You might want to look at a page I found showing the facts of how they originally promised Social Security and how they changed it over time. It also says the fund is in the red, ie spent or will spend too much as it sits, by $16 or $17 Trillion as of 2010. http://www.justfacts.com/socialsecurity.asp I'm sorry, but I still see it as a giant Ponzi scheme were even worse, the money is invested in an even worse Ponzi scheme (US govt debt), and at some point, I think the whole mess blows up and hyperinflation wipes out the value of the check amounts being paid.
Thank you, I looked at the above mentioned report, and I must say in spite of the political leaning of the authors I found it factual so far as I can tell, and in line with the figures I have already given you, and the other projections I have seen. Also, it should be noted that in the various comparison studies, the present contribution rates to social security have been assumed, however going forward these will have to change. Most projections I have seen for the S&P going forward estimate an average return of near 5% for he next 50 years, but what really matters is the return in constant dollars, and there both private plans and social security are liable to suffer. Using the 5% figure you can immediately see what the problem is for low wage earners, because it will be impossible for them to afford to put aside enough to assure a pension equivalent to social security that they can not easily outlive, and that comparison favors social security even more when one considers that in a private plan one has to purchase disability insurance outside the plan. And the amazing thing is that this is true even though the Social Security administrative costs are far higher than in a private defined contribution plan. (The comparisons assume for defined contribution plans that costs will be equivalent to what one experiences in an index mutual fund. Of course once the Wall Street and Insurance lobby gets involved the costs will be far higher. You're not going to find a bunch of minimum wage earners who are capable of setting up a defined contribution plan on their own without "assistance".) I my opinion, the best scenario would be to retain the current system corrected as needed for demographics with all participants having the option of funding a separate defined contribution plan, just as we do now. I also favor allowing anyone to optionally contribute additional money to social security in return for a higher benefit.
...of Social Security and mice: What is and isn't a Ponzi scheme is determined by mathematics and lingustics, not what the money is used for. Let's say originally Ponzi had spent the profits on orphans and charities, would it have been a different and eventually successful system? Of course NOT. What you use the money for is completely IRRELEVANT, it is the system's set up what determines a Ponzi. By definition a Ponzi is a pyramid system where the early investors are paid by the ever increasing number of new investors. The system works as long as they can find new investors to pay the guys on the top of the pyramid. Here is a history lesson for you: http://www.ssa.gov/history/briefhistory3.html#idamay "Ida May Fuller worked for three years under the Social Security program. The accumulated taxes on her salary during those three years was a total of $24.75. Her initial monthly check was $22.54. During her lifetime she collected a total of $22,888.92 in Social Security benefits." So the very first participant who got monthly payments paid only $25 into the system and took out almost $23K!!!! If it is not a Ponzi, I don't know what it is. Now through the years, the US's population increased, so there was no problem with having newcomers into the system. But once the population gets older (the top lives to very old age) and the country's birthrate fails, the system can not sustain itself anymore. And we are talking about everywhere, not just the US! In Italy (I think, but other countries are similar) originally 4 workers were paying for 1 retiree. Now it got down to 2 workers keeping 1 old person in good condition. I can look it up how the SS was raided, it wasn't just by inflation, but literally, the government used up the money for other expenses... Oh yes, the math part, if you are still with me: "And those liabilities are enormous. As most Americans are becoming aware, in 2014 Social Security will begin spending more on benefits than it collects in payroll taxes. Ten years later, its annual deficits will reach $370 billion, and by 2034, when todayâs 33-year olds begin to retire, the program will be mired in $800 billion deficits. Over the next 75 years, those deficits total $122 trillion, or $19 trillion after adjusting for inflation." http://www.freedomworks.org/publications/clintonâs-3-trillion-raid-on-social-security Edit: I didn't realize Thriftybob already mentioned Ida Fuller. I haven't read the whole thread....
Here is the explanation of the systematic raid on the SS: "That Social Security surplus totals $2.5 trillion. Starting in 1969, in an agreement between Lyndon Johnson, Richard Nixon, and the 1969 Congress, the Social Security trust fund was brought "on budget" for the first time, allowing it to be spent for other government programs (Source: Social Security Administration website; see Agency History). The reason was to turn an $8 billion deficit (quaint by todayâs standards) into a balanced budget. When the Social Security system was set up in 1935, the Trust Fund was supposed to be held "in trust" -- literally â by the government for America's citizens, because FDR didn't trust American citizens to actually hold retirement savings until retirement (Source: David Gergen's article entitled "How Much Government?", 2010), and government was going to hold it for them. Instead, the surplus has been spent since 1969 on non-Social Security programs - in its entirety. In its place are $2.5 trillion in Treasury Securities - IOUs, essentially. Here's the rub: those IOUs can only be paid back from future borrowing or future taxes. Translation: America's taxpayers will pay $5 trillion to provide $2.5 trillion in benefits, first as the original FICA taxes that generated the $2.5 trillion surplus, and later as $2.5 trillion in future taxes to redeem the Treasuries. Good deal if you can get it. What it means is that politicians have had a $2.5 trillion cookie jar to raid over the past 40 years." This is from a common sense responder to the article, because the writer of the article was a moron... http://www.thefiscaltimes.com/Blogs...change-No-One-is-Raiding-Social-Security.aspx
http://www.infowars.com/the-nanny-state-cant-last/ ------------------------------------------------------ Although Alex may be out in the deep end at times, his site is very informative and has a lot of credible info. I have had the pleasure of meeting Alex and Ron. In fact, I may be working on Ron's presidential campaign, raising funds, as that is what I do for a living. God Bless TEXAS! He nails it on this radio address.
...of Social Security and mice: " By definition a Ponzi is a pyramid system where the early investors are paid by the ever increasing number of new investors. The system works as long as they can find new investors to pay the guys on the top of the pyramid." That's not how Social Security works. " If it is not a Ponzi, I don't know what it is. " Agreed, you don't know what it is.
The status of the securities held in the trust fund is the same as other government issued securities, except that those held in the Trust Fund can be redeemed at any time. Your problem is not with Social Security but with the U.S, Government, how much it spends, and for what. You also have a problem with Securities issued by the the U.S. Treasury. I share the same concerns, and I don't like the fact that the Trust Fund was "brought on budget."
SouthAmerica's thread has been hijacked -- i'm one of those at fault. I like Ron Paul. I sent him money. He has an important message. I don't know if I can vote for him. I don't want to vote for anyone who won't insist of cutting military expenditures drastically -- who won't get religion out of government -- will he do those things-- can he do those things -- I doubt anyone can. -- I don't want to vote for anyone who does not understand that American medicine operates as a government protected cartel -- does he understand that? I doubt it. The country is fucked. In the end I'll be forced to vote for the least bad candidate. As usual, There will be no good candidates.
Dollar Index still trending down..... analysts predicting 70 by year end. I think it will be far sooner. the rug is being pulled out from under the USD.
Really? Then tell us how it works. I don't expect you to ever change your mind, so the conversation with you on this topic is pretty much over... Those securities there are just a bunch of IOUs, and the government can either print more money to pay them back, or tax. Otherwise that money is already spent on other government expenses. It is gone...