Skip to comments.Rick Perry sticks to claim that Social Security is a scam
Posted on 08/29/2011 11:34:13 AM PDT by reaganaut1
Texas Gov. Rick Perry is standing firm in insisting that Social Security, the federal governments insurance programs for retirees and disabled, is a Ponzi scheme designed to deceive the young.
In a weekend campaign stop in Ottumwa, Iowa, Perry, who has surged into the lead in the Republican presidential sweepstakes in at least one major poll, repeated his characterization of the social insurance program that is generally supported by the electorate. He has made the same point before, especially in his book, Fed Up!, though at one point his campaign tried to explain that he had softened his language.
It is a Ponzi scheme for these young people, Perry insisted. The idea that theyre working and paying into Social Security today, that the current program is going to be there for them, is a lie.
At a later stop in Des Moines, he also threw cold water on his own campaigns efforts to portray his position in a more tempered light. I havent backed off anything in my book. So read the book again and get it right, he said.
Perrys stand is the type of vintage ferocity that the governor has generated in his Texas political career and even in his limited time as a GOP presidential hopeful. For example, he has suggested that Federal Reserve Chairman Ben S. Bernanke would be behaving in a treasonous fashion, if he loosened the money supply in a presidential election year.
Despite complaints from some quarters that his choice of words in condemning the Fed was too strong, Perry has stood firm in that area as well, raising questions about when a colorful and forceful position crosses the line into political gaffe.
(Excerpt) Read more at latimes.com ...
The TRUTH is that SS would be viable forever if the government kept it’s mitts oof th9ose funds, and secured those funds for those who paid into it all of their lives.
I do not think this was a good subject for Perry to bring up during a racr for office unless he includes a fail proof method to replace it.
Governments at both the federal and state levels have so many regulations and requirements relating to private health insurance companies that seniors would be hard pressed to find a comparable plan on the private market, especially if they have some health issues. The one thing about Medicare is that it basically has no cap on enrollee spending. If you want to make private health care affordable to seniors, you have to remove all of the regulation or red tape, or it will be simply unaffordable. Seniors don't need private plans that cover things like abortion or STD screening, for example.
The elimination/phase-out of Medicare has to come with significant repeals of federal and state legislation governing the health care industry. This would allow for more competition in the market and allow for more companies to offer catastrophic plans. The system we have now is broken -- even the private system, because it decouples costs from benefits. If you are covered by your employer under a typical private health care plan then you have almost no incentive to reduce your health care costs.
Five or six taxpayers used to support a retiree. Soon it will be down to one or two taxpayers supporting one retiree.
The math doesn’t work.
There is no "trust fund". Social Security is operating at a cash deficit now and will continue to do so from here on out. What is called a trust fund is just a bunch of IOUs the U.S. Treasury has written to itself. Current claims are paid out of current receipts supplemented by other current taxes and new borrowing. Nothing has been set aside. All revenues collected up to this point have already been spent. Period.
Try to plow throw my 51, if you will.
It has been sold as a retirement plan. That’s the purpose of those stupid little fliers the SSA sends out every year, showing your W-2 income/SS wages and projected benefits. They’re misleading people into thinking “I’ve worked and paid in X, and the SSA tells me that I will be getting at least Y in benefits if I retire at 62, and Z benefits if I wait until 65...” and so on. The government has promulgated this propaganda, and much of the public has bought it, hook line and sinker.
Since the funds are co-mingled via the holding of debt which funds the budget deficit, let’s quit worrying about the accounting charade of a “trust fund.” There is no lockbox, there is no segregated pool of “this” money vs. “that” money. It’s all one big slush fund which Congress has been pissing away for decades, but at a rate in the last 10 years which hastens all event horizons. Last year, the SSA started paying out more benefits than it was taking in receipts from payroll taxes. That event was supposed to first happen in 2017. Well, tomorrow is here now.
There is now a locked and loaded weapon pointed at our fiscal situation: The exploding amount of debt has been issued at the short end of the curve... and when interest rates go up (as they eventually must, when the Chinese and Japanese get tired of being paid negative real yields to buy our debt), the interest payments on the national debt are going to explode upwards - to $800B or more per year, if they only return to nominal levels by historic standards.
