The Homer Simpson Approach to Social Security
In a classic episode of The Simpsons, a hungry Homer Simpson runs out of donuts and breaks into his emergency stash. But when he opens the box, it’s empty except for a note that reads: “Dear Homer, IOU one emergency donut. Signed, Homer.” Homer curses his earlier self: “Bastard! He’s always one step ahead.”
It’s easy to laugh at Homer Simpson’s folly, but America is doing the same thing with Social Security financing, and the end result won’t be amusing.
In a recent Washington Post column, Charles Krauthammer described the federal government’s accounting shell game behind the fictional “Social Security trust fund.” He notes — and Obama administration officials acknowledge — that the federal government has already spent the Social Security surpluses of the last decades, replacing the borrowed money with so-called “special issue” bonds. But according to the Office of Management and Budget (OMB), these “special issue” bonds “do not consist of real economic assets that can be drawn down in the future to fund benefits.” Instead, they are mere promises to repay the borrowed money, just as Homer Simpson’s IOU is a mere promise to someday replace the borrowed donut. These “special issue” bonds are thus no more tangible assets than Homer Simpson’s IOU is edible.
To make matters worse, now that the Baby Boomers have started retiring, Social Security will no longer run surpluses but rather ever-increasing deficits, rising from $40 billion in 2011 to over $100 billion in 2021. As Investor’s Business Daily notes, these Social Security deficits will drain precious capital from the private sector that could have been used for productive investments — making the value of the “trust fund” less than zero.
But more fundamentally, not only is Social Security economically bankrupt, it is also morally bankrupt. Contrary to popular belief, Social Security is not a savings plan where people deposit their money during their working years then withdraw it once they retire. Rather, as Robert Samuelson recently described, it is a “pay as you go” scheme. Current workers are taxed to pay current retirees. When these workers retire, they’ll then receive money taken forcibly from future workers. Hence, Social Security is no different than any other Ponzi scheme, except that Americans are compelled to join whether they wish to or not.
Individuals are legitimately entitled to retire with their own savings or from money contractually owed them via insurance, private pensions, or other voluntary retirement plans. Individuals have both the right — and the responsibility — to plan for their retirements according to their own best judgment. This includes saving money as well as purchasing insurance (or entering into voluntary mutual assistance agreements with others) to protect themselves against unforeseen adverse circumstances that might prevent them from saving for the future.
But they do not have the right to confiscate other workers’ earnings to fund their retirements. The fact that current workers have already been taxed to pay earlier retirees does not give them the right to confiscate future workers’ incomes, just as someone who had been physically abused by his parents does not somehow gain the “right” to abuse his children in turn.
Honestly, I can’t believe Social Security has survived this long. In Australia, we started addressing this in 1984. The employer contribution (equivalent to FICA taxes, but well recognised here as part of your wages rather than a tax on the company) was diverted into personal private accounts called superannuation. It’s currently at about 9%. You own that money and it’s invested on your behalf under your control, you just have limited access to it in return for a concessional tax rate. Effectively it’s a state mandated 401k. You can contribute extra if you like (within limits).
It’s probably not enough yet – we still have an old age pension, albeit one that is limited and means tested. The original intention was to raise the contribution rate to about 15%, which would have made most people self-financing in their retirement. We’re not there, but we’re much better off than most countries.
As an added side benefit, it makes people very responsive to government regulations that hurt private businesses. Because everyone has a dog in the fight. It minimises the rapacious tendencies of governments because no one wants to see their investment portfolio devalued. So it acts as a useful check on government stupidity. Aligning the interests of the general population with the private economy is a good thing.
I like this scheme.
Those aspects of your system you identify as positive features would be regarded as bugs by our political class. What fun would Social Security be if you couldn’t tinker around with it from time to time? Under our system the politicos can bash conservatives and scare old folks into to voting for the right political party every time somebody proposes a rational fix.
