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In Defense of Social Security
Democracy Forums ^ | August 12, 2011 | Truth

Posted on 08/29/2011 10:26:14 AM PDT by TruConservative

At times I find myself out of sync with my fellow Americans. All during the 1980s I was wondering what the heck was up with disco. Today my disconnect concerns social security. Why the heck do so many Americans seem to hate the wisest program our government has ever developed, a program that we all benefit from in a direct and considerable manner? And why do people think it is a “ponzi scheme,” on the verge of “bankruptcy,” or worse, a form of “socialism” that would offend the founding fathers?

...In rough numbers, every paycheck below a cumulative total of $100,000 for the year, has 6% diverted to social security. Employers match this amount. The money streams into Washington, but it doesn’t stay there. It quickly goes to those over the age of 65 in proportion to how much they contributed from their paychecks over their working lives. The government involvement is less than 1% overhead to cover record keeping. The fairness comes from the anticipation of the worker that he, in turn, will receive this benefit in his retirement.

...The lowest quartile (who have almost no savings or pensions) get a full 83% of their income from social security!

...Social security is rock solid. Being based on worker incomes, it is independent of the stock market. So long as there are people earning money, social security earns money.

And then there is inflation. Social security income increases with inflation in a very secure manner. If worker salaries go up 10% due to inflation, so does the income for social security (since it is a fixed percentage).

(Excerpt) Read more at democracyforums.com ...


TOPICS: Business/Economy; Society
KEYWORDS: fakeconservatives; freepers4marxism; freepers4socialism; herekittykitty; ibtz; marxism; retirement; socialism; socialsecurity; zotbait
Okay - I know that SS is remarkably unpopular and just the title of this thread is going to inspire angry responses. Why am I defending this program? Because what I really want to do next is make a suggestion of how to decrease national debt and lower the future deficits, but my suggested solution (which I think is clever) requires that SS is seen as something worth saving. In any case, SS is of vital importance to the deficit. It is the number 1 thing we spend federal money on (roughly $980b out of a total $3,300b), a big source of our debt ($2.7 trillion of the $14.3trillion is owed to SS), and a source of future deficit.

But even so - SS is worthy of being saved. It is actually a very smart system. Consider the founding fathers of SS in 1935, faced with old-age poverty and no money saved to address it. They managed to invent a system that worked from day one right up to now (76 years later) and has provided inestimable value to millions.

Sure - major tweaks are required to save it for the future, but the basic idea (take from your paycheck today; give back to you tomorrow) allows for a system that doesn't need savings, provides the minimal assurance of food and cheap shelter to all retirees, provides a nice supplement to us all, is fair, is not that bad a return, self-adjusts for inflation, and - this is important - cannot go broke. By definition, the system will always have income, and never have debt. It is scheduled to result in lower payments in the future (down actually as low as 68%, I think the article misstates it as 74%) but it doesn't go to zero. It can't. It can't go totally broke until the last American worker is laid off.

I will try to respond every so often. Pls be kind - I'm not trying to rip you off or praise socialism; I'm defending a 76-yr-old American institution that all of us will benefit from, and all of us with parents or grandparents already benefit from.

1 posted on 08/29/2011 10:26:16 AM PDT by TruConservative
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To: TruConservative
"Why the heck do so many Americans seem to hate the wisest program our government has ever developed..."

Yes... so wise. You can stop reading right there- it doesn't get any better.

2 posted on 08/29/2011 10:28:29 AM PDT by Mr. K (CAPSLOCK! -Unleash the fury! [Palin/Bachman 2012- unbeatable ticket])
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To: TruConservative

I agree the idea is good.

However, I despise SS because,

1. It’s a Ponzi scheme.
2. Congresscritters have stolen from it in order to finance whatever “keep-’em-in-office” scheme is popular for that term.
3. It’s a Ponzi scheme.
4. The “lock box” ain’t got nuttin’ in it.

and finally,

5. IT’S A PONZI SCHEME.


3 posted on 08/29/2011 10:28:42 AM PDT by Da Coyote
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To: TruConservative

Social Security is a criminal abuse of property. None of my money should be taken to pay for anyone’s retirement unless they are a public servant - military, police, etc. Moreover, the money put into SS does NOT go directly to recipients, Most of the time it’s funneled into other sectors of government and never paid back.


4 posted on 08/29/2011 10:34:46 AM PDT by arderkrag (Georgia is God's Country. LOOKING FOR ROLEPLAYERS. Check Profile.)
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To: Da Coyote

You can add: It is intergenerational theft on a massive scale and completely unconstitutional.

SS and other federal entitlement programs are entirely evil and are destroying America. Other than that, what’s not to like?


5 posted on 08/29/2011 10:36:18 AM PDT by achilles2000 ("I'll agree to save the whales as long as we can deport the liberals")
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To: TruConservative
It can't go totally broke until the last American worker is laid off.

