Social Security is a Pyramid Scheme

I'm glad Romney picked Paul Ryan because the conversation about Social Security and Medicare needs to happen.

Programs like Social Security are pyramid schemes. They depend on workers at the bottom of the pyramid paying out benefits to those at the top of the pyramid. So the Government depends on a certain amount of people dying before they reach the top of the pyramid. This was fine as long as life expectancy stayed at 65.

Life expectancy has increased to 80 and with the baby boomers the pyramid is turning into a diamond. So you don't have enough workers to pay out benefits as the Politicians fill the S.S. fund with I.O.U.'s.

It's sad to see Democrats and Republicans lie about this issue. Obama and the Democrats just want to scare people and play class warfare when this is a serious threat to our children and grandchildren.

A scheme like this doesn't work as life expectancy increases. It would be the same as running a Ponzi scheme and then everyone started asking for their principle back near the same time. It will collapse the Ponzi scheme.

In a global economy with cheap labor and unemployment over 8%, S.S. will eventually crush the economy as workers decrease and life expectancy increase.

So you have to start reforming the system now and eventually phase it out. This is because someone 25 in 2012 will not need Medicare and S.S. the same way a person 25 needed it in 1970.

So you start by raising the retirement age to 75 or 80 for people 40-45 and under like myself. To offset this increase, you allow them to put part of their S.S. into Savings Accounts that they can start to draw on at age 65.

These will be a list of conservative funds and bonds that our Senators and Congressmen invest in to grow their retirement accounts. How many Senators or Congressmen retire poor? Eventually you will have to phase out the system because a pyramid scheme can't handle an increase in life expectancy.

A person 25 today might have a life expectancy of 90-95 by the time they reach 65 with advances in science and technology.

The way Obama is trying to do it is simply by death panels in Obamacare called the IPAB (Independent Payment Advisory Board) This board will turn Medicare from a reimbursement program into an insurance company. It's designed to slow the increase in life expectancy.

See my thread about the IPAB titled The Real Threat of Obamacare is the Independent Advisory Board here:
www.abovetopsecret.com...

Nonsense.
Social Security is failing because the treasure chest has been raided time and time again.
Funny how it worked fine for years and all of a sudden it is broke ehh?
PROPAGANDA!

Originally posted by g146541
Nonsense.
Social Security is failing because the treasure chest has been raided time and time again.
Funny how it worked fine for years and all of a sudden it is broke ehh?
PROPAGANDA!

Well said! It's not broken because it's been used as a piggy bank. The idea behind it is just fine - it's just the execution of it recently that's flawed.

reply to post by neoholographic

Programs like Social Security are pyramid schemes. They depend on workers at the bottom of the pyramid paying out benefits to those at the top of the pyramid. So the Government depends on a certain amount of people dying before they reach the top of the pyramid. This was fine as long as life expectancy stayed at 65. Life expectancy has increased to 80 and with the baby boomers the pyramid is turning into a diamond. So you don't have enough workers to pay out benefits as the Politicians fill the S.S. fund with I.O.U.'s.

Yep that's certainly is the narrative they try to sell, which you seemed to have bought hook line and sinker.

When the SS funds where untouchable the program worked fine, that is until congress started "robbing peter to pay paul" as it where.

Its amazing how the American government always seems to run off an attitude of "we'll worry about that later"

We saw it with the debt ceiling debacle, instead of making needed cuts they just keep fighting to raise it, every time they do that another future generation is indebted for today's mistakes.

Originally posted by AngryCymraeg

Originally posted by g146541
Nonsense.
Social Security is failing because the treasure chest has been raided time and time again.
Funny how it worked fine for years and all of a sudden it is broke ehh?
PROPAGANDA!

Well said! It's not broken because it's been used as a piggy bank. The idea behind it is just fine - it's just the execution of it recently that's flawed.

You are wrong sir.
Social Security is a “pay-as-you-go” program, which means that today’s workers are paying for the benefits to today’s beneficiaries through their payroll taxes. In 1940, there were 42 workers per retiree. In 1950, the ratio was 16-to-1. In 2010, there were 2.8 workers per retiree, and within 40 years, it’s projected that there will be just two workers per retiree¹. At the present rate, as the population ages and life expectancies continue to rise, the system will not be able to sustain itself into the future.

reply to post by g146541


Yep, it is broken.