To your “if’s”
1. We would need to phase in an eligibility age increase very rapidly. When the age of 65 was first chosen, that was the MEDIAN life expectancy of an adult white male in the US. ie, half of males would be dead by the age of eligibility, so the only issue was survivor benefits for the man’s wife and minor children (if any).
We have a situation where life expectancies are going up rapidly thanks to medical advances, and the rise in SS eligibility age has to be increased 10 years right now to catch up to current male demographics. We can’t take decades to get to a point where one has to be 75 to collect SS - we need to be there in the next five years. That’s not going to happen.
2. OK, remove income caps. Trouble is, there’t just not that many people in the cohort above the current cap, and there are likely to be a lot fewer in the near future. While removing the cap is justifiable, it makes a very small dent in the problem, which is one of stagnating wages, declining labor force participation rates and a huge influx of deadbeats from other countries.
3. Benefits can be adjusted up/down, and the formulas have been messed with before. Heck, we’ve messed with the computation of CPI to get around the COLA increases - to our collective detriment. We’re lying to ourselves about the rate of consumer inflation, and have been for more than a decade to limit COLA increases in Social Security. This is like using a hammer to change your spark plugs - the wrong tool for the job.
On Medicare: Fully agree, but that’s a whole ‘nother discussion.
There are plenty of people on this board who lack either the brains or the 'nads to say what Perry is saying.
At current yields, if the SSA buys US debt, they won’t be keeping up with inflation either. We currently have negative effective yields out to about the seven-year maturity on the yield curve.
You have to pose this properly, and make sure the people understand it.
The GOP doesn’t fail due to “extremist” ideas, they fail (when they do) because of bad marketing and ineffective sales techniques.
Reagan was the master at this. Perry seems well poised to follow in his footsteps.
"That's as good as money sir, those are IOUs. Go ahead and add it up every cent's accounted for. Look, see this that's a car, 275 thou might want to hang on to that one."
What Perry said is honest and courageous.
Your reply is dishonest, cowardly and arrogant.
A few years ago I read an article by a guy who said his dad had come up with a fantastic idea for National Health Insurance. It was very simple. It went something like this: The government would underwrite catastrophic health policies with an $80,000 deductible and then the individual citizen would pay for a health insurance policy up to $80,000. The theory was that all of the insurance companies would be happy to underwrite inexpensive health policies that maxed out at $80,000. I always thought it was an interesting idea. Point being that there are probably hundreds of great ideas about how to manage health care costs if we could just get our legislators off the dime to take a look.
or better yet, how about leaving me the hell alone and letting me prepare for my own old age...
once we return the age to collect to athe point of life expectancy, please tell me again why i should pay into it in the first place ??? just a place to 'hold' my extra cash till i die, makin it impossible for me to pass it on to my kids ???
ole ricardo hs prolly been a fan of the ponzi scheme in years past...give msm a minute and theyll find it...
So someone who needs a transplant or something would still be out of luck, right? What we need to do is get back to the medical care we had in the late 40s and 50s, where doctor's visits were cheap, and having an operation didn't cost more than one or two weeks' pay. Health insurance cost less than 80 a month (adjusted for 2010 dollars) and it covered major expenses, not every little thing. Car insurance doesn't cover oil changes, so there's no reason health insurance should cover every minor thing either.
Removing the cap on income subject to Social Security tax basically turns Social Security into a welfare program, even if you adjust it for benefits. Social Security recipients who are in the bottom-third in terms of contributions make out far better than the top 10% do already, in terms of return on investment. While your plan would maintain solvency for a little while longer, why don't we just call that what it is? Welfare. You can argue that it's welfare now, but the proposals to remove the income cap would definitely make it a welfare program.
You go, Rick! The emperor IS naked!
See #66, but basically this plan changes the nature of Social Security unless there are corresponding benefit adjustments. I don't want to scrap the whole thing, but this would build on the existing damage down to Social Security which began with the early 1980s compromise to tax Social Security benefits. That amounts to double taxation up to the point where benefits paid exceed contributions entered.
The Regime Media is going to go apeshit ballistic!
Perry has called history’s greatest Ponzi Scheme a.... well...PONZI SCHEME!
Oh, The humanity!
