Sure, and by the same logic without Russian food lines the people would have starved. Had the government not appropriated the resources needed to run those programs, they could have been put to other, equally or more productive, uses.
Why? Do you even know what a Ponzi scheme is? :dubious:
I can’t explain everything to you, Elvis - you are going to have to try to keep up on your own. Good luck.
Regards,
Shodan
That’s all the answer we need. Thanks for the confirmation. :rolleyes:
Do you? Such systems are called Ponzi schemes if their liabilities exceed the funds set aside to pay those liabilities, and they can only pay their current liabilities by creating more liabilities due in the future. It’s like getting a new credit card each year to pay off your previous credit card, it is only sustainable until you can’t get enough new credit cards to cover the ever-increasing debt.
The key points being pyramiding, and the illusion of creating money. A Ponzi scheme *must *fail, mathematically, after a certain number of stages, because it simply runs out of people.
But SS is a transfer-payments tax system. There is no investment, no fund, no account which you have on deposit somewhere that is the source of your future income. It’s just taking money from the employed to give to the retired. There is no pyramiding, and no illusion of creating money. It’s sustainable as long as receipts match payments, and all that takes is setting the necessary tax rate.
It is quite common among hard-righties, as our friend Shodan illustrates, to falsely depict it as a “scheme”, Ponzi or other, for the purpose of undermining its credibility. It doesn’t matter to them that the system is still as functional as it ever was, and can continue to be so with just some tweaking of the numbers, only that it was done by the Democrats.
Yes, and this one is going to fail when you hit a change in demographics that leaves you with proportionately more retirees than workers. It will not fail catastrophically, as the government will simply continue to force people to take part, but they will have to rip off one generation or another by taking more money from the workers or giving less money to the retirees.
You are taking money from the current generation of workers and giving it to the current generation of retirees, with the promise that the next generation of workers will give them money when they retire. That is exactly how a pyramid scheme works.
No credible economic model has ever forecast this eventuality.
Just takes some tweaking of the numbers. As I already said.
Ah, another “taxation is tyranny” type, I see.
Wrongwrongwrong. The source of the money to be paid in the future is future earnings, and with the right rate set, outgo matches income indefinitely. It’s a transfer-payments system. As I also said. A pyramid scheme works by constantly *increasing *the required number of entrants, and inevitably fails because it runs out of people. SS does not.
Better go do some more research, friend.
I assume these credible economic models explain why this eventuality will not occur as the post-WWII baby boomers age?
As a matter of fact they do. Here is the GAO projection through 2080, and at no time is there proportionally more beneficiaries than workers .
You have made a mistake - saying “there will be proportionally more beneficiaries than workers” is not the same as saying “there will be more beneficiaries than workers”. I was saying that the ratio of beneficiaries to workers will increase, not that the ratio will be greater than 100%.
It doesn’t have to be an absolute # of retirees outnumbering absolute # of workers to make the system insolvent.
When the politicians created Social Security in 1935, there were 47 workers for each beneficiary. Now we are down to 2 workers for each beneficiary. The politicians who created SS were too stupid to predict how SS would run into financial problems. They didn’t foresee the huge demographic shift. Now those math illiterate politicians are all dead and can’t grasp their shortsightedness. Taxes for SS increased from 2% to 12.5% and it still doesn’t have enough money.
Today, we have a new group of math illiterate politicians promising UHC with certain projected costs. Those rosy projections are just as stupid as the 1935. To add insult to injury, the nation was stronger financially in 1935 than it is now.
We as a nation only have enough brainpower to SPEND. We don’t seem to have the extra brainpower required to actually understand how to PAY for it all. How can citizens realize that politicians are too incompetent to create public programs that are actually sustainable when most of the citizens themselves are financially illiterate?
I can’t think of a single long-term government initiative that has come in under the projected costs. Not SS, not Medicare, not NASA Space Shuttle, not Iraq war. I think the Hoover Dam came in under budget – but that was just small 5-year project.
With the govt’s stellar track records, why should we believe politicians will write this UHC law correctly (that they are rushing through Congress)? Who cares? Just give me the “free” healthcare and let the next generation in 2030 worry about the broken funding!
You should have been more clear. Just because the proportion changes does not make it a Ponzi scheme.
Who has said that the structure of Social Security must be unchanging in the face of demographics changes? You increase the cap a bit to generate more current income. You put off the retirement age (or twiddle benefits in order to encourage people to retire later) to keep people in the working pool and out of the beneficiary pool longer. If you look at the statement that Social Security sends you every few years, you’ll see very clearly what they are doing.
Reagan, faced with a much bigger problem, got a commission together and solved it - and I give him lots of credit for it. Why do you hate the Gipper?
Exactly. There are other steps that could be taken with minimal pain, including raising or eliminating the income cap, applying taxation to unearned income, making taxation progressive (or at least less retrogressive), instituting means testing for recipients, etc.
The system needs regular maintenance or yes, it will become increasingly inefficient and eventually fail - just like your car will eventually break down if you don’t change the oil. But that isn’t the car’s fault, and the fact that it needs maintenance does not invalidate the concept of having a car.
Nevertheless, that is the type of conclusion many of the bathtub-drowners would like to make. Rather than honestly admit they oppose having a tax-funded guaranteed pension program on philosophical grounds, or that it’s because it’s the product of the party they oppose, they’ll claim instead that it simply can’t work for long, en though it has for three generations now, or even somehow claim it to be fraudulent, as we’ve seen again in this very thread.
Universal catastrophic and primary care insurance sounds great in principle because everyone would spend their dollars more wisely but then in the large beefy middle you end up with people getting helath care (perhaps necessary health care based on ability to pay. I would suggest that health care may be one of those goods that should be distributed (at least to some extent) regardless of ability to pay. YMMV
The vast majority of insurance regulation ensuring the solvency of the insurance company. When you are taking money today with the promise of paying it out sometime in the future, how can you NOT regulate that?
Most insurance company regulation is basically consumer protection.
Its amazing how conservatives get comfortable with welfare if it means tax cuts. TANSTAAFL. A negative tax is just a fancy word for welfare (the current fancy word if earned income tax credit) and the flat tax is just a fancy word for tax cuts for the rich.
This does not have a binary outcome. You can have something other than perfect equity or perfect efficiency. The question is how efficient are we now and can we pareto-optimally improve efficeincy or equity (that is improve equity without decreasing efficeincy or improving efficiency without decreasing equity). Once you get a pareto optimal result you move along the curve until you get an equity/efficiency balance that you are happy with. The problem is that we are not at pareto optimality yet. When private insurance companies spend 7 times as much on overhead and administrative costs (underwriting (cherrypicking), claims adjustment (claims denial) and talent retention (huge bonuses to executive)) as medicare).