From the mouth of Social Security they are using current funds being put in now to pay for current SS recepients.
Notice that there is a rumor that all excess SS taxes go into a trust fund gaining interest. But going back to SS online, that is not true. Plus it the government itself that is borrowing this money, so we are paying in the future interest from our own tax payers to fund future SS recepients and using that money now to put into the current government general budget.
So therefore the Government is running a Ponzi scheme.
Social Security doesn’t promise high rates of return, it pays out something like 1-2%. Plus it can hardly be called “fraud”, fraud suggests some sort of hiding of information, the SS website has pretty much all the financial information you could want about the program publicly available.
And while demographic changes alter the ratio of people being paid out to those paying in, there isn’t really any risk of the “new investors drying up” unless everyone under sixty-five leaves the country. At worst, it will end up paying out a smaller amount then it does currently.
Plus its a little silly to call something a 'Ponzi Scheme" which has been functioning for 80 years.
I don’t care if they change it, but they have to do it starting with new workers entering the system - not by refusing to pay back the 20 years worth of my money I’ve put into it.
Just remember that some portion of what you paid in was actually insurance (well, officially I think it is all insurance (that’s the “I” in FICA)) - but that’s semantics) - if you became disabled, it will payout, and, if married, it would pay to your spouse and any children.
I don’t know what percentage of the revenues go to that - but you can’t expect that money back any more than you would expect to get money back from your home owner’s policy if you don’t submit a claim.
A claim is always submitted, as I understand it (unless you die alone and young). I am working on disability, but retirement would also constitute a claim, as would me dying (when my wife reaches retirement age, if she hasn’t remarried).
To say the money was never intended to be paid out to everyone who paid in is, well, factually wrong I think. But, I am willing to be convinced otherwise if you have a persuasive argument.
I’m not too worried about it - the baby boomers aren’t letting anyone near social security, so any changes will not be for a generation or two yet.
Is there anything about your argument that wouldn’t apply to ordinary private life insurance? :dubious: For that matter, the wages paid to Toyota workers for building my truck didn’t come from my truck’s purchase, but from trucks previously purchased. :dubious:
Perhaps linking government to fraud just produces endorphins for you.
Oh … and BTW, five SocSec = Ponzi threads per year is enough; would you please wait until Summertime to start your next one?
But I needed to sorta vent. It is not like I am afraid SS won’t be paid out, but that we (as a country) need to be more fiscally responsible and maybe put some of that money side as real savings which would be put into no interest savings., not even making money but staying static. (I know most of you won’t agree, but when we borrow it for ourselves we are just increasing our future debt). Put it in the mattress for future use. Let us say 5% of our money being put into this “mattress” (I pulled 5% outta my ass for example let someone who can calculate the savings in future debt doing more of the math).
But its not like when the gov’t decided to build the SS Trust Fund with Treasury Bonds, they went ahead and upped gov’t spending purely so that they could borrow from the fund. The amount of spending was going to happen with or without the fund, and if the fund didn’t own that debt, it would’ve been owned by outside investors. The amount of US debt would then be worse then it is now, since we’d owe the same amount of principal, but instead of owing the interest to the Social Security Fund, we’d owe it to private investors.
I realize the “owing money to ourselves” part of the Social Security Fund strikes people as sketchy, but its actually a pretty smart way to invest a surplus. The problem with our current fiscal situation isn’t that we borrowed from the fund, but that we borrowed so much in general. That borrowing would’ve happened regardless of where we did it from though, and in fact the Social Security program has been pretty fiscally responsible, as it not only pays for itself with a dedicated tax but until recently, brought in a surplus.
Perhaps the perception and reality of social security both need to be addressed and brought back to square one. It was created as supplemental retirement assistance to assist in keeping retired people from being destitute. It does not absolve the individual from building their own retirement portfolio which includes social security. Today social security has blossomed beyond supplemental retirement assistance to include disability,survivor, and SSI. I’m not saying these later additions do not have value.
You should not rely on social security for your total retirement income. Some argue it should not even be the majority of your retirement income. But the wise and required decisions to save need to be made very early in your job history, a time when you have other priorities and you think there will always be time (and enormous income) later in life to catch up. A failed scenario for lots of people today, not to mention a big assumption market forces will be kind to you. Of course, as recent history illustrates, banks and other could give a rip that your retirement investments of late are crap. Now what was that number? IIRC, had Bush succeeded in “privatizing” social security, the threat to lots of retired folks, and those near to retirement, would be close to catastrophic.
Fiscal responsibility is everyone’s responsibility, 24/7/365. I doubt the vast majority of Americans think much beyond the current paycheck, let alone 20, 30, 40 years ahead. They live beyond their means, thinking time and an ever-growing economy with keep them out of trouble.
Yes, SS lends money to the Treasury. If it didn’t, Treasury would borrow from Red China instead (and at slightly higher interest rates). N.B.: Those SS bonds are subject to the “debt limit” about to be debated in Congress.
The S.S. already puts Treasury bonds “under its mattress.” It sounds like you would prefer that it put actual $100 FedRes banknotes under its mattress instead. I’m not sure how that would improve things. You might get more support if you became a goldbug instead.
Social Security also provides survivor benefits. If a man who provides for his family, dies, it helps his family survive, Kids are covered until the age of 18. I suppose we would be a better society if we just said “screw them”.
The money goes into a trust fund. Benefits are then paid from that trust fund. Or do you have a cite that shows that “funds being put in now” are being used to immediately pay benefits, instead of it being from the interest generated by the trust fund?
Social Security is going to pay out at 100 percent for about another 30 years. Then it will pay at 80 percent. that is because it is not permitted to take tax money. It can not contribute to the deficit.
Social Security can be easily fixed to go on for a long, long time with a little tweaking.
