In my opinion: Social Security is a Ponzi scam and will crash of its own weight.
For social security the problem is the regressivity of the payroll tax.
According to Senator Bernie Sanders we should apply the Social Security payroll
tax on income above $250,000. Applying the Social Security payroll tax on income
above $250,000 would only impact the wealthiest 1.3 percent of wage earners. In
other words, 98.7 percent of wage earners in the United States would not see
their taxes go up. The social security trust fund is solvent until 2030.
Lifting the cap on taxable income would extend social security an additional 50
years.Social security has been a winner and has rescued many elderly
from abject poverty. Before social security it was a race to see which would
kill off the elderly first - ill health or lack of nutrition.
SS is a fairly easy fix. 1) delay benefits2) increase taxes
to cover it.3) a combination of the 2 above makes the most senseMedicare/Medicaid are much tougher problems.Fixes include1)
reduce benefits2) work to cut medical costs3) raise taxes to pay for
itOf the 3 above, working to cut medical costs seems to make the
most sense as cost are huge compared to the rest of the world.All we
need to do is convince about 1/2 of the country that medical costs need to be
controlled.The longer we wait, the tougher these problems become.
And lately, all our congress HAS been doing is waiting and pushing the problem
down the road.
Contrary to what Republican politicians hope we'll believe, most of us know
that Social Security is an insurance that we working Americans pay for during
our working lives, not an "entitlement" whatever that is. Republican
attacks on it are the biggest threats Social Security faces.
Social Security is one program that is absolutely vital to the health of the
nation but also a program that one would expect would have to be "fixed"
periodically with changing demographics and economic situations. It's
impossible to see 50 years ahead so adjustments should be expected. Luckily Social Security has some very easy fixes we just need the will to do
The only reasonable solution is one that no one is talking about. I have
proposed that we gradually increase the age that people receive benefits from
these programs, increasing it by 6 months per year until we get it to 72 years
old. At 60 years old, that affects me as much as anyone, but it is the right
thing to do. While it would be nice if the money we pay in could be privatized
so it was available to us when we need it, that is not workable in the short
term. This approach will decrease costs substantially in the long run and is
more reflective of how long people live and can and should be productive
compared to when Social Security and Medicare were created.
Anyone who thinks SS is a good deal does not understand math or compounded
interest!M = P( 1 + i )nM is the final amount including the
principal.P is the principal amount.i is the rate of interest per
year.n is the number of years invested.Look at the FICA
deduction on your next paycheck and include what your employer is forced to
contribute and plug those yearly numbers into the above formula for say..40
years! Assign any modest interest rate, compounded for those 40 years! If we had
been "allowed" to invest that money in any simple investment, nearly
every American would retire as multi-millionaires. Congrats Americans, your
government hosed you again!
Lumping Social Security and Medicare together is highly obfuscatory. Social
Security's problems are relatively minor. SS currently consumes 5% of GDP,
that will rise to 6% by 2035 where it is projected to remain. A small tax
increase coupled to a small benefit cut will take care of it.Medicare and Medicaid, on the other hand, is where all of the future deficits
problems originate, But if we were to get our medical spending down to the level
of Germany, or France, or Japan, or any other developed country, we would solve
almost all of long term deficit problems.
Mountanman.Had SS been invested, it would be a great program.But alas, our great and wise elected leaders, Both R and D alike, saw
free money and used it in an effort to buy votes and keep taxes low.So, what we have is a decent program that was hijacked by politicians (even
your beloved Republicans)
To Shaun McC: People in their 50's are already having a hard time finding a
job. Employers do not want 70 year old employees Increasing the retirement age
won't work for that reason, unless we very vigorously enforce anti-age
discrimination laws. Also many people in physically difficult work environments
simply cannot keep working that long.
If we stopped trying to be the police force for the world and started taking
care of our selves, we could afford a lot of things.
