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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: 114465
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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#132. To: A K A Stone, NewsJunky (#131)
I would tax multi-millionaires at 90% like the Republicans did under Ike.
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.
Social Security. It's lasted 7 decades because we are FORCED to participate. If government FORCE wasn't behind it, it would have collapsed a long time ago.
The U.S. population is growing. It is not growing fast enough to support the next generation of retirees. That's why my generation will get back LESS from Social Security than we paid in. This is called a Ponzi scheme.
More than slight tweaking is needed. The funding shortfall forecast indicates a significant increase in revenues or decrease in spending, or some combination thereof will be required. Brian Beutler | September 14, 2011, 5:59AM [excerpt] "I think really the fundamental question for you is not how we got here, but where you want the country to go, what role do you and your colleagues want the government to play in the economy and the society?" said Doug Elmendorf, who heads the Congressional Budget Office. He was addressing the six Democrats and six Republicans on the new joint deficit committee, and for three hours he did his best not to get buried under the same avalanche. "[I]f you want a role that has benefit programs for older Americans, like the ones we've had in the past, and that operate for the rest of the government like the ones we've had in the past, then more tax revenue is needed than under current tax rates," Elmendorf said. "On the other hand, if one wants those tax rates, then one has to make very significant changes in spending programs for older Americans" or all the rest of the government's functions.
I think one possible or probable course of action is to eliminate the cost of living increases. Once that is gone, they can inflate the currency. The dollar amount of benefits would remain, but the buying power would be reduced.
Americans are under taxed. How long will we have to deal with the mythology that lower taxes creates prosperity? Are people still arguing this as fact? That would be like arguing the sun revolves around the earth.
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 this chart shows you from 1960 and beyond This chart shows you the same ratio from 1945 onward. So you can tell that the number of investors to the plan has, for the most part, steadily decreased.
Ping to #138
Which Ponzi scheme has paid out as much in benefits and done as much for the population as Social Security?
The fact that Social Security has always been one of the government's most popular programs for almost 70 years and the fact that most politicians are scared to even mention cutting benefits (the so-called third rail of politics) leads me to believe that politicians will only make changes with the public's permission.
No comment. :o)
Hey, ASSHAT... it's not a decline in the "customer base," that you're showing, it's the number of people that are supporting each CUSTOMER! That is, this graph shows the number of paying in, versus those who are pulling money out.... And NOW.........? Shit, there's aren't enough people left to STEAL from, to keep the Ponzi Scheme alive............ Jeez...... (((((shaking head in utter disgust)))))
To:Skippy, toe-jam, old man Fred Alzheimers Mertz, _jim, loonymom/ming, e-type-jackoff, goober56, Wrek, calcon, dummy DwarF, continental op, Biff, gobsheit and meguro From: Capitalist Eric Message: You're SOCIALIST morons. ESAD. No, your premise is unrelated to your conclusion. The chart shows a declining RATIO of workers to beneficiaries which I have repeatedly said is the case and the problem. The RATIO does not express anything in terms of the quantity of participants, investors, or beneficiaries. To retain the RATIO, the system would have had to sign up 40 new workers for each addition to the rolls of beneficiaries. The number of beneficiaries has risen to 54,032,097. To maintain a 40:1 ratio you would need to find 2,161,283,880 investors to pay in. That is about 7 times the population of the entire United States. The number of people paying in has gone UP. The number of people collecting benefits has gone up at a higher proportional rate. Where there one was over 40 people paying in for each person drawing benefits, it appears there are now between 3 and 4 persons paying in for each person drawing benefits out. The baby boomers are retiring, swelling the number of beneficiaries in numbers the system never could sustain. This is the type of thing that happens in a Ponzi-like system.
Wise choice.
"...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
The number of people paying in has gone UP. The number of people collecting benefits has gone up at a higher proportional rate. In other words, it's a Ponzi scheme. The 2 + billion number is really interesting because we are bumping up against the entire population of the world. At a 40 to 1 ratio, there aren't enough people to keep this pyramid scheme from continuing past the current generation of retirees. Of course, this is what the Social Security Trustees have already concluded.
Didn't see your response before I said about the same thing. This shows the Ponzi-like nature of the scheme. The number of beneficiaries swells at a rate that is impossible for the population to keep up with, resulting in an ever diminishing RATIO of donors to beneficiaries. As the ratio diminishes, the burden on each donor rises until the donors no longer meet the needs of the beneficiaries. Social Security Beneficiary Statistics
That is true up until 1975; since then the ratio has been pretty darn stable, ranging between 3.2 and 3.4. In 2009 the ratio dropped to 3, and was 2.9 in 2010. www.ssa.gov/history/ratios.html Because workers generally spend more years (about 50) working than they do in retirement (15-20), the ratio should remain relatively stable as long as the economy creates jobs and population isn't declining.
