it was transparent I don't think that really makes it acceptable to take money from some people to redistribute it to others while selling it as a self funded social retirement program.

the fact that there are adjustments shows that it is a bad program, and seeing as how that bad program is required by the government, its pretty easy to see how it is morally wrong. especially with better options out there.

I’m saying it isn’t a Ponzi scheme. It’s transparent because the financials aren’t unavailable.

Being underfunded and missing projections isn’t fraud. Fraud is an element of Ponzi schemes and people that commit them actually go to jail.

The beneficiaries of our biggest social program, actually of our biggest tax payer funded program, aren’t investors any more than those that have paid into national defense.

 

[LouderVol]

I’m saying it isn’t a Ponzi scheme. It’s transparent because the financials aren’t unavailable.

Being underfunded and missing projections isn’t fraud. Fraud is an element of Ponzi schemes and people that commit them actually go to jail.

The beneficiaries of our biggest social program, actually of our biggest tax payer funded program, aren’t investors any more than those that have paid into national defense.

I am not trying to put words in your mouth, I am saying its a Ponzi scheme because it walks like a Ponzi scheme, talks like a Ponzi scheme, acts like a Ponzi scheme. just because its a legal government mandated Ponzi scheme doesn't make it any less predatory.

isn't that how a Ponzi scheme works? Those who benefit the most aren't putting their own money in, and instead relying on taking from others? I don't see it as any sort of justification that a third party, the government, requires the "investors" or those who benefit to participate. if anything that forced participation is part of the problem.

 

[Thunder Good-Oil]

I am not trying to put words in your mouth, I am saying its a Ponzi scheme because it walks like a Ponzi scheme, talks like a Ponzi scheme, acts like a Ponzi scheme. just because its a legal government mandated Ponzi scheme doesn't make it any less predatory.

isn't that how a Ponzi scheme works? Those who benefit the most aren't putting their own money in, and instead relying on taking from others? I don't see it as any sort of justification that a third party, the government, requires the "investors" or those who benefit to participate. if anything that forced participation is part of the problem.

There have been tens of millions of beneficiaries so far and benefits haven’t been slashed. Only reductions on some of the top half of earners.

It won’t be 100% equitable. Some will take more out than they paid in. Some will get less. That’s the same for any government program. Today’s users of the interstate system and the rest of the transportation infrastructure don’t currently pay in enough to build what’s now in place.

SS is a social program that uses tax revenues to guarantee a minimum level of support. It isn’t a retirement plan that guarantees a certain amount of investment returns. It’s the largest element in the US government. It’s packaged differently to make it more palatable to tax each worker and employer several hundred thousand over a life time to support it.

Adjustments are always being made. But now every politician is kicking the can down the road because they are getting extremely wealthy by holding on to their elected office. When SS was begun 90 years ago the tax rate on employees and employers was 1%. Now it’s 6.2%. Any elected official supportive of raising the rate by even a small amount will be voted out of office.

 

[LouderVol]

There have been tens of millions of beneficiaries so far and benefits haven’t been slashed. Only reductions on some of the top half of earners.

It won’t be 100% equitable. Some will take more out than they paid in. Some will get less. That’s the same for any government program. Today’s users of the interstate system and the rest of the transportation infrastructure don’t currently pay in enough to build what’s now in place.

SS is a social program that uses tax revenues to guarantee a minimum level of support. It isn’t a retirement plan that guarantees a certain amount of investment returns. It’s the largest element in the US government. It’s packaged differently to make it more palatable to tax each worker and employer several hundred thousand over a life time to support it.