"...Unsustainable might be an appropriate term for the seemingly lackluster
interest from Capitol Hill lawmakers, outside of Utah Republican Sen. Orrin
Hatch and a few others. The report, stated Hatch, is a stark reminder of the
urgent need for entitlement reform...".It's good to read
Hatch is aware of something.Hatch has been in the Senate since
1977.It's good to read Hatch sees anything as being urgent."...Actually, the feds financial picture right now isn't dire,
given budget cuts and tax increases. The CBO projects a U.S. budget deficit of
$492 billion this year, the lowest since 2008 and nearly a third of the record
$1.4 trillion in 2009...". Actually, it's surprising to
read this report in the DN."...Americans are hesitant to see
reductions in Social Security benefits. A recent Pew Research Center study shows
67 percent want no reductions at all in benefits,...".Those
Americans who are hesitant to see reductions in Social Security represent the
voting base of the Republican Party.Republican law makers will slash
Social Security benefits for their voting base.Right?
Re: "The social security trust fund is solvent until 2030."No, it's not. There is no social security trust fund. Any more than there
exists a Social Security fairy.Here's how the welfare-system
Ponzi scam works -- current benefits are paid out of current receipts. Current
excesses are applied to other general-budget items, with an understanding
they'll be paid back out of future receipts. Resulting, of course, in
unsustainable systemic debt.To say that Social Security is solvent
until 2030 must be translated from liberal newspeak as: "CBO hopes --
that's all they can do, there's no real way to predict -- that current
receipts, plus redemption of government debt instruments will meet current
expenditures until 2030."But a "lockbox," into which
current excesses are placed, ready to be used when needed in the future? Nothing
but disingenuous accounting fantasy -- Social Security fairytale.Best time to begin solving this problem? Back when President Bush suggested
it, and liberals fought it off. Second best? Now, but liberals will never let
the issue be solved.They'll continue to press the Social
Security fairy approach until it all collapses.Sad.
"Best time to begin solving this problem? Back when President Bush suggested
it,"Are you talking about just before the stock market crashed
Ida Mae Fuller, the first SS recipient, paid less than $25 in SS taxes. She
then received almost $23,000 in SS welfare payments.Thus Social
Security has been a Ponzi scheme from the very beginning. Eventually all Ponzi
schemes collapse as the number of those who reach the receiving end grows until
it can no longer be supported.Second, Social Security is a tax, not
an investment. The money taken from you today isn't being stored in any
account waiting to you to cash it out on a later date. Money taken from you is
immediately being given to one of the SS welfare recipients (remember that this
is a Ponzi scheme and has been since the first recipient). Those notices from
the government telling you about an account with your name on it? Those are
fiat accounts, meaning they only exist in an arbitrary sense and not a literal
one.Before solutions can be found, we must first face the reality of
The real problem Medicare and Medicaid. The high cost of health care, and the
lack of savings to prepare for paying health costs in retirement is both killing
the competitiveness of American businesses, and leaving us unprepared to pay for
medical costs in old age. The problems? 1) A lack of open markets in health
care (consumers don't feel the full impact of their health choices so they
spend less time shopping for good medicine than they do for a $600 television)
2) with limited information available to consumers 3) Poor dietary and
health/fitness choices 4) Under-educated workers who do not contribute
sufficient value to cover their own health costs.Until we start to
address the real underlying issues, the problems will continue to grow.
So what if you think Social Security is a Ponzi scheme. So what if it a
"redistribution" of wealth.Well, you get the point. So what.It is a program that US citizens rely on for a modicum of security in
their old age. We may argue endlessly about when "old age" begins and
what a modicum of security means in actual dollars. However, we are not going
to abolish the system.The best advice to all sides of this political
debate is to find common ground, compromise and give the American people comfort
knowing this safety net will stay in place. Sadly, even power Senators like Mr
Hatch can not seem to find this common ground and actually do something positive
for the majority of Americans. I don't blame him, but just where does the
buck stop in the Congress and the Senate? Can they every draft any kind of
compromise legislation, or are they going to continue to bicker like fishwives
(apologies to the spouses of fish mongers, its a vivd metaphor if misogynistic).
Social Security would've been just fine if the politicians from both
parties hadn't raided and plundered the trust fund from the 1960's to
Obama has proposed cutting SS benefits by tying them to CPI, thus maintaining
solvency forever. In return he wants certain loopholes for rich taxpayers
closed. This is a fair and responsible compromise, but the House
Republicans won't even talk. Sheer obstructionism.
