Subject: Who taxed Social Security?

Unknown | 7-31-03

[staytrue]

It is not a ponzi scheme. It is a scheme that works well for one generation, the generation that does not pay in but gets something back. After that, as long as the population increases, it is a good deal, but not a free lunch like the 1st generation. Of course, eventually, the population stops increasing, then there is no free lunch and the program starts looking pretty unattractive.

I'm just trying to explain the popularity and success of the system. A lot of people got a free lunch, but the free lunch works only once. Who the hell doesn't like a free lunch ? I think the free lunch is coming to an end however.

[poet]

To be more accurate, it was raised to 85% in '93

[KarlInOhio]

It is not a ponzi scheme. It is a scheme that works well for one generation, the generation that does not pay in but gets something back. After that, as long as the population increases, it is a good deal, but not a free lunch like the 1st generation. Of course, eventually, the population stops increasing, then there is no free lunch and the program starts looking pretty unattractive.

That's pretty much the definition of a Ponzi scheme. About the only difference is that the Government doesn't even pretend to invest in anything. They just count on being able to take enough taxes from this generation of workers to pay the last. From http://www.smithsonianmag.si.edu/smithsonian/issues98/dec98/ponzi.html:

[Charles] Ponzi claimed to have found a way to profit by speculating in international postal reply coupons — a form of prepaid return postage for use in foreign correspondence. After he had paid off his first round of investors, Darby relates, he scarcely had to repeat his story. All that anyone cared about was that he paid 50 percent interest in 90 days. Later, he shortened the investment period to 45 days.

In no time, the money was rolling in. "At the height of his success, Ponzi had offices from Maine to New Jersey." The problem, Darby explains, was that there was no actual investment going on; the only activity was the shuffling of money from new investors to old ones. This kind of swindle, borrowing from Peter to pay Paul, is also known as a pyramid scheme or — since 1920 — a Ponzi scheme.

"Half-a-dozen banks crashed in the aftermath of Ponzi's fall," reports Darby, who is currently working on a screenplay about the charming con artist. "His note holders received less than 30 cents on the dollar." But, she asks, was Ponzi's proposition, which snared nearly 40,000 would-be millionaires, "any more absurd than the promise of a $59,000 loan in exchange for $20 sent to a post office in Las Vegas?" Pitches like this one, says Darby, are now popping up on the Internet, and as long as people are more worried about their profits than their principal, Ponzi schemes will continue to part fools and their money.

[staytrue]

A ponzi scheme fails because each generation wants more than they paid in and wants the return to be within a few years. This leads to eventual collapse.

The social security system differs in that most people can get out what they paid in except for the first generation who get the free lunch and the last generation who get screwed. The beauty of social security is that presumably there will be no last generation and if there is, the last thing they will care about is getting a ss check.

With a ponzi scheme, the last generation shows up wanting money and the thing fails. With social security, (and the national debt), there is no last generation. Hence, you can get 1 free lunch for the first generation.

[dark_lord]

Subject: Who taxed Social Security?

Since many of us have paid into FICA for years and are now receiving a Social Security check every month - and then finding that we are getting taxed on 85% of the money we paid to the federal government to "put away," you may be interested in the following:

Q: Which party took Social Security from an independent fund and put it in the general fund so that Congress could spend it?
A: It was Lyndon Johnson and the Democratic-controlled House and Senate.

Q: Which party put a tax on Social Security?
A: The Democratic party.

Q: Which party increased the tax on Social Security?
A: The Democratic Party with Al Gore casting the deciding vote.

Q: Which party decided to give money to immigrants?
A: That's right, immigrants moved into this country and at 65 got SSI Social Security. The Democratic Party gave that to them although they never paid a dime into it.

Then, after doing all this, the Democrats turn around and tell you the Republicans want to take your Social Security. And the worst part about it is, people believe it!

===

Ain't nothin' democratic about the Democrat party -- the "Party of Treason".

[LiteKeeper]

OJO - INTSUM

[y2k_free_radical]

Then it is really a PONZI SCHEME

[Digger]

When FDR started Social Security, he never intended to pay any benefits since the retirement age was 65 and the average male only lived to be 59

He knew that all could not be gotten in one swoop, ergo incrementalism.

[SheLion]

The intent of social security was never to "put away" money for the individuals who paid in. It is not a personal retirement account.

Then why do we pay INTO it all those years we have been working??!!

[SheLion]

Ping!

[lewislynn]

Then it is really a PONZI SCHEME

Uh huh, just like "globalization".

[Madame Dufarge]

That's all it's ever been.

[metesky]

In the thirties, when SS was passed by the FDR (spit) controlled congress, the average life span for an American male was 58.1 years and most women didn't work.

The freakin' DemonRats thought they'd never have to pay.

How'd it work out?

[sarasmom]

I get the honor of paying:
Todays two week payroll statement
Federal Income Tax. -74.81 YTD $1036.88
Social Security Tax.. -85.52 YTD $1124.36
Medicare Tax...........-20.01 YTD $ 282.96

Insurance.............-95.82 YTD $1245.77
(Health/Life/Short term disability)
401K.................. -29.17 YTD $ 383.26

SS recipient looking me straight in the eye while receiving an annual COLA raise and lobbying for a prescription drug program
..........................priceless....priceless