S.S. can't withstand an increase in life expectancy. IT'S A PYRAMID SCHEME.

It's a system that needs more workers at the bottom of the Pyramid. Especially in a global economy with cheap labor.

This is why some want to open up the borders and let illegals in and put them on a guest worker program. More workers paying into the system.

This will not work though because most illegals will do low paying jobs and with the increase in life expectancy, they will not pay enough into the system to support the benefits that will be paid out.

I wish people actually understood how the system works. It's a Pyramid Scheme that can't handle an increase in life expectancy.

Why do you think Politicians are always talking about the baby boomers? It's because they're living longer which means they're collecting benefits longer and there's not enough workers to pay out those benefits. So the Government pays out more than it takes in.

Social Security has already begun paying out more in benefits than it takes in from workers' payroll taxes.

But the difference has been made up for with interest paid by the Treasury on the $2.6 trillion that the federal government owes the program. That debt represents the amount of extra revenue paid into the system over the years that Uncle Sam borrowed and spent.

money.cnn.com...

What happened is the Government borrowed from S.S. and spend it and the new workers paying into the system made up the difference.

That's fine when life expectancy is 65. When life expectancy increases and the workforce decreases this is a recipe for disaster.

reply to post by neoholographic


I agree that it is unsustainable with how it is currently being run, and how Trillions have been stolen from it by the Corporatist government that we have had running this country.

My question is, what do we do to change the current system? Yes there are jobs available, but I don't hear too many people talking about "living wages". We already have an employment problem in this country, due to our wonderful government allowing corporations to move their companys overseas, don't we? I grew up in an era where we had many profitable steel mills and manufacturing jobs. Look at what we have now! Service jobs, where nothing really is produced and all people do is want the latest and greatest gadgets! Almost all made in China!

What I am trying to get at, is that we like to want to blame those who are on "entitlement programs", but with the people who are out of work now, what do we do with more people who theoretically will flood the jobs market if a so called "entitlement program" is ended? Do you see where I am going with this one? We will see wages drop like a rock, because the corporations will once again, take advantage of influx of people needing jobs and then there will be NO jobs that would have a "living wage" attached to them! Thus we all become slaves to the corporations!!!

I really see this as a well planned out move to turn America into a third world country, run by a corrupt government at the hands of dirty, criminal corporations. We see politicians every day, telling us they CAN fix this problem, when in reality, the problem has become so bad that I really don't see anyway possible to fix it, unless the U.S. does what Iceland did. At this point, the United States government is doing nothing more than taking as much money from the working class as they can, creating many new restictive laws to stop any small business growth, meanwhile they are creating a private Corporate prison system and getting as many people as they can on paper!!!

If you really sit back and think about it, the U.S. government has turned into one big Corporate Prison System, that is doing a fine job bleeding us citizens dry of our freedom, while wining and dining of off our suffering!

reply to post by benrl

There is no narrative to sell. It is simple demographics. Millions of aborted children are not around to pay into SS, millions currently on welfare are not contributing, and bammy cut the SS tax so those paying now pay less. How can this be sustainable? It is impossible. Two workers cannot support one retiree, especially with current pay levels and ever increasing payouts.

Here is what the SSA has to say about the current condition of SS. The section of the SSA press office. Scroll down to April 23, 2012 and read.


www.ssa.gov...

I have done some reading on what Paul Ryan and Mitt Romney want to do; and so far from what I understand if a person is in their 60's or older; they are safe and their SS benefits etc. will continue as usual; with very little in changes.

reply to post by neoholographic


I SEE NOW!!!
The US system is broken because we allow illegal immigrants, shipping jobs overseas, ssi robbing, union busting, regulating businesses until they die so in turn the Social Security is the one that is broken.

Why not fix all of the other above rather than killing what has worked for decades??
I don't see the logic

Yea, whatever!

To those that want to make cuts to SS and KILL the retirement option for our retiring elders, heres a BETTER IDEA:

We need to STOP the wars and stop building a GAZILLION BASES all around the world. Thats where we need to cut, PERIOD.

Then, if we need to go further (HIGHLY UNLIKELY) then we can [color=gold]go after the politicians benefits/entitlements/etc/etc which are WAAAAAAAAAAAAAAY lavish for even a KING.

