End Social Security

[ModerateRepZero]

social security is not a ponzi scheme. but it is a pay-as-you-go system. the difference is that a ponzi scheme is a pay-as-you-go system disguised as an investment program that promises high returns. ponzi schemes are deceptive. not true with social security, nothing deceptive about ss.

Excellent point; the key characteristics of a ponzi scheme is that it is based on deception, and the fact that it's unsustainable based on its setup and payout. The trust fund concept can be somewhat confusing/misleading but it's an accounting gimmick. There's nothing deceptive about how Social Security pays out money; it collects FICA taxes and pays current beneficiaries based on what it collects.

I don't think you know what a ponzi scheme is. They collapse on the weight of themselves because there is no investment at all, it is all a mirage to extract money from people. SS isn't meant to extract money, it is a fund set up to ensure stability for the old and disabled. It does that.

Also true. For ponzi schemes, any money coming in just pays off earlier investors; it's unsustainable on its face because the only way to pay off investors is to attract new ones; there's no investing the money to reap a profit and reward investors with the aforementioned profit.

In contrast, Social Security does exactly what it's designed to do; pay monetary benefits to eligible beneficiaries based on someone's paying into the system.

 

[Incorruptible]

How can you get something back that was in place before you were born?

Thats exactly the problem, a generation wanted something with no way to pay for it and expect me to pay for it, why should we suffer the consequences

Nothing is going to change, so move to a first world nation that doesn't have these forms of welfare. Good luck with that. Instead of trolling here, go troll your congressmen and leave us alone, troll.

Most 1st world nations have a form of welfare which is wrong.

The politicians are corrupt, we could have had Ron Paul but too many idiots dont understand him.

I am not a troll but I do like the idea of trolling a politician/bureaucrat/lobbyist/welfare recipient

 

[ModerateRepZero]

No, I have made it very clear I oppose all forms of welfare and want my freedom back. I am not trolling

Considering that for Social Security it's based on someone paying into the system and is not limited to people based on need, it's not welfare.

Social Security isn't an investment; how could it be since it's not an asset, ownership is not possible, it's not backed by collateral or counter-parties, and its payment depends completely on the whims of Congress. The current government issuing and holding its own bonds to fund future liabilities makes a mockery of the idea that it's an investment; it's a self-cancelling accounting notation where the government holds both the credit and debit simultaneously.

Wikipedia has a good definition for a Ponzi Scheme, and Social Security matches it exactly:

a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation.

Ignoring the fact that Wikipedia is not a reliable source, you only provided a partial definition:

A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. The Ponzi scheme usually entices new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. Perpetuation of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going.

The system is destined to collapse because the earnings, if any, are less than the payments to investors.

The key features, as I mentioned earlier in another post, is that it is deceptive, and also structurally unsustainable. Social Security is neither; it collects FICA taxes and is sustainable as long as revenues exceed expenses (mainly benefits paid). Its current fiscal problems are because beneficiaries are living longer than expected, and there's fewer workers contributing to revenues.

If the fact that it's "unsustainable" makes Social Security a Ponzi scheme, then what are speculative bubbles, a pay-go system such as a pension fund that ends up having more beneficiaries then workers, or a pyramid scheme?



As a sidenote, the proposals to fix Social Security generally fall into 3 categories:

1) change eligibility; ie raise the full retirement age to 69 or 70.

2) raise taxes such as raising the Social Security taxable income limit capped around $106,000.

3) cut benefits.

 

[Incorruptible]

Considering that for Social Security it's based on someone paying into the system and is not limited to people based on need, it's not welfare.





Ignoring the fact that Wikipedia is not a reliable source, you only provided a partial definition:



The key features, as I mentioned earlier in another post, is that it is deceptive, and also structurally unsustainable. Social Security is neither; it collects FICA taxes and is sustainable as long as revenues exceed expenses (mainly benefits paid). Its current fiscal problems are because beneficiaries are living longer than expected, and there's fewer workers contributing to revenues.

If the fact that it's "unsustainable" makes Social Security a Ponzi scheme, then what are speculative bubbles, a pay-go system such as a pension fund that ends up having more beneficiaries then workers, or a pyramid scheme?



As a sidenote, the proposals to fix Social Security generally fall into 3 categories:

1) change eligibility; ie raise the full retirement age to 69 or 70.

2) raise taxes such as raising the Social Security taxable income limit capped around $106,000.

3) cut benefits.

ss is a form of welfare and it still shouldn't exist

 

[actuarial]

ss is a form of welfare and it still shouldn't exist

It's amazing how unable you are to see the big picture when evaluating something. Social security reduces transfers of wealth in any nation that doesn't have the stomach to watch people starve to death (of which the US is one).

I'll try to make this as simple as possible. You have two people: Mr. Saver and Mr. Spender.

Without Social Security:
Mr. Saver has enough to cover his retirement. He needs no government assistance.
Mr. Spender does not have any money left at retirement. He eventually goes on welfare when he is no longer able to work. Mr. Saver must now pay taxes to support Mr. Spender since he's not willing to watch Mr. Spender die of starvation.