Adjustments are always being made. But now every politician is kicking the can down the road because they are getting extremely wealthy by holding on to their elected office. When SS was begun 90 years ago the tax rate on employees and employers was 1%. Now it’s 6.2%. Any elected official supportive of raising the rate by even a small amount will be voted out of office.

you aren't countering the philosophical side of things. It is Ponzi scheme-esque. yes there are tons of government legalese mumbo jumbo that semantically make it not "technically" a Ponzi scheme, but that doesn't take away from what it actually is.

just because some people have benefited from it, doesn't mean it is not a ponzi scheme. my understanding is that people that are early or middle "investors" into a ponzi scheme, benefit. its just the people at the end that are in trouble. that is what is happening. the "end" of the Ponzi scheme hasn't happened yet so people tell themselves its fine to steal from the next generation, because there is a chance they will get some diminishing return. thats still a Ponzi scheme.

if the government actually wanted to do something equitable, or actually help people it could take the same SS payments and set up individual retirement funds/trusts. your 6.2% goes to your account, the employers 6.2% goes to the government to be divided amongst those who don't contribute. EVERYONE would end up with more money, except for the government. and the government won't let it happen, because its a PONZI SCHEME they run to their benefit. they don't want the ride to end, they enjoy the money and the power too much.

 

[Thunder Good-Oil]

you aren't countering the philosophical side of things. It is Ponzi scheme-esque. yes there are tons of government legalese mumbo jumbo that semantically make it not "technically" a Ponzi scheme, but that doesn't take away from what it actually is.

just because some people have benefited from it, doesn't mean it is not a ponzi scheme. my understanding is that people that are early or middle "investors" into a ponzi scheme, benefit. its just the people at the end that are in trouble. that is what is happening. the "end" of the Ponzi scheme hasn't happened yet so people tell themselves its fine to steal from the next generation, because there is a chance they will get some diminishing return. thats still a Ponzi scheme.

if the government actually wanted to do something equitable, or actually help people it could take the same SS payments and set up individual retirement funds/trusts. your 6.2% goes to your account, the employers 6.2% goes to the government to be divided amongst those who don't contribute. EVERYONE would end up with more money, except for the government. and the government won't let it happen, because its a PONZI SCHEME they run to their benefit. they don't want the ride to end, they enjoy the money and the power too much.

If half of the tax revenue to support the social program went into a defined contribution plan then there will be more issues to resolve.

The net tax revenue would be decreased by what has been paid in by everybody that now dies before participating or getting very little back. There would be a shortage of funds available to pay benefits to a substantial portion of the program beneficiaries.

What do you do about those that haven’t accumulated enough in their “account” to cover their basic needs?

SS is the largest part of the federal budget. It isn’t an investment program. Therefore it’s no more of a Ponzi scheme than the spending on defense, education, interest on the debt, or any other spending program. The difference is that some of the tax payers get rebates on their contributions.

It only requires slight adjustments to the variables to reverse the trend of reducing the trust fund balances to yet again growing them. The longer it is deferred the bigger the adjustments will probably need to be. There’s a small generation without enough workers to support the current population of beneficiaries, but there will be less of a burden a couple of generations out supporting the small generation when they retire.

 

[LouderVol]

If half of the tax revenue to support the social program went into a defined contribution plan then there will be more issues to resolve.

The net tax revenue would be decreased by what has been paid in by everybody that now dies before participating or getting very little back. There would be a shortage of funds available to pay benefits to a substantial portion of the program beneficiaries.

What do you do about those that haven’t accumulated enough in their “account” to cover their basic needs?

SS is the largest part of the federal budget. It isn’t an investment program. Therefore it’s no more of a Ponzi scheme than the spending on defense, education, interest on the debt, or any other spending program. The difference is that some of the tax payers get rebates on their contributions.

It only requires slight adjustments to the variables to reverse the trend of reducing the trust fund balances to yet again growing them. The longer it is deferred the bigger the adjustments will probably need to be. There’s a small generation without enough workers to support the current population of beneficiaries, but there will be less of a burden a couple of generations out supporting the small generation when they retire.

I would do the same thing for those who SS isn't enough to meet their basic needs. nothing. stop acting like SS is some grand perfect answer.

the government shouldn't be in the retirement business. It allows them to play politics with people's futures, as we are seeing now. its another way to addict people to the government. like all addictions its harmful and manipulative.

