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Title: Rick Perry is Right: Social Security Really is a Ponzi Scheme
Source:
Dissenting Opinions
URL Source: http://jwpegler.blogspot.com/2011/0 ... -is-right-social-security.html
Published: Sep 10, 2011
Author: Eric Blankenburg
Post Date: 2011-09-10 21:05:00 by jwpegler
Keywords: None
Views: 112412
Comments: 228
Rick Perry's comments during this week's GOP debate at the Reagan library has caused quite a stir in the liberal media. During the debate, Governor Perry defended the words in his book, calling Social Security a "Ponzi scheme". After the debate, the "analysis" on MSNBC was truly fun to watch as every commentator sat shelled shocked over the fact that a politician would dare to use these words to describe America's most sacred welfare program. The only person on the panel who had a clue about what might be going on was Ed Schultz who at one point questioned whether or not whether young people would stick with Obama or jump on the Perry bandwagon. Unlike the political and media establishment in this country, young people understand that they are going to get the short end of the Social Security "inter-generational compact". Schultz surprisingly realized that Perry's message might resonant with young people. Let's take a quick look at the Social Security system and see if Perry might be on to something. The people who got into the Social Security system very early got back on average 15 times the amount of money they paid in. They got a great deal and were raving proponents of the system. The people receiving Social Security benefits today are getting back on average 2 1/2 to 3 times what they paid in. They are also generally strong proponents of the system. Today, Social Security is paying out more every year than it takes it. We are borrowing money from the foreigners, like the Chinese and Saudis to pay current benefits. As the huge Baby Boom generation retires, the amount of debt we incur each year will quickly escalate until it blows up in our face and old people without resources really do wind up in the street. So, what happens when my generation starts to retire in 15 to 20 years and what will happen to my kids? We will all be left holding the bag. There is a financial MODEL that describes this. The model is called a Pyramid scheme or Ponzi scheme or a Bernie Madoff scheme. The people who get it in early make out like bandits and the people who get it late get screwed. That is exactly how the Social Security system will play out. The fact is that the Social Security is a pay-as-you-go welfare system that transfers money from young, struggling families to relatively well-to-do retired people. There isn't any "trust fund". The words "trust fund" are used to describe a mountain of debt. A mountain of debt is NOT a trust fund. It's a mountain of debt. Today, the mountain of debt in the Social Security system is so great that it cannot be paid. Peel away the emotion, the Orwellian language about the "trust fund", and the other political rhetoric, and just look at the financial facts. Then this all becomes very clear. Rick Perry is absolutely right and I am actually impressed that a politician would tell the truth about this. It's truly amazing. The big question is what can be done? Long term, people need to be able to save for their own retirements. Social Security needs to be taken back to it's roots as a program that supplements the income of retirees who are truly poor, through no fault of their own. Today, 25% of people over 65 have pension or investment income that places them in the "wealthy" category. They still get Social Security benefits, so long as they don't work for their income. Why should young struggling families hand money over the wealthy retired people? They shouldn't. Means testing Social Security will go a long way to make it solvent for the future. When Social Security was implemented, the retirement age was 65. The average life expectancy was 59 for men and 61 for women. Most people didn't live long enough to get a check. Today, the retirement age is still 65. However, life expectancy is 73 for men and 78 for women. The math just doesn't work. We need to gradually raise the retirement age to keep up with life expectancy. Bravo to Perry for telling it like it is. I certainly agree with Ed Schultz that a lot of young people will find this message appealing. The other group who should find this message appealing are wealthy retirees who are stealing from their children's and grandchildren's future. Will they finally put their selfishness aside and say: "no more"? Probably not, but we'll see.
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#12. To: mcgowanjm (#10)
Show me that law or that written promise. Every 20-year vet is "eligible" for medical or dental care at any military medical facility on a space available basis. Actual care is scarce, especially at overseas locations.
SS has no cash and now runs a negative annual balance. The funds were transferred to the general fund and have been spent. All the SS has are credits based on the full faith and credit of the government. The government is 14T in debt. To pay SS back, the government would have to print money or tax the people. If the general government defaults, the IOU's are worthless.
Great cartoon and oh so true.
Huh??? Social security is paying out more every year in benefits than it receives in taxes. There isn't any cash on hand. None.
