Social Security is Not a Ponzi Scheme, Mr. Perry (It's Worse)

Reason ^ | 09/08/2011 | Sikha Dalmia

[SeekAndFind]

Rachel Maddow and her MSNBC guests are scandalized that Rick Perry stuck to his guns that Social Security is a Ponzi scheme during the presidential debate tonight. “This kind of rhetoric will hurt him in the general elections,” they reassured each other. They didn’t flat out say that Perry was wrong, but actually he is. Social Security is not a Ponzi scheme. It is much worse.

Here are three reasons why:

One, a Ponzi scheme collects money from new investors and uses it to pay  previous investors—minus a fee. But Social Security collects money from new investors, uses some of it to pay previous investors, and spends the surplus on programs for politically favored groups—minus the cost of supporting a massive bureaucracy. Over the years, trillions of dollars have been spent on these groups and bureaucrats.

Two, participation in Ponzi schemes is voluntary. Not so with Social Security. The government automatically withholds payroll taxes and “invests” them for you.

Three: When a Ponzi scheme can’t con new investors in sufficient numbers to pay the previous investors, it collapses. But when Social Security runs low on investors—also called poor working stiffs—it raises taxes. Indeed, Cato Institute’s Michael Tanner points out,

Social Security taxes have been raised some 40 times since the program began. The initial Social Security tax was 2 percent (split between the employer and employee), capped at $3,000 of earnings. That made for a maximum tax of $60. Today, the tax is 12.4 percent, capped at $106,800, for a maximum tax of $13,234. Even adjusting for inflation, that represents more than an 800 percent increase.

And given that the worker-to-retiree ratio is expected to fall from 3-1 today to 2-1 in 2030 (down from 16-1 in 1950) these taxes will only go up unless the government decides to kick retirees in their dentures and slash benefits.

Rick Perry should stop soft-peddling the issue and tell it like it is.

[sickoflibs]

RE :”if a gang of mejicans broke down my door tonight and stole everything Ive ‘paid into’ my retirement, it wouldnt be *right* for me to demand that the rest of the folks in the neighborhood pay my mortgage for me...”

Yes it would because you ‘paid in’

If a kid on the schoolyard gets his lunch taken by the class bully he ‘paid in’, so when he is a senior he mugs the smallest weakest kid in the class to get himself a free lunch that is OK, because it's his money. “He paid in” It's SOCIAL SECURITY.

[DoughtyOne]

both of a have valid points...I understand the distaste that it leaves in my mouth to say that SS recipients are drawing an 'entitlement' or 'welfare'...its at one point disrespectful, but its also true...

Okay, since we don't seem to be getting anywhere, what would you call it if a person was required to place their own funds into a bank account for between 45 and 50 years, and then they quit work and started drawing out those funds a little at a time?  Would you call that an entitlement?  No.  And this is essentially exactly what people are doing.  They paid Social Security with-holding for 45 to 50 years.  Now they are drawing those funds out.  Is it an entitlement?  No, it is every bit as much maintaining the contract that these people adhered to for their entire working lives.  They paid in.  They draw out.  That's how it works.

If you don't like this system, then join me in demanding a change in the system, but seniors are not evil, you are not evil, and when the time comes, I am not going to be evil, simply because I start withdrawing the funds I paid into the system.  And when it comes to the point that I draw out more than I put in, I'm going to be very cognizant of the fact that the government did not invest the funds I paid in, didn't accrue one single dime of interest, and there was absolutely nothing I could do about it.

if a gang of mejicans broke down my door tonight and stole everything Ive 'paid into' my retirement, it wouldnt be *right* for me to demand that the rest of the folks in the neighborhood pay my mortgage for me...

Okay, then if you're still working today, you march right into the personnel department and demand they stop with-holding Social Security funds.  We'll see how far you get with that.  I advise anyone that buys into what your stating here, to do the same thing.  Just demand they stop payroll dedcuting Social Security deductions.

prolly a bad example, but Im beyond givin a ratz azz anymore...if ya qualify for the gimme, might as well get it while ya can,and im talking all the goodies at every level of grafternment, cause the bottom has to drop out sooner or later. but please, old folks, just dont bitch and moan that its 'yours' and that you are 'owed' the bennies because somebody stole yer money, and my kids hafta pay for it...