While pensions will be a big problem in 20 years should we continue on this road, there is a greater problem within reach: European economy is collapsing under the burden of its ‘idle classes’.
Back when the rich were idle, maybe 5% of the population did not work, some were landowners, some had inherited their money. They provided people with jobs (and mistreated them too, I know).
Now we have an average 10% idle, living on the [forced] hand-outs of the working peoples. (This is an average – some areas it is 30%!)
Labour bosses are of course on the side of these prions, since the labour bosses have always lived off the work of their ‘sheep’ (or at least since ~1880) as see nothing wrong in this.
The offspring of this 10% is providing the much needed pyramid base to counteract the old-age demography – in theory!
In practice, it just means that in future the resources will be drained from both ends since many of these offspring have learnt by example and are happy and willing to become members of the new ‘idle class’.
Then, when the workers realise that they are working to keep 2+ other families – who offer nothing in exchange – they will go away, either to another town or, if necessary, to another country, leaving the NIC to starve.
The Democratic/Labour/Left parties count heads not brains, voters not workers. Europe is breaking down under the burden, just as the so-called Ottoman East broke down long ago and is now full of slums and starving children.
Not until there is nowhere left for the workers to go will they stand and fight.
Better too soon than too late.
I feel the same way about islam..
funny you mention the sick man of Europe..
Great comment…
Doc, I understand and agree with your premise to a point. What about the working man who has not accrued a 401K or any wealth? While the philosophy of your pact makes sense, this worker has contributed 6.2% of his income with a match from his employer.
I saw Anthony Weiner debate Jason chaffetz yesterday about the budget showdown. Weiner stopped Wolf Blitzer in his tracks when Wolf said SS was not solvent. Weiner went immediately to a liberal screed about the fact that SS is absolutely solid till 2037 or so and we can take that off the table. An outright lie we know but they do it without even thinking. Weiner and most far left liberals will never be realistic or even agree with facts that don’t suit their goals. they must be defeated!
Giving up our rights for the younger generation will only be used by them like they use tax increases on the rich. they lie and will always do the wrong thing when able to demonize a conservative, a Tea party member etc. When we give them an inch, they will take a mile. They negotiate ruthlessly and give no ground, we must do the same.
Smaller government, more individual liberty, strong defense, drill oil, mine coal!
What about the working man who has not accrued a 401K or any wealth?
The country of Chile has no SS. It has a system which uses something like mandatory 401ks. Everyone is required to contribute at least 10% of their income. If when you retire you lack enough in your account to provide a subsistence living, then the government will help you. Their system has been very successful. Most people are able to save for their retirement and the minority who cannot accrue wealth are also taken care of.
I think this is something that can work in the US.
TennesseeVolunteer: I address the issue that you raise here in a later comment on the thread: http://pajamasmedia.com/blog/the-homer-simpson-approach-to-social-security/#comment-967026.
One way to put the problem in perspective is as follows: Tell them to get out their annual Social Security statement from the government, add up all the wages that have been taxed, and multiply by 12 percent. That’s the amount you and your employer have paid into Social Security. Divide that number by your expected monthly Social Security payment. The result is the number of months you can live on your Social Security contributions. After that, you’re on welfare, and living off of someone else. If you are still working, estimate how much you’ll earn until retirement, add that in, and repeat the formula.
Hey David,
To save everyone some time I ran two separate scenarios using the SS benefits calculator on socialsecurity.gov. Two different taxpayers retiring in 2011 after 35 years of average earnings of $50k and $100k.
1) $50k/yr: SS payment = $2,288/month -> ~$27.5k/yr covers ~8 years.
2) $100k/yr: SS payment = $2,548/month -> ~$30.5k/yr covers ~14 years.
SS is clearly a redistribution of wealth scheme.
Here’s my solution: we have vast quantities of land owned by the Federal government. Let’s sell those lands and use the proceeds to give everybody their money back. Due to the scale of both operations, this will take several years, but it is an equitable solution that neither defrauds the young nor abandons the old.