Approximately $2.6 trillion of Social Security funds were transferred to the general fund and spent. Here's the problem: over the next 75 years, current projections show that the government will spend $211 trillion more than it takes in (net present value of expenses minus revenue). $211 trillion. Most of this is because of Social Security, Medicare, and Medicaid. There is no way that this can possibly work. People are living with their heads in the sand. Ignoring the problem is not going to make it go away.
You have to be a real a$$hole to try blaming those folks who had their money confiscated by government for 50 years with the promise of getting it back with interest when they could no longer work. If they did not pay, guys with guns were sent to wring it out of them or put them in prison. That is no damned Ponzi scheme that is armed robbery. The damned government stole the money from those folks and from their children and grandchildren and I tired of hearing this crap blaming the victims of government armed robbery for their own problems. It takes a real gutless bastard to blame other victimized Americans for the theft of their future by a criminal government because they are too frightened to do something about it now.
This is not news, but was anticipated decades ago; payroll taxes were increased, a reserve was created, and interest is collected on what the government borrows from the trust fund.
"...all of the equations in neoclassical economics are rubbish. The differential equations describe nothing. Economics is not about mathematics, it is about the human being." Sandeep Jaitly
So, your answer is to steal our money to pay them off? Who is going to pay us off when we retire? At some point it has to stop. People with a pension income and/or investment income that places them in the top 25% should be cut off right now. Young people should be allowed to divert their payroll taxes to private bank accounts. The employer's portion of the payroll tax can continue to pay for the 75% of current retirees who remain in the system until they die. Then it can be diverted to individual accounts as well. Not sure that the numbers completely add up here without further investigation, but this is generally the approach that we should take -- cut the wealthy off and let people start saving for their own retirement.
I'm sure the private sector thinks it has a god given right to American's retirement money to risk and loose.
"...all of the equations in neoclassical economics are rubbish. The differential equations describe nothing. Economics is not about mathematics, it is about the human being." Sandeep Jaitly
Godamit! The criminal government is stealing from you and all you can do is blame those the government has already fleeced. All the a$$holes who think that way need to gut up and place the blame where it belongs. Your government is pissing away trillions on building an empire and the gutless wonders are wringing their hands at the prospect of giving promised billions to some old folks. Get a grip!
Why? Why not raise the cap on earnings and pay out benefits in a more progressive manner. Since it is an "insurance" program, the purpose is to insure that people have a modicum of support in their old age. So even a wealthy person may have some unfortunate set events occur that plunges him into poverty and he does need it.
SS is a retirement insurance program - it does not function like a "Christmas club" account where after a period of deposits you get your money back when the day comes around. You want a ponzi scheme? Invest in the private sector like Wall Street.
With the economy still in the dumper -- maybe permanently? -- and full-time jobs becoming as scarce as rain during a drought, huge percentages of Americans have had their (misplaced) faith in the American dream shaken, the upper-middle-class consumerist lifestyle is exposed as a mirage for anybody who plays by the rules. Capitalism and the America that embraced it as a way of life is now and forever more a failure. It does me good to know that the generation that voted in Reagan and his ideology will see their America die from that ideology before their very own eyes and knowing they had a hand in its destruction.
So what? Invest in the private sector like Wall Street. What happens when baby boomers start cashing in their investments?
"...all of the equations in neoclassical economics are rubbish. The differential equations describe nothing. Economics is not about mathematics, it is about the human being." Sandeep Jaitly
Listen Bozo, current retirees joined the greedy geezer lobby (AARP) and they lobbied for the goodies. It is their fault that we are in this mess.
Current retirees paid for your grandparents retirement, medicare, while keeping you in diapers and paying for your education. It's time for you to man-up and do your share.
"...all of the equations in neoclassical economics are rubbish. The differential equations describe nothing. Economics is not about mathematics, it is about the human being." Sandeep Jaitly
Social Security needs to be abolished, today. Government has proven that it can NOT be trusted with the peoples wealth.
Nonsense! Stupid people do not realize the dollar is worth only a small fraction of what it was. If the dollar has been devalued by about 90% over that time, you argument is specious and ignorant.
The people who got into the Social Security system very early got back on average 15 times the amount of money they paid in. Nonsense! I also said it was nonsense - I highlighted that passage to re-explain to the stupid GOPers that SS is an insurance program that is not an investment.