We are all agreed that Medicare, Social Security, and a myriad of other government programs, are very ill advised.  That does not mean that people today who are benefitting from these programs are somehow evil.  They weren't evil as they paid into these programs for 45 to 50 years.  They are not evil now that they are using the programs.

The evil players are the people who set up these programs.  They could have opted to keep these programs privatized, but didn't.  They could have set up a system that saw citizens become self-insured across the board, not having to pay for medical insurance, vehicle insurance, life insurance, retirement, medicare, and even a good share of their household mortgage interest.  So don't state that today's elders are wrong to be taking from a system they paid into.  You could just as easily state with accuracy that they were swindled for 45 to 50 years of their life, when they could have had a much better standard of living during their lives, as well as at the end of their lives.

unfortunately, satanic communists designed the system to do this very thing, making a class of people beholden for a scrap of food or medicine...its simply another face of the evil that rules the world...for awhile yet...

Couldn't agree more, but it is the satanic communsits that should be the focus of your attention.

[DoughtyOne]

Thanks Charles.

[beandog]

Actually, today’s seniors are partially to blame. They continued to elect the people who promised to give them stuff. They chose not to pay attention to what was really going on.

[DoughtyOne]

Those payments were directly connected to their own retirement. So many quarters, so much pay, a certain level of retirement guaranteed

the lie and theft has occured from day one...no contract or binding features, simply a politicians greasy smile and *promise*...

I don't disagree with that.

the thieves are still runnin the same con, this many years later...and no, the retirees of today didnt concoct the scheme, but my kids didnt steal their money either...

Yes, we have a new set of players in there who are extending the same con on into the future.  Once again, we have another issue that did not get addressed from January 2001 to December 2006, when the Republicans held the White House, the House, and the Senate.  And people wonder why I have expressed anger at Bush and the Republicans of those years.

You really do have to get over this 'stealing from my kids' thing.  The parents of the retirees of today could have said the same thing.  And if things don't get fixed between now and when your kids retire, the parents of their grand-kids could say the same thing then.  That's how this misserable system has worked since day one.  Those caught in it, are not evil.  Those on the bottom rung today are being no more absued than today's retirees were when they were on the bottom rung.

we cant dig up FDR and hang him for treason, but we *could* do so for those who still have functional necks...

I think it's more productive to consider alternatives to what S.S. is today, and get some form of privitization implemented.

the ploy of SS wasn another of the tactics to divide and conquer the USA...it worked as intended by those who proposed it, and it worked as intended, as a slush fund for all kinds of graft and goodies for every politician since...

It did increase the available funds to be absconded with as soon as they came in.  Here you do what I constantly find myself doing, referencing a 'slush fund' or 'S.S. pool of funds' or some other form of fund related to Social Security, even though it all goes into the same general fund everything else does.

our rhetoric is dicey today, because theres no easy answers to 'fix' SS...the music has stopped, and there aint enuff chairs for everyone, but i'll be damned if my children are gonna be burdened for several trillion, before they ever have a choice in the matter...

And becoming involved with an effort to fix this situation is to be admired.  It is not to be admired to trash people whose careers are at an end, for playing by the same rules they were required to their entire working lives.

they didnt steal the cash, why should they pay...???

And the people who are retired now, didn't steal any cash either.  A lot of money was taken from them over the years also.

[DoughtyOne]

If you’re a Republican, you saw one chance to change this in your lifetime. It occurred from January 2001 to December 2006.

The Democrats have controlled either the White House, or the House, or the Senate for every other year since the 1960s, probably way before that.

Blaming seniors for what they did or didn’t force our government to do, is hollow rhetoric.

We have had an illegal alien problem since the mid 1990s. Could all the demanding in the world get our leaders to even enforce the laws on the books? No.

Blaming seniors today regarding S.S., makes a much sense as blaming a Conservative citizen today for not getting illegal immigration under control.

Our government does whatever it pleases. Screw the rank and file.

[DoughtyOne]

And when today’s seniors were just starting out, and through their whole careers, they couldn’t opt out either.

So nice of you to volunteer them to opt out now after 45 t0 50 years of paying in.

[TruthConquers]

The history of the Income Tax would be better.

