Posted on 01/16/2008 10:11:52 AM PST by bs9021
Trust Fund Fantasies
by: Malcolm A. Kline, January 16, 2008
Young people watching a large chunk of their paychecks going to pay social security taxes may question why anyone would defend a program that, in an age of IRAs and 401 (k)s, seems to be such an anachronism. They might ask their professors, or just wait to hear them defend the status quo.
“Social Security is a tried and true system, popular, successful and highly efficient,” University of Missouri political scientist Max J. Skidmore writes in The Montana Professor. “It would be foolish to revise it radically based upon tenuous long-term projections that some critics charge have been influenced by political ideology.”
Incidentally, Skidmore takes much of his information from the left-wing Center for Budget and Policy Priorities. Nonetheless, he makes a good point about journalists who rely too heavily on economic projections.
He is on shakier ground when asserting that the system is currently in good health. “The trust funds hold U. S. bonds with equally valid claims on the U. S. Treasury,” Skidmore claims. “It is ignorant and irresponsible to claim otherwise.”
Actually, unlike bonds, you cannot cash in the notes in the Social Security Trust Fund. They are non-interest bearing and non-redeemable.
What do you call such certificates? “How about worthless?,” Washington columnist Robert Novak has suggested.
“One may genuinely prefer a completely private system and accept its risk and variable results, but this is a value judgment, an ideological position, not one dictated by economic principles,” Skidmore concludes. Nevertheless, he makes ideological assertions of his own about the program’s critics.
“They take the gnat-straining position that Social Security, health care, and similar programs constitute government threats to liberty,” Skidmore notes. “Swallowing the camel, many of them ignore...
(Excerpt) Read more at campusreportonline.net ...
Regardless of the viability of social security, I just cannot envision myself being satisfied in retirement with $1204 a month in social security. Call me an overachiever.
In first with:
Damn those boomers!
Born 29 June 1945 - just missed being a boomer.
Fred Thompson: Saving and Protecting Social Security
A Plan to Ensure Retirement Security for All Americans
http://www.fred08.com/virtual/socialsecurity.aspx
The demise of Social Security = All the reason the government needs to ban personal firearms ownership.
In a sense, I have to disagree with this statement....”Actually, unlike bonds, you cannot cash in the notes in the Social Security Trust Fund. They are non-interest bearing and non-redeemable.” Social Securyty does in fact pay interest. Figure out how long it would take you to receive what you have put into SS. I think the number is about 5 years. After that, you continue to draw, which is basically interest.
They actually do acrue interest.
However, that doesn't change the fact that Social Security is a giant pyramid scheme. Pyramid schemes work well as long as more suckers are being brought in at the bottom than are being paid at the top. Now that the baby boomers are retiring that won't last for long.
Ever read Can the Second Amendment and Social Security Coexist? by Claire Wolfe and Aaron Zelman?
Ha! I was about to ping you..... FRegards, 4/30/47 -- less than a year and a half until the suckling window opens.
Along with that, and you can do with this what you will, with 40 million + abortions in this country, you have 40 million less paying into the system.
I don’t have time to look it up, but it isn’t 5 years. It’s much longer. Many will not get back the amount they put it.
The “trust fund” is the equivalent of spending your money and then writing yourself an IOU.
Regardless of what option a person might want, can someone tell me where in the Constitution the government is granted permission to set up a ponzi scheme like this?
It's the F.D.R. Clause.
I actually hadn’t read that......until now. God help us.
BLOAT.
No $#!t.
I don’t think SS was bad as it was conceived. Whenever it became a retirement plan instead of a supplement, and when it started covering other than retirees (handicap, fatherless, illegals), that is when it spiraled out of control...imho.
“One may genuinely prefer a completely private system and accept its risk and variable results, but this is a value judgment, an ideological position, not one dictated by economic principles...” or allowed to individuals I might add.
Every time they send me my statement and I look down and see the 86 dollars that they took from me when I was 15 is still only 86 dollars 45 years later, my blood pressure goes up. And I want to dig up FDR and all his con-artist that foisted this scheme on our nation and hang them all. I don't care that they are already dead, I want to kill 'em twice.
Social security does not pay any interest. Social security simply transfers tax revenues to recepients. There is no underlying asset, hence no interest payments.
Your estimate about benefits to taxes is misleading. I am not sure about your source for 5 years. Average statistics about the entire population of seniors receiving benefits are misleading in not put into context. In social security, there is little relationship of contributions (employee and employer taxes) to benefits. Lower paid workers receive similar benefits as higher paid workers. Non working spouses also receive benefits. The relationship of benefits to taxes also depends heavily on the retirement year as recently retired seniors (and of course baby boom retirees) paid far higher taxes than greatest generation retirees.
For future retirees except low wage workers, social security is stealth of retirement security. The taxes paid could have been invested to provide a more secure retirement. The benefits are paltry compared to the taxes paid (employee and employer). The worse part is that the money to pay benefits has already been spent. The only ways to pay promised benefits involve huge tax increases (the rat way) and huge budget deficits. Neither are feasible although I know that the rats want dramatic tax increases.
Benefit cuts will be made, either direct cuts through means testing and retirement age or indirect cuts through tax increases, higher inflation, and slower economic growth. The slower economic growth and inflation will lower the value of retirement assets outside of social security. Get ready to work longer with much less retirement income than you anticipated.
Actually, it’s welfare.
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