With the economy still in the dumper -- maybe permanently? -- and full-time jobs becoming as scarce as rain during a drought, huge percentages of Americans have had their (misplaced) faith in the American dream shaken, the upper-middle-class consumerist lifestyle is exposed as a mirage for anybody who plays by the rules. Capitalism and the America that embraced it as a way of life is now and forever more a failure. It does me good to know that the generation that voted in Reagan and his ideology will see their America die from that ideology before their very own eyes and knowing they had a hand in its destruction.
You are as ignorant as you are stubborn. AARPs are a political lobby that comprise a tiny minority of stupid liberal/socialist slugs. Gut up you ignorant fool and direct the blame for your anxiety where it belongs, the government you now still are so godamned scared of confronting.
Well, you are correct. What in hell is wrong with the a$$holes who decide it is easier to blame the older victims of government theft for their own chicken shit, cowardly, ineptitude in correcting the situation in their own time?
SS is not theft.
With the economy still in the dumper -- maybe permanently? -- and full-time jobs becoming as scarce as rain during a drought, huge percentages of Americans have had their (misplaced) faith in the American dream shaken, the upper-middle-class consumerist lifestyle is exposed as a mirage for anybody who plays by the rules. Capitalism and the America that embraced it as a way of life is now and forever more a failure. It does me good to know that the generation that voted in Reagan and his ideology will see their America die from that ideology before their very own eyes and knowing they had a hand in its destruction.
LOL! What happens if you do not pay? Guys with guns come to wring it out of you or put you in prison. What do you call that?
It is a government program and does not function like any commercial insurance program. With the government program, the "insurer" can change the benefits at any time and in any manner of its choosing. You can pay in for 40 years, retire, and the government may increase, decrease, or eliminate the benefits. There would be political consequences, but the government has the power to do it. An insurance company cannot unilaterally absolve itself of responsibility. The only government responsibility is to pay in accordance with the effective law, but they can always change the law. The fund itself basically consists of bookkeeping entries. The money collected has been transferred to the general fund and spent. The government is over $14T in debt. The amount in the fund, including any interest, is a bookkeeping entry. It is payable by the U.S. government. If the government does not have the funds, there are few ways to produce the funds on demand. They can just print money which acts like a tax, decreasing the value of all existing U.S. currency, and the value of all savings. They can collect the amount needed with revenue, but that is just handing the bill to the people to pay them what they are owed (or what is due by law). They could borrow the money, or perhaps sell some national infrastructure. In its current form the system will go bust. Effective reform means changing the eligibility or benefits to reduce the overall payment to beneficiaries, or to increase the revenue stream coming in.
Is that was what promised? Is that the fault of those who had their money confiscated by a criminal government?
No. Every single credible politician over the last 50 years has been scared to death to tell the truth about Social Security, because the Greedy Geezer Lobby is too powerful. Why are the politicians scared? Because old people vote and they love Social Security. This is a well know fact. No amount of huffing and puffing with change that fact. We finally have a very credible politician who stands up and tells the truth about Social Security being a Ponzi Scheme. It tells me that something in the country is changing. That's a good thing.
You are new on this board. I already like you because you deal in facts. No, Social Security does not function like any commercial insurance program. The Social Security "trust fund" does not function like any private trust fund either. The whole system is a fraud. The big question is how do we unwind it? That's what I'm trying to address. We can't sit here and just say: "I paid in so I want my money". The math doesn't add up. The system needs to change.
My 60+ year-old friend told me his Dad said, "Social Security is enough to starve on."
Bullshit! You need to face the fact that you are too godamned timid to tell the government criminals that they are no longer going to take your future from you. You pussies need to gut up and tell the politicians of your time to kiss your ass. What in hell is wrong with you?
Commercial insurance companies change their benefit programs all the time and in many cases they don't pay out.
With the economy still in the dumper -- maybe permanently? -- and full-time jobs becoming as scarce as rain during a drought, huge percentages of Americans have had their (misplaced) faith in the American dream shaken, the upper-middle-class consumerist lifestyle is exposed as a mirage for anybody who plays by the rules. Capitalism and the America that embraced it as a way of life is now and forever more a failure. It does me good to know that the generation that voted in Reagan and his ideology will see their America die from that ideology before their very own eyes and knowing they had a hand in its destruction.
