What is Digg?213 Comments
- SirBruce, on 09/28/2009, -5/+71"The deficits — $10 billion in 2010 and $9 billion in 2011 — won't affect payments to retirees because Social Security has accumulated surpluses from previous years totaling $2.5 trillion. But they will add to the overall federal deficit."
Uhh, what? That's not the way it works. There's no bank account with $2.5T sitting in it for Social Security... Congress spent it all already; the accumulated surpluses don't mean anything except as an accounting gimmick. It won't effect payments because the government will just keep printing money for the deficit spending. And once the 'surplus' is consumed and benefits are threatened, the government will just print even more money. - johnwayne1, on 09/27/2009, -7/+55And so it begins...........
- iamacyborg, on 09/28/2009, -8/+49Damn I wish I could opt out of social security and put the money into my retirement account instead where I actually have some chance of getting my deferred consumption back someday instead of a pile of useless government paper.
- eh123, on 09/28/2009, -23/+62Roosevelt's greatest gift to America is generation after generation of crushing debt. Thanks!
- Animan351, on 09/28/2009, -6/+37Having to pay into Social security that I will never see pisses me off so much. Especially when many of our Government officials don't have to pay into it because they get automatic lifetime paychecks after retirement from every ones tax dollars.
- rizzo2008, on 09/28/2009, -2/+33until you don't have enough young people to force into it anymore
- Wheelingdude86, on 09/28/2009, -11/+39They should have made it optional...
- jeffiek, on 09/27/2009, -5/+33They do when you have enough guns to keep everyone in it.
- bmcnally, on 09/28/2009, -3/+29The author gives emotional and moral reasons about why it isn't a Ponzi scheme. He never debates the point that the system relies on continuous income in order to pay off those who have already sunk money into it.
- SilverBlade2k, on 09/28/2009, -3/+28Wasn't this predicted like 10 years ago?
- emazur, on 09/28/2009, -2/+24We could have cut the shackles if Social Security if not for the big government, big intervention Alan Greenspan:
-this "high philosophic" adherent of laissez-faire saved the racketeering Social Security program in 1982, just when the general public began to realize that the program was bankrupt and there was a good chance of finally slaughtering this great sacred cow of American politics. Greenspan stepped in as head of a "bipartisan" (i.e. conservative and liberal centrists) Social Security Commission, and "saved" the system from bankruptcy by slapping on higher Social Security taxes. http://mises.org/story/359 - Phernoree, on 09/28/2009, -4/+25Try 60 years ago by Ludwig Von Mises.
- SystemicThought, on 09/28/2009, -9/+29And in 2000, we voted "Strategery" over "Lock Box"
- prisoner24601, on 09/28/2009, -4/+23That article is fluff. It's an incredibly ineffective attempt to define Ponzi scheme in such a technically precise and narrow way that it obfuscates the practical reality that Social Security is, without a doubt, fundamentally unworkable without wholesale redesign.
FTA: "It would take great political will, but the government could change benefit formulas or take other steps, like increasing taxes, to keep the system from failing." That's like Madoff saying at his trial: "I was genuinely hoping that a series of astronomically improbable changes in the market would come to my rescue and eventually make the paper gains I had promised people into actual ones."
We all know that Social Security was built on the absurd premise that ongoing growth in the number of payors would provide enough cash flow to satisfy the outlays to payees.
That, my friend, is a Ponzi scheme in the primary relevant aspect of the term. Any efforts to dismiss this or redefine the term to try to remove the stench of the name from the black hole for cash that is the SSA is subterfuge.
We all know where our money is going: Into wise investments that will grow and provide an increased return? Hardly. Into some safe deposit instrument set aside for me that will be available when I want to retire? Not even close. Into a house of cards that transfers my payment to someone else instantly, and I can reliably assume (but most do not recognize) will only give me some portion of my "investment." Precisely. - Akairenn, on 09/28/2009, -5/+24Madoff wasn't running a ponzi scheme either, it was an investment opportunity.
*nods* - reposado, on 09/28/2009, -4/+23Next is Medicare.
From AP news in 2008 "Medicare is in even worse shape. The trustees said the program for hospital expenses will pay out more in benefits than it collects this year, just as it did for the first time in 2008. The trustees project that the Medicare fund will be depleted by 2017, two years earlier than the date projected in last year’s report."