The US govt is bankrupt? But Charlie Martin assured me that we were fine.
I beleive he said we’d be fine if we halted the last several year’s increases in spending and resumed normal growth. That means there is no contradiction between that post and this post, this post assumes we will increase spending in the future as we have in the past, and that we will not adopt growth friendly legislation.
And what, exactly, is the difference to a government between a box of IOUs and a box of paper dollars? A paper dollar is nothing more than a note saying, “I owe you one dollar. Signed, Society.”
And what if space aliens in a flying saucer took pity on us, calculated the money a retiree needed to live well, and gave that money IN GOLD to every retiree on the planet. Would that do anything more than to cause the price of gold to plummet — thereby destroying those retirement incomes even before they began?
Before social security, people depended on their children to support them in old age. No children, no old age support. Now, with social security, we rely on society’s children in general. No next generation, no old age care support. (It’s pretty much the same if, instead of having children we replace ourselves with impoverished Third Worlders.)
Nope. The IOUs are real debts of the Federal government and represent part of the nonpublic debt component of the federal debt which is running up against the debt ceiling next month. That makes them really real.
But it also illustrates the futility of the current scheme of issuing IOUs to SS. Suppose we were to keep raising SS taxes in order to pay current SS outlays with any surplus going to the general fund thus continuing to pile up IOUs? That would solve the current problems but as a child could see actually just exacerbates future problems. Until the boomers die off and we reach some kind of demographic equilibrium we are in a pickle. Medicare dittos.
FYI SS also runs the disability insurance program SSDI.
They are receiving a record number of applications. Many of these people have been collecting unemployment for 2 years and when that runs out they are trying to obtain disability.
If the job market does not get much better fast, SSDI is also going to be running in the red in a big way.
You are absolutely right, and I don’t believe the general population has a clue as to how many perfectly able, young people collect SSI. The stories I’m hearing from friends who work at SS, it makes my hair hurt.
There are towns in Kentucky, I have read, where every child is on SSDI for “ADHD.” EVery child !
You should call Congressman Paul Ryan and ask for the child SSI benefits (for those under 18) to be discontinued.
…. Robert Samuelson recently described it as a pay as you go scheme ….
What utter rubbish.
Social Security is the world’s biggest ever Ponzi scam!
Part of the very real and lasting legacy of the traitor: Roosevelt. His Uncle Joe’s disciple for the ages!
…. Robert Samuelson recently described it as a pay as you go scheme ….
What utter rubbish.
Social Security is the world’s biggest ever Ponzi scam!
Part of the very real and lasting legacy of the traitor: Roosevelt. His Uncle Joe’s disciple for the ages!
Actually, it’s a pay-as-you-go system that *became* a Ponzi scheme. The original system was based on two premises: the actuarial UN-likelihood that people would even reach 65 and begin collecting (average lifespan then was in the 50s) and a large base of workers to support a small number drawing a pension. Well, today the average lifespan in the US is approaching 80, while roughly three are paying for each retiree. That’s simply unsustainable.
Me, I’m an “unfunded liability” of a different sort – collecting a generous US civil service pension. But as SS goes broke, I expect CSRS will also be crippled. My immigrant father, even back in the 1960s, mocked people who counted on social security, and it alone, for their retirement. Luckily I took that to heart, so my nest egg is secure unless the dollar collapses. (Uh oh…) But if that happens, we’re all royally screwed. Maybe he should have told me to buy gold.
The unknowing masses of baby boomers are about to find out the truth behind FDR’s giant pyramid scheme. This will make Bernie Madoff’s con game look like a Girl Scout campfire marsh-mellow roast.
Social Security has been broke for years and everyone refuses to acknowledge it. Thank God for taking FDR out of this world-ironically this day (April 12th)is the anniversary of the day he died.
The stock market will surely take a giant hit as these babyboomers start selling off their stocks to buy cans of dog food just to survive on.
