Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Six Misconceptions About Social Security
Bellevue University's Economic Department ^ | Dr. Judd W. Patton

Posted on 11/30/2002 5:23:18 PM PST by Republican_Strategist

Six Misconceptions About Social Security

by
Dr. Judd W. Patton

     Social Security is headed for bankruptcy! No one disputes this fact, too many retirees to workers in the future. The dispute is over what to do - you know - reform proposals. Proposals range from raising the retirement age, to raising the payroll taxes, to cutting benefits, to eliminating the limit on earnings subject to the payroll tax, to having government trustees invest a portion of the Trust Fund in private assets, to letting individuals invest a portion of their payroll  taxes into their own retirement accounts or into stocks, bonds, and mutual funds. The debate is on!

    In the spirit of intellectual inquiry and academic interest in a genuine reform of Social Security, the following six misconceptions are offered to clarify the discussion.

Social Security Taxes are Contributions

     Not! From its inception in 1935, Social Security - officially known as Old Age and Survivors Insurance (OASI) - has been compulsory. Try telling your employer you plan to end your "contribution" and see how voluntary it is! The Federal Insurance Contribution Act (FICA), is a misnomer of the first magnitude. Social Security payroll taxes are taxes.

     More importantly, Americans do not have a legal right to these taxes. In 1960 in Flemming vs. Nestor, Mr. Nestor sued the Federal government claiming he had a right    to collect Social Security benefits since he had paid his Social Security "contributions." The U.S. Supreme Court ruled that he, and all workers, have no such property right. "I paid in, I contributed, and therefore I deserve my benefits," is, therefore, a common  mis-belief among Americans. Congress can change, as the current debate reveals, any and all criteria as to benefit amounts, tax rates, retirement age, etc. They can cut or eliminate benefits regardless of workers' so-called "contributions."

Social Security is Constitutional

     This misconception is easy to identify and confirm. Blow the dust off your United States  Constitution booklet, and go to Article I, Section 8. Our Founders enumerated 20   powers or areas for the Federal Government. All other areas "are reserved to the States respectively, or to the people" (Amendment 10). Can you find a power giving the Federal government the responsibility to care for the retirement welfare of American citizens? I will give you five minutes to find the answer! For the record, there is no such power and no such amendment has ever been passed giving such authority. Social Security is unconstitutional.

Workers pay Only One-Half of Social Security Payroll Taxes

     Well, it is true that workers today pay 6.2% of their earnings (up to an earnings limit of $72,600) and the employer pays the 6.2% as well. Yes, that adds up to 12.4% in payroll taxes. (Self employed pay 15%.) But as economists often say, "There ain't no such thing as a free lunch." That 6.2% "mandated benefit" is not free; it forces employers to reduce workers' market- determined salaries or fringe benefits. Otherwise, the mandated cost  would inflict losses on employers, causing unemployment. In other words, mandated benefits simply replace market- determined benefits and/or monetary compensation. Economically this means that workers, in fact, pay the full 12.4%. The bottom line is don't be fooled: It's your money the employer is sending to Washington, D.C.

Social Security is a Government Insurance Program

     Superficially, Social Security appears to be just a government pension plan for the   elderly. Rather, it is a pyramid or Ponsi scheme. It is not based on sound principles of insurance. Private insurance companies invest the premiums of their customers in stocks and bonds and other income-producing assets. Real wealth is created. Later, the earnings from that wealth is used to pay annuities or pensions. But Social Security is not a savings-and-investment program. Social Security taxes (premiums?) create no wealth. The payroll taxes are not invested, but are used to pay current retirees and survivors under the program. It's called a pay-as-you-go system. Some call it an intergenerational income-transfer program. It is indeed!

     Now understand this, please. A pyramid or Ponsi scheme (illegal in all 50 states) works under the unsound and unethical principle that early investors are paid handsome returns with cash taken from later investors. As long as more and more investors (suckers) are attracted, the scheme works and appears to be successful. Eventually, however, the system  collapses with the inevitable decrease in the number of new investors. In like manner, Social Security seemed to work well in the early years when there where few eligible retirees and lots of workers. A person retiring in 1940 could get an inflation-adjusted return of 135%!! But as the ratio of workers to retirees has declined over the decades, so has the average expected return, now 4% in 1999. A minus return is a distinct possibility in the near future. One wonders what Mr. Ponsi would have thought about Social Security "stealing" his idea.

