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Bilgerat
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Posted: Wed Jul 1st, 2009 04:59 pm |
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Southerndawg
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Posted: Wed Jul 1st, 2009 03:04 pm |
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Your lucky lobster at least you have the opportunity to Draw it. By the time I retire there wont be any ssi. Because all the illegals will granted amnesty and will be able to draw it and suck it dry just they have our health care system.
Dawg
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lobster
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Posted: Wed Jul 1st, 2009 02:05 pm |
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i would say by the times on these latest posts that our friend mr a$$hole is not employed, if i were a profiler i would say he is probably on the gov. dole. people that work are usually in bed at that late hour. i am on social security and i live very comfortable on what i draw. i worked 50 yrs for that entitlement and i don't feel like i am robbing anyone. i earned every dime i get. a lot of people depend on that money to live and to say they are robbing anyone is dumb. if any one feels that way they don't have to apply for benefits, but you can bet they will.
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Joe Bltzlflk
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Posted: Wed Jul 1st, 2009 06:43 am |
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Believe me, it is not a retirement program -- I could not live on mine, even if I lived in a tent and ate dogfood.
As for the investment, the primary difference is that the SSA is investing the surplus for a very moderate rate of return. Individuals who are financing the system are NOT investing; they are paying what is essentially a tax in order to fund the entitlements of their elders. They are doing so in the hope that they will get the same when their time comes.
My analysis was aimed at point out that this is very possible, with only minor modifications. Such modifications have been made in the past; for example, people did not preciously pay income tax on their SS receipts, now it is counted in their income for tax purposes. There have also been modifications already to the age at which SS can be collected; it is advancing slowly, but it is advancing. There are also fairly recent limitations on how much can be collected if one starts collecting early; between the ages of 62 and 65, once one earns beyond a certain amount, the SS payments are lowered by $1 for every $2 earned. People will not feel cheated if there are future changes; all of the previous changes affected me and my peers, and I haven't heard anyone complaining.
I stand by my statement that it is not an individual investment, therefore it is not a Ponzi scheme.
I am glad you recognize the stability that the program has provided; I'm curious what you propose as an alternative. Calling it by a different name will not change a penny, and if it did become a welfare/insurance program for those who need it, the individual payments would have to go up considerably to provide for their welfare.
Last edited on Wed Jul 1st, 2009 06:54 am by Joe Bltzlflk
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acehole
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Posted: Wed Jul 1st, 2009 05:49 am |
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Very well written Joe. I agree with most of your work. However, you can't claim that the system cannot be compared to a ponzi scheme and claim that the extra money is "invested in T bills." True the money "invested" cannot be directly tied back to an individual with an accumulated account balance and a linear rate of return relationship as in a normal annuity or investment. But you inadvertently made the ponzi scheme argument by explaining that the checks going out are funded by those who are currently paying into the system. Those "minor adjustments" you spoke about to keep the system solvent, will be made at the expense of the "victims" of this scheme. For example if they raise the eligibility age, increase taxes, etc. When Ida Mae retired there were over 40 million people working and contributing to ensure she got her check. In a few years we will have as many people eligible for benefits as we have working. When a stand alone system depends upon robbing from peter to pay paul it is a scam that is destin to fail. The math is simply not there, if it were, the system wouldn't "get out of balance" and start burning cash (t-bills). One thing is certian, even though it may be a ponzi scheme, it has contributed to the stability of this nation. Many countries without such a system are plauged social issues that we just don't have to deal with. If we changed our mindset and looked at it as a social welfare/ insurace program for only those who need it, instead of a government funded retirement program, we would all be better off.
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Joe Bltzlflk
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Posted: Wed Jul 1st, 2009 02:06 am |
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If Social Security had been designed as an investment, the way it is structured could technically be called a Ponzi scheme (for the record, a Ponzi scheme is an investment scheme in which the money invested by later investors is used to provide a return on investment for the earlier investors. Note, the key word is "invest").