Thanks; to this and all previous Congressional Sessions for bankrupting our Social Security System. You guys and gals deserve to be hung high on the nearest tree for your participation in this treasonous robbery of our money and our future.
When will the Justice Department start prosecuting the people who really run continuing criminal enterprises, such as the fraud committed by our elected representatives. They should implement the RICO statutes against these theives.
Ditto, Ditto, Ditto. We are being ruled, not represented.
If the criminals in Congress had not been permitted to MISAPPROPRIATE THE FUNDS, like they have done, and continue to do, with other programs and departments, Social Security would not be in the shape it is in today.
Consider the fact that government workers have their own retirement plans. These have evolved over the years, but, they still have them; Separate from Social Security, and DEDICATED to a retirement fund that cannot be MISAPPROPRIATED.
You should have expanded on the Homer Simpson theory, describing where the money actually went that was in the emergency donut box. In this case, there are Congressional records to indicate where these funds were allocated.
Example: The Post Office Dept. has been take off it’s budget and placed on a “general budget” by act of Congress on a Monday; Excess Postal funds (when there has been a surplus) were taken and placed into the “general budget”. On Tuesday the Post Office Dept. was placed back on it’s own budget by another act of Congress. Then next year the Post Office Dept. shows a loss. Too bad; That money has been spent on Planned Parenthood.
All government agencies ‘waste’ what revenue they have at the end of their fiscal year. They are not allowed to carry any over. If all is not spent, their budget is cut for the next fiscal year.
You have written a concise, sensible article. BUT, MISAPPROPRIATIONS AND WASTE HAVE NOT BEEN ADDRESSED.
Is there any wonder why Congress has no fiscal responsibility when they have so much freedom to play with as much money they want to play with? They act like juveniles that have just been given a huge inheritance.
Damn it! It took me so long to write this, my donut got stale! That’s an unconscionable waste!
Economic historian Niall Ferguson argues that governments with more debt than they can pay apply a variety of solutions but governments like the United States do two of them: Force bondholders to accept years of negative real returns and to cut spending on the politically least powerful groups. The way to force bondholders to accept negative real returns is to inflate the currency faster than the interest accrues. Yet, Social Security is indexed to the rate of increase in labor productivity (not the C.P.I.). We cannot grow our way out of this debt since S.S. benefits will grow along with productivity. Even if S.S. benefits were indexed to the Consumer Price Index, inflation would drive up those benefits also. Short of a cut in real benefits, that leaves higher taxes on politically defenseless groups. If that happens, it will come in the form of a Value Added Tax, shot through with as many exemptions for the politically powerful as the income tax code already is.
TennesseeVolunteer: I address that issue in the article that Paul cites. It is wrong to speak of workers having *contributed* 6.2% of their income with a match from their employer. They have not made contributions to a fund of real assets, which would entitle them to a share of those assets on retirement. What they have been doing in fact is simply paying another income tax, since under the law that is all that Social Security “contributions” really are. For details, I recommend the article that I cite, “Property Rights: The Hidden Issue of Social Security Reform,” which explains these issues in more detail.
http://www.socialsecurity.org/pubs/ssps/ssp19.pdf
The law (confirmed by Supreme Court rulings) has stated for generations that no one is *entitled* to have a thin dime of their payroll taxes returned to them in the form of Social Security payments, and congress can alter or abolish the program at will. That most Americans don’t know these facts about the system points up both the deceptive language with which the federal government has “sold” it, and the lack of civil due diligence that this nation’s citizens have exercised in learning about and understanding it.
Hi Tony,
Great point. I was shocked to discover the 1960 US Supreme court ruled that entitlement to social security benefits is not a contractual right. This means that SS is an entitlement program.
Yet another great article, Paul.