Social Security can be saved by Federal Budget Surpluses

     In fiscal 1998, our government ran a $70 billion surplus, the first since 1969. Some politicians propose saving Social Security with these and future surplus funds. It's ironic, but the budget surplus was generated by "raiding" the Social Security trust fund and   other trust funds in the first place! Here's what happened and happens generally.

     In 1998 the Social Security trust fund had its own surplus of $99 billion dollars. It wasn't invested to create real wealth and an income stream. That is not permitted. These funds are, by law, borrowed or "invested" into a special class of non-marketable U.S. Treasury securities ( government IOUs). The SS surplus then ends up in the Treasury's general fund and is subsequently spent on other government programs. Some Trust Fund! Since1970 these SS surpluses have financed, in part, government deficit spending. However, in 1998, with a booming economy, "borrowing" from the SS trust fund actually helped generate a Federal budget surplus.  But understand this. If the trust funds had not been "raided," the general budget would have had a significant deficit, just like the preceding 28 years.

     And in all likelihood all the talk about what to do with these "supposed" budget surpluses would not have emerged!

     The key point to understand is that the Social Security trust fund is nothing more than a pile of IOUs. These non-marketable IOUs are not assets but unfunded liabilities, government investing in its own debt. They represent payroll taxes that have been diverted to general spending. When Social Security outlays eventually exceed payroll taxes, expected in about 2012, the government will need to raise taxes, cut its spending, or borrow more money to pay off the debt (IOUs) to the Social Security trust fund when the SS managers redeem the IOUs.

     So, to answer the question, can Social Security be saved or "fixed" by not "raiding," or by "raiding" less of its own excess revenue (Present Clinton's proposal)?  Of course not, it is still a Pyramid scheme relying on more and more workers to retirees, just the opposite demographic as to what is actually occurring - more retirees to workers in the next century.

     Social Security can be saved by Privatization Investing retirement money into the creation of real wealth is an essential element to any economically sound reform of Social Security. Thus privatization, the act of converting a government- run program into a private activity, appears appropriate at first glance. However, a private pyramid scheme is just as unsound as a government one. Current proposals to have government trustees invest a portion of the SS trust fund into the stock market, or to establish "private accounts" where individuals make their own investment decisions (within certain government guidelines of course), is privatization-lite at best. Truly these proposals are not boni-fide privatization reforms in any meaningful sense of the word. The latter idea would be better classified as a mandatory savings program - a truly socialist proposition with its own grievous flaws.  Americans would not be free to use "their" money as they see fit. For example, they could not withdraw it or decide how much to "contribute." Taxation and government oversight can never be a feature of real privatization.

Conclusion

     The Social Security system, passed in 1935, is not a legitimate, savings-investment, insurance program. Taxes are not invested into real, income-earning assets. There is no trust fund but in name only. Americans have no property right in their supposed "contributions." The Social Security system today is a compulsory, redistributive, unconstitutional, pyramid scheme that contains the seeds of its own destuction given the demographics of the next 30 years. Reforming  or "tweeking" a corrupt system is not a meaningful option. There is only one true privatization reform of Social Security. There is only one  Constitutional solution. There is only one economically and morally sound system. Our nation must begin the difficult but manageable process of dismantling the Social Security system - yes, in total. The sooner the debate begins on how best to do it, on how to transition to free-market retirement options with their vast array of investment and retirement program choices, the sooner all Americans will remove the social insecurity in their futures.