With Social Security:
Mr. Saver has enough to cover his retirement. He needs no government assistance. He paid taxes into the SS fund and gets a benefit from it.
Mr. Spender does not have any money left at retirement. He paid taxes into the SS fund and gets a benefit from it. He does not require welfare payments.

Of course this is a simplified example and even with SS payments someone may need welfare. But at least that person will have funded some of the money the consume after they can no longer work, as opposed to none of it. It also doesn't deal with the inter-generational transfer problem that comes up when the government raids the pension funds (which is a reason for SS reform, not to scrap it).

 

[Incorruptible]

How about both of them save up on there own? Why is that so difficult to understand?

 

[actuarial]

How about both of them save up on there own? Why is that so difficult to understand?

I'm not sure why you can't grasp this, but people fuck up. In an alternate universe where the country had the stomach to let those that fucked up die in the street your solution would make sense. Since that alternate universe is not the current one, you are simply ignoring the reality of the situation.

The reality of the situation is without a socialized pension scheme you will have greater transfers of wealth than with one. Complaining about wealth transfer as the reason to end SS is just being ignorant of reality.

 

[DucatiMonster696]

It's amazing how unable you are to see the big picture when evaluating something. Social security reduces transfers of wealth in any nation that doesn't have the stomach to watch people starve to death (of which the US is one).

I'll try to make this as simple as possible. You have two people: Mr. Saver and Mr. Spender.

Without Social Security:
Mr. Saver has enough to cover his retirement. He needs no government assistance.
Mr. Spender does not have any money left at retirement. He eventually goes on welfare when he is no longer able to work. Mr. Saver must now pay taxes to support Mr. Spender since he's not willing to watch Mr. Spender die of starvation.

With Social Security:
Mr. Saver has enough to cover his retirement. He needs no government assistance. He paid taxes into the SS fund and gets a benefit from it.
Mr. Spender does not have any money left at retirement. He paid taxes into the SS fund and gets a benefit from it. He does not require welfare payments.

Of course this is a simplified example and even with SS payments someone may need welfare. But at least that person will have funded some of the money the consume after they can no longer work, as opposed to none of it. It also doesn't deal with the inter-generational transfer problem that comes up when the government raids the pension funds (which is a reason for SS reform, not to scrap it).

That isn't a benefit considering that in your scenario it is very plausible that Mr. Saver could of just easily had a greater opportunity to reap a greater return on his investment then having that money taken from him forcibly and put into SS where the rate of return is much lower then what he could of earned by investing directly himself. Once you realize this point your analogy falls apart and the so called "benefit" is false illusion to prop up the forcible inclusion of Mr. Saver in the ponzi scheme known as SS.

 

[Rangoric]

That isn't a benefit considering that in your scenario it is very plausible that Mr. Saver could of just easily had a greater opportunity to reap a greater return on his investment then having that money taken from him forcibly and put into SS where the rate of return is much lower then what he could of earned by investing directly himself. Once you realize this point your analogy falls apart and the so called "benefit" is false illusion to prop up the forcible inclusion of Mr. Saver in the ponzi scheme known as SS.

Yeah after the market crashed in 2008, when people lost their job they looked around and said "Wow, so glad I saved that money, now I can retire!"

The reason the ROI on SS is so low is to avoid things like that.

 

[tgferg67]

That isn't a benefit considering that in your scenario it is very plausible that Mr. Saver could of just easily had a greater opportunity to reap a greater return on his investment then having that money taken from him forcibly and put into SS where the rate of return is much lower then what he could of earned by investing directly himself. Once you realize this point your analogy falls apart and the so called "benefit" is false illusion to prop up the forcible inclusion of Mr. Saver in the ponzi scheme known as SS.

Your perfect investment scenario does not take account what can go wrong for Mr. Saver. What if Mr. Saver if is is divorced 2 times after long marriages and loses half of his retirement savings 2 times? What if Mr. Saver becomes disabled? What if Mr. Saver becomes ill and has to live on his retirement savings several years before getting a medical diagnosis(not uncommon)?

 

[actuarial]

That isn't a benefit considering that in your scenario it is very plausible that Mr. Saver could of just easily had a greater opportunity to reap a greater return on his investment then having that money taken from him forcibly and put into SS where the rate of return is much lower then what he could of earned by investing directly himself. Once you realize this point your analogy falls apart and the so called "benefit" is false illusion to prop up the forcible inclusion of Mr. Saver in the ponzi scheme known as SS.

Research shows that institutional investors do better than individuals on average, so it's likely that Mr. Saver will not beat a properly managed fund (look at the CPP fund, not the SS fund). In addition, it is EXTREMELY unlikely he's going to make enough more (even looking at the positive tail assuming he gets a better than average return) to have more for himself after he has to pay to keep Mr. Spender alive.

 

[sothsegger]

beware of means testing:
if social security becomes an insurance/welfare program where you only get it if you need it, then why should someone who makes under the cap pay a greater percentage than someone who makes over the cap? to make it a welfare/insurance program without making the middle and working classes shoulder an unfair burden you'd have to scrap the cap entirely.