Factually incorrect. It can, and will, go broke because the recipients are drawing out more then they paid in while the ratio of payers to payess is falling. From a high of 16 to 1 the ratio will fall to 2 to 1 by 2030.

6 posted on 08/29/2011 10:40:08 AM PDT by MNJohnnie (Giving more money to DC to fix the Debt is like giving free drugs to addicts think it will cure them)
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To: TruConservative

*** The money streams into Washington, but it doesn’t stay there. It quickly goes to those over the age of 65 in proportion to how much they contributed from their paychecks over their working lives.***

Which means that for every retiree it requires three workers paying into the system.

10 million retirees require 30 million workers to support them.

When those 30 million retire it will require 90 million workers to support them.

When those 90 million workers retire it will require 270 million workers to support them.

When those 270 million retire it will require, 810 million to support them.

When those 810 million retire it will require 2 billion, 430 million workers to support them.

By the way, just what is the population of the US right now?


7 posted on 08/29/2011 10:41:42 AM PDT by Ruy Dias de Bivar (Click my name. See my home page, if you dare! NEW PHOTOS & PAINTINGS)
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To: Da Coyote; TruConservative

SS was not originally a ponzi scheme- it transformed into one from something almost just as bad.

When SS was first invented, the age to take money out was the same as now- 65, but the average life expectancy was 57 for men and 64 for women (I may be off a couple years, but I am close)

IT WAS A MONEY GRAB- nobody was expected to live long enough to receive it.

Now, people live into their 70’s and they actually have to pay out more than they take in- THAT IS WHY IT IS GOING BANKRUPT.

And they do not take 6% they take 15% (7.5% from you and your employer, but your employer does not “match” yours- he just does not give half to you first, before he gives it to the government)

Most people who are receiving SS now are getting on average many many times what they ‘paid into’ it over the last 40 years

It is NOT put into a lockbox- they SPENT IT each year, and then pay people from current tax receipts. (If your company did this with your retirement plan they would be jailed immediately)

The overhead is way more than 1%- the government is NEVER repeat NEVER repeat again NEVER EVER 99% efficient.

Welfare is only 27% efficient- I dont remember the numbers for SS but I will bet you a gazillion bucks it is NOT 99%

There is so much else wrong with TruConservative’s commentary that he should be ejected from FR on general principles...


8 posted on 08/29/2011 10:42:36 AM PDT by Mr. K (CAPSLOCK! -Unleash the fury! [Palin/Bachman 2012- unbeatable ticket])
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To: TruConservative

Here is an essay I wrote in 2004 about Social Security, as part of my application to appear as a “presidential candidate” on Showtime’s “American Candidate” show which aired in the summer of 2004 with Montel Williams as the host. Hope it helps:

* * * * *

In August 1919, a man named Charles Ponzi hit upon a great idea for making money. He came up with a plausible sounding investment vehicle that he promised would double investors’ money in 45 days. As his scheme attracted more and more participants, he would pay off his obligations to earlier investors with the money provided by later investors. Naturally, the fact that the early investors received all the money they were promised served as a major enticement to later investors.

Of course, this scheme could not go on indefinitely. Eventually, there were not enough new investors to pay off the older ones, and the whole thing collapsed. Within a year, some 40,000 investors had been taken by Ponzi for some $15 million (about $140 million in current US dollars), and by August 1920 he had filed for bankruptcy and was sent to prison. But during the year his scheme was operating, Ponzi enjoyed a very luxurious lifestyle.

In 1934, a man named Franklin Delano Roosevelt hit upon a great idea for getting votes. He came up with a plausible sounding plan that he promised would bring economic security to Americans by “providing social insurance for the citizen and his family.“ As the power of law was used to force almost four generations of Americans into “contributing” to this program, the United States government was able to pay off the obligations to the earlier generation of contributors with the money provided by later generations.

Of course, this scheme could not go on indefinitely. Eventually – as the core of the enormous “baby boomer” generation enters retirement in about 15 years – there will not be enough new contributors to pay off all the outstanding obligations to the older contributors, and the system will collapse. In less than 100 years of operation, Social Security – the largest government program in the world with current obligations accounting for more than one-fifth of the federal budget – will essentially be bankrupt. But during the four generations that the scheme was operating, US presidents, senators and congressional representatives have enjoyed a lot of votes, especially when they expanded the scope and obligations of the system to cover ever wider constituencies.

Well folks, the Social Security party is very nearly over. For those who haven’t been paying attention these last 70 years, here is what is really going on. You pay your “contributions” into the Social Security “Trust Fund.” The US Government “borrows” the money from that fund to pay current government expenses, including obligations to current Social Security recipients. It replaces the money in the “trust fund” with federal IOUs.

You know that “Social Security Lock Box” that Al Gore was always talking about during the 2000 election? Well, guess what? There’s no money in it — just a big pile of IOUs from Uncle Sam.