Before we deal with the two budget crisis the dems want to start a third huge entitlement program by giving health insurance to everyone. This will end badly for us all. - SeekerDarksteel, on 09/28/2009, -2/+20Yeah, it's like the government has $10 in its left hand. Then it's right hand writes the left hand an IOU in the form of federal bonds for $10. They trade, and now they have TWENTY DOLLARS.
>_> - omgwtflawl, on 09/28/2009, -2/+19It is for Congressmen. They don't touch the ***** they make us eat.
- superkendall, on 09/28/2009, -4/+21Anyone younger than 40 has known for a while we are not going to see a dime of SS we pay in, just as most people don't get money out of a ponzi scheme.
Nice while it lasted for you old folk though!
What a shame that true SS reform never goes anywhere politically. It would be nice to have even the tiniest percentage tagged as actually belonging to ourselves, that could never be spent by anyone until we retired. - superkendall, on 09/28/2009, -5/+21I don't think you understand the orders of magnitude involved here, where SS needs many Trillions and you are talking mere Billions (and with a very outdated figure to boot, as your quote is from the height of the surge).
I also think you can't just ignore problems overseas, or you will pay more later. Meanwhile Social Security would have always failed eventually just due to simple demographics, and Socialized Health Care costs more in all sorts of ways (including actual health) than privatized efforts. At least with Iraq we poured a ton of money in, and helped a people take back over the government from a true tyrant (unlike any U.S. president who people claim is one, Obama or Bush included). - Snuffs, on 09/28/2009, -5/+21sheer inevitability.
- DiggerLater, on 09/28/2009, -0/+15Check out the essay "Gold and Economic Freedom" by Greenspan. Great read. The guy's life is basically a portrait of hypocrisy and self-betrayal.
- jftitan, on 09/28/2009, -3/+18***** government...
- DiggerLater, on 09/28/2009, -1/+15It originally was.
- BlackJackJester, on 09/28/2009, -9/+23and these are the people you are trying to entrust your entire health system to? I don't ***** get it, I really don't.
- iamacyborg, on 09/28/2009, -3/+17If you're suggesting government intervention is necessary to prevent people from investing poorly for retirement, may I also point out that the two bubbles you cite are the direct result of intervention in the money supply by the Federal Reserve, a government chartered and entity with a legal monopoly on currency creation.
In any case, it's my retirement and I can plan for it by myself.
Next thing, they'll be passing a law requiring a Federal agent to wipe your ass for you after you take a *****. - reposado, on 09/28/2009, -6/+19Social Security will be in the red.
Medicare is even wroser off:
"Medicare is in even worse shape. The trustees said the program for hospital expenses will pay out more in benefits than it collects this year, just as it did for the first time in 2008. The trustees project that the Medicare fund will be depleted by 2017, two years earlier than the date projected in last year’s report."
Lets add a third huge federal government health insurance entitlement program(before we show healthcare cost can be controlled) and this one according to the dems will SAVE us money. Yeah right after it costs us a few trillions. - FearlessFreep, on 09/28/2009, -5/+18The only difference is that the investors in a Ponzi scheme are promised a big pay off as motivation to join whereas the 'investors' in Social Security are just legally required to with no promise of return...and the assumption that population trends and economic growth will keep social security from collapsing on itself, which is happening
- NoTiG, on 09/28/2009, -5/+17What right does the government have to take your money and "save" it for you? Is social security even constitutional?
- reposado, on 09/28/2009, -6/+18careful there... your messing with the liberal holy grail.
- RikkiTikki, on 09/28/2009, -1/+12I used to work for an employment network that worked with people receiving social security insurance. The Social Security system is completely screwed up, especially when it comes to disability insurance. After 9 months of working, if the client makes more than $900/mo, they lose their cash benefit. There's no financial incentive to keep working. If that cash benefit is more than what they're making, they quit their job. Social Security Insurance is even worse, because the trial work period doesn't exist. For every $2 they make, they lose $1 from their benefits check. It seems the vast majority of people who receive benefits can work, but it's not financially optimal. On top of that, Social Security pays employment networks like mine $1211 for every 1, 3, 6, 9 month periods every client makes above $350 (first milestone), then $700(2nd-4th milestones). Every month after the initial 9 months they make above $900, we get $350.