As you pointed out earlier they won't make adjustments because it kills their political future. the collapse or complete reset of SS will be far worse than people with their own, maybe lesser, resources.

all those other non-welfare government programs just take money. none returned. so no its not the same.

how does the math work out in your head with SS contributions now if you think taking half of it away from the group dooms the poor? To me that says you know people who contribute are not getting back even half of "their own" money. really hard to see how that isn't a net negative.

in my world that "shared" SS money still goes into some type of interest earning or investment account. yeah that account receives less tax payer funded money, but over 40 years of growing the balance delta can't look all that bad.

taking my employers 6.2% contribution, and sticking in some vehicle that earns ONLY 3% interest for 40 years I am working would yield 188 SS payments. which is more than number of typical SS payments an individual would expect to draw. you take that same contribution and invest it with only a 3% ROI you would get 263 payments, which is darn near 2 people's SS draws. and that is with incredibly low return rates.

even a modest 5% ROI, expected ROI over 40 years is 7%, you are talking 444 SS payments.

Government 40 year bonds are currently over 5%. no idea if those work the same, but just pointing out there are multiple options out there.

you could take any of the leftover money from accounts of people who didn't contribute and fold them back into the system after they die. assuming there is no other SS beneficiary for them.

yeah its not perfect, but neither is SS. this just gets it out of the governments hand, and at least lets the Ponzi scheme actually generate a return.

Its been a while since I ran it, but IIRC, if I kept 3% more percent of my SS contribution, stuck it in a 401k and didn't get a cent from SS when I retire I would come out ahead. and the government got the other 9.4 to waste away in the Ponzi scheme. I find it incredibly lazy to say SS is viable option worth defending with math like that. and I am not rich that 3% is only a couple thousand dollars a year.

 

[Thunder Good-Oil]

I would do the same thing for those who SS isn't enough to meet their basic needs. nothing. stop acting like SS is some grand perfect answer.

the government shouldn't be in the retirement business. It allows them to play politics with people's futures, as we are seeing now. its another way to addict people to the government. like all addictions its harmful and manipulative.

As you pointed out earlier they won't make adjustments because it kills their political future. the collapse or complete reset of SS will be far worse than people with their own, maybe lesser, resources.

all those other non-welfare government programs just take money. none returned. so no its not the same.

how does the math work out in your head with SS contributions now if you think taking half of it away from the group dooms the poor? To me that says you know people who contribute are not getting back even half of "their own" money. really hard to see how that isn't a net negative.

in my world that "shared" SS money still goes into some type of interest earning or investment account. yeah that account receives less tax payer funded money, but over 40 years of growing the balance delta can't look all that bad.

taking my employers 6.2% contribution, and sticking in some vehicle that earns ONLY 3% interest for 40 years I am working would yield 188 SS payments. which is more than number of typical SS payments an individual would expect to draw. you take that same contribution and invest it with only a 3% ROI you would get 263 payments, which is darn near 2 people's SS draws. and that is with incredibly low return rates.

even a modest 5% ROI, expected ROI over 40 years is 7%, you are talking 444 SS payments.

Government 40 year bonds are currently over 5%. no idea if those work the same, but just pointing out there are multiple options out there.

you could take any of the leftover money from accounts of people who didn't contribute and fold them back into the system after they die. assuming there is no other SS beneficiary for them.

yeah its not perfect, but neither is SS. this just gets it out of the governments hand, and at least lets the Ponzi scheme actually generate a return.

Its been a while since I ran it, but IIRC, if I kept 3% more percent of my SS contribution, stuck it in a 401k and didn't get a cent from SS when I retire I would come out ahead. and the government got the other 9.4 to waste away in the Ponzi scheme. I find it incredibly lazy to say SS is viable option worth defending with math like that. and I am not rich that 3% is only a couple thousand dollars a year.