Now, if you or I were sitting on a large pile of federal promissory notes, we would have a solid asset worth a lot of money, because the whole world assumes that the US government will always make good on its debt. That assumption is the basis of our financial system.

But when the federal government finally has to start cashing in those IOUs in the “Lockbox” to meet its Social Security obligations, what do you think will happen? What would happen to you if you tried to pay your mortgage by writing an IOU to yourself and then endorsing it over to your bank?

Well, that’s exactly the position that the federal government will be in when the current level of social security “contributions” is no longer enough to cover the government’s obligations to a new generation of retiring baby boomers. And that day is coming soon.

Do you know who will pay the shortfall then? You will – either in the form of increased Social Security “contributions” or higher income taxes. Or maybe both. But pay you will, and it will hurt.

The fact is that if Social Security was a private insurance program, everybody connected with it would be in jail by now. Of course, the federal government is different, which is why this scheme has been able to go on for so long. But while the federal government is able to exempt itself from criminal sanction, it does not have the power to exempt itself from financial reality.

I used to work in the commercial finance business, and I am going to share with you a lesson that I had to learn in a very hard and personal way. If financial institutions do not pursue sound policies, they are susceptible to what I call “financial cancer.”

A good example of “financial cancer” is what has happened in Japan. The large Japanese banks loaned money on real estate, and carried the loans on their books as assets. The more assets they had, the more loans they could make. And since loans are what banks use to make profits, the more profitable these institutions became. Unfortunately for the banks, however, the Japanese real estate bubble eventually burst, prices plummeted, the underlying real estate collateral turned out to be worth less than the loans, and the borrowers were no longer able to pay off their obligations to the banks. Thus performing assets became non-performing assets, and profitability went out the window.

The problem for the banks in this situation is that they cannot afford to write off these “assets” as worthless (or worth less, at any rate), which is what they are. If the banks do take this step, they will automatically become insolvent and fail.

But in some cases, the banks are too big to be allowed to fail, because if they do, the entire financial system will collapse with them. So the government has to keep figuring out new accounting gimmicks to keep the banks apparently solvent, and to delay the inevitable outcome. When it finally arrives, the delay in writing off the bad assets will only cause the problem to be that much larger, because the banks will have been operating in the red for that much longer and the losses will be that much bigger. The result is that the toll on real people’s lives and fortunes will be that much more catastrophic.

The progressive deterioration of the banks’ financial position in this tragic scenario is why I use the term “financial cancer.”

Our Social Security system is also riddled with “financial cancer.” The system’s inevitable insolvency can no longer be honestly denied. We can no longer kick the can down the road to be dealt with in future election cycles by future generations. Politicians who glibly and vaguely talk about “saving,” “preserving,” or “fixing ” Social Security are only demonstrating either their ignorance or their cynical capacity for deceit.

The financial laws of nature cannot be repealed or ignored. Eventually, the day of reckoning must come, and the longer we wait to openly acknowledge this reality, the worse it will be for our people and our society. There is no way to “fix” a Ponzi scheme. The only thing you can do is shut it down before the guaranteed losses get bigger and a new tier of sucker investors loses their money.

In its heyday, the Social Security system was sold to the American public as a “contract between the generations.” (Actually, they used the term “compact,” but it amounts to the same thing.) Apparently, nobody stopped to consider that contracts with minors are not valid, to say nothing of contracts with those who have not yet been born.

In 1950, there were 16 workers paying taxes to support one Social Security retiree. By 1996 there were only 3.3 workers supporting each retiree, and by 2030 there will be only 2 workers per retiree. For those in Generation X and younger, the “compact between the generations” turns out to have been a major shafting. Taking candy from babies, you might say.

Given this reality, to continue the Ponzi scheme of Social Security into the future will mean imposing an intolerable tax burden on those who themselves cannot possibly benefit from the system in their own old age.

Even today, the burden is difficult for many to bear. For more than 80% of us, our Social Security taxes are even higher than our income tax liability.

That burden is even heavier for those who lose their jobs and, as so many have done, seek work as independent consultants. For those people to discover, at the time of their greatest financial vulnerability and uncertainty, that their Social Security taxes have doubled because they no longer have an employer to pick up half the tab, is an outrage. Is this right? Is this fair? Does it make sense?

I believe that the American people must stop listening to the glib lies of self-serving politicians and face the facts about Social Security now.


9 posted on 08/29/2011 10:42:58 AM PDT by Maceman (Obama: As American as nasei goreng)
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To: TruConservative

The problem you have is apparently you don’t understand numbers.

You have accepted some fundemental points from which to start your analysis - some “base assumptions”. These base assumptions are wrong - and thus - the remainder of your analysis is wrong.

To see it - since you really seem interested - why not make a chart of cash flows into and out of the “Soc Security” system, since its inception. Then - look at rate of return, and inflation adjustments.

