How Social Security Rips of the Average American

The Johns Hopkins News-Letter (Johns Hopkins U.) ^ | 1/3/3 | Aaron Back

[Mr. K]

SS was not originally a Ponzi Scheme, but it has turned into one...

It was originally a simple money grab. The original retirement age of 65 was signed into law at a time when the avg. life expectancy was 56. Seriously. And people fell for it.

They politicians thought they would never have to pay anything out. But as the avg life extended well into the 70's we now have the younger genration paying the old folks' CURRENT retirement needs (the spent all the money they took in)

[ThinkDifferent]

dedicated funding for Social Security must end

Bingo.

[Gunslingr3]

Social Security and I agree it does need fixing, however if that 14 per cent or so did not go into some fixed long term program that cannot be touched until a person is either retiring or has been disabled and is unable to work,(ins.part of SS)my bet would be that 95 per cent of working people would not have money to buy food with after working for 40 years.

The Superman Idea

"The claims of these organizers of humanity raise another question which I have often asked them and which, so far as I know, they have never answered: If the natural tendencies of mankind are so bad that it is not safe to permit people to be free, how is it that the tendencies of these organizers are always good? Do not the legislators and their appointed agents also belong to the human race? Or do they believe that they themselves are made of a finer clay than the rest of mankind? The organizers maintain that society, when left undirected, rushes headlong to its inevitable destruction because the instincts of the people are so perverse. The legislators claim to stop this suicidal course and to give it a saner direction. Apparently, then, the legislators and the organizers have received from Heaven an intelligence and virtue that place them beyond and above mankind; if so, let them show their titles to this superiority.

They would be the shepherds over us, their sheep. Certainly such an arrangement presupposes that they are naturally superior to the rest of us. And certainly we are fully justified in demanding from the legislators and organizers proof of this natural superiority." -Frederic Bastiat, The Law

[Gunslingr3]

The current and future problems with SS are simply demographic in nature.

I see using political influence to weild the force of law in order to plunder your neighbors as a 'problem' that isn't simply demographic. Since this program was instituted the money has been considered general revenue and spent in the same year. The Treasury Dept then gives the SSA an IOU for the money spent over and above SS disbursements and it's expected the next generation will pay off the current generations largesse. Disgusting.

"There are people who think that plunder loses all its immorality as soon as it becomes legal. Personally, I cannot imagine a more alarming situation." -- Frederic Bastiat

[Gunslingr3]

Get past the notion that it is your money that you are putting into Social Security.

And if a thief tells you, "Get past the notion that it is your money that I'm taking from your wallet."? Are you going to accept it? Afterall, we have to get past antiquated notions like property rights in order to have socialism don't we? It makes no difference to me if the pick pocket is elected by my neighbors, he's still thief and they're just looking forward to recieving stolen goods.

[k2blader]

You will either receive more or less from SS than you paid in FICA taxes. In the latter case you've been ripped off, in the former case you are receiving funds that have been stolen from later generations.

Well said.

[Protagoras]

People in the USA have forgotten how to save,

One of the biggest reasons they have is because SS lulled them into a false sense of security.

[CDHart]

If you mean only the FICA and Medicare, that comes out of every dollar that everyone makes up to $87,000 and it is matched by the employer. So just from FICA & Medicare, the feds get 15.3% of every dollar earned. That's why they love minimum wage increases. They don't do much for the working people but they sure increase the $$$ the feds get.

Carolyn

P.S. We have been ripped off for so many years, it just makes me ill to think about it.

[gridlock]

And if a thief tells you, "Get past the notion that it is your money that I'm taking from your wallet."?

The money in my wallet is mine. The money that I turn over in FICA is not mine. It is the government's, and they spend it on whatever they want.

The fact that I will be eligible for Social Security down the road does not mean that the money I paid in will have anything to do with the money I get out. People have the incorrect notion that Social Security is a savings plan, but it is not. As long as they cling to that notion, it will be impossible to reform Social Security before it bankrupts the country.