It’s not a retirement plan. It’s a social welfare program.

It’s not your money any more than the taxes that were taken from you to fund the military are.

Why should it be equitable? People that don’t have children pay into the education system but don’t receive direct benefits in return. Those with children can have a direct benefit.

We aren’t going to have everybody that can’t afford basic living expenses be homeless and destitute. It’s what civilized societies do.

 

[LouderVol]

It’s not a retirement plan. It’s a social welfare program.

It’s not your money any more than the taxes that were taken from you to fund the military are.

Why should it be equitable? People that don’t have children pay into the education system but don’t receive direct benefits in return. Those with children can have a direct benefit.

We aren’t going to have everybody that can’t afford basic living expenses be homeless and destitute. It’s what civilized societies do.

yes its still my money. even if the government takes it. Withholdings are the worst thing our government has done. fooled people into thinking its not their money being taken because they don't have to write a check.

the only reason the government gets "that" money is because I work. I directly create that income that is taxed and taken from me.

again I don't care what legalese semantic BS you try to hide SS behind. there are better ways to do it that would take less from me, and give more to those who need welfare. but there are people like you who think SS is the ONLY way to do things.

 

[Big Orange#1]

Doesn't matter. The nations of the world's taxpayer funded social safety nets will be gone by the end of the century. We are going to slowly die out like those dumbass pandas at the zoo who won't reproduce.

 

[jmacvols1]

Rant all you want about whether it’s been properly managed, but Social Security is in fact a trust fund. Actually 2. The old age fund is projected to have a deficit balance in less than 10 years - but as of today it still has a surplus.

The disability insurance trust fund is projected to maintain a positive balance until the 2050s.

Social Security isn’t a Ponzi scheme. It isn’t an investment. The record keeping is transparent. There isn’t a fraud being committed by promoters that are stealing the funds.

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fee.org

SS does not have a trust fund for the money is being spent and not saved. Every year that you have paid SS taxes to the IRS, that money, every penny of it, was spent in the year you paid your taxes. What you are calling a trust fund is a bunch of worthless IOUs in the form of non-negotiable bonds. Bill Clinton even admitted "The Social Security Trust Fund does not consist of real economic assets..." These bonds are debt obligations, not assets.

Make it personal....you go and squander $5000 of your own money and that money is gone forever. You can sit down and write yourself an IOU to yourself signed by yourself for $5000. That "IOU" for $5000 is worthless, it's not really an IOU. You can call it a $5000 'trust fund" if you want and leave it to your next of kin and it will be just as worthless to them as it was to you.

This is what the gov't (Congress) is doing...taking SS money, squandering it and the Treasury department (gov't) is leaving the SS Adm (gov't) a boatload of worthless IOUs in the form of bonds. The gov't issuing itself its own bonds is no different than you issuing yourself your own IOU...it's all worthless debt obligations with no real asset value and are just as worthless to future generations. These IOUs continue to grow and grow leaving these future generations a boatload of debt to pay.
But the gov't can do something you cannot, you cannot tax people $5000 to get your $5000 dollars back that you squandered. Yet the gov't can tax current tax payers to make good on those IOU's in order to pay current beneficiaries...Ponzi scheme.

If you don't believe me maybe you will believe other people:

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fee.org

"Ponzi schemes, which appear to be investment programs, have two elements.

First, no investment actually takes place. People are promised returns on their money, but those returns don’t come from profits on successful investments; rather they come from new contributors to the scheme. Ponzi tells Contributor 1 that if he turns over a sum of money, he will see a handsome return next week. One week later Ponzi makes good on his promise — not by investing C1’s money, but by making the same promise to Contributor 2. Once C2’s cash is in hand, Ponzi can pay C1, and so on. Obviously, this is unlikely to last forever.