After that - you can look into the effects of the government controlling MY money - and the social costs of that over a lifetime. For instance - for what I’ve paid in - WITHOUT correcting for inflation, and a return of 0% - I could either own a very nice vacation house (and been living in it for 15 years) - or my own house paid off - and be ready to retire 10 years early.

Instead - I have a “promise” from a financially out of control government - to allow me to get some of my money back at a rate they decide is OK - starting at age 67.

If it were such a good idea - why has the free market not developed similar products? Imagine a free market retirement fund - with a return of zero, that you can’t touch till 67. Yeah - great product. Where is it?

Do you know what a ponzi scheme is?


10 posted on 08/29/2011 10:43:21 AM PDT by Eldon Tyrell
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To: TruConservative

Okay, give this some thought.
Would any corporation be allowed start a pension fund that operated in the same fashion as social security?
If not, the why should the Federales be operating something like Social Security?
And, if it so good, why doesn’t Congress use it, instead of its private pension system?


11 posted on 08/29/2011 10:43:24 AM PDT by Little Ray (FOR the best Conservative in the Primary; AGAINST Obama in the General.)
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To: TruConservative

if SS needs “major tweaks” to save it for the future, it doesn’t need tweaking. SS needs to operate on a sustainable business model, or it needs to be put down.

SS was a Ponzi scheme from the very beginning (see Ida May Fuller’s $22K payout for only a $24 investment as proof).


12 posted on 08/29/2011 10:53:52 AM PDT by jz638
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To: MNJohnnie

It isn’t merely factually incorrect, it is knee-slappingly funny. If this claim were true, no company would be “broke” until it had $0 gross revenue. The article is idiot bait.


13 posted on 08/29/2011 10:58:51 AM PDT by achilles2000 ("I'll agree to save the whales as long as we can deport the liberals")
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To: TruConservative
My parents had five children, all of whom became gainfully employed as young adults starting 50 years ago. My father had the bad judgement to die at 53 so he never saw a penny of SS; a success story for SS. My mother died at 69 but worked every day of her life and never collected a cent of SS money either. Chalk one more up for SS.

Those five kids now have eleven kids among them, most gainfully employed but three still in college. The worker/recipient ratio from my parents day has gone from 5/2 to 8/5 perhaps one day to be 11/5. In most families the ratio is closer to 2.4/2. The very supportable ratio of 5/2 ( especially where the two die before collecting) is a workable ratio for long term solvency. The insane ratio of 2.4/2 will never last long if those 2.4 are expected to generate something like $40K annually for the two recipients. ThTs why it's called a ponzi scheme.

14 posted on 08/29/2011 10:59:16 AM PDT by muir_redwoods (Somewhere in Kenya, a village is missing an idiot)
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To: TruConservative

You do know that most of the people on SSI ARE NOT old people do you NOT?....

Taking care of old people is one thing.. all the hangers on that SSI PAYS are another thing..

Besides that way back when FDR proposed SSI private capitalist ways of handling this was proposed.. AND REJECTED..
With you SSI deduction operating like an investment controlled by YOU..

The so-called government trust fund was JUST BEGGING to be stolen by the democrats.. as it was..
Government controlled SSI WAS NEVER A GOOD IDEA... from day one..


15 posted on 08/29/2011 11:01:30 AM PDT by hosepipe (This propaganda has been edited to include some fully orbed hyperbole...)
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To: Maceman

You should quit misleading people. There is a “lockbox”....I have it, but I won’t tell you where it is ;-)


16 posted on 08/29/2011 11:02:12 AM PDT by achilles2000 ("I'll agree to save the whales as long as we can deport the liberals")
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To: hosepipe

“You do know that most of the people on SSI ARE NOT old people do you NOT?”

More specifically, about 1 in 7 SSI recipients is elderly and more than one quarter of these are non-citizens. http://www.ssa.gov/policy/docs/statcomps/supplement/2010/7e.html


17 posted on 08/29/2011 11:17:39 AM PDT by DrC
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To: TruConservative
They managed to invent a system that worked from day one right up to now (76 years later)

Wow, it beat the Soviet Union by 2 years!

18 posted on 08/29/2011 11:21:19 AM PDT by Tijeras_Slim
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To: Mr. K
Yes... so wise. You can stop reading right there- it doesn't get any better.

LOL, so true.

And if you take a peek at the "forum" being pimped, you'll find this article receiving kudos from people who would never, ever be labeled "true conservatives".

19 posted on 08/29/2011 11:27:30 AM PDT by Col Freeper (FR is a smorgasbord of Conservative thoughts and ideas - dig in and enjoy it to its fullest!)
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To: qam1; ItsOurTimeNow; PresbyRev; Fraulein; StoneColdGOP; Clemenza; m18436572; InShanghai; xrp; ...
Xer Ping

Ping list for the discussion of the politics and social (and sometimes nostalgic) aspects that directly effects Generation Reagan / Generation-X (Those born from 1965-1981) including all the spending previous generations are doing that Gen-X and Y will end up paying for.