I have heard tell that it was only supposed to “be on the rich”, never be over 1%, was to never be more than the cost to support a family, and the child deduction was to be the total cost of feeding and housing your child, etc etc etc.

[sickoflibs]

RE :"And when today’s seniors were just starting out, and through their whole careers, they couldn’t opt out either. So nice of you to volunteer them to opt out now after 45 t0 50 years of paying in"

I don't get to volunteer anyone to do anything. They want my and others money and they have the political muscle to take it, so they take it.

So nice of you to see that as justice, just like that six grader who got mugged so he picked on the kinder-gardener and told him he couldnt 'opt-out' either.

[Boogieman]

“Actually, today’s seniors are partially to blame. They continued to elect the people who promised to give them stuff.”

Spot on. I wouldn’t say Seniors should get the biggest part of the blame, since they didn’t set the system up. Still, we are living in a country where the electorate helps shape policy, and this influential segment of the electorate is the one that is most responsible for blocking any sensible reforms.

They’re protecting their piece of the pie, but in doing so, they are effectively taking bread from the mouths of babes. I’m not swayed by their arguments that they “paid in” and are entitled to get their money back, since I’m forced to “pay in” as well, yet I’ll likely never see one thin dime of my money back. What makes them special?

[Gilbo_3]

You really do have to get over this 'stealing from my kids' thing.

I have to 'get over it' ???

The parents of the retirees of today could have said the same thing.

and indeed they shouldve, back to the point of buying the initial lie...it shouldve never been implenmented, but the fact that we are screaming about it today, and being rebuffed, is an indicator of how far entrenched the poisin pill has become...'granny *needs* her check, so denying it is somehow more immoral than thieving from myself and my kids ???

its theft, its the truth, why NOT say it to protect my kids ???

Those caught in it, are not evil. Those on the bottom rung today are being no more absued than today's retirees were when they were on the bottom rung.

didnt say the recipients today are evil, just selfish in that they got pwned, and want to pass the literal buck to my kids...who, because of increasing demographics and insolvency are indeed MUCH more abused if they hafta shoullder the burden...

I think it's more productive to consider alternatives to what S.S. is today, and get some form of privitization implemented.

how will that work in a FRee country ??? we agree that the scheme shouldve never began in the first place, so how will entrustin grafternment with future dollars make it better ???

how about this, let me OUT of the conn game ???

I, and my kids, can look after ourselves and know how to better prepare for our future, and if we fail, then tough shit to us, FReedom aint a guaranteed check...

Here you do what I constantly find myself doing, referencing a 'slush fund' or 'S.S. pool of funds'

not at all...there never was or will be any contract for ss dollars, or a 'lockbox' regardless of where the money is placed...it always was and always will be a 'slush fund' of monopoly money for which pols buy favors and votes...its all general revenue/tax receipts, just a matter of when the physical take ends and the IOUs begin...the more strongarmed robbery dollars, the less 'borrowing' has to be done...ie more graft...

And becoming involved with an effort to fix this situation is to be admired. It is not to be admired to trash people whose careers are at an end, for playing by the same rules they were required to their entire working lives.

there aint no 'fix' to the mob...sorry, but its not trashing granny to tell her shes been robbed and *her* money is gone...coming to my house and telling my children that they must reimburse her gullibility is an insult to my kids...i have some pity for granny, but not enuff to starve my kids...

granny shouldve stood up when she had the energy, instead of allowing the scam to continue...

And the people who are retired now, didn't steal any cash either. A lot of money was taken from them over the years also.

and again, they chose to play the game, when the demographics were trending to insolvency...roughly half of em supported more guv largess and debt that stole the money...my kids didnt have that option and wont with the numbers we know to be true today...

[Gilbo_3]

it is the satanic communsits that should be the focus of your attention

well it is, cept that earlier in yer reply you said 'good luck with that' more or less...

now, in tryin to get people on board to help fight the commies, we have to educate em on *why* the system is wrong...and its wrong because its passing the stolen buck...

reforming it to pay back the stolen money, on the backs of my kids is immoral to say the least...

you say they shouldve/couldve spoken up and helped their own cause years ago, yet when i do so, im told to just pay up outta 'fairness' to people i didnt rob...

passin the gubmint pistol to the next generation aint a 'fix'...