George Reisman has posted a revised and expanded treatment of how to phase out Social Security and Medicare (from his book ‘Capitalism: A Treatise on Economics’). It’s a must read after you finish Paul’s article.
http://georgereismansblog.blogspot.com/2011/04/how-to-eliminate-social-security-and.html
C. August,
Thanks for the link. Reisman is always edifying.
I was inspired by Reisman’s idea to get retirees to delay retirement several years. Anyone 66 – 69 would continue to work and would pay no Federal taxes but they would be ineligible for SS payment.
It would encourage those interested in working to continue working while removing them as a liability in the system.
Cybergeezer wrote: “If the criminals in Congress had not been permitted to MISAPPROPRIATE THE FUNDS, like they have done, and continue to do, with other programs and departments, Social Security would not be in the shape it is in today.”
I wish it were that simple, but unfortunately it’s not. The more fundamental problem with Social Security is that it’s not only a program that doesn’t work, but a program that *CAN’T work*. The reason, in a nutshell, is that to finance retirement savings, one has to invest in *assets with actual value* that can be redeemed when benefits are to be paid out. That’s how pensions, 401Ks, and so on, actually work: they’re invested in things like stocks and bonds that convey a right to a share of the profits of productive enterprises that actually create wealth. The only “asset” the government has to offer, by contrast, is a promise to tax its citizens.
So specifically, what would you propose that the government should have done differently with the last 70 years of payroll tax reciepts? The only workable approach to backing the “trust fund” with real assets would have been to purchase stock in American companies. But the scale of the assets that would be required would give the federal government massive ownership over those companies, effectively socializing the economy. This is why under a capitalist system, the only workable system of retirement savings HAS to be a private one.
Mr. Donadio;
What about the federal workforce that DOES have it’s own retirement plans? Why have they NOT BEEN PILFERED by Congress to buy/pay other ‘obligations’?
As I stated; Congress enacts a law on Monday to appropriate funds from, one or more, agencies. And on Tuesday enacts legislation to put those agencies back on their own budget. This is basic, everyday, Congressional fiscal mismanagement. GOVERNMENT AGENCIES ARE NOT IN BUSINESS TO MAKE A PROFIT. They are required to spend their annual allotments, or next years budget will not equal or surpass the prior years allocations. This is why the Post Office Dept. has losses from year to year; They are not permitted to carry over any profits.
Most States are required to maintain some resemblance of a ‘balance sheet’. Congress does not; And they love it just the way it is. No one, within an arms length of their Congressman, will ever have to eat dog food. If there weren’t huge sums of money to be made as a Congressman, and a guaranteed cushy lifestyle, for the rest of their lives, there wouldn’t be as much spent on campaigning for these offices.
I was a federal employee. There once was a system by which both the employee and the government contributed to the civil service retirement system. Congress at some point decided that they were always good for their share, and stopped contributing. When I left civil service, I was able to get my money back out. The congressional share, which had not been contributed, was not available to me. (Why take it out? The golden handcuffs: your wage contribution is adjusted for inflation if you are in civil service, or if you are retired, but not if you leave CS for private industry.)
Civil Service Retirement system is much the same as Social Security: funded partly by the current employees who pay the current retirees, and a government promise to tax as necessary. As long as government keeps increasing in size, the employee contribution will be able to pay for the retirees.
“I was a federal employee” was all I had to read.
As of 1986, CSRS has been discontinued.
Google your research to get up to date.
You should have kept your federal appointment. Best retirement programs going for wage grade level employees.
Excellent point!
See my comment at the very top of the thread. Give the payroll tax receipts to the individuals and allow them to manage their money themselves, with restrictions. Then they rather than government invest in companies and you’re not socialising the economy. Better still, those people then have a stake in the economy being managed well.
Such a simple answer.
Give the payroll tax receipts to the individuals and allow them to manage their money themselves? What purpose does the tax serve, then? Why not just eliminate it and let them keep their money and invest it the first place? That’s the real way to reform the system.