 

[Zorkorist]

Wow, you sound desperate, sothsegger. Which is sad.

I hope you know that Social Security pays out about $1,000 per month right now.

That's not a great number, but it is not a tiny number either.

Good luck to you.

-John

 

[JEDIYoda]

Yes, it needs to be ended and replaced with a system that is sustainable. This could be done over a period of 40 years. All we need to do is have leadership and courage to start the process.

I agree in fact let me re write what you just said so we both can agree...

Yes, it needs to be ended and replaced with a system that is sustainable. This could be done over a period of 40 years. All we need to do is have leadership that doesn`t care about those who are getting SS presently and courage to start the process of screwing our seniors who paid into it........

 

[Olikan]

OP, the money that you could save at your 20s would mean almost nothing when you get 70s... inflation is a bitch

 

[Fenixgoon]

Excellent point; the key characteristics of a ponzi scheme is that it is based on deception, and the fact that it's unsustainable based on its setup and payout. The trust fund concept can be somewhat confusing/misleading but it's an accounting gimmick. There's nothing deceptive about how Social Security pays out money; it collects FICA taxes and pays current beneficiaries based on what it collects.



Also true. For ponzi schemes, any money coming in just pays off earlier investors; it's unsustainable on its face because the only way to pay off investors is to attract new ones; there's no investing the money to reap a profit and reward investors with the aforementioned profit.

In contrast, Social Security does exactly what it's designed to do; pay monetary benefits to eligible beneficiaries based on someone's paying into the system.

while ss is not deceptive like a ponzi scheme, the fact that it relies on a growing base of younger workers to pay into the system via taxes is similar to a ponzi/pyramid scheme - you need more "investors" (young, employed people) to pay into the system in order to pay the profit/reward (SS benefits) to the previous ones.

and especially due to the baby boom, we now have the issue that there is a huge age group ready to collect benefits, yet the number of people supporting the system is insufficient to pay the full benefit amount. if this were a ponzi/pyramid scheme, this would be the point where the whole thing collapses (schemer cannot pay the promised returns to original investors).

 

[Acanthus]

I doesn't even need 40 years or your other BS. Raise the friggin cap!!!!!!!!!

Yur done.

This is true.

Get rid of the cap on the SS tax, reimplement when it is solvent.

Problem solved.

 

[shira]

This is true.

Get rid of the cap on the SS tax, reimplement when it is solvent.

Problem solved.

With a small number of relatively minor changes, SS can easily be made solvent:

1. Change the formula used to compute the yearly cost of living adjustment. This change has long been advocated. As currently computed, the COL adjustment is actually higher than the inflation rate.

2. Gradually increase the SS retirement age to 70. People are living and working longer, so increasing the retirement age from its current value of 66 to 70 would be a fair reflection of this demographic change.


3. Increase the fraction of SS benefits subject to federal income tax. Right now, a maximum of 85% of SS benefits is subject to federal income tax, even for those with very high incomes. This should be raised to 100% for higher-outside-income individuals.

4. As has been suggested above, increase the SS wage base subject to the 6.2% SS tax. Note that this would also increase taxes on employers, since the actual SS tax rate is 12.4%, where the employer pays half. So increasing the maximum wage subject to the tax is more controversial than the other change.

5. Means-test benefits. Probably not necessary. Items (1) through (3) are probably all that are needed to make SS completely solvent for the foreseeable future.

 

[Darwin333]

Nope. All we need to do is plug the hole Reagan created to fund other programs. It was set up to be self sufficient.

Most people are too stupid for us to expect everyone to save for the future. It would be wonderful if this were not true, but it is what it is.

What about medicare/medicaid?

 

[Darwin333]

I doesn't even need 40 years or your other BS. Raise the friggin cap!!!!!!!!!

Yur done.

I assume you also think that the cap on payouts should be equally raised as well?

 

[Juror No. 8]

OP, the money that you could save at your 20s would mean almost nothing when you get 70s... inflation is a bitch

LOL. This response is representative of the average liberal's understanding of finance and economics. They thinking saving money means putting it in a coffee can or stuffing it under a mattress. They have no concept of investment.

This is your brain on government education. Any questions?

 

[Incorruptible]

LOL. This response is representative of the average liberal's understanding of finance and economics. They thinking saving money means putting it in a coffee can or stuffing it under a mattress. They have no concept of investment.

This is your brain on government education. Any questions?

Completely agree. Liberals really need to educate themselves

 

[Pens1566]

Completely agree. Liberals really need to educate themselves

Pure unadulterated irony coming from the forum's most ignorant troll.

 

[Londo_Jowo]

Pure unadulterated irony coming from the forum's most ignorant troll.

Exactly, if anyone needs to educate themselves he's at the top of the list.

 

[Incorruptible]

Pure unadulterated irony coming from the forum's most ignorant troll.

They believe government is the answer to everything, they support a welfare state with increased taxes, spending and regulations.

I am not a troll, my opinions are different than others because I only speak the truth and have controversial views