Now it so happens that this is indeed how Social Security works, except unlike Ponzi, the government uses compulsion. People are forced to pay FICA taxes, assuming that when they reach 65 they will receive a monthly check. Where will that money come from? From revenue extracted from the current working generation. No one’s contributions are invested."

You admitted SS is not an investment...neither is a Ponzi scheme.

"The second is deception. That should have already been clear. You couldn’t run a Ponzi scheme if you told your contributors the truth: “Give me $1,000 today, and I will double your money – as soon as I find two more people willing to give me $1,000 on the same condition.” That wouldn’t get very far.

The question, then, is: Does Social Security dishonestly represent itself as an investment, or insurance, program? It often has done so. The regressive payroll tax is formally known as FICA: Federal INSURANCE Contribution Act. (It also funds Medicare.) Besides that, the Social Security website mentions insurance on its history page, which features a picture of the father of “social insurance,” nineteenth-century German chancellor Otto Von Bismarck.

SS .... is a transfer program. By the time you go on Social Security your money has long been spent, and the money you receive is taken from current workers through taxation. That’s a transfer, or welfare, program in insurance clothing.

While the government has usually tried to fool people into thinking Social Security is insurance, it has operated on a different track when necessary. Will Wilkinson notes, “The Act was scrupulously drafted to ensure that the tax and the government transfers would not appear to have anything to do with each other. And the program is never described therein as ‘insurance.’”

The reason is that the government needed to protect itself — from the people. Wilkinson: “In anticipation of a constitutional challenge, Social Security officials went out of their way to purge their informational materials of insurance language.” When court challenges came, the government argued that the payments were taxes and benefits were not a matter of contractual right.

“The old-age monthly benefits program which Title II of the Social Security Act establishes is not a federally-administered ‘insurance’ program,” Health, Education, and Welfare Secretary Arthur Sherwood Flemming said in his brief in Flemming v. Nestor (1960). “The contribution exacted under the Social Security plan is a true tax. It is not comparable to a premium promising the payment of an annuity commencing at a designated age” (emphasis added)."

In essence, in the 1930s in order to get people to accept SS, the Dems lied to people telling them it will be insurance knowing that wasn't true. Then when the Dems realized SS would not pass the Supreme Court if it really were insurance, the Dems quit calling it insurance and started calling it what it really is..a tax. Since it is a tax no one has a contractual, legal right to a SS check as the Supreme court says so SS does not work like insurance works.

 

[Thunder Good-Oil]

Loading…

fee.org

SS does not have a trust fund for the money is being spent and not saved. Every year that you have paid SS taxes to the IRS, that money, every penny of it, was spent in the year you paid your taxes. What you are calling a trust fund is a bunch of worthless IOUs in the form of non-negotiable bonds. Bill Clinton even admitted "The Social Security Trust Fund does not consist of real economic assets..." These bonds are debt obligations, not assets.

Make it personal....you go and squander $5000 of your own money and that money is gone forever. You can sit down and write yourself an IOU to yourself signed by yourself for $5000. That "IOU" for $5000 is worthless, it's not really an IOU. You can call it a $5000 'trust fund" if you want and leave it to your next of kin and it will be just as worthless to them as it was to you.

This is what the gov't (Congress) is doing...taking SS money, squandering it and the Treasury department (gov't) is leaving the SS Adm (gov't) a boatload of worthless IOUs in the form of bonds. The gov't issuing itself its own bonds is no different than you issuing yourself your own IOU...it's all worthless debt obligations with no real asset value and are just as worthless to future generations. These IOUs continue to grow and grow leaving these future generations a boatload of debt to pay.
But the gov't can do something you cannot, you cannot tax people $5000 to get your $5000 dollars back that you squandered. Yet the gov't can tax current tax payers to make good on those IOU's in order to pay current beneficiaries...Ponzi scheme.

If you don't believe me maybe you will believe other people:

Loading…

fee.org

"Ponzi schemes, which appear to be investment programs, have two elements.