For the horrible jobs politicians have been doing, they deserve [color=gold]NO MORE than MINIMUM WAGE and NO benefits or retirement package whatsoever. They can eventually make more than minumum wage once they demonstrate that they are CAPABLE and WILLING to start DOING THEIR DAMN JOBS for a change.

If we must make benefits/entitlement cuts, its [color=gold]only FAIR that we go after those in this country whom dont do their DAMN JOBS and dont deserve any benefits anyways. CUT the LAVISH ROCK-STAR-like benefits of the FAILURES in this country whom we call POLITICIANS.

Leave our hard-working ELDERS RETIREMENT option ALONE!!!!!!!!!!!!

All of this SS cuts and ponzi-scheme nonsense is [color=gold]just a clever scheme being used to keep the wealthy from being forced to pay their FAIR SHARE PERCENTAGE-WISE in this country. So instead, these SNAKES and DEVILS want to make the argument to cut the already BURDENED People of America!!

So those such [color=gold]SOULLESS folks fighting to make cuts on the people rather than the SUPER-WEALTHY can STUFF IT, because the HUGE MAJORITY of American people DISAGREE with such nonsense as cutting SS anyways. The American People DONT accept this GARBAGE!!!!!!

This nonsense really gets sickening.

Social Security has never worked it is the largest legal ponzi scheme out there first in first out and leave others holding the bag.

A person only pays 6% from their payroll taxes the employer is forced to pay another 6% and then has to match that everytime some yayhoo says raise their wages.

People are forced to pay in to a system for over 40 years only to collect around 10 years more if they are lucky.

SS was a scheme to fund the government since the average person take more out than they ever paid in and then we have those who have never worked a day in their lives collect.

Then we have welfare where they collected that then the collect medicaid, and then off to the SS and medicare rolls.

The program has never worked over 70 million are currently on SS the average check is $1000k that is living it up.

SS supporters are worthy of the corrupt "wall street" cries but always turn a blind eye to it people have been lied and sold a bill of goods that government programs are the only way.

The fact is they have never been the only way a better standard of living out there has always existed except when those same people who push ss set contributions limits on IRA"s and other financial vehicles that lifted millions of middle class in to that 1 %.

But hey rest easy people are really going to be living high on the hog in their golden years.

Good old SS

We need to STOP the wars and stop building a GAZILLION BASES all around the world. Thats where we need to cut, PERIOD.

In FY 2013, mandatory spending is budgeted at 60% of total Federal spending, and 2 1/2 times as much as the military budget. The mandatory budget is estimated to be $2.293 trillion, a new record. The mandatory budget was $2.252 trillion in FY 2012 and $2.073 trillion in FY 2011.

he largest mandatory spending programs were Social Security and Medicare, as follows:
Social Security - $820 billion
Medicare - $523 billion
Medicaid - $283 billion
TARP - $12 billion
All other mandatory programs - $654 billion. These programs include Food Stamps, Unemployment Compensation, Child Nutrition and Tax Credits, Supplemental Security for the Disabled and Student Loans.

useconomy.about.com...

"This is where we need to cut" ?

Entitlement spending is 2 and half times defense hrmmmm go on those cut defense and put those people on those programs and take away the cash that funds all those entitlements.

reply to post by neo96


I dont see how paying a bunch of old folks about 1 to 2 grand a month could possibly be more than housing, feeding, clothing, training, arming, plus all of the equipment and real estate, guns, bombs, bullets, jets, aircraft carriers, land Etc
Are you saying social security cost more than the US military and its excursions?
I wanna see this comparison.
Of course in your comparison I would also want to see contract spending as well.
You know, our high dollar mercenaries, construction companies, trucking companies, Etc.

It's certainly true the fed has raided the SS monies on more than one occasion. Just as the state governments raid their own education fund (lottery) for general purposes.

However, we are well past the point of a simple "don't raid it" fix. Even if SS were to return to being only for SS the amount being paid in versus the amount being paid out is falling further and further out of line every year.

Just this year for the first time it became official that anyone paying in will only receive a fraction when it comes time to collect. Up until this year you could still expect a positive return. Not anymore. It is a negative investment. Which means that same money would be better stuffed in a mattress or simply left in a typical savings account than handed over to the government.

That's not propaganda. That's reality. The figures were just published last month I believe.