TOPICS: Constitution/Conservatism; Culture/Society; Free Republic; Government
KEYWORDS: congress; socialsecurity
Navigation: use the links below to view more comments.
first 1-5051-60 next last
Contact Dr. Judd W. Patton

Why do we continue to accept this socialist program?
1 posted on 11/30/2002 5:23:18 PM PST by Republican_Strategist
[ Post Reply | Private Reply | View Replies]

Comment #2 Removed by Moderator

To: Republican_Strategist
I guess we can only hope for another Ross Perot'esque'" type to run for President and harp, harp, harp about this b.s. scheme called social security. We can always hope.
3 posted on 11/30/2002 5:33:04 PM PST by demkicker
[ Post Reply | Private Reply | To 1 | View Replies]

To: Republican_Strategist
"In 1916 an Italian immigrant named Charles Ponzi created an investment fund that paid large dividends without making any investments. Money from new investors was transferred to old investors while the new investors received money from newer investors yet. The system had flexibility and boldness and worked as long as an ever-expanding pool of suckers could be found. Charles Ponzi made a profit on this, and so does the U.S. Government." - P. J. O'Rourke, on the subject of Social Security.
4 posted on 11/30/2002 5:33:36 PM PST by TheGrimReaper
[ Post Reply | Private Reply | To 1 | View Replies]

To: TheGrimReaper
A worker's rate of return is based on the amount of money paid into the system, the worker's monthly benefit and life expectancy. Since Social Security is skewed to help those with lower incomes, people with higher wages tend to get a lower return than those with lower wages. However, some of this progressive tilt is offset because lower-wage workers generally have shorter life expectancies (and receive fewer benefits) and longer working lives (and pay taxes longer). A person who starts his working life immediately after high school and works from age 18 to age 67 will pay into the system for 49 years; however, Social Security only credits individuals for their 35 highest earning years. Extra taxes paid by those who begin working early do not earn additional benefits.

In general, workers born before World War II paid significantly less in taxes than they will receive in benefits - and can expect a higher rate of return than subsequent generations. By contrast, baby boomers can expect a rate of return of less than 2 percent, and Generation Xers can expect less than 1 percent. Children born today can expect a rate of return from Social Security of almost zero, assuming that the program can pay full promised benefits.
5 posted on 11/30/2002 5:44:52 PM PST by Republican_Strategist
[ Post Reply | Private Reply | To 4 | View Replies]

To: Master-Kon
Blacks have shorter life expectancies than whites, they can expect to collect fewer Social Security benefits. For example, in 1996 the life expectancy of a black male at birth was 66.1 years. This means a black youth can expect to pay Social Security taxes for his entire work life and die almost a year before achieving the right to collect full benefits at age 67. (However, reduced benefits will still be available at age 62.) Prospects are better for black females, but their life expectancy of 74.2 years is less than the 79.6 years for a white female. All these life expectancies are expected to increase in future years - but the rate of return will still be lower for blacks. Further, a smaller proportion of blacks go to college, so blacks as a group begin their working lives earlier and thus start paying payroll taxes sooner than whites. But on the average they receive no additional benefits for the extra taxes they pay because Social Security benefits are based on 35 years of work history. Paradoxically, even though black workers get a lower rate of return, their overall expected loss from Social Security (discounted value of taxes minus benefits) is slightly smaller. Why? Because they earn lower incomes, they pay less in taxes. Thus, although their return is smaller, their "investment" in Social Security is also smaller. By contrast, the average white worker is forced into making a larger "investment" in Social Security.
6 posted on 11/30/2002 5:48:59 PM PST by Republican_Strategist
[ Post Reply | Private Reply | To 2 | View Replies]

To: Republican_Strategist
If the current SS System = Enron, then Dubya's "privatization" plan = Arthur Anderson.

Both major political parties perpetuate The Big Lie regarding Social Security. The Big Lie has existed since Social Security's inception. The debate over "privatization" is only the latest version of The Big Lie.

The Big Lie is that Social Security is some kind of retirement savings plan.

It is NOT.

Social Security is a socialist income redistribution scheme, nothing else.

Those who are working are taxed to provide a "safety net" for those who are less fortunate.
Originally, this meant retirees and surviving dependents.
Congress has, of course, complicated it far beyond this over the last 65 years.

But one fact remains: it is NOT a "savings plan", it is an income redistribution scheme.

A major facet of The Big Lie is that "we have to do something so that Social Security remains solvent in the future.

Poppycock!