Who the ***** came up with that? - omgwtflawl, on 09/28/2009, -4/+15From your article:
"First, in the case of Social Security, no one is being misled. Madoff allegedly falsely claimed to have discovered a "black box" method of earning impressive results, and by doing so enticed individuals and organizations to invest with him. Social Security is exactly what it claims to be: A mandatory transfer payment system under which current workers are taxed on their incomes to pay benefits, with no promises of huge returns."
So because social security is upfront about stealing your money, its not a ponzi scheme. Got it.
Even if we accept what this guy is saying, it makes SS look even worse then a ponzi scheme.
"It's true that Social Security faces a huge burden -- and a significant, long-term financing problem -- in light of retiring Baby Boomers. (The latest projections anticipate Social Security tax revenues to fall below costs in 2017 and the Social Security Trust Funds to be exhausted in 2041.) But Social Security can be, and has been, tweaked and modified to reflect changes in the size of the taxpaying workforce and the number of beneficiaries. It would take great political will, but the government could change benefit formulas or take other steps, like increasing taxes, to keep the system from failing."
Looks like those predictions are coming to roost way ahead of schedule! And this author totally trivializes the problems SS faces. The problem can't be solved by tweaking the system. One glance at the numbers should be enough to tell anyone this.
"Third, Social Security is morally the polar opposite of a Ponzi scheme and fundamentally different from what Madoff allegedly did. At the height of the Great Depression, our society (see "Social") resolved to create a safety net (see "Security") in the form of a social insurance policy that would pay modest benefits to retirees, the disabled and the survivors of deceased workers. By design, that means a certain amount of wealth transfer, with richer workers subsidizing poorer ones. That might rankle, but it's not fraud."
I don't really see why that is morally the opposite of a Ponzi scheme. One encourages voluntarily handing over one's funds by lying about the returns, and the other involves forcing your funds away from you at the threat of violence, kidnapping, rape, and murder. Either way your getting *****, but at least Madoff won't throw you in jail.
The truth of the matter is the surplus funds that Social Security has been generating which were supposed to be saved for future benefits by the government have been systematically pissed away. If there were a "lockbox", it would look like the suitcase at the end of "Dumb and Dumber". Since that money is now gone, we use the money taken from people buying into the system now to pay for the benefits of past investors. That's what a Ponzi scheme is. - Phernoree, on 09/28/2009, -0/+11So...long story short... social security taxes will be going up soon to "save" social security.
- inactive, on 09/28/2009, -12/+23Haha ***** you, sperm! One day when the condom breaks and you make a little me he will be forced to pay for my retarded government's inability to balance the budget.
- scuvball, on 09/28/2009, -2/+13
Not that I want to bring facts into the discussion, but I have a couple problems with your emotional argument here. First, I want to agree with you that the wars are costly and that we probably should not be spending as much on defense as we are. The problem is, eliminating ALL of our military spending right now would not even come close to addressing the financial problems associated with entitlement programs.
Second of all, the argument is not based on fear, but on common sense. If you look at the numbers and truly understand them, there's no possible way you can say they aren't scary.
From my link (Let the following sink in for a moment)
http://usdebtclock.org/
Total Budget Deficit: $12 Trillion (accumulated over years)
Total unfunded liabilities+ $59 Trillion.
Total Tax REVENUE* $1.5 Trillion
+Includes Medicare, Social Security, Prescription Drugs
*YTD (let's say year revenue ~ $2 Trillion)
Without ANY government spending, it would take 30 years to pay those unfunded liabilities. Unfortunately, three of the top four budget items cannot be straight-up eliminated and are unavoidable. The only one not required is military spending, and obviously that will not be cut significantly anytime soon. If you take the three non-removable spending items into consideration, that is $1.3 Trillion (YTD). Even if every other item was eliminated from our budget, we'd only be able to put .3~.4 Trillion every year towards the unfunded liabilities, without even trying to pay down our current national debt.