Freep mail me to be added or dropped. See my home page for details and previous articles.

20 posted on 08/29/2011 11:35:52 AM PDT by qam1 (There's been a huge party. All plates and the bottles are empty, all that's left is the bill to pay)
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To: TruConservative
And then there is inflation. Social security income increases with inflation in a very secure manner. If worker salaries go up 10% due to inflation, so does the income for social security (since it is a fixed percentage).

TC, I have to say, I haven't seen an @ss-whipping this good on FR in quite a while, so I'll take a different approach to point out another "chink" in the SS armor.

You mentioned inflation. IIRC, social security recipients haven't received a COLA for the past two years. Why not? The government says that inflation is flat. Say what?

Yes, another financial accounting gimmick. Those government bean-counters only look at prices of certain goods and services when they calculate the Consumer Price Index. Unfortunately, many energy and food costs are left out of the equation, which leaves inflation "flat."

Have you filled up your tank lately, or bought food from a grocery store? Remember how much that cost a couple of years ago? No? It was significantly lower in 2008, than it is today.

Let me ask you something else, TC. What did people who reached retirement age do, prior to 1935? Did all of them suddenly drop dead? Did they all live in the street, and pick through garbage cans? I suspect they did not. I also suspect that people who became eligible for SS back in 1935, weren't suddenly "living the high life," with all their basic needs met by SS.

21 posted on 08/29/2011 11:50:23 AM PDT by Lou L (The Senate without a fillibuster is just a 100-member version of the House.)
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To: muir_redwoods
My father had the bad judgement to die at 53 so he never saw a penny of SS. My mother died at 69 but worked every day of her life and never collected a cent of SS money either.
Why didn't your mother get survivor's benefits? Why didn't she go on SS at 62 or 65 or ... ever?
22 posted on 08/29/2011 12:05:35 PM PDT by oh8eleven (RVN '67-'68)
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To: hosepipe
most of the people on SSI ARE NOT old people
Have you been in an SS office lately? I dropped by mine a few years ago before I was 62, and was met by a security guard.
WTF - why would they need a security guard for old people? Then I looked in the waiting room and I knew why - filled with minorities and foreigners - all young too.
I asked the guard WTF they were doing at an SS office and he said - they're all here for SSI.
23 posted on 08/29/2011 12:13:56 PM PDT by oh8eleven (RVN '67-'68)
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To: oh8eleven

She died about 40 years ago. Complicating the matter is the fact that age lied about her age for years. I’m really not sure what her rights were back then as a full time employee.


24 posted on 08/29/2011 12:14:19 PM PDT by muir_redwoods (Somewhere in Kenya, a village is missing an idiot)
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To: muir_redwoods
This sounds personal and I don't mean it that way, but it sounds like she never used what was available.
You railed against the system (SS), but how can it be blamed for failing her?
25 posted on 08/29/2011 12:20:51 PM PDT by oh8eleven (RVN '67-'68)
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To: TruConservative
I'm not trying to rip you off or praise socialism; I'm defending a 76-yr-old American institution that all of us will benefit from, and all of us with parents or grandparents already benefit from.

Dude, how old are you? I'm 36, and I know *exactly* what's going to happen.

Baby Boomers expect Gen X and Millenials to pay for their retirement. Yeah, Boomers paid in $30 dollars a month and saw movies for a nickel. Now they want hundreds of dollars a month forever because *they earned it*. Uh huh.

Gen X will pay for Baby Boomer retirements and we'll get nothing in return. We're already planning around it. When I retire, it'll be without Social Security. There's zero chance I'll see a dime, and we're getting off lucky compared to our kids.

Millenials will get nothing but a gargantuan bill for people that are either already dead or living in unearned luxury. You'll be lucky if they don't bolt your doors and burn your retirement home down once they get done counting the zeros. Their retirement will be spent paying the interest off on yours.

26 posted on 08/29/2011 12:25:00 PM PDT by Steel Wolf ("Few men desire liberty; most men wish only for a just master." - Gaius Sallustius Crispus)
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To: TruConservative

It has worked all these years because only 1 of 4 was expected to live to be 75. Raise the “retirement age” I don’t plan on retiring and depending on social security anytime soon and I am one of those 61 year old boomers.

But I am getting tired of the 30 somethings complaining about all the boomers who created their nightmare. Their solution is slip us the needle and get rid of us all. There wasn’t one of the 78,000,000 “boomers” alive in 1935, the first one was born in 1946, so blame your great grandparents for the whole mess. Oh, guess they are mostly dead, so aim your hatred at those now eligible to draw from it. At least $3 trillion of that fund was paid for by those same boomers who also paid trillions in income tax that was wasted on all those snot nosed punk’s education. Once they have paid their share, then they may have earned the right to complain. Until then stuff a sock in it.