In today's age of modern computerization, the computation for operating an income redistribution scheme that remains perpetually solvent is quite simple:

This month's total SS tax receipts = Next month's total SS tax disbursements

The only change necessary to the current system is that monthly payments to eligible recipients would be a variable amount, not fixed.

THERE IS ABSOLUTELY NO NEED FOR A MULTI-TRILLION DOLLAR "TRUST" FUND!!!

Congress should NEVER have been permitted to confiscate so much money from the American People in the name of The Big Lie. This fund is nothing but a slush fund that Congress raids to pay for other government expenditures. If private sector employers did the same thing with their companies' pension funds, they'd be placed in prison. The "privatization" plan proposed by Bush is merely an attempt by Wall Street brokerage firms and financial institutions to get in on the scam: grab a portion of a constant revenue stream (guaranteed by taxation) from which they can skim their commissions.

Daschle's "concern" over the Social Security system is a lie.

Bush's plan to Enronize the system is worse.

The American People need to wake up and put these liars and thieves in prison.

7 posted on 11/30/2002 5:55:48 PM PST by Willie Green
[ Post Reply | Private Reply | To 1 | View Replies]

To: *Social Security
bump
8 posted on 11/30/2002 6:01:48 PM PST by Libertarianize the GOP
[ Post Reply | Private Reply | To 7 | View Replies]

To: Willie Green
To his credit, Bush concedes Social Security is bankrupt and he proposes a partial privatization, with 2 percent of payroll taxes diverted to private accounts. Workers could keep more of their earnings, invest it in markets and own their assets. But it's not nearly enough. The system should be abolished.
9 posted on 11/30/2002 6:04:22 PM PST by Republican_Strategist
[ Post Reply | Private Reply | To 7 | View Replies]

To: Republican_Strategist
Placemarker bump.
10 posted on 11/30/2002 6:13:07 PM PST by El Sordo
[ Post Reply | Private Reply | To 1 | View Replies]

To: Republican_Strategist
Ponzi-scheme BUMP. Eradicate SS bump. And some people wonder why I don't trust FedGov... Hmmmmmmmmmmmm
11 posted on 11/30/2002 6:26:27 PM PST by dcwusmc
[ Post Reply | Private Reply | To 5 | View Replies]

To: Republican_Strategist
Children born today can expect a rate of return from Social Security of almost zero, assuming that the program can pay full promised benefits.

For this, Charles Ponzi went to prison.
FDR was elected President 4 times.

12 posted on 11/30/2002 6:29:53 PM PST by TheGrimReaper
[ Post Reply | Private Reply | To 5 | View Replies]

To: Republican_Strategist
Why do we continue to accept this socialist program?

The answer (sort of) lies in the opening sentence from the third myth: Well, it is true that workers today pay 6.2% of their earnings (up to an earnings limit of $72,600) and the employer pays the 6.2% as well.

The fact of the matter is, the employee NEVER sees that money in the first place so he or she has no sense of ownership of it. In other words, the "worker" doesn't PAY any of those taxes. It has been my long-held belief that the quickest way to overhaul our tax and socialist security system is to require employees to write a check every month for all the taxes that are currently "withheld" from their paychecks.

Yes, yes, I know a lot of people aren't responsible enough to do this, but to hell with them. If they fall behind on their payments, then the taxes could be garnished from their paychecks.

Isn't garnishing the taxes the same as withholding them? Ask someone who has had his or her paycheck "attached" and I will tell you.....errrr.....I mean THEY will tell you that there is a very big difference.

13 posted on 11/30/2002 6:36:06 PM PST by Texas Eagle
[ Post Reply | Private Reply | To 1 | View Replies]

To: Republican_Strategist
" Why do we continue to accept this socialist program?"

LOL, you missed the 1st misconception. It ain't voluntary. Beside that, if you do attempt to eliminate it and get close, some old guy'll run ya though with a sharpened golf shaft.

14 posted on 11/30/2002 6:47:55 PM PST by spunkets
[ Post Reply | Private Reply | To 1 | View Replies]

To: dcwusmc
Stop the madness!

I am 44 and I am screwed.

I have no wish to pass this insane burden on to my beloved child.I missed the original cuttoff and the subsequent reinstatement of the GI bill.Bad timing on my part.Good lesson on the fact that life is not fair.

