Social Security is not "Insurance"

Social Security is not "Insurance"

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Perhaps the biggest media story of 2010 was the influence of Tea Party voters on the congressional landscape. The new congress comes to Capitol Hill with a mandate to end profligate spending and restore fiscal sanity, we are told. But when the House and Senate convene in January, the newly elected members will face tremendous pressure to maintain spending levels for entitlement programs. Even the most modest proposals to trim Social Security or Medicare spending will be met with howls of indiBut millions of Americans now realize that the status quo is an illusion that will not last even ano

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Courage begins with a commitment to see things as they are, rather than how we wish they were. When it comes to Social Security, we must understand that the system does not represent an old age pension, an “insurance” program, or even a forced savings program. It simply represents an enormous transfer payment, with younger workers paying taxes to fund benefits. There is no Social Security trust fund, and you don’t have an “account.” Whether you win or lose the Social Security lottery is a function of when you happened to be born and how long you live to collect benefits. Of course young people today have every reason to believe they will never collect those benefits.

Notice that neither political party proposes letting people opt out of Social Security, which exposes the lie that your contributions are set aside and saved. After all, if your contributions really are put aside for your retirement, the money is there earning interest, right? If your money is in your “account,” what difference would it make if your neighbor chooses not to participate in the program? The truth, of course, is that your contributions are not put aside. Social Security is simply a tax. Like all taxes, the money collected is spent immediately as general revenue to fund the federal government. But no administration will admit that Social Security is nothing more than an accounting ledger with no money. You will collect benefits only if future tax revenues materialize as hoped; the money you paid into the system is long gone.

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Well that is the false screen, that social security money is not just sitting in the bank gaining interest.

There is no money saved for social security, (no magic bank account it's sitting in) the people working now are paying now for the people who are on SS.

By the time i'm around to ever get SS lets see about another 43 years I doubt there will even be SS as we know it now..

It is a flawed system and needs refining..

Me paying into something that will not be there when I am that age seems so freaking senseless.

The op is right, I saw on local news today that now 10k *baby boomers* are hitting the age of 65 everyday.

There is simply not enough money to go around for much longer, yet alone another 40+ years for some of us..
I would rather take the money the government takes out of my check and it be put into a ROTH account or 401k so I can retire with it MYSELF..

I would like to stop letting these politicians squander our money away to no end...

The only mandate the republicans have in regards to anything is simple...get jobs growing again. Thats it. Its not about ending social security, or reinstalling prayer in school..the tea party darlings were destroyed in the last election, the GOP won...and the GOP simply used the "jobs jobs jobs" call

The anti-masturbation queen and all the other palin endorsed tripe idiots were soundly defeated. the people are simply looking for more job opportunity. Should they lead the charge in trying to fulfill some right wing agenda, well, they will exist as the majority in congress for a full two years.

I find it hard to believe that anyone with ears and an IQ over room temperature thinks that Social Security is anything other than what it is -- an entitlement program paid for by the current workers. Where do you think the money came from for the people who retired in 1937?

You are mistaken in your belief that money from SSA taxes go into the General Budget, not directly, anyway. For surplus funds today (which will be needed tomorrow, figuratively,) the government doesn't just shove it under the mattress, they buy special government bonds, which gives the General Budget the cash, but incurs a debt, which will have to be repaid when the Social Security Trust Fund goes into the red in a few years.

It's most assuredly not insurance -- my wife paid probably $50,000 into the fund over the years, but when she died at 46, the "benefit" I was paid was $255. Not a bad return for the government. I, too, will not likely receive anything back for the money that I've paid in, but most people will take out more than they've put in, because there is no limit to how long you can draw money out, regardless of how much you put in.

Like I've stated in the past, social security is a no-go for me. I'm in my 40's. I'm planing my own retirement where I don't have to depend on ANY political party to determine how I live in my golden years.

If you younger folks actually think you'll be seeing a dime, then good luck.

reply to post by Whereweheaded


Medicare = Mediocare

S+F

Wouldn't it be interesting to see, the " op-ed out " filing for social security. If your in a job that offers a retirement program, why would you need the SS to begin with? Its not like SS payments are all that dramatic anyhow. If as part of the labor force of this country, it should be up to us if we wish to par take in the SS payments/taxes. All SS is, is a unconstitutional social program designed for one thing anyhow.