"...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
Except that an adjustment in the amount collected was made during the Reagan administration to compensate for the dreaded baby boomer retirement.
"...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
It is actually 1.75 people per social security recipient. You can't rightfully say people who work for the government who "pay" social security taxes adds anything to the system since their paychecks and "taxes" they pay is actually tax money itself. Some group did a study on this and they came up with 1.75.
Baby boomers who have publicly stated their support for abortion shouldn't get any Social Security. They should be sent to Jack Kevorkian. That would go a long way towards solving the problem and it would be just.
Jack's dead. You don't get out much, do you?
I know they should be with him. lol
You only wish death on others because you are so pro-life, yes?
That does not include the overhead for administration. At a ratio of 3:1, each worker needs to pay almost $400 per month. When it shrinks to 2:1, that would rise to nearly $600 per month. As the ratio shrinks, the burden on each worker rises at a much more rapid rate. From 3:1 to 2:1 causes a 50% increase. The ratio will continue to shrink unless the worker base increases at an impossible rate.
Everything collected has been spent, plus over 14T more. The SSA is running monthly deficits. The deficits must be paid with tax dollars from the general fund, adding to the national deficit and debt. There's a problem.
People who argue that a child is a burden and you should be able to murder er abort it. They should reap what they have sown. If they become a burden they shoudn't get any help and they should be left to themselves. Is that unjust?
That is an opinion you read, I disagree.
"...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
You argue people who don't agree with you should die and claim you are pro- life. And you expect me here to argue in good faith with such insanity. Save it for your psychiatrist. He gets paid enough to hear such crap; I don't.
It is not an opinion it is a fact. They number you quoted. Does it include people who are paid with tax dollars? If it does, and it does your number is skewed and not true. You can't count people who only receive tax dollars and pay taxes that way. They aren't adding anything new to the system.
In that case, neither should they nor their employers contribute.
"...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
Pro life is a term that has no definition. You say you are pro life but you would let a murderer go free. That is anti life. You say you are pro life but you vote for Obama the man who champions baby murder. Your words are hollow. I never said people who disagree with me should die. That is ridiculous. I said if someone is running around saying abortion abortion. Who is going to pay for the kid. We can't afford it. Abortion is a right. People who say that then at the end of life want government help should be aborted.
They participate in the flow of money and thus add to economic activity that takes place within our borders.
"...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
That may or may not be true. But they get all of their money from other tax payers. So you can't say that it is 3 taxpayers for social security recipient. Because all of the money they put in came origianlly from someone with a "real" job. If you don't get that or can't be honest enough to admit that then that is your problem and not mine.
Your position is more akin to exposing a new-born baby to the elements.
"...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
They participate in the flow by grabbing out some of the money from the producers. Thomas Jefferson said something about those people in the Declaration of Independence. They don't add to economic activity though. They just took something of what someone else produced. That person who produced it would have been to stimulate the economy with the fruits of their own labor. So the government parasite didn't add anything to the pie. They just spent it instead of someone who earned it spending it.
This post is conflicted and convoluted. It in no way merits being taken seriously. For example; being against Capital Punishment turns no murderer loose. Which makes this hyperbolic sentence utterly meaningless. As I said, save it for your shrink.
Yes I am for babies being allowed to be born and breathe air and eat food. The liberal parasite says the baby is a burden kill it. That is why Americans think of liberals as sickos. Well one of the many many reasons.
Tell that to Dukakis and Willie Horton.
Since when did Stonie ever care about any human life after birth?
Stone, if government workers pay the tax then they are taxpayers by definition. If you don't get that or can't be honest enough to admit that then that is your problem and not mine. Good try , Stone but no cigar.
"...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 you are claiming I don't care about people? Mike you are stupid if you believe that. Really stupid. Your rhetoric is separated from reality.
Comments (173 - 228) not displayed.
Top • Page Up • Full Thread • Page Down • Bottom/LatestSo you want to pay out less? Or raise taxes? Don't you care about the deficit?
#133. To: NewsJunky (#124)
Which Ponzi Scheme has lasted for almost seven decades?