Stop taking FICA from anyone under 40 years old.In the interim chaos, do means testing for benefits, but for the sake of future generations, stop the insane lie of the Social Security system now!I am fully aware that this "sacrifice" is not "fair" to people my age and older.But the continuation of this now obscene scheme is not fair to anyone.End it!

15 posted on 11/30/2002 6:56:27 PM PST by sarasmom
[ Post Reply | Private Reply | To 11 | View Replies]

To: sarasmom
Stop taking out the "contribution" and let US have it to invest as WE see fit. Let our money help create NEW wealth! Let us enrich ourselves!
16 posted on 11/30/2002 7:05:24 PM PST by dcwusmc
[ Post Reply | Private Reply | To 15 | View Replies]

To: Willie Green
Where is Hillary when we need her?
17 posted on 11/30/2002 7:08:58 PM PST by Mark
[ Post Reply | Private Reply | To 7 | View Replies]

To: Mark
Good point. SHe is the smartest woman in the world and could fix this very quickly. Hillary is wonderful. While she is at it, she could fix all the worlds problems.
I think I am going to get sick after saying that !!!!
18 posted on 11/30/2002 7:15:28 PM PST by Maxy
[ Post Reply | Private Reply | To 17 | View Replies]

To: Republican_Strategist
Because not one single Republican has the cojones to stand up and call it what it is, let alone enough Republicans to sponsor a bill to end this Government sponsored thievery.

L

19 posted on 11/30/2002 7:19:39 PM PST by Lurker
[ Post Reply | Private Reply | To 1 | View Replies]

To: Lurker
I don't know why we are arguing about it. We all know that as long as the 65 and older population block votes at a higher rate than the rest of us, no Administration in Government will propose, and no Congress ever elected will pass a repeal of Social Security.

What is most likely to happen, is that the government will continue to send out the checks, every month, whether they have the income from taxes to pay for them or not. And they will print dollar bills for the Federal Reserve Banks to issue to cash those checks. The resulting inflation will effectively reduce the benefits, to zero in the end, while the politicians maintain the fiction that the government is meeting its obligations to the retired.

VietVet
20 posted on 11/30/2002 8:38:46 PM PST by VietVet
[ Post Reply | Private Reply | To 19 | View Replies]

To: Republican_Strategist
Why do we continue to accept this socialist program?

Old people are greedy, don't care about the future, don't care about their children, grandchildren, etc, and they vote in large numbers. Large enough numbers, so that politicians are afraid to do anything.

21 posted on 11/30/2002 8:59:14 PM PST by AlaskaErik
[ Post Reply | Private Reply | To 1 | View Replies]

To: Republican_Strategist
What will the average SS check be in 2033? Whatever it takes baby, whatever it takes.
22 posted on 11/30/2002 9:01:21 PM PST by Waco
[ Post Reply | Private Reply | To 1 | View Replies]

To: Republican_Strategist
"Why do we continue to accept this socialist program?"

Good question.....

...and another good question.

"And why does the Bush Administration want to make it even larger with the new Prescription proposal???"

redrock

"Repeal that [welfare] law, and you will soon see a change in their manners. St. Monday and St. Tuesday, will soon cease to be holidays. Six days shalt thou labor, though one of the old commandments long treated as out of date, will again be looked upon as a respectable precept; industry will increase, and with it plenty among the lower people; their circumstances will mend, and more will be done for their happiness by inuring them to provide for themselves, than could be done by dividing all your estates among them."

Benjamin Franklin, letter to Collinson, 1753

23 posted on 11/30/2002 9:11:26 PM PST by redrock
[ Post Reply | Private Reply | To 1 | View Replies]

To: TheGrimReaper
Social Security is THE Ponzi Scheme.
24 posted on 11/30/2002 10:17:28 PM PST by HighRoadToChina
[ Post Reply | Private Reply | To 4 | View Replies]

To: Republican_Strategist
If you count the employer contributions, the total return for an average lifespan, average wage worker is only about 85% - in other words, you get back less money than you put in. And that doesn't even consider inflation.
25 posted on 11/30/2002 10:18:30 PM PST by calenel
[ Post Reply | Private Reply | To 5 | View Replies]

To: Republican_Strategist
"Well, it is true that workers today pay 6.2% of their earnings (up to an earnings limit of $72,600) and the employer pays the 6.2% as well. Yes, that adds up to 12.4% in payroll taxes."