Can you cite an instance of where all contributions have been completed, as with a retiree, the plan payout is due, and the company simply decides not to pay for any reason other than default (bankruptcy)?
Government has proven that it can NOT be trusted with the peoples wealth. SS is paid for thru 2024. Your Unfunded cheney wars? Not so much...;} Egyptian Junta Vows 'Harsh Measures' Against Dissent by Jason Ditz, September 11, 2011 | Print This | Share This | Antiwar Forum Underscoring just how thin their commitment to the Arab Spring protest movements actually is, the Obama Administration is loudly demanding that the Egyptian military junta launch a crackdown on dissent to “meet its obligations under the Vienna Convention.” They warned the junta of “consequences” if they didn’t crush the protests around the Israeli Embassy.
I can see why you've had banning issues here and elsewhere...8D
None. Only because the US Gov't has been systematically robbing the SS Fund since Nixon.... And leaving IOU's. It's the Unfunded Wars....How many are we waging now?.... 8D
SS is good to at least 2024.
SS is no different from any other pooled risk that gets paid out... A ponzi scheme never has the funds to pay for itself...
America...My Kind Of Place... "I truly am not that concerned about [bin Laden]..." "THE MILITIA IS COMING!!! THE MILITIA IS COMING!!!" I lurk to see if someone other than Myst or Pookie posts anything...
And leaving IOU's. They only borrowed $2.6 trillion from Social Security. Over the next 75 years, Social Security, Medicare, and Medicare will run deficits of $211 trillion. The system no longer works. It need major surgery or it is going to collapse.
Government has proven that it can NOT be trusted with the peoples wealth. While it is true that the government cannot be trusted, the Social Security system cannot be abolished today because the Greedy Geezer Lobby (AARP) is too powerful.
40 million people is not a tiny minority of stupid liberal/socialist slugs. What other political pressure group has 40 million members?
They only borrowed $2.6 trillion from Social Security. Over the next 75 years, Social Security, Medicare, and Medicare will run deficits of $211 trillion. BUWAHAHAHAHAHA ...,intake....BUWAHAHAHA 8D Didn't know you were tracking....LMFAO ONLY $2.6 Trillion You can't even imagine what $2.6 Trillion is. And when did they pay it back? When did they plan on paying it back? At Interest? Say 5% interest (which is fucking low ball over 30 years. Suppose your 30" wiast grows at 2%. How big will it be in 50 years. 80 inches! So SS should have at $7 Trillion owed to it by the US Gov't JUST on interest.
But as an actuary, you war, of all people should know that SS is solvent. It's the thieves of US Gov't 'borrowing' and 'leaving' IOUS. Until we talk UNFUNDED WAR and that EVERY WAR SINCE WWII has been illegal, we're talking nothing but bullshit... Masters and Slaves. The longer we keep up this charade, the harder we will fall. Then again, that presents a huge dilemma, the essence of our human tragedy. As long as our leaders and media deny the reality of what's happening, we are all too eager to follow. We're therefore pretty much guaranteed to walk, nay run, into our own traps eyes wide open. For who wants to see this all for what it is? Who's ready for the fall?
Take away my SS and you'll have to bring the troops home. Cause we'll be in the Winter of 32/33 when 7 million in FlyOver Country starved to death. No Food Stamps then either....;} Rip up the Social Contract and see how long you can keep driving your Beamers....;}
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#13. To: mcgowanjm, jwpegler (#11)
SS is the only place left that has cash.
#14. To: nolu chan (#6)
Anything that the government does today to help us can and will be used in the future to hurt us -- jwpegler
#15. To: mcgowanjm (#11)
SS is the only place left that has cash.
Anything that the government does today to help us can and will be used in the future to hurt us -- jwpegler
#16. To: nolu chan (#13)
(Edited)
The funds were transferred to the general fund and have been spent.
Anything that the government does today to help us can and will be used in the future to hurt us -- jwpegler
#17. To: jwpegler (#0)
The other group who should find this message appealing are wealthy retirees who are stealing from their children's and grandchildren's future. Will they finally put their selfishness aside and say: "no more"? Probably not, but we'll see.
#18. To: jwpegler (#15)
Social security is paying out more every year in benefits than it receives in taxes.
#19. To: eskimo (#17)
The damned government stole the money from those folks
Anything that the government does today to help us can and will be used in the future to hurt us -- jwpegler
#20. To: jwpegler (#19)
Young people should be allowed to divert their payroll taxes to private bank accounts.