The money you put in is not the money you get out. It never has been and it never will be. This fiction was created in order to provide political attractiveness to the program, but it was a lie from Day 1, and the lie gets more disgusting with every passing year.

[inquest]

This fiction was created in order to provide political attractiveness to the program...

...and it's being maintained to provide continued justification for it. Without it, there would just about zero public support for a program that does nothing but tell people how to manage their own money. Who would actually want to be told that?

[AdamSelene235]

Oh I don't know about that, Money is pretty handy to buy food, gas for you car, disiel for you truck and ammo for your weapons cache, you know for deer hunting and varmit shooting?

My point exactly. Its for spending not for saving.

[Moosilauke]

If I were 25, I'd KILL to put a portion of my FICA tax into investments of my own choice.

If you were a rational, long term oriented 25 year old you would. Most 25 year olds know they will live forever, with lottery winnings to support them. Social security is something affecting only those, like their parents, who are so pathetically unhip as to have allowed themselves to grow old. That's always been part of the problem about changing Social Security: it only becomes interesting to you after your too old to do much about it!

[dyed_in_the_wool]

$87,000 for 2003
http://www.ssa.gov/employer/factsheet.doc

[k2blader]

...it only becomes interesting to you after your too old to do much about it!

I think the older generations (baby boomers on up) can do much to help "reform" socialist insecurity since voting demographics are in their favor.

However, too many seem more interested in preserving their entitlement than correcting the problem.

[pepsionice]

Almost every single western nation is now looking over their national pension program and they all fall into the same category...as long as the national populations were increasing...the pensions worked...when the national populations decrease, then the whole thing starts to fall apart. France, England, and Germany are in the same category. All are starting to change...add six additional months onto retirement...increase the personal contribution by 1 percent...limit use of pension by folks with 'other' investments...etc. Unless you can change the birthrate, they all will suffer and eventually fall apart.

After living in Germany for 10 years, I can see first hand the whole pit that folks fall into. Almost everyone is counting on the national pension program. Only a small number of citizens (probably less than 10 percent), have a investment program on the side. Most companies offered a minor-league chance...buy special company stock...at a special rate...and sell it later in life. Of course now, as the person is getting up to 65...the stock they thought might be worth $50k (as a slight cushion) is barely worth $10k and they would have done better with just a plain savings account. Politicans are in deep stew over the entire issue but they cannot possibly allow the national pension program to go into a major overhaul.

One has to wonder how America survived until the 1930s without a social security program. What held this fragile nation together and helped people survive their senior years?

[MurryMom]

The candidate had won my eternal respect some months before by proposing that workers be allowed to redirect a portion of their Social Security taxes into private investment accounts.

That's what little Dumbya SAID, but what has he DONE since being elected to allow workers to redirect a portion of their SS taxes into a private investment account? An even better question is "How much money has little Dumbya budgeted for the purpose of setting up private investment accounts to supplement their SS paymments?"

Hint: You answered both questions correctly if your answers include the following words: Zero, zilch, nada, nothing.

[oldcomputerguy]

"stolen from later generations"

Give me a break!

[oldcomputerguy]

"Disgusting"

I suggest you get a grip. While I agree an actual trust fund would have been better, the system is pretty good as a retirement safety net and has worked well for 70 years! I paid so my parents could eat and my kids will pay so I can eat. The problem with most of the complainers is that their greed is greater than their altruism. Think about it.

The problems with SS as I see it are with the SSI portion for disabilites.

[ThinkDifferent]

Sorry if it offends you, but it's the truth. The money you paid in SS taxes didn't go into an account with your name on it, it was spent by the government (and replaced with IOUs the government writes to itself, which they fraudulently call a "trust fund"). The money you will receive will come from the taxes extracted from current workers. If you get back more than you put in, you're effectively receiving welfare.

I'm not blaming you for anything, but I hope you'll eventually realize that Social Security is a Ponzi scheme designed to produce dependence on government, which in turn produces Democratic votes.

[Principled]

If every worker paid into the general fund, every worker would have the same incentive to make government as inexpensive as possible.

Not true under your scenario of differing rates. This is true only if all individuals pay the same rate.