It isn't a 12.4% tax - it's an 11.67% tax. 12.4 parts of 106.2 parts is 11.67%. But it is still a scam.
26 posted on 11/30/2002 10:21:39 PM PST by calenel
[ Post Reply | Private Reply | To 1 | View Replies]

To: sarasmom
Stop taking FICA from anyone under 40 years old.In the interim chaos, do means testing for benefits, but for the sake of future generations, stop the insane lie of the Social Security system now!I am fully aware that this "sacrifice" is not "fair" to people my age and older.

Well said. I just wish there were more voters with your understanding and ethics. As a worker under 30, I'd be more than willing to let the government keep the FICA taxes I've already paid with no expectation of any benefits if I could opt out of this Ponzi scheme.

27 posted on 11/30/2002 10:31:19 PM PST by ThinkDifferent
[ Post Reply | Private Reply | To 15 | View Replies]

To: VietVet
We all know that as long as the 65 and older population block votes at a higher rate than the rest of us, no Administration in Government will propose, and no Congress ever elected will pass a repeal of Social Security.

That's the most frustrating part; it's possible to privatize SS without affecting the benefits of current recipients. (I don't really blame them, they were lied to their entire lives about the nature of SS). But that won't stop Democrats from blatantly lying to retired people and telling them that Republicans are out to steal their benefits, and too many of them buy it.

28 posted on 11/30/2002 10:35:01 PM PST by ThinkDifferent
[ Post Reply | Private Reply | To 20 | View Replies]

To: Republican_Strategist
bump
29 posted on 11/30/2002 10:41:00 PM PST by TheLion
[ Post Reply | Private Reply | To 1 | View Replies]

To: Republican_Strategist
Thanks. this is a nice thing I sent to EVERY ONE ON MY EMAIL LIST.

I just want is out of social security!! I want to be able to take care of myself, thank you. You people who are self-employed know how punishing the 15% tax is.

30 posted on 12/01/2002 12:14:47 AM PST by MichiganConservative
[ Post Reply | Private Reply | To 1 | View Replies]

To: Republican_Strategist
I suspect a lot of us on Free Republic would like to see it abolished. However, any politician who proposed that would be unemployed or dead, depending on how long it took the AARP to wheelchair in a riot.

Combine greedy old folks with the abyssmal knowledge of economics in our country, and you have the hallowed and revered social security system.
31 posted on 12/01/2002 5:47:29 AM PST by Mr Rogers
[ Post Reply | Private Reply | To 1 | View Replies]

To: ThinkDifferent
(I don't really blame them, they were lied to their entire lives about the nature of SS).

Many of them who experienced the great depression, IMO, wanted to be fooled and lied to. I don't think a lot of them wanted to face what were the real problems of that day. One of the problems being an out of control government, no longer responding to the Constitution.

32 posted on 12/01/2002 6:16:15 AM PST by CWRWinger
[ Post Reply | Private Reply | To 28 | View Replies]

To: Republican_Strategist
Elderly immigrants who have never worked a day in their lives in the US are routinely granted SSI. There are approximately 700,000 of these leeches who draw on average over a thousand a month in benefits. My best buds mother in law is from Iraq and she gets Social Security, discounts on phone and utilities, housing subsidies, Medi Care and the list goes on. Makes me feel good that all these deserving folks get taken care of. They need to start fitting all newborn kids with the yoke that represents the debt they are inheriting. And we have let it happen.
33 posted on 12/01/2002 8:04:21 AM PST by willyone
[ Post Reply | Private Reply | To 5 | View Replies]

To: dcwusmc
The really sad part is that if govt. had kept its hands off the money and invested it even at a six or seven percent rate of return by now so much income would be generated that no new taxes would be needed. Instead the country faces financial ruin in a few years. It will be interesting to see how the ruling class gets out of this one. I am so glad I am not in this corrupt system.
34 posted on 12/01/2002 8:11:54 AM PST by willyone
[ Post Reply | Private Reply | To 16 | View Replies]