But I guess the motto , Spend Spend Spend, by our beloved progressives should be embraced, for fear of being shunned.

reply to post by SaturnFX


The "idiots" you refer to were not the crux of the Tea Party. Those were only the poster children for the opponents of the Tea Party. The Tea Party was HUGELY successful, although I do agree that it was overrun by the Republicans, and the results were not exactly what the Tea Party wanted. We were more interested in getting Independents, Libertarians, and Constitutional Party candidates elected, and that didn't work out as well as hoped.

Anyhow, jobs-jobs-jobs, was not the mantra that won. The mantra that won was, common sense, fiscal conservatism, and less legislation. At one Tea Party event, we joked that the best platform to run on would be a promise to "not do anything." It seems the more we legislate, the more we mess things up. If we could get a Congress to sit and stop screwing things up, it would be an improvement! Then maybe we could work on repealing the last 100 years of screw ups, and pretty soon we might have a country we recognized again!

I don't like the current Social Security system any more than anybody else. What a stupid and short-sighted business plan that was. Imagine pitching that plan to a corporate board! You would get laughed out of the room, but somehow our elected leaders endorsed and enacted it! We have to start shifting younger workers to a better plan while revamping the current one without cutting too many benefits. A difficult task, but not impossible.

I have paid into ss for over thirty years and by the time I retire, if there is any money left, it won't be enough to retire on. People are lucky to even be employed these days. It is a shame how many people are screwed over by the system and how often.

Originally posted by Night Star
I have paid into ss for over thirty years and by the time I retire, if there is any money left, it won't be enough to retire on. People are lucky to even be employed these days. It is a shame how many people are screwed over by the system and how often.

Lets make a reasonable calculation.

Lets say you put in roughly 200$ a month into SS so 2400 a year for 30 years... It comes out to
$72,000.00
Then lets break it down to 3 years thats $24,000.00
You have only paid about 3 years worth of wages into SS.

So you live to 80 years of age..... Your getting 3x more then you put in... (These are all if's but likely scenarios) I am no mathematician but anyway you look at it this whole SS thing seems retarded....

You neither totally loose at this SS game (if you die young) or you ultimately gain from it (depending how long you live)....

Does this not seem senseless?

As modern medicine advances now so rapidly people we will be living LONGER AND LONGER AND LONGER
this has to be the most epic fail..

reply to post by thecinic


I think what the poster was trying to submit, was that according to the article, a " savings" account would have some sort of interest. By paying into SS, and collecting at retirement a mere 1600.00 a month, with no interest gains, would show a loss of revenue payments.

reply to post by Whereweheaded


I get that part..

I agree also..

Just what I meant was ANY way you look at it...

The system seems flawed in so many ways....

reply to post by thecinic


Put the same $200 per month into a mutual fund at a modest 5% for 30 years and see what your return is.

According to Dave Ramsey's calculator it would be worth $167,000 dollars. More than double the return on Social Security and with no cost to any other tax payer or your employer!

Now, if the employee paid $200 per month, then th employer matched it, so double that figure to $320,000 dollars upon retirement! Social Security is a bad investment!

Edit to add:
Imagine the "stimilus" of taking the burden of matching Social Security tax from employers! That would immediately provide 7.5% more payroll funds for more employees. If the Govt reports are accurate, and there is 9% unemployment, then we could almost wipe it out just by this one action!

In addition to being an unlawful Ponzi Scheme, one of the most egregious aspects of Social Security is that it is TAXED!!

Not only have people been forced at gunpoint to contribute to this scheme, they are then taxed on the distributions!

Talk about adding insult to injury...hold a gun to my head and force me to contribute and then hold a gun to my head and take a portion of my pittance of a distribution. Pathetic.

S&F for the OP.

reply to post by getreadyalready


Exactly what I was trying to say, there has to be a better way then how it is being done now...

Just when will we get some good common sense politicians in?

To anyone looking at this situation HAS to see this SS issue isn't going to fix itself or get any better..

Why do they seem all blind???

What about the people who hasn't really worked their whole life though when they turn 65 if they have not put their own money up then they will be screwed..

I still say let them have medicaid for the old people and disabled.