I'm a young guy - 28 years old. I would much rather be legislatively
required to personally invest the SS "tax" that hits my pay check than
kiss it goodbye without any hope of seeing a dime back when i retire in 35-40
years.When the government does for someone what they can do for
themselves, everyone loses except the government.They have used this
"tool" to buy votes. R's and D's. No other explanation for
The problem I have with SS is two fold:#1: It is forced upon us. You have
no choice! You can not opt out or alter it in anyway.#2: No accountability
from the government. They took OUR money from the "trust" fund, spent it
on who knows what and we accept that? If your banker did that with your
money, they would be arrested and sent to prison! Its called grand larceny!
ordinaryfolks,So long as you are accepting the reality of the
situation then I am fine with discussing compromise. I suggest restoring SS to
it's more original form and intent. Social Security was originally set to
65, which was actually higher than the median life expectancy at the time.
Meaning that less than half of the population was ever intended to receive SS
payments. Today this would mean changing the age of receiving Social Security
to 79 or a little higher. That would significantly increase the
financial stability of Social Security. It would also facilitate reducing SS
tax rates to a more original form. In the mid 50's, SS taxes were only 2%
for employees and 2% for employers. It would be nice to keep more of our own
One of the defining characteristics of a Ponzi scheme is that it is started by
someone who can capture the accumulated funds before the whole thing goes bust.
Social Security was initiated by Congress, and Congress has used those funds for
many decades to buy votes.Yep, it sure fits the definition of a
Ponzi scheme. If so, then who are the scam artists and who are the suckers?
@Shane333 - Your suggestion of raising the retirement age to 79 has mathematical
merit, but it doesn't capture reality. Yes, we're living far past 65
now, but our ability to work declines rapidly in our later years. Just because
some of us are living into our 70's and 80's doesn't change the
fact that we're wearing out in our 60's, through injury, disease, and
mental deterioration. We're struggling in a world that is
leaving us behind. Most workers in their 60's have lost their jobs through
forced retirement or layoffs, and can't find another job. They deserve the
Social Security insurance that they paid into all their lives.
How about letting me pay to opt out of it. I will gladly just give the
government 1/5th of whatever I am paying in social security for free and not
expect anything in return when I need to retire.
RE: Procuradorfiscal "There is no social security trust fund. Any more
than there exists a Social Security fairy."First, it is not
possible to put rubber bands around payroll tax receipts and toss them into a
vault waiting for people to retire. That would create a huge idle pool of cash
- not good for the economy. So like almost all other funds the payroll receipts
are invested - in U.S. government debt - the safest investment in the world.
Says who? Says the entire world. This is not the socialist solution I would
like, but it will have to to do for now.
"So like almost all other funds the payroll receipts are invested - in U.S.
government debt"Gotta disagree here in principle.Had
the money been "invested" that is one thing. But, the money was
"SPENT" and an IOU was put in its place. That money is gone and must be
collected from those yet to retire.The money was spent. Not
RE: JoeBlow "and an IOU was put in its place."That IOU is
an interest bearing U.S. government security. The entire world is invested in
these instruments.BTW, the Tea Party plan to have the U.S. default
on its debt come October has as one of its goals the bankrupting of the social
security trust fund. Of course it would also trash capitalism globally. Just
in case we socialists will run candidates locally in 2016.
The original ides of OASI commonly referred to as Social Security had basic
concepts. First it was not expected that more than 1/2 of those who would need
it would live to be 65. Secondly, there was a cap on wages because it was
believed that 90% above the cap would have no need of it if they reached 65. And
yes in that respect it was a redistribution of wealth from the truly rich to the
truly poor. Thirdly, it was only supposed to supply you with sufficient income
to keep you out of the county poorhouse basically just above poverty level or
currently approx. $900/mo for you $450/mo for your spouse. However,
after it was passed and the money began to accumulate because there were few
recipients changes were made. Higher payouts and inclusion of everyone who paid
in even if they didn't need it. To make it worse those above the cap
insisted that they receive the max. payout since they paid in the max. And of
course we are living longer than then due to modern medical procedures. Practical solutions would be to remove the cap and reduce the max.
payout to 2.5X the poverty rate.