First, no investment actually takes place. People are promised returns on their money, but those returns don’t come from profits on successful investments; rather they come from new contributors to the scheme. Ponzi tells Contributor 1 that if he turns over a sum of money, he will see a handsome return next week. One week later Ponzi makes good on his promise — not by investing C1’s money, but by making the same promise to Contributor 2. Once C2’s cash is in hand, Ponzi can pay C1, and so on. Obviously, this is unlikely to last forever.

Now it so happens that this is indeed how Social Security works, except unlike Ponzi, the government uses compulsion. People are forced to pay FICA taxes, assuming that when they reach 65 they will receive a monthly check. Where will that money come from? From revenue extracted from the current working generation. No one’s contributions are invested."

You admitted SS is not an investment...neither is a Ponzi scheme.

"The second is deception. That should have already been clear. You couldn’t run a Ponzi scheme if you told your contributors the truth: “Give me $1,000 today, and I will double your money – as soon as I find two more people willing to give me $1,000 on the same condition.” That wouldn’t get very far.

The question, then, is: Does Social Security dishonestly represent itself as an investment, or insurance, program? It often has done so. The regressive payroll tax is formally known as FICA: Federal INSURANCE Contribution Act. (It also funds Medicare.) Besides that, the Social Security website mentions insurance on its history page, which features a picture of the father of “social insurance,” nineteenth-century German chancellor Otto Von Bismarck.

SS .... is a transfer program. By the time you go on Social Security your money has long been spent, and the money you receive is taken from current workers through taxation. That’s a transfer, or welfare, program in insurance clothing.

While the government has usually tried to fool people into thinking Social Security is insurance, it has operated on a different track when necessary. Will Wilkinson notes, “The Act was scrupulously drafted to ensure that the tax and the government transfers would not appear to have anything to do with each other. And the program is never described therein as ‘insurance.’”

The reason is that the government needed to protect itself — from the people. Wilkinson: “In anticipation of a constitutional challenge, Social Security officials went out of their way to purge their informational materials of insurance language.” When court challenges came, the government argued that the payments were taxes and benefits were not a matter of contractual right.

“The old-age monthly benefits program which Title II of the Social Security Act establishes is not a federally-administered ‘insurance’ program,” Health, Education, and Welfare Secretary Arthur Sherwood Flemming said in his brief in Flemming v. Nestor (1960). “The contribution exacted under the Social Security plan is a true tax. It is not comparable to a premium promising the payment of an annuity commencing at a designated age” (emphasis added)."

In essence, in the 1930s in order to get people to accept SS, the Dems lied to people telling them it will be insurance knowing that wasn't true. Then when the Dems realized SS would not pass the Supreme Court if it really were insurance, the Dems quit calling it insurance and started calling it what it really is..a tax. Since it is a tax no one has a contractual, legal right to a SS check as the Supreme court says so SS does not work like insurance works.

The “worthless” securities in the trust funds have been generating almost 10% of Social Security’s revenues.

They are trust funds. Just because expenditures exceed revenues in certain years, that won’t change the definition.

Loading…

www.cbpp.org

 

[jmacvols1]

The “worthless” securities in the trust funds have been generating almost 10% of Social Security’s revenues.

They are trust funds. Just because expenditures exceed revenues in certain years, that won’t change the definition.

Loading…

www.cbpp.org

You can call it a trust fund if you want to, but it was not set up like a trust fund, it does not work like a trust fund and there is nothing it but IOUs, as Cllnton said those bonds in this so called trust fund are not real assets, they are just "bags of sand"......

 

[LouderVol]

You can call it a trust fund if you want to, but it was not set up like a trust fund, it does not work like a trust fund and there is nothing it but IOUs, as Cllnton said those bonds in this so called trust fund are not real assets, they are just "bags of sand"......

175 trillion? lol wut? over what time span?

thats more than our entire GDP, I am not sure how anything could possibly be underfunded that much.