[sickoflibs]

RE :”And the people who are retired now, didn't steal any cash either.”

No, instead they are DEMANDING that the Federal government steal from those younger than them to give to them, much like Jesse Jackson demands money be taken from Whites to give to blacks.

What is worse than the direct stealing from those politically weaker (younger) is the FICA employer payroll tax that punishes employers for hiring the young people, talk about ‘job crushing taxes’. But that is what happesn when you buy into Marxist redistribution schemes like this. It's a crime to steal from their employers to buy senior votes when there is such high youth unemployment .

[DoughtyOne]

And when today’s seniors were just starting out, and through their whole careers, they couldn’t opt out either. So nice of you to volunteer them to opt out now after 45 t0 50 years of paying in.

I don't get to volunteer anyone to do anything. They want my and others money and they have the political muscle to take it, so they take it.

You've spent your time on this thread trashing people drawing social security because you thought they were evil to take Social Security payments after paying in like you are, for 45 to 50 years.

As long as the $50 to $100 bucks you pay in each payday is cut to zero, it's doesnn't bother you that people who paid that same $50 to $100 bucks for 45 to 50 years, wind up with zero retirement dollars.

That's infantile.

When you're 65 or perhaps 70 by then, you'll be drawing funds too, unless the system is converted by then.  If not, you'll be right in there dipping with the best of them.

So nice of you to see that as justice, just like that six grader who got mugged so he picked on the kinder-gardener and told him he couldnt 'opt-out' either.

School-ground, sixth-graders, kindergarteners, you're talking points express that level of logic.  Grow up.

[sickoflibs]

RE :”You've spent your time on this thread trashing people drawing social security because you thought they were evil to take Social Security payments after paying in like you are, for 45 to 50 years.....
As long as the $50 to $100 bucks you pay in each payday is cut to zero, it's doesnn’t bother you that people who paid that same $50 to $100 bucks for 45 to 50 years, wind up with zero retirement dollars. That's infantile....School-ground, sixth-graders, kindergarteners, you're talking points express that level of logic. Grow up.”

You are using liberal arguments to defend a socialist system where the government plunders the politically weak (the young) to give to the politically (strong) the old. This is exactly what Marxist Jesse Jackson calls for every day: Democratic Marxism, for the Feds to take from others and give to those they think is deserving .

Calling me 'infantile,School-ground, sixth-graders, kindergarteners' and telling me to 'grow up' WON'T make you right anymore than when Chris Matthews does it to promote similar redistribution. I have been called worse,

[sickoflibs]

Grandma enjoying the reaps of Social Security Plunder:

[DoughtyOne]

Gilbo_3 to DoughtyOne; sickoflibs

You really do have to get over this 'stealing from my kids' thing.

I have to 'get over it' ???

Yes, you have to get over it.  Until the system is changed, which I'll be happy to join you to support, this is how things work. It's how it has worked for every worker and retiree over the last 70 years.

The parents of the retirees of today could have said the same thing.

and indeed they shouldve, back to the point of buying the initial lie...it shouldve never been implenmented, but the fact that we are screaming about it today, and being rebuffed, is an indicator of how far entrenched the poisin pill has become...'granny *needs* her check, so denying it is somehow more immoral than thieving from myself and my kids ???

There are certain things you're going to have to come to grips with.  I don't know of another time since 1933, when the Republicans were the majority of the House and Senate, and were ensconsed in the White House as welll, until January 2001, until January 2007.  We have had one six year window that I know of.  Not I or any other Conservative can get our elected officials to jump to our tune.  Please explain why you think it's rational to blame Social Security on retirees.

I can see why you would take Bush to task, for not addressing it when he had the chance, but Bush didn't dance to my tune.  I have wanted to cut off freebies to illegal immigrants since the mid-1980s.  Have I gotten my way on that issue?  I would like to see almost all government social programs either gutted, or turned into privately held funds controlled by the people who paid them in.

As for defending the Social Security system we have, I'm not defending it.  I am defending people who paid into it, and have every right to think the retirement they were promised, will be there.

Do you think the idea that Social Security won't be there when you retire, is something new?  It's not.  People have been saying that since before I got my first job.  You and your children are not being any more unfairly treated than anyone else who held a job post 1933.