Even if the government had saved all of the Social Security receipts and invested them (but in what, T-bonds? It's still the same pool of money), it still wouldn't be enough to pay anything. These tweaks are putting lipstick on a pig. The program is still unsustainable and I'm opposed to these little tweaks that make it "sustainable" for another 20-25 years or whatever. The time to deal with it is now. Let people my age OUT of it. If there are going to be cuts, give them to current recipients as well. It's not fair to punish my generation (the under 35s) by pushing all of the cuts onto us.
Politicians who advocate entitlement reform seem to go down in the polls, including Chris Christie and Obama. Unless they have the Secret Service and a picked audience, angry protesters attack them on camera. (Obama doesn't face mobs, but leftist leaders denounce him on TV.) Maybe Perry will survive that trap and even prosper. If he does, it will be quite a trick.
No I dont like Perrys Dream Act for illegals. Different subject.
I agree. It's supposed to be only for illegals who are "in the process" of applying for citizenship, but that seems to include those who "will apply" for citizenship at some unspecified future date. If I am wrong about that, somebody please correct me.
Suitcase full of IOUs from “Dumb and Dumber.” LOL!
I’m wondering if this isn’t some kind of rope-a-dope where he gets the left looking way over in the wrong direction before delivering a sucker-punch to the jaw on a completely different issue.
Just a thought...
I had not thought of that he is cunning enough to do just that. ;o)
To SSA it IS an investment. U.S. Treasuries are still the safest investment in the world. If SSA was an independent agency no one could say that it's not an investment.
That SSA is not an independent agency, does not change the fact, that SSA must still put the money somewhere. The choices are limited.
Unless you got a better idea, treasuries are the appropriate place for SSA funds.
These facts are true:
This is true whether or not:
The problem isn't SSA or what SSA invests in. The only two problems are
I knew it, that if I said one thing nice about something Perry said that it would freak out at least one of you. But what the heck... and maybe illegals will vote Republican too....LOL
Perry is in a corner here because he already beat up SS in his book so trying to backtrack on it now would backfire on him. What gets me is when they change or run from their positions in the general election from what they said in the primary. Sharon Angle tried to hide from the Media so they couldn't ask her about stuff she previously said and it didn't work.
It is not just the retirees he supports, there is that little social justice trick called SSI, then of course Medicaid, which I guess costs more than Medicare, since Obama decided to move half a trillion in funding from medicare to medicaid.
You are confused.
The government has two sources for revenue at any moment in time, current taxes and current borrowing.
Over the next thirty years there will be certain Social Security payments made to those Americans who are presently age 50 or over (say) and are eligible, or soon will be eligible to receive Social Security retirement benefits.
Whatever benefits those future recipients collect will be funded (just as all other government outlays are funded) by future taxes and future borrowing.
The impact on the economy and on the future taxpayers of those future Social Security benefits is entirely unaffected by the imaginary existence of an imaginary trust fund. The U.S. Treasury can have a big box of U.S. Treasury bonds or it can have a big box of make-believe unicorn turds, it doesn’t matter.
The past is the past. There is no trust fund. And there is a huge slug of Americans at or near retirement age for whom there have been no actual assets (e.g. cash, gold, securities, etc.) set aside to cover their future Social Security retirement benefits.
Those benefits, whatever they are, will be funded by future taxpayers.
This is proof of how bad a financial situation we are in in my opinion.
Q: Why would the Republican frontrunner reach down and willingly grab the 3rd rail with both hands??
A: Because SS is gonna crater....guaranteed. Medicare is worse. Unfunded mandates as far as the eye can see. He’s either gonna win by telling the truth and turn the ship of State or we are all done.
An excellent way to control the cost, is to quit lying about the cost.
I had 3 stents put in about a year ago, the hospital billed my insurance $117.000.00 for the procedure. Blue Cross paid $6,200.00 it was my responsibility to pay nothing.
Over billing insurance holders has been common practice for over 60 years that I know of, for sure.
“I knew it, that if I said one thing nice about something Perry said that it would freak out at least one of you. But what the heck... and maybe illegals will vote Republican too....LOL”
I don’t think it’s freaking out to state a fact. The man has been seriously deficient in recognizing what Conservatism is, for so long, that it goes against the grain when he actually says something decent now.