#21. To: jwpegler (#19)
So, your answer is to steal our money to pay them off? Who is going to pay us off when we retire?
#22. To: jwpegler (#19)
Young people should be allowed to divert their payroll taxes to private bank accounts.
#23. To: jwpegler, e_type_jag, hondo68, lucysmom, nolu chan, NewsJunky, eskimo, mcgowanjm (#1)
The people who got into the Social Security system very early got back on average 15 times the amount of money they paid in. They got a great deal and were raving proponents of the system.
#24. To: Godwinson (#23)
The people who got into the Social Security system very early got back on average 15 times the amount of money they paid in. They got a great deal and were raving proponents of the system.
#25. To: eskimo (#21)
Anything that the government does today to help us can and will be used in the future to hurt us -- jwpegler
#26. To: jwpegler (#25)
Listen Bozo, current retirees joined the greedy geezer lobby (AARP) and they lobbied for the goodies. It is their fault that we are in this mess.
#27. To: jwpegler (#0)
Long term, people need to be able to save for their own retirements. Social Security needs to be taken back to it's roots as a program that supplements the income of retirees who are truly poor, through no fault of their own.
#28. To: Godwinson (#23)
The people who got into the Social Security system very early got back on average 15 times the amount of money they paid in.
#29. To: eskimo (#28)
#30. To: jwpegler (#25)
Listen Bozo, current retirees joined the greedy geezer lobby (AARP) and they lobbied for the goodies. It is their fault that we are in this mess.
#31. To: Godwinson (#29)
I also said it was nonsense - I highlighted that passage to re-explain to the stupid GOPers that SS is an insurance program that is not an investment.
#32. To: eskimo (#31)
What in hell is wrong with the a$$holes who decide it is easier to blame the older victims of government theft
#33. To: Godwinson (#32)
SS is not theft.
#34. To: Godwinson (#23)
SS is a retirement insurance program - it does not function like a "Christmas club" account
#35. To: nolu chan (#34)
The fund itself basically consists of bookkeeping entries. The money collected has been transferred to the general fund and spent. The government is over $14T in debt.
#36. To: eskimo (#30)
You are as ignorant as you are stubborn. AARPs are a political lobby that comprise a tiny minority of stupid liberal/socialist slugs.
Anything that the government does today to help us can and will be used in the future to hurt us -- jwpegler
#37. To: nolu chan (#34)
(Edited)
It is a government program and does not function like any commercial insurance program.
Anything that the government does today to help us can and will be used in the future to hurt us -- jwpegler
#38. To: Godwinson (#23)
SS is a retirement insurance program -
#39. To: jwpegler (#36)
No. Every single credible politician over the last 50 years has been scared to death to tell the truth about Social Security, because the Greedy Geezer Lobby is too powerful.
#40. To: nolu chan, eskimo, jwpegler (#34)
It is a government program and does not function like any commercial insurance program. You can pay in for 40 years, retire, and the government may increase, decrease, or eliminate the benefits.
#41. To: Godwinson (#40)
Commercial insurance companies change their benefit programs all the time and in many cases they don't pay out.
#42. To: We The People (#27)
Social Security needs to be abolished, today.
#43. To: nolu chan (#41)
Can you cite an instance of where all contributions have been completed, as with a retiree, the plan payout is due, and the company simply decides not to pay for any reason other than default (bankruptcy)?
#44. To: jwpegler (#15)
There isn't any cash on hand.
#45. To: All (#44)
#46. To: jwpegler (#0)
--GW Bush
--Sarah Palin's version of "The Midnight Ride of Paul revere"
#47. To: mcgowanjm (#44)
Only because the US Gov't has been systematically robbing the SS Fund since Nixon....
Anything that the government does today to help us can and will be used in the future to hurt us -- jwpegler
#48. To: We The People (#27)
Social Security needs to be abolished, today.
Anything that the government does today to help us can and will be used in the future to hurt us -- jwpegler
#49. To: eskimo (#30)
AARPs are a political lobby that comprise a tiny minority of stupid liberal/socialist slugs
Anything that the government does today to help us can and will be used in the future to hurt us -- jwpegler
#50. To: jwpegler, All (#47)
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#51. To: war (#46)
#52. To: All (#51)
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