Posted Via ATS Mobile: m.abovetopsecret.com

reply to post by neoholographic


In (denying ignorance) let's look at the other side of the coin; social security is not a ponzi scheme.

Links: www.wisebread.com...

articles.latimes.com...

Reply to post by thisguyrighthere

Here it is: moneyland.time.com...


Posted Via ATS Mobile: m.abovetopsecret.com

Social Security is in a trust fund and is not part of the general budget. The government cannot touch it, and never has been able to touch it.

Reagan in the day raised taxes in order to keep social security solvent beyond the baby boomer generation.

Yes, in time, there will have to be an increase in Social Security taxes in order to pay for the younger generation, but that day is decades away.

The right wing wants to take social security away from the people and give that money to wall street and ensure that each and every social security investor has every single dime ripped off from them by people on wall street who gamble with the economy.

You all think it's a pyramid scheme or a ponzi scheme, but the real scam is the right wing trying to rid this great nation of a essential social safety net. They would rather that money go to the 1% and make sure that the lower classes starve to death well before they ever get a chance to realize they were duped by the GOP.

reply to post by HauntWok


I think you have "hit the nail on the head" so to speak. What you have stated is what I think is really happening.

A Ponzi scheme is similar to a pyramid scheme in that both are based on using new investors' funds to pay the earlier backers. One difference between the two schemes is that the Ponzi mastermind gathers all relevant funds from new investors and then distributes them. Pyramid schemes, on the other hand, allow each investor to directly benefit depending on how many new investors are recruited. In this case, the person on the top of the pyramid does not at any point have access to all the money in the system.

For both schemes, however, eventually there isn't enough money to go around and the schemes unravel.

Read more: www.investopedia.com...

Definition of 'Ponzi Scheme'

A fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for older investors by acquiring new investors. This scam actually yields the promised returns to earlier investors, as long as there are more new investors. These schemes usually collapse on themselves when the new investments stop

Read more: www.investopedia.com...

Ok, according to your link, the only reason it isn't a ponzi scheme is that they aren't lying about it. Except that they are...

See the difference? The Social Security Administration never pretended that investment returns were going to fund everyone's pension. They never lied and said that your contributions were waiting to pay your pension when you retired.

Yet every time conservatives want to cut SS, liberals whine and yell that they are just collecting the money that they paid in. Do you see the discontinuity there?

By dollars paid, the U.S. Social Security program is the largest government program in the world and the single greatest expenditure in the federal budget, with 20.8% for Social Security, compared to 20.5% for discretionary defense and 20.1% for Medicare/Medicaid.

• Year – Beneficiaries – Dollars[15]
  1937 – 53,236 – $1,278,000
  1938 – 213,670 – $10,478,000
  1939 – 174,839 – $13,896,000
  1940 – 222,488 – $35,000,000
  1950 – 3,477,243 – $961,000,000
  1960 – 14,844,589 – $11,245,000,000
  1970 – 26,228,629 – $31,863,000,000
  1980 – 35,584,955 – $120,511,000,000
  1990 – 39,832,125 – $247,796,000,000
  1995 – 43,387,259 – $332,553,000,000
  1996 – 43,736,836 – $347,088,000,000
  1997 – 43,971,086 – $361,970,000,000
  1998 – 44,245,731 – $374,990,000,000
  1999 – 44,595,624 – $385,768,000,000
  2000 – 45,414,794 – $407,644,000,000
  2001 – 45,877,506 – $431,949,000,000
  2002 – 46,444,317 – $453,746,000,000
  2003 – 47,038,486 – $470,778,000,000
  2004 – 47,687,693 – $493,263,000,000
  2005 – 48,434,436 – $520,748,000,000
  2006 – 49,122,624 – $546,238,000,000
  2007 – 49,864,838 – $584,939,000,000
  2008 – 50,898,244 – $615,344,000,000
  
  

1/6 of the entire population is collecting retirement benefits. That is unsustainable. In 2008, there were nearly 74 million children under 18 years of age in the USA.

For tax year 2005, 134,372,678 individual tax returns were filed. Of those filed, 99,880,223 actually had a tax liability and actually paid taxes.

Thus, only 1/3 of the population actually pays the income taxes(and thus FICA) which supports government spending. Again, unsustainable. Spending needs to be drastically slashed in every single category.