Not necessarily. One way around that problem would be to run the Social Security Administration like the State Divisions of Investment, who are responsible for managing State Pension Funds. A custodian will hold the securities, and the government can forfeit their voting rights on common stock. The Director and his subordinates will be accountable only for producing returns while taking only acceptable levels of risk, and the position shall not be political. The government owning a large chunk of American companies or their debt is not a problem unless that ownership is used to influence their operations. If, however, it’s simply a matter of professional money managers making decisions based on what’s best for their clients (in this case, the American people), there is no difference between the investor who works for the government and the one who works for Berkshire Hathaway or Blackrock.
I want to know what the government used all the Social Security money for. Is there a way to find out I wonder. Who signed the IOUs.
Hey Bob, if you really want to know, go to
http://www.ssa.gov/OP-Home/ssact/ssact-toc.htm
Did you know that every county in every state gets $1.00 for every $2.00 collected for child support to fund their budgets. (I believe this is in Title IX)Given the fact that most child support is automatically garnished from wages by the employer, why allocate SS dollars to the counties? And although I feel every parent should be responsible for the emotional and financial support of their children, why is this being funded with SS funds?
Hey Doc- With all due respect, but as a successful radiologist in your thirties, it’s easy to argue you’re willing to sacrifice what you have contributed to date in order to end SS. I wish I had the option when I was your age too. Having contributed the maximum for the last 20 years and being on the last leg of my earning years, I just want my money back. All of it, the full 12% contributed by myself and my employer. My contribution is that I will forgo all earnings and interest.
For the record, I am a fiscally conservative, constitutionalist republican with very strong libertarian, tea party leanings. I must say however, as someone whose employer, as well as myself, have been required to pay a combined total of 12% of MY income into a government run retirement fund, I strongly resent Social Security being referred to as an entitlement program. Social Security was meant to ensure that every working person had some resources in retirement. The assumption being that there are those among us not disciplined enough to provide for themselves. Social Security is in trouble not because of a shortage of contributions. It is in trouble because the politicians couldn’t stand it any longer that there was a huge amount of dollars out of their reach. Further, the current crisis is being exacerbated by the large number of retiring baby boomers. So the same greedy, sleazies are fooling you into believing that the funds are not in fact yours but some kind of entitlement that they need to place further from your reach. Don’t fall for this BS. Think of the retiring boomers as a sort of bubble that will pass as they die off. If the prostititions have their way, we would welcome the rules being changed to reduce the likelihood of ever recouping anywhere near what we have contributed. The politicians need to get their sweaty, grimy paws out of the cookie jar and rededicate all of Social Security’s funds to pay only what it was originally meant to pay. If you really want to get upset, actually read the entire social security act, specifically for all the extra programs that it pays for beyond its original intent. Our corrupt representatives have turned Social Security into the worlds largest Ponzi scheme and anyone who has had SS deducted from their pay is the victim. The Social Security Fund should be solvent. Imagine a Mutual Fund company that was guaranteed 12% of every tax payer’s income from their first job until some 40-45 years later when they retire. Also, if that person should die without a spouse or children under 18, the mutual fund company could keep all the contributions. Anything left when the spouse dies, or the children reach 18, would also allow the company to keep any left over funds. This would be the richest and largest accumulation of wealth on the planet. Ask Jack Bogel or anyone who understands mutual funds. So please, don’t be a fool’s fool. Social Security is not an entitlement. In it’s current form it is a scam whose operators should be imprisoned just like Bernie Madoff, and restitution guaranteed.
For clarification. I have been paying into SS for 40 years. Paying the max for at least 20 years.
jPulcinella;
Hear! Hear! Well stated.
My work life spanned 46 years. If my money had been used to buy Savings Bonds, I’d be so rich I wouldn’t even know Pajamas Media existed.
Bernie Maddoff should have been a Congressman. His actions would have been legal in that capacity.