The White House has estimated a $9 Trillion deficit over 10 years. Think about it: We are going to nearly double our national debt (and therefore the interest we owe on it), all while continuously accumulating more and more 'unfunded liabilities,'
So, I say to you: when you hear the arguments about higher taxes, budget deficits, government spending, social security, and medicare, these arguments are meant to inspire fear because THE GODDAMN NUMBERS ARE TERRIFYING! - SirBruce, on 09/28/2009, -1/+11Both parties borrowed from it. Clinton did it to claim there was a balanced budget. True, Al Gore supported the idea of a "lock box" in 2000... but it had tepid support among Democrats. Have you seen any Democrat talk about a "lock box" for social security since they got back in power? Not at all, at least not until they can pair up the necessary tax increase that would be necessary to go with it (unless they cut spending from elsewhere - ha!).
- Animan351, on 09/28/2009, -0/+10You'd have to be a congressman to get the benefit of opting out.
- PopcornDave, on 09/28/2009, -0/+9Younger than 40? Try younger than 50. I'm nearly there and I always knew I wasn't going to see one ***** cent of social security. I've never even bothered relying on collecting it and fortunately I've done some planning so I should be fine.
- kaelyiesta, on 09/28/2009, -4/+13You're right. Social security is not a ponzi scheme. It's worse. A ponzi scheme relies on fraud to get people to participate. Social security relies on violence to get people to participate.
- Animan351, on 09/28/2009, -2/+11Yep. just how it should work.
Take in xxxxx amount and pay out less over the years to develop $2.5 trillion more than has been paid out, but don't keep that extra money saved or invested for social security. That would be stupid. Spend the money instead because it's there, on other government stuff.
Damn it. we didn't take in more money than we have to pay out now and we already spent the extra money from years before (isn't this why the government decided we couldn't manage our own retirement savings?) so we'll just have to print out more money that's only backed by our good name as a responsible and stable government and increase our inflation and national debt instead. BRILLIANT!
/s minus what I put in the parenthesis. - Phernoree, on 09/28/2009, -0/+9Ron Paul goes into great detail about this in his latest book "End the Fed."
- eh123, on 09/28/2009, -9/+18I bet you believed Al Gore when he said Social Security funds are kept in a lockbox, too.
- cjhowe, on 09/28/2009, -2/+10Civil unrest comes to mind. Taking 15% of peoples income for 45 years with the promise that they'll receive income in retirement tends to make people a bit angry.
- Californication, on 09/28/2009, -3/+11Dammit people, how many times must I beg you to study your 8th grade civics books -- or at least give yourself a passing acquaintance with the Constitution!
Here is a fact: The president (Reagan, Bush, Carter, etc.) cannot spend a single penny without the explicit authorization of Congress. So, all money spent during any president's administration comes from spending bills passed by ... Congress!
So, you see, the argument that Reagan spent the Social Security surplus is out and out *****. Did he want to? Perhaps. But who actually authorized it (if it did in fact happen)? The Democratically controlled Congress, that's who.
So please, spare me and other readers your DNC talking points -- they get tiresome and only serve to reveal your ignorance. Read the damned Constitution. Please. - Rugmeister, on 09/28/2009, -2/+10If it might be in the red next year, then it is in the red right now.
- scotchw, on 09/28/2009, -0/+7I don't know what you think a "bank account" is if not an "accounting gimmick".
Unless you have gold, in your hand, it's all the perception of value, anyway. I say, the IOUs that Congress wrote to the Social Security fund are just as good as those little IOUs you're carrying around in your wallet. - Stiverton, on 09/28/2009, -1/+9America is likely facing a very inflationary future, pumping money into the system has that effect. The Gov't is trying to deflate the dollar themselves though, we'll see how that goes.
- Californication, on 09/28/2009, -1/+9Wafla, please buy a clue -- or at least return to the 8th grade to learn basic civics. Only Congress has the authority to disburse federal funds. The president literally cannot spend one thin dime without the explicit authorization of Congress. Take a wild guess at who controlled Congress during the Reagan administration. I'll give you a hint: it starts with "Dem".
So if you have something to bitch about, please direct it toward the responsible parties. Do not rely on old, worn out, disproved talking points of the Democratic National Committee to make rational arguments. - buzaman, on 09/28/2009, -1/+8Make Medicare and Social Security optional for anyone. Set an age, say 40 years old, any one younger than that date is permanently removed from the program and removed from paying. We continue to support the program until it is phased out by reducing government (Wars, Defense, welfare) and shifting money to help phase out the program.
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