But, Social Security has always been a pay-as-you-go entitlement. The very first person to ever collect Social Security monthly payments was Ida May Fuller, from Vermont. She worked for three years under the Social Security program. The accumulated taxes on her salary during those three years was a total of $24.75. Her initial monthly check was $22.54. She lived to be 100 years old, dying in 1975; during her lifetime she collected a total of $22,888.92 in Social Security benefits. Who paid those benefits? all the people who were working at the time. it has always been that way, it has never been an investment such as an annuity. Therefore, comparisons with annuities or other similar investments are not valid. Your entire premise is incorrect, and shows a basic lack of understanding about how the program was designed. If Social Security had been designed as an investment, then the remainder of the invested funds would be inherited by others. As it is, now, if someone dies shortly after they start receiving beneifts, and they have no surviving spouse, the money is simply never paid out. It is not "lost", as it was never the recipient's money in the first place, it is just an entitlement to receive payments as long as the recipient survives.
Another common misconception is that the program is running out of money. It is not. In fact, collections have exceeded payouts for a long time, and are still higher than current payouts. Thus, Social Security actually has a substantial surplus.
So, where is that surplus? In this case, it is actually invested. After the current entitlement is paid, the money left over is invested in United States Treasury Bills. Backed by the "full faith and credit" of the United States Treasury, these are the safest investments in the world. In fact, most of the world invests heavily in TBills. TBills are the mechanism in which the United States borrows money to run the government. The National Debt consists of the total amount of the TBills which are owed to investors. Investors include wealthy individuals, corporations, pension plans, insurance companies, governments from Saudi Arabia to China (one of the largest holders of TBills), and the Social Security surplus. Some other surplus funds, like road and bridge funds that are not currently needed, are also invested in TBills. To be sure, these TBills are classified as "special investment" funds that are slightly different than the TBills available to the general public. But, in fact, these special investment funds are actually safer, as they can be redeemed at full face value, while those held by the public are subject to market forces.
As long as collections of Social Security are higher than entitlement payouts, we will, in effect, be loaning money to ourselves. It is these investments in TBills that are erroneously called "stealing the money from Social Security to run the government." It is mostly ignorant journalists, simplistic citizens and politicians who use this phrase. The first two can be excused because of lack of knowledge or lack of thinking power. The politicians call it that because they have no intentions of paying it back.
This is where the crux of the matter lies. If and when we come to the day when workers are paying less into the system than is being paid out to social security recipients, it should be theoretically possible for the Social Security administration to begin to cash in their investments in TBills. However, doing so would require the politicians to either raise taxes or borrow the money from somewhere else. Because we are already concerned that the Chinese, as the largest single investor in our debt, may not be able to invest more and more money, it'w unlikely we could find other sources from which to borrow.
That leaves raising taxes, and no politican is going to voluntarily do that. So, they obfuscate and claim the money is being "stolen", when, in fact, they are the ones "stealing" it.
By the way, on another topic, those who are concerned with the "unfair" balance of trade with the Chinese are not going to be happy to learn that we have to continue to buy more from them than they buy from us, and we have to continue helpin g their economy to grow, or they are not going to have enough money to loan to our National Debt.
I don't want to hear any Obama bashing here, yet -- the total amount of money that Obama has borrowed or wants to borrow in order to invest in our financial sytem, healthcare, education and infrastructure is less than Reagan borrowed to finance the cold war, and less than Bush borrowed to blow on a phony war. If we can blow money like that, surely we can take care of our elders, provide health care for all and make our bridges safer to cross.
By the way, a significant amount of Social Security goes to other than seniors -- it goes to survivor benefits for widows or widowers (as long as there own SS is lower; the maximum for the survivor is the higher of the payments for themself or their deceased spouse), and survivor benefits for minor children. If I die, my wife would not get my payments because hers are higher; if she dies, I would lose mine but get hers. My own father died when I was 15 years old; I received a child's benefit until I finished technical school at age 20 (otherwise I would have lost the benifits at age 18).
SS will eventually run out of money as long as seniors continue to live longer and the productivity rate of workers declines, even if it receives the payback of the invested surplus to which it is entitled. Estimates range from 25 to 30 years with no changes. There are moderate proposals that will easily extend this period to 75 years without extraordinary pain. Some of these proposals include a gradual increase of the age at which one may receive benifits; this makes sense as improved health care extends to healthy life span of citizens. Another would be the gradual reduction of benefits to wealthy individuals. This has to be done with care, because the wealthy have paid in the same or more than others, and are thus entitled to receive the same benefits. This has to be balanced against yet another proposed solution, which is to raise the income level on which FICA payments are made.