I want to see Social Security privatized.  What you and your kids pay in, should be placed in a fund you control.  Until we get that up and working, we're stuck with what we have.
<>What other rational thing do you suggest?

its theft, its the truth, why NOT say it to protect my kids ???

I know this is going to be a big blow to you, but the whole world for everyone esle but you, does not revolve around you and your children.  Theft is taking funds and not returning them as promised.  It would be theft if Social Security payments were to cease today.  It is not theft, taking the money with the proviseo that you and your children will have Social Security too when you retire.

Those caught in it, are not evil. Those on the bottom rung today are being no more absued than today's retirees were when they were on the bottom rung.

didnt say the recipients today are evil, just selfish in that they got pwned, and want to pass the literal buck to my kids...

Glad you didn't say they were evil.  Whew!  The glowing descriptions you provide, pretty much infer they are evil.  I disagree.

As for them getting owned, that's just silly.  As Conservatives we rail on many things.  Is it easy to get things changed?  No.  The Social Security system was set up long before I was born.  There are reasons why it wasn't over-turned.  They are political, and the rank and file had no chance whatsoever to change that system.  The Democrats will never allow that system to be changed for the better, if they have any say whatsoever.  You should know that.

who, because of increasing demographics and insolvency are indeed MUCH more abused if they hafta shoullder the burden...

We all had to shoulder the burden.  I got paid a lot less money when I was younger.  I was still paying into the system.  Your kids get higher pay than we did, they're also paying out higher rates than we did.  You didn't know this?  Really?

I think it's more productive to consider alternatives to what S.S. is today, and get some form of privitization implemented.

how will that work in a FRee country ??? we agree that the scheme shouldve never began in the first place, so how will entrustin grafternment with future dollars make it better ???

If the plan is devised right, and the funds are placed under the control of the individuals paying in, I envision a way for folks to save a ton of money across the board.

This would wrap a housing fund, your retirement, your healthcare, your vehicle insurance, your life insurance, your mortage insurance, your unemployment insurance, and probably other similar outlays I've overlooked in a fund to be administered by you.  You would be self insuring for most everything by the time you were thirty, some of it much earlier.  You would be able to take out funds to place a down payment on a home. You wouldn't be paying out monthly payments for the above things (other than you home mortgage of course), or you would be paying out very little for a comprehensive catastropic plan, that would only kick in, if you had a major loss.  The rates would be very reasonable, as compared to thousands of dollars at present.

how about this, let me OUT of the conn game ???

Until the current system is converted to something along the lines I have outlined above, that's not going to be possible.  I wish it were.  It's out of my control.  We have responsibilites to people who paid into the system for 45 to 50 years, and that's a fact adults have to come to terms with.

I, and my kids, can look after ourselves and know how to better prepare for our future, and if we fail, then tough shit to us, FReedom aint a guaranteed check...

You can wax rhapsodic until your lips are raw, cracked, and bleeding, you're in the tail end of a line of people who have been belching about Social Security probably since it's inception.  IMO, the system should have been set up along the lines of what I outlined above from the get go. It wasn't.  We have to deal with the idiocy that was devised.  That's a sad fact of life.

Here you do what I constantly find myself doing, referencing a 'slush fund' or 'S.S. pool of funds'

not at all...there never was or will be any contract for ss dollars, or a 'lockbox' regardless of where the money is placed...it always was and always will be a 'slush fund' of monopoly money for which pols buy favors and votes...its all general revenue/tax receipts, just a matter of when the physical take ends and the IOUs begin...the more strongarmed robbery dollars, the less 'borrowing' has to be done...ie more graft...

You were right the first and third times.  There never was or will be a lockbox.  There is no social security slush fund, just a general revenue/tax receipt fund.

And becoming involved with an effort to fix this situation is to be admired. It is not to be admired to trash people whose careers are at an end, for playing by the same rules they were required to their entire working lives.

there aint no 'fix' to the mob...sorry, but its not trashing granny to tell her shes been robbed and *her* money is gone...

Okay, then you want to go on the record as stating that probably in excess of 50 million U.S. Citizens who paid into Social Security for 45 to 50 years, should have their entire income cut off immediately, so you and your children won't have to pay out $50 to $100 dollars per pay check.

coming to my house and telling my children that they must reimburse her gullibility is an insult to my kids...i have some pity for granny, but not enuff to starve my kids...