There’s nothing wrong with what you’re saying JPulcinella. But the money is gone. There’s nothing for it to be paid back from. You can punish the perpetrators, but you’ll never see a cent. They can promise all they like, but you won’t get it. Don’t believe anyone who says that you’ll actually get it. They’re lying.
See my first post about what should have happened 25 years ago, when it was blindingly obvious that SS was not sustainable.
We can start by confiscating all the assets of the perpetrators. These assets are considerable given the fact that most arrived in Washington of modest means, but almost all have become and/or have retired multi-millionaires. How did that happen?
JPul’s response is perfectly understandable, and perfectly futile.
There simply is no money, and the Chinese who are currently funding Social Security could care less if you live or die. There are plenty of people to blame, but no one to take responsibility. The people responsible all built statues of themselves and retired. The teachers who lied to you in grammar school about the “trust fund” are long dead.
There’s going to be a lot of perfectly justifiable complaining, but the time to do something about this with relatively little pain was decades ago running right up through 2008 (somewhere between the first bailout vote and the election of Obama). We’ve known since that SCOTUS case in 1960 that the “trust fund” was a bunch of nonsense. It is, as some famous con bloviator puts it, the most predictable crisis in history.
Rest assured, few to none of the writers or commenters here can afford to retire comfortably on their own. But there’s no way around doing something. Tax the rich and the already farcical “recovery” is completely wiped out, and 35% of nothing is nothing. Either we restructure SS, or the Chinese do it for us.
“We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program.” — FDR recalling why Social Security was based on payroll contributions, 1941
“…legal, moral, and political right to collect…”
I guess I just prefer to be kissed first.
I don’t expect to be taken care of by anyone.
Fair enough JPul. I’m not accusing you of expecting something you don’t deserve. Of course you do. It’s just a shame someone else spent the money.
FDR was wrong. He says “…legal, moral, and political right to collect…”
Legal? No parliament can ever bind a future parliament, so no. Even the Constitution can be amended, it’s just a higher bar. Nothing is immutable.
Moral? Well, yes, I’ll stipulate this one. Shame they lied to you though.
Political? Ah, well, there’s the rub. For decades the political ‘right side’ on SS has been to pretend it can work. Eventually it will matter more to encourage employment. And benefits will be cut or means tested or both.
You’ve been screwed. Sorry.
the funds in SS have already been stolen. Now what cha going to do?
Should we turn to a life of government enabled crime, stealing by proxie from the next generation? Perhaps start a new career as a bank robber?
I don’t expect to retire. I hope to continue to work productively as long as I can. I think there are people in our country who need the product of my work. My children will not have a chance to retire either, with the economy destroyed. Gold will again be be stolen by the government and banned, as it was in the days of FDR.
I don’t see a good answer.
Good luck getting a new job after you turn 55. You might have to retire after your unemployment benefits run out.
Better get a federal job quick.
How about US silver coins, dated 1964 and earlier? As far as I know, they’re still legal tender, though their silver content is worth nearly 30 times face value. The point is that since they are legal tender currency, there is no basis on which the government could seize them even with fair market compensation.
There are ‘currency hedge funds’. DIVERSIFY.
“[T[he overall guiding principle of any such discussion must be that the government should not compel a man to pay for his neighbor’s retirement against his will any more than it should compel him to pay his neighbor’s mortgage — or his neighbor’s medical bills. Instead, the government should leave individuals free to plan for their own retirements (or not) according to their own best judgment — and enjoy the rewards (or suffer the consequences) of their decisions.” The Socialists believe exactly the opposite and will riot in the streets rather than permit this anti-Socialist philosophy to become an operating principle of government.
What is it about the Left and the Right that inspires them to rail and rant against some of the greatest things about our Country?
Do you suppose it is just jealously that despite their protestations we remain the greatest and most successful country on the earth?
Gee, giving Blacks full civil rights and allowing women to compete in the workforce didn’t end civilization, freedom or the free market world.
What will be next?
No tin huts at the outskirts of the cities and a healthy population?
Horror!