Eventually, these and other modifications will be made that will restore a balance to the system and ensure that everyone will receive their entitled benefits when they need them. Social security is less than 75 years old, now, and will survive at least another 75 years with only minor adjustments. Fear mongers need not apply.
By the way, I researched many of these facts and answers at the Social Security Administration's FAQ (ssa.gov), but none of it is cut and paste -- all the words, thought and logic are my own.
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acehole
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Posted: Wed Jul 1st, 2009 12:27 am |
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Dear Florida Senior,
No need to get upset. I have no hate for seniors. Security has nothing to do with the facts. I'm simply stating that the system is in fact a ponzi scheme. It doesn't take a PHD in mathematics to see it for what it is. The last generation holding the bag will be the loser. In fact it was seniors that taught me not to steal from others. If you are one of the few seniors that elected to stop receiving the check when the amount they paid in is equal to the amount they took out, then I am sorry. If not, the argument of an uncertain future still doesn't justify stealing from your grandchildren without their consent. If you treated them well in the first place they would have gladly given you the resources you need, just as I do with my grandparents. Part of the problem is the system was designed to keep the elderly from starving to death, and now it has become an entitlement program.
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newsie
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Posted: Wed Jul 1st, 2009 12:17 am |
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Well ya know Social Security IS going to run out of money eventually. As is Medicaid. I would support a move to fix these before we screw future payers.
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lobster
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Posted: Wed Jul 1st, 2009 12:00 am |
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you didn't misspell it, you got it right
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flsr
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Posted: Tue Jun 30th, 2009 11:29 pm |
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acehole wrote: Looks like Bernie Madoff was just sentenced 150 years for what is called the largest ponzi scheme ever. I maintain there is an even larger ponzi scheme that makes Bernie's look like child's play. It's called Social Security. A ponzi scheme is an operation that pays returns to investors from their own money or money paid by subsequent investors rather than from any actual profit earned. It takes just a matter of a few years for a person to take out more money from social security than they paid in, and that's considering a reasonable rate of return on the money. After that, they rely on "new investors" mainly their children and grandchildren who pay into social security to keep the checks coming. Too bad most of the people who orchestrated this ponzi scheme and are benefiting from it, are already dead or close to it. Social Security benefactors of America you should be ashamed of youselves for stealing from your children. One more thing: When you get to heaven, tell your parents thanks for stealing from us out too. I hope you guys and Bernie think about what you did for next 150 years!
Sincerely,
Your Children, Grandchildren, and Great Grandchildren.
And I suppose you are so extremely secure, a$$hole, (oops,maybe I spelled your name wrong) that you will never need it. If that is the case, be forewarned--it's hard to read the future and know for sure what it holds for you. And from the hate you are displaying for your elders, think about this one a little bit........ you are probably saving yourself from having to take them in and support them in your own home. God forbid, as you sound like you would be an abuser.
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lobster
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Posted: Tue Jun 30th, 2009 05:23 pm |
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i think you spell your name wrong, it should have 2 s's
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acehole
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Posted: Tue Jun 30th, 2009 03:46 pm |
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Looks like Bernie Madoff was just sentenced 150 years for what is called the largest ponzi scheme ever. I maintain there is an even larger ponzi scheme that makes Bernie's look like child's play. It's called Social Security. A ponzi scheme is an operation that pays returns to investors from their own money or money paid by subsequent investors rather than from any actual profit earned. It takes just a matter of a few years for a person to take out more money from social security than they paid in, and that's considering a reasonable rate of return on the money. After that, they rely on "new investors" mainly their children and grandchildren who pay into social security to keep the checks coming. Too bad most of the people who orchestrated this ponzi scheme and are benefiting from it, are already dead or close to it. Social Security benefactors of America you should be ashamed of youselves for stealing from your children. One more thing: When you get to heaven, tell your parents thanks for stealing from us out too. I hope you guys and Bernie think about what you did for next 150 years!
Sincerely,
Your Children, Grandchildren, and Great Grandchildren.
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