27 posted on 08/29/2011 12:33:24 PM PDT by BlowNegative (The Thing about Silent Warfare - Don't leave footprints)
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To: Steel Wolf

Same here, 33yo and will NEVER see a dime of the hard earned money that’s been stolen from each of my paychecks since I started working.

Thanks for takin’ my money, a**holes!


28 posted on 08/29/2011 12:36:24 PM PDT by filospinato
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To: All

Wow, I expected negative responses, but these!!

I’m not sure where to start. I guess I’ll tackle just two points: I contend that SS cannot go broke. By that, I mean it will never run out of money or fail to be able to provide money. At worst, it will provide only about 74% of what is being promised, because the inflow will be 74% of the promised outflow. I’ll use the analogy that one is used to earning $1000 and spending $1000 per month. If one’s salary drops to $740, then one just spends $740, and you don’t go broke. You just get by on less. SS is the same. When the income drops below 100%, then the benefits drop. In the future (roughly year 2080), without tweaks, then the SS beneficiary who may be expecting $1000/month will only get $740/month.

(Incidentally, I got a 68% value from an anti-SS site; the SSA projections on page 11 of http://aging.senate.gov/crs/ss1.pdf show that SS can pay close to 80% up until the year 2063)

Second: the definition of a Ponzi scheme doesn’t relate to SS for a number of reasons:
1. Ponzi schemes involve intentional fraud - the info on SS is open and available to all
2. Ponzi schemes enrich some scoundrel. No one is getting rich off SS
3. Ponzi schemes involve complete collapse at some point. SS never collapses. As I say, out to the year 2063, we are at close to 80% funded, and even out to the end of the century we are at 74% funded.

This is really important, because dealing with SS is at the heart of dealing with our deficit. I absolutely 100% believe we must change SS, but we can change it without stranding our elderly population who currently rely upon it. Aren’t there posters here who get SS checks? Aren’t there posters like me who have been paying into social security since high school? Don’t you want to get something back?

SS can not go broke. It is a mathematical impossibility, if you define broke as “out of money.” SS may have to cut its payments by 20% or so, but that is not broke.

SS is not a Ponzi scheme. There is no intentional fraud, there is no deceit, there is no mastermind running away with the money, and there is no chance of complete collapse.


29 posted on 08/29/2011 12:36:49 PM PDT by TruConservative
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To: TruConservative

Again - this idea that a 33yo “will never see a dime” and so on is not true. Even if nothing is done to SS and we just run on autopilot, the 33 year old (who presumably retires in another 32 years in the year 2044) will get about 80% of his SS benefit. That is, take all the workers in the year 2044, take 6% of their wages and matching from employers, divide by the total expected number of retirees, and you end up with a value that is 80% of full SS benefits.

You cannot say with certainty that the stock market won’t collapse. I know people who had Enron stock, for example, and that became worthless. SS, however, is a fixed fraction of all the salaries in the nation. It cannot go broke. It cannot disappear. It cannot be zero return. It doesn’t suffer from inflation (it rises with inflation automatically). It isn’t dependent on past savings. It isn’t variable based on the whims of the market. That’s pretty incredible secruity if you think about it. If you really stand back and look at it, SS is a smart idea because of all these reasons.

I think people attack it because they don’t understand it, or they think it is meant to do something other than be a safety net/supplement. If you say SS is a minimal retirement income that protects all of us against the risk of total poverty, and provides a nice supplement to our savings, then SS fulfills its function admirably.


30 posted on 08/29/2011 12:49:13 PM PDT by TruConservative
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To: BlowNegative
Once they have paid their share, then they may have earned the right to complain. Until then stuff a sock in it.

Everyone that expects to get theirs on the backs of their children and grandchildren chance at a prosperous life is the enemy.

If "stuff a sock in it" is your attitude, then you can expect their boot kicking you to the curb, because you'll have earned it. The 'greatest generation' and the Boomers are a disgrace for accepting this deal, but Gen Xers know the party is over. Deride us as "snot-nosed kids" all you want, but we're stuck with the problems you so maturely kicked into the future for us to deal with.

You'd better hope we do deal with it, before our kids are old enough to. If you think they're going to starve their own kids because you paid your dues and aren't willing to negotiate any changes to 'the third rail of politics', then you deserve to be in the street.

31 posted on 08/29/2011 12:57:09 PM PDT by Steel Wolf ("Few men desire liberty; most men wish only for a just master." - Gaius Sallustius Crispus)
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To: oh8eleven

I have no issue with her misuse of the system. The point of my narrative was to describe how the demographics of smaller family size and longer life make the actuarial assumptions under SS today absurdly unworkable. One case does not affect that analysis.


32 posted on 08/29/2011 12:59:07 PM PDT by muir_redwoods (Somewhere in Kenya, a village is missing an idiot)
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To: muir_redwoods

“the actuarial assumptions under SS today absurdly unworkable.”