Oh, God, can you ever imagine what would happen to the country if Lyndon Johnson were president? -- Jackie Kennedy
#134. To: NewsJunky (#123)
(Edited)
In fact it has had a shrinking base of customer
Oh, God, can you ever imagine what would happen to the country if Lyndon Johnson were president? -- Jackie Kennedy
#135. To: Godwinson (#130)
Just some tweaking can get SS to survive past our lifetimes and America's population is not shrinking.
Super Committee Riven By Major Divide Over Basic Facts
Talking Points Memo
#136. To: jwpegler (#134)
my generation will get back LESS from Social Security than we paid in.
#137. To: nolu chan (#135)
More than slight tweaking is needed. The funding shortfall forecast indicates a significant increase in revenues
#138. To: nolu chan (#128)
#139. To: jwpegler (#134)
#140. To: jwpegler (#133)
#141. To: nolu chan (#129)
#142. To: lucysmom (#95)
Who can you trust? Banks? What about the stock market? Real estate? Perhaps gold buried in the backyard?
#143. To: NewsJunky, jwpegler, nolu chan (#138)
#144. To: NewsJunky, jwpegler (#138)
This chart shows you the same ratio from 1945 onward. So you can tell that the number of investors to the plan has, for the most part, steadily decreased.
#145. To: We The People (#142)
No comment. :o)
#146. To: nolu chan (#144)
(Edited)
To maintain a 40:1 ratio you would need to find 2,161,283,880 investors to pay in. That is about 7 times the population of the entire United States.
Oh, God, can you ever imagine what would happen to the country if Lyndon Johnson were president? -- Jackie Kennedy
#147. To: Capitalist Eric, NewsJunky, jwpegler (#143)
And NOW.........? Shit, there's aren't enough people left to STEAL from, to keep the Ponzi Scheme alive............
#148. To: nolu chan, NewsJunky, jwpegler (#144)
(Edited)
This chart shows you the same ratio from 1945 onward. So you can tell that the number of investors to the plan has, for the most part, steadily decreased.
#149. To: nolu chan (#144)
The baby boomers are retiring, swelling the number of beneficiaries in numbers the system never could sustain. This is the type of thing that happens in a Ponzi-like system.
#150. To: lucysmom (#148)
That is true up until 1975; since then the ratio has been pretty darn stable, ranging between 3.2 and 3.4. In 2009 the ratio dropped to 3, and was 2.9 in 2010.
#151. To: lucysmom (#149)
Except that an adjustment in the amount collected was made during the Reagan administration to compensate for the dreaded baby boomer retirement.
#152. To: A K A Stone (#151)
#153. To: Ferret Mike (#152)
#154. To: A K A Stone (#153)
"I know they should be with him." lol
#155. To: lucysmom (#148)
That is true up until 1975; since then the ratio has been pretty darn stable, ranging between 3.2 and 3.4. In 2009 the ratio dropped to 3, and was 2.9 in 2010.
The average monthly Social Security benefit for a retired worker was about $1,177 at the beginning of 2011. This amount changes monthly based upon the total amount of all benefits paid and the total number of people receiving benefits.
#156. To: lucysmom (#149)
Except that an adjustment in the amount collected was made during the Reagan administration to compensate for the dreaded baby boomer retirement.
#157. To: Ferret Mike (#154)
#158. To: A K A Stone (#150)
You can't rightfully say...
#159. To: A K A Stone (#157)
(Edited)
#160. To: lucysmom (#158)
#161. To: A K A Stone (#151)
Baby boomers who have publicly stated their support for abortion shouldn't get any Social Security.
#162. To: Ferret Mike (#159)
#163. To: A K A Stone (#160)
If it does, and it does your number is skewed and not true. You can't count people who only receive tax dollars and pay taxes that way. They aren't adding anything new to the system.
#164. To: lucysmom (#163)
They participate in the flow of money and thus add to economic activity that takes place within our borders.
#165. To: A K A Stone (#162)
You say you are pro life but you vote for Obama the man who champions baby murder.
#166. To: lucysmom (#163)
They participate in the flow of money and thus add to economic activity
#167. To: A K A Stone (#162)
"Your words are hollow."
#168. To: lucysmom (#165)
Your position is more akin to exposing a new-born baby to the elements.
#169. To: Ferret Mike (#167)
For example; being against Capital Punishment turns no murderer loose.
#170. To: lucysmom (#165)
"Your position is more akin to exposing a new-born baby to the elements."
#171. To: A K A Stone (#164)
So you can't say that it is 3 taxpayers for social security recipient. Because all of the money they put in came origianlly from someone with a "real" job.
#172. To: Ferret Mike (#170)
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