I see arguments that Social Security is "insurance" that people have
paid into all their lives.Well then, let's treat it like
insurance. Set benefits according to what they would be if Social Security
really were an insurance program -- if your benefits equivalent to what
you'd get from an annuity bought with the amount of payroll tax you paid,
compounded with a conservative rate of interest.Most people would
get much lower payments under that scenario than they get currently. Because
Social Security is not insurance. For most people, a significant part of their
benefit consists of transfers from other taxpayers. If you got only what you
put in, plus interest, Social Security would be solvent.
SS is like any other publicly funded retirement account except that the
"trust fund" was not allowed to invest the surplus. Instead, the gov
borroweed the money with IOU's. I dont even know if an interest rate was
included in that IOU or not. What the government should do is stop
taking this money for general fund usage. They could invest any surplus in the
total market index (low expenses, and no Financial advisors trying to rip people
off by selling their financial advice). Let SS be only what it is, a retirement
fund. Then the goverment would have to support the general fund expenses by
the current taxes. Peoplw would learn pretty quickly how far their tax dollars
There are some good ideas above mixed in with some nut cases above.At 69,
retired, working intermittently, and going undeniably downhill, I say don't
raise the retirement age 'cause that won't work for most people who
actually work with tools vs sit in a chair. But I do have 2 ideas to fix social
security: 1. Cap the payments. This is not a general cut but a cap on
the top recipients. Cap the payments so in today's dollars this pension
does not increase a person's annual income above say $70k. Those who rely
on ssa for daily living will still get their pensions; those who have other
income cannot use their ssa to pile on above $70k. 2. Remove the cap on
contributions. FICA tax is paid on the first $110k or so, it's inflation
adjusted, now that means the high earners get a tax reduction or 7% for earnings
above that amount, and it's past time to stop that. Remove this cap. If you don't like this solution please contribute yours that actually
works, I can still read. . .
If Social Security in its function dies, America will be dead. We will have
come full circle and ended up back where we started prior to the revolutionary
war that gave birth to the American experiment. Whatever they call the
government it will be a virtual copy of the government of old England.Fortunately for our outlook, the predictions and prophesies of the prophets of
doom have a solid record of failure. Not that we won't have
troubles, it may take a rebirth of America to perpetuate the notion of
government by the people and if that happens the New America will be even more
"“unsustainable” federal deficits through the next
quarter-century" . . . Unless we generate enough revenue to pay for
expenditures.So . . . Let's generate enough revenue to pay for
expenditures.REVERSE REAGANOMICS. Tax the highest
earners more . . . Like we did back in the days when we could spend prodigiously
on national security, infrastructure, science, and needed social programs and
STILL balance the budget because we had enough REVENUE.Reagonomics
was supposed to create jobs.It obviously does not . . . So lets
simply do away with it, and get the nation back on a track toward success.At it is, we are babying the rich and letting everyone else suffer.And that's just dumb.We know what works, so let's
do what works.
dave 4197good ideas!but you are going to get trashed by our
The long Term Outlook on anything our Government is doing isn't good. They
are inept socialist's, doomed to repeat the failures of history, too bad
they have to drag us with them.
RE: U-tar "The long Term Outlook on anything our Government is doing
isn't good. They are inept socialist's, doomed to repeat the failures
of history, too bad they have to drag us with them."It's
too bad Eastern history (as in Russia, India, and China) is not taught in our
schools. The Communist Revolution in China was a success! They drove out the
foreign invaders and took a feudal society into the 20th century in the space of
15 years! Yes, China has adopted some capitalist forms, but China's
success is based on the Communist and Cultural Revolutions.Communist
Russia accomplished much the same, going from feudalism to a modern industrial
state in 20 years, able to soak up at least half of Hitler!Yes
socialism is a mixed bag, but so is everything else including our own
imperialist brand of capitalism.
Hey Utar -"The long Term Outlook on anything our Government is
doing isn't good". . . According to ideology-dominated
"Conservatives."When the Founders created this government
you hate so much, they did so with the understanding that good governance is
absolutely necessary for American success.They were right.The Constitution and the Federal Government are here to stay . . . even if
your ideology forbids it.Get used to it.