This is a guy who changes his spots at the drop of a hat.
Is that the type of person we give kudos to when they do something right, knowing full well he’ll change his spots again in 48 hours?
I can’t trust this guy for two seconds. He was for Gore before he was against that sort of thing. He was a Democrat before he was against that sort of thing. He was for open borders before he wasn’t. He was for big government projects before he wasn’t. He was for taking over 500,000 acres by eminent domain before he wasn’t. He was for forcing vaccinations on girls before he wasn’t.
Today he says he’s one of us. And when elected he’ll be another person who was with us, until he wasn’t.
Do we need to feed into the idea this guy is solid on any issue, when he has consistently backtracked on so many things he thought was right in the past?
He’ll be pilloried by leftards for insulting his High Holiness’s crowning achievement .
Anything that has 3rd party payers is bound to be a boondoggle.
Add goobermint rules and mandates to the mix and it’s guaranteed.
I'm not confused at all. You are correct up until you say that there is no trust fund. Then you become confused.
From SSA's standpoint they have assets. They have a box full of U.S Treasury bonds. Just like China has a box full of U.S. Treasury bonds. It's an asset. And it's appropriate to say that SSA has assets just like it's appropriate to say China has assets.
SSA has assets. It's the U.S. Treasury that doesn't have assets. The U.S. Treasury has a boatload of debt that it's going to have to pay on. Either through tax revenues or rollover borrowing. That doesn't change the fact that SSA has assets and those assets have value.
Now neither of us like the fact that congress has directed the U.S. Treasury to borrow and spend all of this money. But that's not SSA's problem. To say SSA doesn't have assets, is equivalent to saying that Ford Motor Credit doesn't have an asset, just because all they have is a note from you, and you don't have a lot of cash. You've got earning power and Ford Motor Credit will collect on that note. Be assured SSA will collect on that note from the U.S. too. The U.S. is not going to default on the debt owed to the SSA. It will be paid.
Your last comment is true. Taxpayers are on the hook for all the funds that the treasury has borrowed. The U. S. treasury either has to tax to pay it's debt or it has to issue more debt. And that's whether it was borrowed from SSA or from China.
The problem with your comments, is that it is neither true or appropriate to say that there is no SSA trust fund. Clearly SSA has a legal claim against the U.S. government. If the treasury failed to redeem bonds held by the SSA that would be clearly be a default, but there is no chance of that ever happening.
That you and I both want the treasury to have set aside funds for all the debt they have issued or made real investments with real paybacks. Doesn't mean the treasury doesn't really owe the funds, and will have to come up with the cash.
Now to be fair, some of what the treasury spends on are real investments. Defense is a real investment that protects our country and the treasury's ability to raise funds. Some infrastructure projects increase commerce and increase treasury revenues. But a lot is clearly inexcusably wasted. And I don't like it either.
You say numerous unintelligent and irrational things.
I’ll respond to one.
You say that when the U.S. Government holds U.S. Treasury bonds they are just as much an asset to them as those bonds would be to China if it was China holding them. This is monumentally illogical. A U.S. Treasury bond is a contract for a stream of cash payments between the holder of the bond and the U.S. Treasury, the issuer. If China holds those bonds then they are entitled to receive that stream of payments in return for the fixed payment they made previously when they bought the bond. If the U.S. Government holds a U.S. Treasury bond they are entitled to receive the payments but they are also obliged to make them. Thus the net value to the U.S. Government of that bond which they hold is zero.
Everything else you have said in your posts to this thread is equally irrational as the above. I am beginning to suspect that you are an evil lying commie. If you are not an evil lying commie then you are crazy and stupid. Either way, you will never say anything decent and true. That I am sure of.
” Is that the type of person we give kudos to when they do something right, knowing full well hell change his spots again in 48 hours?
I cant trust this guy for two seconds. He was for Gore before he was against that sort of thing. He was a Democrat before he was against that sort of thing. He was for open borders before he wasnt. He was for big government projects before he wasnt. He was for taking over 500,000 acres by eminent domain before he wasnt. He was for forcing vaccinations on girls before he wasnt.
Today he says hes one of us. And when elected hell be another person who was with us, until he wasnt.”
Perry is scum.
However you feel about this particular issue, it doesn’t help our cause to call a leading candidate scum.
by the way,I know scum. Perry may not be your cup of tea, but he is not scum.
The real issue is the national debt, and whether or not it can be paid. Misstating facts by saying things such as there is no trust fund is not really helpful in solving the problem, though as I admitted, I have actually said this at times, myself in sheer frustration.
It would be better to say that the debt has grown to about 7 times the trust fund, almost 100% of GDP, and endangers the government's ability to continue, since economic collapse ultimately will occur without changes.
On paper, in the government accounting, there is indeed an account that is the social security trust fund. The excesses paid into that fund since 1986 have been
“invested” in non-negotiable government securities. Intra government payments of interest on the securities have been posted to this trust fund account as well.
These securities become part of our national debt, and currently total about $2.5 trillion. The projections were that current receipts would be sufficient until 2017 and then the trust fund securities would begin to be liquidated.
The interest due annually to the trust fund was projected to allow the fund to grow until 2025. Unfortunately, the recession etc. has sent the current receipts into the red about 6 years ahead of time.
Can the government pay this debt? Of course it can. All it has to do is transfer the assets needed to the Federal Reserve Bank, and they print the money to pay the cash. Question is, what will it be worth, if the current spending levels are maintained, debt continues to grow, and money continues to be printed?
I think I read that about half of the current debt is owed to Americans, so the government can simply continue printing money and devaluing the the dollar. Mr. and Mrs. America gets the shaft.
Eventually, other countries will demand higher interest rates to buy our securities, but at the present time, everyone else has so many problems that we are still the safety currency as well as the reserve currency. We need to take steps to make sure we keep this advantageous position by reducing the government spending and outstanding debt.
Focus on the debt, it's something everyone agrees needs to be lowered.
Sorry, when talking about removing income caps, I was just stating that social security is a flat tax for everyone except those that make more than around $100,000. They get to exclude part of their income. I really don’t see how that makes it a “welfare” program, and that issue is not what I wanted to focus on. The debt, interest on the debt, and health care spending are the biggest problems.
Social Security is an insurance program part of the Old Age Survivors and Disability Insurane (OASDI). I was not suggesting that the formula not include this income, if the cap was taken off. I was thinking of it as a simple stop-gap to increase cash flow temporarily, and buy some time to pay down debt, and reform health care.
I was not particularly advocating for or against it. Just stating that there are several options that are politically possible and likely, some of which have been implemented before, notably during the Reagan Administration.
The biggest problem is that the debt is now such a huge percentage of GDP, and the interest on the debt and growth of health care are so huge that the OASDI (social security) problem pales in comparison.
A man who has photo ops with La Raza and ACORN ??
A man who spoke out against SB1070, and probably gave Obama the nerve to sue us A FEW DAYS LATER??
That is scum!
A man who spoke out against SB1070, and probably gave Obama the nerve to sue us A FEW DAYS LATER??
That man is NOT a conservative.
I've discovered why so many
moderate liberal FReepers love RINO Rick. You can see why HERE. WARNING! It may turn your stomach and it will definitely disgust you.
Perry musthave really hit a nerve on this one. I mean, we have 90 posts and not one from Red South and not one about Gardasil.
Myself, I always thought a phased transition to privatization for a retirement system would be okay. Politically, I think we missed the time for that. The elderly vote, and the baby boomers are becoming elderly.
Social Security is part of OASDI (Old Age Survivors and Disability Insurance). Its purpose was insurance against getting to old to work, and having no income. That age was originally set at 65.
Since it was conceptualized as Insurance, there was no provision for inheriting the benefit. Just like your homeowners insurance, disability insurance, or car insurance, your family doesn't normally inherit anything based on the premiums paid. Though they did include provisions for minor children, and allow 1/2 of the benefit to a surving spouse.
I also, would rather make my own arrangements, but that ain't about to happen given the current political climate, and if the elderly get the idea that their benefits are going to be cut off overnight, then good luck getting anyone elected who will cut spending on anything.
“SS is on a perfectly sound footing, except for the math.”
When you put it that way, it makes perfect sense.
You can thank me only once.
lol! No problem my FRiend. :-)
Where did all the RINO FReepers come from?