It is in many ways. You pay into it throughout your working life with the expectation that the Government has ensured it would grow and then pays you a retirement benefits from a huge common fund. It is not the same as a standard investment, but it is fairly similar.
Jim
The problem is that the government doesn’t “grow” the money. Funds withheld for Social Security go into the general revenue stream (albeit via some creative accounting) and payments come out of the general revenue. There is no investment in terms of value accrued. It would be more properly analogized as a pyramid scheme, where the later investors supply the funds for the upper tiers. The only difference between this and the scams run by con artists is that this one is strictly legal.
Stranger
Aye, you are right about that. It is why I am not expecting SS to cover any of my retirement to speak of.
My stepfather was the Executive Director of a local men’s homeless shelter. At the urging of the board of directors, he got the place hooked up with United Way. Pretty soon the shelter, which averaged around 50 year-round residents and 100 or more during the cold winter months, and which served three hot meals per day (honest-to-goodness full meals, not coffee and a donut or a bowl of soup) was allocated a <sarcasm> generous </sarcasm> contribution of $6,000/year from the United Way.
Meanwhile, the local Salvation Army, which had shut down its homeless shelter operation and turned the building into offices, was receiving $30,000/year from United Way.
In addition, in order to receive UW funding, the shelter run by my stepfather was not allowed to run its own fundraising campaign during the holiday seasons (UW didn’t want us competing with them). As you may have guessed, the Salvation Army did not suffer this restriction - their bellringers are in front of every store in town during the Christmas season.
The result was that the shelter had less money after getting on board with the United Way.
My stepfather waited three years, expecting that the UW contribution would increase over time. It didn’t, and so he said, “Heck with this!” and disassociated the shelter from the UW. However, the shelter’s board of directors, enjoying the status imparted to them by being associated with the UW, were peeved and used this as an excuse to finally give my stepfather the golden toe (they didn’t like him anyway, due to the fact that his ideas about actually helping the homeless conflicted with the board’s view that the homeless are lazy, stupid reprobates who need to be controlled with an iron fist).
I was a volunteer for a few years in a local women’s shelter. We raised much more money on our own than we would have received through Centraide (United Way here in Quebec). Not only that, but having our own fundraising events would keep up from qualifying for Centraide. So, we did without their “help”.
Since that experience, I stopped giving to UW, though my husband still does. He finds it easier, he says. I research carefully the charities I want to support, and oddly enough, I now donate about 4 times more a year than I used to give to Centraide.
I donate directly to a local homeless shelter, our local zoo, and usually one or two other charities that have some meaning for me. 100% of my money goes to the charity in question, and I get to support the charities that do things I agree with. I really don’t see how donating to the top-heavy UW is easier than this. It comes off my paycheque automatically? See, I don’t particularly like anything coming off my paycheque automatically - I like to be in control of my ins and outs of money as much as possible. I’m funny that way. I write three or so cheques a year to charities - not exactly exhausting labour.
Stranger, far be it for me to be the one to have to say this, since there are many posters on this board on both sides of the political spectrum infinitely more qualified to respond…
But…
…could it be that if the government of the United States goes out of business like a pyramid scheme similar to the one you used in your analogy above, that you and I and everyone else living in the US might have just a tad more problems to worry about in our lives than, say, whether or not Social Security checks cash…? :dubious:
Do you have some evidence that the government of United States is going out of business and will be defaulting on its debts and obligations?
Cite, please.
Conflated those first two for a few reads…coffee deep in sinuses.
I’m not clear what you’re asking for in terms of a cite. Should I pop into the future and come back with copy of the Wall Street Journal with the headline, “Federal Government Defaults on Social Security: Asset Auction on Friday”?
The point I’m making, apropos to the discussion of Social Security as an investment vs. welfare, is that it is not an investment vehicle in the accepted sense of the word, i.e. it does not accrue value via profitable support of the production or distribution of goods and services. Social Security can continue to pay out indefinitely as long as the government is willing to devote the necessary portion of the general revenue stream to it. Of course, the size of the eligible population will continue to grow while the inpaying population stagnates or possibly even reduces in size (as is currently happening in several European states), requiring revenue streams to come from other sources, i.e. the portions of the general revenue exclusive of Social Security withholdings. This makes it de facto welfare, and the system is ultimately unsustainable without such extra income. Claiming (as advocates do) that Social Security is self-financing or is an investment is delusionary at best and fraudulent at worst.
The only investment vehicle offered by the federal government are Treasury Securities (T-Bills, T-Notes, T-Bonds, TIPS, EE Bonds, et cetera) which are all predicated on the notion that either a) inflation will outpace the moderate interest due, or b) the government will have more general revenue at the maturity of the bond (presumably due to public works improvements, business growth and private investment due to lower taxes, and so forth) than at its issuance. These are typically lousy but stable investments that are purchased as a hedge against market downturns as they have a guaranteed return, rain or shine.
Social Security, on the other hand, doesn’t “invest” in anything; the money isn’t used for infrastructure improvement, tax abatement, or whatever. It is, in effect, just another tax to fund a social welfare program. Whether that’s inherently good or bad depends on your point of view (if you’re a wealthy uber-conservative radio pundit, for instance, it’s the sixth seal of the Apocalypse), and whether it is viable or not depends on your expectation of future development and revenue, but to characterize it as an investment is factually incorrect.
Stranger
In one of my previous jobs I was taken aside and told that a person of my “stature” in the company (I was a freeking programmer analyst) was expected to contribute x% to United Way. They were a Utility so wanted to look good to the public. I was horrified.
What, you don’t keep your homeless in the zoo? Crazy 'Merkins.