Oh boy! Privatizing SS seems like yet another "great" idea along the
lines of deregulating Wall Street, arming radical Iranians, and giving tax cuts
to rich people while at the same time invading Iraq!Some ideas are
so pathetic that they don't even deserve to be talked about.Folks, let's listen to some common sense here. SS didn't come out of
a vacuum. Thousands of elderly Americans suffered heavy losses. In fact,
thousands committed suicide because they didn't have the funds nor did they
have family members nearby.Another inconvenient truth? SS
outperforms conventional retirement funds. Why? Most Americans don't have
the time nor wisdom necessary to adequately invest. The inconvenient truth is
that without SS most Americans would be in the poor house.Hence, why
the safety bet SS is necessary. If Wall Street steals your money and you lose
your savings, at least you have SS to keep you from living in a Hooverville.Folks, we can either repeat history or learn from it. Let's learn
from history and avoid the pitfalls we've fallen into in the past. Let's use some common sense here and keep SS.
JoeBlow -"But, the money was "SPENT" and an IOU was put
in its place."Well, yes and no. Our government
shuffles money around as needed . . . routinely taking money from one government
agency, often Social Security, and giving it to others governmental agencies.It's called intragovernmental borrowing and intragovernemental
debt.But that money is routinely paid back to Social Security with
interest as needed. In that sense, it's an investment, and it actually
works pretty well.And isn't it reassuring that a significant
portion of the 17 trillion dollars our nation's government owes . . . is
owed to our nation's government?5 trillion of that 17 trillion
is money the government owes to itself.
We have $2 trillion to waste on Iraq and yet we don't have enough for
social security?Are we living in the Twilight Zone here?Think Washington, Lincoln, the Roosevelts, or Eisenhower would agree to
that?It's almost like the right wants Americans to suffer.
Stop calling Social Security an entitlement. It's a retirement plan for the
American worker. The funds in Social Security were put there by the American
worker. Less part time jobs and a better economy will do wonders.
The funds coming in have always exceeded those going out until the last three
Marxist, I usually agree with most of your positions but I have to say that
while technically correct your assessment of China and Russia is truly looking
at the situation with one eye closed. In fact most would argue that the
downfall of the Soviet Union was due to the fact that they built an
unsustainable industrial state precisely because it went from feudalism to
industrialism in 20 years. Even Marx didn't think that was a good idea.If it hadn't been for the war weariness of the Russian people the
Bolsheviks may not have prevailed and the democratic parliamentarians may have
carried the day from the February revolution and Russia would have had a very
different future. Possibly a future where Russia today would look much more
like the rest of Europe. That would have been a successful revolution.
@Jeff Harris:"Contrary to what Republican politicians hope we'll
believe, most of us know that Social Security is an insurance that we working
Americans pay for during our working lives, not an "entitlement"
whatever that is. Republican attacks on it are the biggest threats Social
Security faces."Well I disagree. But don't take my word for
it. Call up the Social Security administration, give them your social security
number and ask them how much money is in your personal SS account. You may
recall that 15 years ago Bush the son wanted to have individual social security
accounts so that you really would have a social security insurance account when
you called the SS administration. The Democrats ridiculed the
idea.What happened with your money is that wealthy seniors in the
last 30 years have been collecting 50 to 100 times more out of social security
that they put into it. Instead of your money going into your account it went
into their back accounts. Congress knew what was happening but it was
politically unpalatable to go against well to-do seniors.So your
money is gone.
Gary O, I never said I hate the Government, I just don't like the direction
current leaders are taking our Country. That goes for both sides. I love
Just a few points.SS: we had to pay it but the administration has to
pay us back.Obviously the payback must represent what the money was
worth when confiscated, notthe actual amounts paid in, b'c of the
inflation resulting from government deficit spending.What was a dollar
worth in the 1930's? 1940's? 1950's? etc.The
employers' "contributions" should be included in any such
calculation.SS: If you don't like it work to have it repealed,
but don't seek to reduce the valueof the money paid in or to
outright steal it from those who had no choice but to pay. Let it be used
for the stated purpose, and adjust for inflation.
Does anyone remember harry reid saying there was no problem, it was secure? Yep,
and we are supposed to believe it.