To: calenel
Don't forget that if you die before drawing anything out of the system all your contributions are gone. You cannot leave them to grown children, grand kids or anyone else. What a deal huh.
35 posted on 12/01/2002 8:15:05 AM PST by willyone
[ Post Reply | Private Reply | To 25 | View Replies]

To: ThinkDifferent
Start a Roth IRA. Fund it to the max allowable and do not miss a year. That is about the only option you have. And it is a good one.
36 posted on 12/01/2002 8:16:58 AM PST by willyone
[ Post Reply | Private Reply | To 27 | View Replies]

To: spunkets
spunkets you state, "It ain't voluntary...."

Listed below is a brief letter I sent to author of the article. You may be interested in the same.

Hello Dr. Judd,

Permit me a brief moment of your time to comment on your article titled, "Six Micsconceptions about Social Security."

1--Social Security participation is "voluntary." See EEOC v. Information Systems Consulting CA3-92-0169-T IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

2--The Social Security Act is constitutional because it is a law passed by our federal congress in conjunction with a treaty called the International Labor Agreement.

Laws made to implement a treaty are the law of the land. See U.S. Constitution, Article VI, Sec 2, "all treaties made, or which shall be made, under the authority of the United States shall be the supreme law of the land; and the judges in every state shall be bound thereby, any thing in the constitution or laws of any state to the contrary notwithstanding."

But for the most comprehensive compendium on the subject of voluntary participation in the Social Security system, please visit the following website:

http://www.nite.org/articles/social_security.htm

Thank you for your time.

37 posted on 12/01/2002 9:20:04 AM PST by tahiti
[ Post Reply | Private Reply | To 14 | View Replies]

To: Republican_Strategist
SS pays more than just retirement benefits. There are lots of people that are way under 60 years of age or have never worked that still collect checks from SS.


If you had some numbers on that portion of the population broken down by race, I'd be curious to see them.
38 posted on 12/01/2002 11:52:03 AM PST by mamelukesabre
[ Post Reply | Private Reply | To 6 | View Replies]

To: willyone
If you think about the situation in which SS was created, you will realize that they didn't really have a choice. they needed funds RIGHT NOW to start paying benefits RIGHT NOW. THey started paying benefits immediately with the funds that were just collected. There is no way the public would have agreed to start paying into a system with the PROMISE of a program sometime in the future that would pay benefits to a select few.....YEAH RIGHT....who would have gone along with that back then? Banks were defaulting and people were losing everything. I don't think there were any options at that time.
39 posted on 12/01/2002 12:00:10 PM PST by mamelukesabre
[ Post Reply | Private Reply | To 34 | View Replies]

To: willyone
Start a Roth IRA. Fund it to the max allowable and do not miss a year. That is about the only option you have. And it is a good one.

Until a future congress decides that the "evil rich" received far too great a benefit from the Roth IRA and decide that all Roth proceeds over and above the original contributions must be included as taxable income!

Face facts, Roth IRA's would be much easier (politically) to eliminate than would Social Security!

40 posted on 12/01/2002 12:05:36 PM PST by ExSES
[ Post Reply | Private Reply | To 36 | View Replies]

To: mamelukesabre
SS pays more than just retirement benefits. There are lots of people that are way under 60 years of age or have never worked that still collect checks from SS.


You are sooo correct! I wish someone would push a button on the main computer at SS headquarters and find out just how many people under 62 years of age get benefits. It would drive the "seniors" nuts. Then we might get some reform.
41 posted on 12/01/2002 12:06:10 PM PST by PeteyBoy
[ Post Reply | Private Reply | To 38 | View Replies]

To: mamelukesabre
Not that it really helps anything, but Social Security payments are available only to those who have worked and paid into the system (or their dependents.) Supplemental Security Income (SSI) is for the poor and the non-workers, and those payments come from the general tax fund.
42 posted on 12/01/2002 12:10:34 PM PST by freedox
[ Post Reply | Private Reply | To 38 | View Replies]

To: Republican_Strategist
Any bumper sticker people out there? Here's a good one:

SOCIAL SECURITY IS A PYRAMID SCHEME
PYRAMID SCHEMES ARE ILLEGAL IN ALL 50 STATES

43 posted on 12/01/2002 12:19:43 PM PST by Slyfox
[ Post Reply | Private Reply | To 1 | View Replies]

To: freedox
People that claim to be "unable to work" are often on SS. THey are not retirement age.