You're kids are starving because you pay out $50 to $100 dollars per pay check?  Really?

granny shouldve stood up when she had the energy, instead of allowing the scam to continue...

So what you're saying, is that everything you ever wanted government to do, happened just the way you wanted right?

You don't like Social Security, yet you're not to blame, Granny is.  Have you stood up and forced change in the Social Security system?

After all, you're implying that with just a little effort, Granny could have changed the system for the better.  What alternate universe are you living in?

And the people who are retired now, didn't steal any cash either. A lot of money was taken from them over the years also.

and again, they chose to play the game, when the demographics were trending to insolvency...

You are one dense individual.  Workers are forced to pay Social Security withholding.  What choice did any older person today have when they were working, when the Democrats held at least the House, the Senate, or the White House since Social Security began?  Before you go shooting off your mouth again, explain the process you think people should have taken to fix this.

roughly half of em supported more guv largess and debt that stole the money...my kids didnt have that option and wont with the numbers we know to be true today...

I'm honestly not quite sure what you're saying here, but I believe you are infering the retirees today supported more freebies for themselves, even though they knew the system was upside down.

Well, I'm not retired yet, but I was furious with Bush pushing through the Medicare Part-D provision.  How far did that get me?  I can't even control our own side.

We can't even keep a guy like Obama out of the White House, and you're pissed that today's seniors didn't force a change in Social Security?

I'm sorry you don't like the current system.  I don't like it either.  I just don't think you cut off 50 million people cold turkey, even if the current system does suck.  That would be tantamount to murdering them.  I'm not on board for that.  And spewing incessantly against Seniors, is not helping anyone.

[DoughtyOne]

Okay Gilbo_3. You’re the first guy to ever think Social Security was a rip-off. When I spent time in my high school class over 40 years ago figuring out the difference between the sum I would have deducted for Social Security that would never realize interest, as compared to what the sum would be if I paid into a fund that did pay interest, I wasn’t thinking along the lines of what you are at all.

You’re the first guy. You need to tell everyone because they don’t know any of this.

Good grief.

[DoughtyOne]

RE :”You've spent your time on this thread trashing people drawing social security because you thought they were evil to take Social Security payments after paying in like you are, for 45 to 50 years.....

As long as the $50 to $100 bucks you pay in each payday is cut to zero, it's doesnn’t bother you that people who paid that same $50 to $100 bucks for 45 to 50 years, wind up with zero retirement dollars. That's infantile....School-ground, sixth-graders, kindergarteners, you're talking points express that level of logic. Grow up.”

You are using liberal arguments to defend a socialist system where the government plunders the politically weak (the young) to give to the politically (strong) the old.

If you wish to think that objecting to 50 million seniors having their Social Security is a liberal argument, I don't mind.  Any person with far less than average intelligence can deduct that the current system sucks, but you can't just kill off 50 million seniors because you don't want to support the system the way those seniors did.

As for you trying to make the case that Seniors are more powerful than the young, you've got every person in the U.S. older than 18 and younger than 65 in one pool, and every person older than 65 in another.  You honestly think here are more people over 65 than people over 18 and under 65?

This is exactly what Marxist Jesse Jackson calls for every day: Democratic Marxism, for the Feds to take from others and give to those they think is deserving.

Seniors paid into the system for 45 to 50 years.  They worked hard, got their quarters in, and played by the rules.  Now you're comparing them with the people Jessie Jackson promotes programs for, that haven't worked a day in their lives.  What the hell is wrong with you?  These two groups of people actually equate closely in your estimation?

Calling me 'infantile,School-ground, sixth-graders, kindergarteners' and telling me to 'grow up' WON'T make you right anymore than when Chris Matthews does it to promote similar redistribution. I have been called worse,

You've probably been called worse for things you shouldn't have, but here you're being treated rather tamely for calling for the deaths of 50 million seniors, because you don't want to pay out $50 to $100 per paycheck via FICA withholding.

[DoughtyOne]

If grandma is reaping anything, it’s because she spent 45 to 50 years paying FICA withholding just like you are.

You obviously don’t like it, so why don’t you change it if you think it’s so damned easy to do it?

What measures have you taken to get Social Security changed? Why haven’t you gotten it changed yet?