Not absurdly unworkably, just 20% unworkable. It’s true that in the past the ratio of workers to retirees was higher, but in the past SS had huge surpluses. We don’t really need huge surpluses - the politicians raid them anyway. All we need is a balanced system of inflow equals outflow. We have a balanced system today. In the future, the projections are for inflow to equal 80% of outflow in the period of 2040 to about 2065, and then fall to 74% by the year 2100. (based on page 11 of http://aging.senate.gov/crs/ss1.pdf )


33 posted on 08/29/2011 1:09:21 PM PDT by TruConservative
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To: TruConservative
Social Security to See Payout Exceed Pay-In This Year (last year)

Nuff said....
34 posted on 08/29/2011 1:24:40 PM PDT by Eagle of Liberty (Shaking My Head on a daily basis)
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To: TruConservative
1. Ponzi schemes involve intentional fraud - the info on SS is open and available to all

For the vast majority of "Sheeple", it is a Ponzi scheme, the politicians have lied to them for so long, and they simply dont care at this point, because ultimately, it has become (and for people who DO know) a Pyramid scheme. Look up Pyramid Parties, from the 70's I believe? The Government put and end to those, ironically.

2. Ponzi schemes enrich some scoundrel. No one is getting rich off SS

Dont be naive. Politicians are enriched with VOTES. More votes than mere money could buy.

3. Ponzi schemes involve complete collapse at some point. SS never collapses. As I say, out to the year 2063, we are at close to 80% funded, and even out to the end of the century we are at 74% funded.

And a Ponzi scheme could do the same thing, they only collapse because they are discovered and the operator is booked.

Look, at this point, we are not going to get rid of SS as we know it, but we need to look long and hard at how to make the best of it.

35 posted on 08/29/2011 1:36:27 PM PDT by Paradox (Obnoxious, Bumbling, Absurd, Maladroit, Assinine)
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To: muir_redwoods
the demographics of smaller family size and longer life make the actuarial assumptions under SS today absurdly unworkable.
Perhaps true today, but the system was thought up in a different time and it did run fairly well for a long time.
I don't think it would take much to put it back "in the black" and throwing 99% of the SSI recipients off system would be a good start.
Remember, until all the scamming started, the vast majority receiving bennies were hard working Americans.
36 posted on 08/29/2011 1:57:17 PM PDT by oh8eleven (RVN '67-'68)
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To: TruConservative
I'm defending a 76-yr-old American institution that all of us will benefit from, and all of us with parents or grandparents already benefit from.

You're defending socialism!

37 posted on 08/29/2011 4:07:32 PM PDT by rabscuttle385 (Live Free or Die)
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To: Steel Wolf; BlowNegative; qam1; bamahead; calcowgirl; Wolfie; randita; roamer_1; DoughtyOne
If "stuff a sock in it" is your attitude, then you can expect their boot kicking you to the curb, because you'll have earned it.

Nobody wants to slip you the needle, BlowNegative.

However, the reality here is that in order to sustain Socialist Insecurity, taxes are going to go up - by a LOT. And, at some point, for those Gen X-ers and Millennials with useful, productive educational backgrounds and skill sets, other tax jurisdictions are going to begin looking awfully attractive in comparison to the United States.

In fact, folks from other tax jurisdictions are already here in the United States, recruiting its best and brightest...to leave.

If I were you, I would be very nice to Gen X-ers and Millennials, especially the ones in areas like engineering, technology, the hard sciences, and accounting - they are the ones working to pay your "benefits," as well as for dozens and dozens of Big Government programs started by Republicans and Democrats alike - tell them to "stuff a sock in it" one too many times, and they may eventually tell you to go to hell.

38 posted on 08/29/2011 4:28:11 PM PDT by rabscuttle385 (Live Free or Die)
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To: rabscuttle385

I don’t believe current retirees set up the current system. They played by the rules and expect those rules not to change now that they are retired.

I’m not retired yet, but I’m headed in that direction, and I want social security to be overhauled. I want medicare over-hawled too. It’s not good for the nation the way it is set up. Big news huh...

Retirement, health care, life insurance, vehicle insurance, disability insurance, household insurance, and catastrophic loss insurance should be something that all citizens become self-invested in by the time they are thirty.

That sounds very expensive, but if you consider that you wouldn’t have to pay out high levels of insurance and retirement fees each paycheck/month, it would soon become apparent that citizens could not only cover themselves for each of these categories, but save tons of money as well.

When you first started working, you would purchase coverage that would take care of 90 to 95% of your loses in relevant coverages. As you worked longer, that 90 to 95% would relatively soon become coverages for anything above $10,000 for medical, perhaps $10,000 for your vehicle. You would pay out a large deductible, and the insurance company would only pay out if the total became catastrophic.