At least, they(the ones unable to work) say they are getting SS checks. Maybe they are calling a SSI check a SS check.
44 posted on 12/01/2002 12:27:46 PM PST by mamelukesabre
[ Post Reply | Private Reply | To 42 | View Replies]

To: mamelukesabre
"People that claim to be "unable to work" are often on SS. THey are not retirement age."

You are correct. One does not have to be retirement age to collect Social Security payments. Social Security also covers workers who become disabled prior to retirement age. However, in order to collect Social Security Disability Income (SSDI), one must have a qualifying employment record. Those who don't have qualifying employment records might be eligible for Supplemental Security Income (SSI), but only if they meet the strict poverty standards that program requires.

Please don't misunderstand me......I am by no means a cheerleader for the Social Security system. I'm just telling you how it works.

45 posted on 12/01/2002 1:23:05 PM PST by freedox
[ Post Reply | Private Reply | To 44 | View Replies]

To: ExSES
Congress will confiscate all private retirement funds to save Social Security. Your IRA's and any other tax deferred instruments, and your company retirement funds. There are far too few people who are planning for the future and their votes will be minor compared to the destroyers. You will be better off with regular savings and real property. The mutual fund peddlers will deny this, but wait and see what happens.
46 posted on 12/01/2002 1:36:08 PM PST by Comus
[ Post Reply | Private Reply | To 40 | View Replies]

To: sarasmom
I have no wish to pass this insane burden on to my beloved child.I missed the original cuttoff and the subsequent reinstatement of the GI bill.Bad timing on my part.Good lesson on the fact that life is not fair.

Just curious, but do you think the GI Bill has anything to do with SS? Or are you just demonstrating something which is "unfair"?

47 posted on 12/01/2002 2:04:21 PM PST by Dianna
[ Post Reply | Private Reply | To 15 | View Replies]

To: Comus
We received my husband's SS statement recently. Here is what I see as a problem (not necessarily a huge problem, but a problem nevertheless).

If my husband dies, I can collect benefits for myself and our two children to the tune of $3000 per month.

If my husband dies, he is well insured. I would not have a house or car payment. I would have sufficient funds to go back to school and gain a skill allowing me to support my family.

My husband has paid in less than $20k. I would be paid well over the amount that he has contributed.

This money may well have been intended to keep widows and children from being poor, but quite frankly, I would be very well off financially (until the youngest turns 16)if my husband died.

48 posted on 12/01/2002 2:17:09 PM PST by Dianna
[ Post Reply | Private Reply | To 46 | View Replies]

To: Lurker
>>Because not one single Republican has the cojones to stand up and call it what it is, let alone enough Republicans to sponsor a bill to end this Government sponsored thievery.<<.....They would be voted out of office in a heart beat. Baby boomers want what they "invested" in the system. The majority are not well off enough to live off their savings in their old age. How many have savings in excess of $750.000? That's what it takes nowadays.

49 posted on 12/01/2002 2:26:48 PM PST by orfisher
[ Post Reply | Private Reply | To 19 | View Replies]

To: Dianna
Just demonstrating that government programs are not set in stone. I used the GI Bill as an example of an instance where changes in cut-off dates, and program options did not benefit me, personally.They were of great and I believe proper benefit to those before me, and those after me.I would have loved them, but I was outside the dates.

SS has to change greatly.I am not altruistic when I say I am willing to suffer the pangs of the required cuttoff.I would consider it sunk cost, as long as it stops somewhere,preferably before my childs generation has to fund my generation.

50 posted on 12/01/2002 5:21:48 PM PST by sarasmom
[ Post Reply | Private Reply | To 47 | View Replies]


Navigation: use the links below to view more comments.
first 1-5051-60 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson