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The SS admin will pay me 4.2% of that fund per year for the rest of my life. At 5%, the SS admin will make 0.8% per year more than they will pay out. The SS admin can afford the benefit they pay me forever, and ultimately be left with more money than my labor's contributed.

Your calculations do not seem correct to me. To calculate a rate of return, you need a mortality table. The impact of inflation is tricky to factor into the calculation. The major driver of Social Security deficits is the CPI-W compounding. This inflation factor is unsustainable in any pension.

Your caluclations are meaningless even if you consider all factors. Social Security has neve had assets. It is simply a transfer program collecting taxes and paying benefits. The excess taxes have been spent in other areas of government. Social Security is now in a cash flow defiicit paying more in benefits than receiving in taxes. SS supporters using phony intra government interest payments to mask the problem. Trust funds, intra government interest payments, and other government account gimmicks are diversionary tactics. Social Security, Medicare, Medicaid, federal pensions, Obamacare, Section 8 housing, SSI, Social Security disability, student loans, refundable tax credits, and a host of other programs are exploding deficits with much higher levels in the future especially when the dollar begins its descent into oblivion.

Government spending including Social Security benefits for current recipients will be substantially reduced either voluntarily or imposed by external forces. Perry cannot say that benefits for baby boomers must be reduced. He probably understands this concept however.

For all your reasons, I say SS is a ripoff. I'm just trying to exemplify that fact with real numbers that anyone can run. Perhaps if most understood the ripoff, politicians would be forced to eliminate (or privatize) the SS program.

SS does not even give a participant a 5% return on "contributions." (I have 10 years of EE bonds yielding more than that: 1984-1993, and the bond principal is mine as well - not so with SS extortion). And I was not annuitizing the fund and determining a fair payment - requiring a mortality table, and inflation projections. I'm just pointing out that the SS admin could pay me their determined benefit forever without depleting the hypothetical fund, in fact it would increase over the years (except for the real world facts you cite - the "lock boxed" fund never did, nor ever will exist - except as foul lies from the uber corrupt politicians).

More to the point, I believe that my example is ubiquitous, that just about every participant in the SS scheme could demonstrate similar theft of their earnings, and current payers could easily do better by taking their SS contributions and buying "riskless" EE bonds even, not to mention 1000 other better places to invest. Perhaps our unhappy but cognizant victims would reject the scheme at last, and demand its repeal.

I'm not considering inflation at all. Do the calculations yourself, take out your SS annual report, put the numbers in a spreadsheet (employee + employer contribution). Apply a 5% annual return on the accumulating fund, and see for yourself what it amounts to at expected retirement, or anytime for that matter. Then check to see what SS will benefit you with at the time you qualify.

Going forward, you will also grant me that the CPI-W figures are determined by the government, and "curiously" seriously understate inflation - giving no real inflation protection to SS recipients (food, healthcare, services & energy being big items for them).

One easy way to save on SS, the biggest US budget item, lie. Next, of course, for our viper filled "government", is to deny life-extending health care measures to SS recipients, on the basis of cost/benefit, you see. Doubt me?