What that meant was that folks were setting aside $1.00 in Social Security to get back $0.10.
This also meant that folks were 'investing' in Social Security with hard currency at the time of their lives when they were earning the least, and then retiring to receive soft currency at the time of their lives when they were moving out of the productive sector.
Of course they imagine they paid more in than they get out ~ because it's true ~ inflation makes it true.
Today, without inflation ~ in fact, with massive deflation, we get an opposite effect. People paid in soft dollars over the last 30 years, and now they're getting back hard dollars.
Any normal society would have re-issued it's currency somewhere in the middle of all that ~ with new values, and some sense that over time currency probably ought to reflect essentially the same value ~ that is, a dollar today should be able to buy much the same as a dollar then, or a dollar tomorrow.
Alas, we do not have normal societies these days, and the Democrats were in charge so long nobody really knows what Social Security has cost them.
[Notice that, when the tax code was amended to mandate tax brackets increase along with inflation, that something was done about inflation?]
You're right in that it's a confusing world, financially speaking. There's an odd symbiosis between the banking circuit, the regulatory apparatus and the academy. Bankers and investment dealers come up with shiny new products which promise to mitigate market turbulence. The more complex they are, the more expertise is needed to run them. And where do you get the expertise? In the academy. Having a Ph.D. in statistics can get you a six-figure Wall Street job right off the bat.
And the regulators? Their expertise comes from the same source, and they depend upon professors to a far greater extent than Wall Street. Look at how many economists the Federal Reserve sponsors, whether directly or indirectly.
The 2008 crisis, although triggered by the pop of the housing bubble, was accentuated by a design flaw buried in the complex statistical models used in the Collateralized Debt Obligations products and whatnot. Put simply, it underestimated the correlation between local real estate markets in a bubble. Since the same design flaw was part of the standard model, all of those fancy risk-mitigating products contained the same flaw: in panic time, they blow apart because they underestimate the correlation between different investment classes in a crisis.
With that background in mind, here's the point. None of the experts spotted the design flaw until the entire system blew up! Not the Wall Street experts, not the regulators, not the ratings agencies, not the professors. All these groups were caught with their pants down when the wall fell away. The only ones who spotted it were non-experts, who were largely swept aside as too unsophisticated to know what they were talking about.
A lifetime from now, when everyone hurt has gone to their final rest, people will see the '08 crisis as yet another example of the comedy of specialization. The people who spotted the flaw didn't know enough about the field to avoid being brushed off. The people who knew enough about the system to track down the flaw were too emotionally invested in it to even see the flaw.
As a sideline: have you heard of the Minsky Effect? It says that greater stability leads to greater instability. Whether risk mitigation is provided by government (i.e., tighter regulations) or by the private sector (those risk-mitigating doodads), people become used to the idea that risk is being actively whittled away. Thus, they get lulled into the notion that risk is disappearing entirely. With that false sense of security, they take bigger risks because they assume they're safe. And then, the system becomes more unstable until the inevitable end.
If you know any athletes at the college level, you should tell them about the Minsky Effect. Adjusted, it explains why there's so many concussions in pro football and ice hockey today. Better equipment leads to that false sense of security, leading to...