By the time someone was thirty to thirty-five, their insurance payments would be very low, as their capitalization would increase dynamically.

Instead of paying out thousands of dollars per year for vehicle insurance, you would be paying yourself, building up a fund that would not only self-insure you against loss, but go on to become a massive retirement fund by the time you were 65 to 70.

At retirement you could use equity and other savings to pay out a large health deductible, that would cover most everything until a catastrophic loss. With home equity and savings, each of us would be well covered.

As our life progressed, we would have massive amounts of cash saved up. Although it seems that could be lost due to catastrophic loss, cheap catastrophic loss insurance would prevent that.

Something along these lines needs to be incorporated into the system over time. If we got to work on it today, our citizens would be better off in no time, and our government would be out of the favors for votes routine as well.


39 posted on 08/29/2011 5:04:51 PM PDT by DoughtyOne (McCain 5 yrs Left/1 yr right "BAD!" - Republicans 3 yrs Right 1 year Left to elect RINOs. "Good?")
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To: TruConservative

If 20% of the hull of your boat were missing, it would be absurd to take it for a sail


40 posted on 08/29/2011 5:33:41 PM PDT by muir_redwoods (Somewhere in Kenya, a village is missing an idiot)
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To: DoughtyOne
They played by the rules

That's the problem.

This Ponzi scheme should have been destroyed a long time ago.

41 posted on 08/29/2011 5:45:24 PM PDT by rabscuttle385 (Live Free or Die)
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To: rabscuttle385

I don’t think many people think of Social Security to be a very suitable retirement in the overall scheme of things. They more or less tolerated it not counting on it being the be all end all when they retired.

I’ve know the Social Security system was a fraud from the later years of high school, over 40 years ago.

Our leaders knew it, both Republican and Democrat. Everyone said they understood the government plan was severely flawed. Another-words they agreed with us saying so every few years along the way.

Here’s your chance. We’ll see how effectively you get things changed.

Perhaps you will get it changed, but my take is that the replacement will be every bit as big an inadequate fraud as this current system is.


42 posted on 08/29/2011 5:53:29 PM PDT by DoughtyOne (McCain 5 yrs Left/1 yr right "BAD!" - Republicans 3 yrs Right 1 year Left to elect RINOs. "Good?")
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To: TruConservative

I’ve been paying in since high school. I don’t want to see a dime of it back or have to pay any more into it. And quite with the “care for the elderly” angle - they should have put something aside before then or they can try to survive on charity.


43 posted on 08/29/2011 7:02:57 PM PDT by arderkrag (Georgia is God's Country. LOOKING FOR ROLEPLAYERS. Check Profile.)
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To: arderkrag

Well, I guess I’m the only person who who thinks this, but I’ll respond just to prove that I read responses and consider them. I can take it.

SS is not capitalism, nor socialism; it is not a Ponzi scheme; it does not depend on investment or savings. It is an uniquely American solution born out of our historic tradition of neighbors helping neighbors. It is in the tradition of American homesteading and barn-building and great projects that made us a great nation. It is that everyone with a paycheck puts money into a pot; and everyone post-working life gets to draw money out of that pot.

The nearest analogy I can come up with is that it is like a group of people at your work getting together to buy lotto tickets. The more people who join in, the greater the odds of wining, but the smaller the personal take. Only in SS, it is everyone (who has a job) in the country joining in, the odds of wining are 100%, and the take is very modest.

I think the biggest valid complaint is that it is mandatory - but it is not! (No, I don’t mean that you don’t have to have a job if you don’t want to.) It is a program created by politicians elected by us. If you really want to end SS, you can end it like we ended prohibition. We have the constitutionally-provided ability to end SS if enough voters agree. In the meantime, it is no different than all the other laws we abide by. Yes, it is a limit on our freedom that we can’t walk naked down the street, can’t swear whole-heartedly in a public place, and have to have a license to drive a car, have to contribute to SS, and a host of other agreed upon things that we are stuck with until we the voters change it.

But it’s not a bad deal!!! It is not as good as investment with perfect hindsight, but it turns out to have been a lot better than buying stock in Enron or Lehrman brothers! And it solves the problem of devastating retirement poverty that existed in 1935 so completely that we’ve forgotten all about that problem. Now that’s a successful program - one whose success has been so complete that we forget the reason for it.


44 posted on 08/31/2011 11:15:41 AM PDT by TruConservative
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To: TruConservative
And it solves the problem of devastating retirement poverty that existed in 1935 so completely that we’ve forgotten all about that problem.

They should have relied on voluntary community charity. You should never be taxed for charity's sake - it makes the charity meaningless. And yes, SS IS socialist, through and through. You are taxing people to help others. That's socialism in action.
45 posted on 08/31/2011 11:29:13 AM PDT by arderkrag (Georgia is God's Country. LOOKING FOR ROLEPLAYERS. Check Profile.)
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