Even an option for people who want to opt out but who is to say you opt out your first 20 years of work, then you opt back in your last 15?

It can't be that simple to just opt in or out...

Or maybe a way you can opt in and it be like a ROTH where after say 20 or 30 years you can take it out...

reply to post by thecinic


Because the elderly vote heavily! Youngsters not so much. Talk about reforming Social Security and risk getting booted out of office. Not to mention that the politicians do not participate in the same plan! If they serve two terms, they have a lucrative retirement for life!

The Ponzi Scheme could have worked in the beginning if they had delayed payouts for about 20 years. Coops often use this technique. People pay in for 10 or 20 years before any benefits start being paid back out. There is time to build a reserve, gain interest, and then the payouts are replaced by the new coop members.

I would love to tackle the Social Security issue! It can be fixed. Privatization has to be a part of it, and there has to be several phases to keep from alienating the "soon to retire." We could start diverting some funds now, and we could look at "temporarily" moving the retirement age. We could also revamp Disability payouts, or fund them seperately. It seems like such a dynamic situation with such easy victories within reach. To quote Six Sigma, this is the "low hanging fruit" that our politicians should be clamoring to take credit for!

reply to post by getreadyalready


Makes DADT seem so minimal, small, and a worthless issue
when there are so MANY MANY more important issues to deal with then DADT.


LET ALONE THIS WHOLE UNIVERSAL HEALTHCARE ORDEAL shoved down out throats..

How can we progress into whole new arena when we still need to fix what we are doing now?

Hmm.. Makes sense do away with peoples retirements to further fund illegal / immoral wars and murder innocent people around the world... End the wars and shut down the overseas bases you guys would have money for retirement/disability programs. Nah too easy and the pols couldnt make their bloodmoney ...

Originally posted by getreadyalready
reply to post by thecinic

 

Put the same $200 per month into a mutual fund at a modest 5% for 30 years and see what your return is.

According to Dave Ramsey's calculator it would be worth $167,000 dollars. More than double the return on Social Security and with no cost to any other tax payer or your employer!

Now, if the employee paid $200 per month, then th employer matched it, so double that figure to $320,000 dollars upon retirement! Social Security is a bad investment!

Edit to add:
Imagine the "stimilus" of taking the burden of matching Social Security tax from employers! That would immediately provide 7.5% more payroll funds for more employees. If the Govt reports are accurate, and there is 9% unemployment, then we could almost wipe it out just by this one action!

edit on 28-12-2010 by getreadyalready because: (no reason given)

edit on 28-12-2010 by getreadyalready because: (no reason given)

Sorry, i have to disagree.... your example is a pie-in-the-sky scenario.

""

Put the same $200 per month into a mutual fund at a modest 5%
for 30 years and see what your return is....$167,000 dollars..... then the employer matched it,
so double that figure to $320,000 dollars upon retirement!

""

Not IF, like many conservative Funds that invest only in Bonds & Mortgage paper...
they had lost the better portion of 50% of the value just since the 2007-present Crises.
it turns out 5% compounded growth,' guaranteed', is a pipe dream now.
It may have been Post WWII , Post Vietnam...but not since the first oil embargo era.
during the Carter mess.



Next... its a rose colored glasses worldview to think that companies/corporations that
were suddenlt relieved of paying each employees 7.5% social security contribution...
that the mamagement & board would redirect those funds for hiring people->

they would most likely award themselves bonuses, then increase the wage disparity
even more than the CEO raking in 450 times more than a blue collar line worker.
after they reward themselves handsomly, the firm migh buy back more of their outstanding stock
which should increase the firms bottom line---and guess what ! -> it will be time for
more bonuses and raises for the executives & management that 'produced' these gains !

lets see reality instead of being blinded with idealism

~~~~~~~~~~~~`


your later post is way more reralistic:

Because the elderly vote heavily! Youngsters not so much. Talk about reforming Social Security and risk getting booted out of office. Not to mention that the politicians do not participate in the same plan! If they serve two terms, they have a lucrative retirement for life!

The Ponzi Scheme could have worked in the beginning if they had delayed payouts for about 20 years. Coops often use this technique. People pay in for 10 or 20 years before any benefits start being paid back out. There is time to build a reserve, gain interest, and then the payouts are replaced by the new coop members.

i star this one