How do you think pensions, life insurance (or really any insurance) and annuities work?
What pilfering? How did the US government “pilfer” the social security funds? The fund may not have enough assets to fulfill its obligations unless we do seomthing about it (like eliminate the SS cap or raise retirement ages or reduce benefits or impose a SS surcharge on deferred compensation (see stock options)).
You keep saying that, I don’t think you are doing faithful to the entire meaning of the word when you apply it to social security but I suspect you intend the entire meaning of teh word when you use it as shorthand for social security.
I already posted a link to a CBO report that says 2044 in an earlier post, you could try reading what I post. The worst-case scenario from the SS trustees is 2037 (assuming rubbish economic growth up tilll then, their medium-case scenario is around 2050) so let’s split the difference and say the trust fund will be exhausted in 2040.
There’s no need to pay 5% to retirees. The CBO makes clear that they can be paid 83% of benefits in 2040ish (maybe 2050ish and if we get massive economic growth between then and now then in perpetuity) once the trust fund is exhausted. And because SS benefits are linked to wages and because wages rise faster than prices then 83% of 2040 benefits will give 2040 retirees a far higher standard of living than 100% of 2010 benefits give to 2010 retirees. No need to stoke inflation, print money or anything like that.
And yes, we’re paying today’s recipients with today’s investors. That’s the way SS has always worked, that’s the way it was set up to run. It’s a social insurance scheme, managed by actuaries and investment managers like every other insurance fund. Except this one doesn’t take a profit.
If we get health insurance spending under control and make modest adjustments to SS (or if we get good economic growth over the next few decades, just leave it alone) then both programs are chill.
No one should ever have been under the delusion that the system would run forever on autopilot. Were you? Or anybody else you can name?
If you keep driving a car without ever changing the oil, eventually it’s going to stop running. Is that the car’s fault? Is it just impossible to make a car properly? Should we just not bother to try making cars at all because there isn’t one that can do without maintenance?
Of course not. SS needs maintenance. The responsible thing is to provide it, not complain about it, and try to use the issue to pretend there is no value in this “community” and “responsibility” stuff whose mention so irritates a certain portion of our country.
How is that a problem? It has always been a transfer-payments clearinghouse with some cash reserves on hand, nothing more. Its obligations are essentially all met by tax payments, not investments. But that’s still insurance.
:rolleyes: Just tell us, do you know what a pyramid scheme is? Or that that was what Ponzi was doing, and how it was therefore fraudulent? Or how SS is not a pyramid and not fraudulent? Please try to do better than a 12-year-old level here, okay?
Not COLA, filling the doughnut hole. That used to be a popular position among Republicans, too, even though they never did it.
It’s a pension you’re entitled to. What can’t you figure out?
You too. Show us you know what a Ponzi, AKA pyramid, scheme is. :rolleyes:
Until the market crashes, then you’ll be demanding a government bailout. Don’t kid yourself.
You can’t let people opt out, you have to have everybody paying in to have enough revenues to pay the bills.
You voluntarily choose to invest your assets with a company of your choice. And usually, for most schemes, you have the flexibility of switching your money to another company if you choose to do so.
I didn’t realize that was so hard to understand.
EXACTLY!
Don’t you realize that you and Elvis1Lives keep contradicting yourselves?
There are no reserves. It’s an accounting fiction.
It is a Ponzi scheme.
It’s actually worse than a Ponzi scheme. You are correct in that most Ponzi schemes involve an element of fraud - meaning, someone voluntarily agreed to invest their money, and then were deceived due to the ‘House of Cards’ nature of the scheme.
SS is actually worse. The House of Cards is still there, and for everyone to see. But the voluntary part is gone. It’s mandatory. We are forced to participate.
So it’s actually a worse type of animal. It’s a Forced Ponzi scheme.
I’m going to coin the term “Fonzi” scheme to describe it from now on.
I’ll let the 12 year olds at CATO address that one.
No, not necessarily. If it were a pension, then you’d get back your money based on some kind of return. But if we’re talking about reducing benefits, making more benefits subject to tax, delaying payout/retirement, etc., then we’re acting as though SS is an entitlement, and one that can be monkey’d with as needed to delay disaster. This is the concept of autopilot and maintenance I guess you were trying to clumsily make earlier.
Oh thanks.
As discussed above, you are choosing the (extremely) weak debating tactic of claiming that I don’t know what’s good for me, and I’d better be thankful for the government sponsored schemes that exist when I inevitably screw up.
I’ll be fine, thanks. Really I will. Save yourself some brainpower and stop worrying about me.
But that’s not really it, is it? You’re actually worried about yourself, and covering that up by claiming you’re worried about someone else. See erez’s comments above. Spot on. Sort of like the guy who goes into buy something embarassing at a pharmacy and claims that it’s for a ‘friend’.
If the market crashes, and the real wealth of the country evaporates, where do you think the government will get the wealth to ‘bail us out’? The government cannot create wealth. It can only confiscate it and transfer it, backed by use of force.
Where do you think ‘bailouts’ come from? From where does the government get the resources to ‘bail’ people out?
All I did was play back your own definition. I used your own rules. Didn’t you see that?
You seem to be infusing way too much symbolism to the notion of taxation. I don’t feel like the social security tax is depriving me of liberty, I feel like its depriving me of 6.2% of the first $106,800 of my earnings or $6,621.60 and a similar amount of my wife’s earnings, or about $1000/month.
Trying to shoehorn social security taxes into the “sacrificing liberty for security” notion is kind of far fetched isn’t it?
I thought for most life insurance policies and annuities you would take a loss for opting out. I think the main difference is that the insurance and annuity providers are supposed to be investing and growing the money to ensure the payout. SS money doesn’t really accrue directly, although it is supposed to promote overall growth by alleviating problems that would have to be paid for more directly. Many people have the mistaken belief that SS payments were put away and earning interest like a life insurance policy. A lot of that misimpression came from politicians advertising the system as working that way.
Who’s the other one? 
And don’t you want government to be so irrelevant that it doesn’t matter who is in power?
No, you obviously do not know what a pyramid scheme is, nor do you have any interest in finding out. It would take away too much of the fun of denunciation, it seems.
You could have stopped right there. Anything with their name on it is going to conclude that government is bad, you don’t even have to read the stuff that comes before. Sometimes their arguments can be superficially plausible, sometimes they have to resort to 12-year-old’s tactics.
You do. The return is paid for by people still working.
Clumsy as it may have been, it appears to have gotten through. As evidenced by your lack of reply to the query as to why you think it’s a problem.
Okay, maybe you’re getting somewhere. But you still don’t show you understand why a pyramid scheme is an unsustainable house of cards, why it’s inherently fraudulent, and why SS is not.
In that case every single insurance scheme in the world is a Ponzi scheme. There’s a difference between investment funds and insurance funds, if you don’t want to se it that’s up to you. SS currently has over two trillion dollars in US bond in a very real trust fund administered by very real trustees and actuaries, not by Ponzi schemers. Ponzi schemers operate investment funds which they pilfer. They pay out investors’ invested capital in “profits” to their investors at higher than average rates of return to encourage new investment until eventually the whole thing blows up and the investors are left with nothing. People paying into SS are paid by future workers’ insurance payments when they retire, they don’t have any capital investment to Ponzi, just the same guarantee an insurance company gives you to pay your future claims when it takes your current premiums and pays them out in claims/shareholder profits. What part of this don’t you understand?