Ozzy, are you on drugs? Is there some sort of point in there somewhere?
Heh, that was the exact phrase I was about to use.
Are you trying to say Social Security is like civil rights or suffrage? Because no one has to pay for the latter.
And what “makes America great” (or different at all) is what its citizens do between the ages of 15 and 65, not the particular welfare system in which they spend their dotage.
The Biggest Dirty Little Secret about social security is how many public employees, including teachers, police, bean counters and pencil pushers, aren’t part of the social security system at all. They don’t pay into SS and they will never take any SS benefits.
Those folks, due to their public sector unions’ hold on the democrats, are already at the fulcrum of maximum political power.
What do they care if SS exists or not? They could pull the plug tomorrow and they wouldn’t be hurt one penny.
I think you have the wrong Homer Simspon approach. From Homer Goes To College:
“I’ve been working on a plan. During the exam, I’ll hide under some coats, and hope that somehow everything will work out.”
Does this not exactly match the current attitude concerning entitlement spending?
JPulcinella wrote:
“…have been required to pay a combined total of 12% of MY income into a government run retirement fund,…”
that’s the point, you didn’t pay into a “government run retirement fund” you paid a tax, and that revenue was spent and now it’s gone, and you want the government to steal someone else’s money to pay you.
Precisely, and well put. Thank you.
“We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program.” — FDR recalling why Social Security was based on payroll contributions, 1941
“…legal, moral, and political right to collect…”
HE LIED. That’s the naked fact of the matter.
There’s no question that the statements made during the process of “selling” Social Security to the American people were laced through with what can only be called falsehoods and fraud. The easily verifiable *facts* of the matter show this to be the case, and are laid out in the article I cited earlier. But that’s nothing new; one only has to look at the deceptive claims with which the same was done to “sell” ObamaCare to see that this political technique has been alive and well in the country for decades.
The point, though, is that after seventy years, the American people simply no longer have any excuse *not to know* these “open secrets” about how the Social Security system works. As I wrote in the comments on the article that Paul cites: “Individuals in a free society have an obligation to exercise a basic level of civic responsibility, and cannot claim to be innocent victims if they do not do so… Social Security in the United States is not a contract. This is openly available knowledge to anyone willing to devote the minimum civil due diligence to learning about such a large and important part of the American political system…”
This quote was not taken during the sell phase. This quote was taken during an anniversary celebration of the passage of the social security act.
So?
I wasn’t born during the sell phase.. I was not represented..
I demand a referendum
Or you can do this:
“Trying is the first step towards failure.”
“Kids, you tried your best and you failed miserably. The lesson is, never try.”
What’s the solution then?
“To alcohol! The cause of — and solution to — all of life’s problems!”
Indeed, the Universal Panacea, “Victory Gin for everyone”, Obamacare’s sacred promise to the People!
Like JCL, I expect the theftists to riot if the gravy train is cut off. Just look at the recent civil disorder in Wisconsin at the mere threat of a lessened capacity to demand more.
As far as the government selling off assets to pay down debts, how does the value of assorted federal lands compare to the federal debt?
This same moral calculus applies to some extent to every federal liability. If I buy a corporate bond, I’m lending money to shareholders who promise “I’ll pay you back, or the person who voluntarily buys my stock will pay you back, or we’ll lose our entire investment while trying.” If I buy a 30-year government bond, I’m lending money to taxpayers who promise “I’ll pay you back, or my kids will pay you back.” The morality of fulfilling these promises does seem to hinge on the fact that the shareholders get a chance to opt out, but the kids don’t. Even progressives might be bothered that the kids’ liability can end up being a regressive wealth redistribution: kids benefit from their parents’ overspending in proportion to their inherited wealth, they pay for it in proportion to their income, and while those are correlated the net effect is still a benefit for old money at the expense of new.
On the other hand, while this has been an interesting theoretical exercise, does anyone actually expect it to mean anything in practice? Grandma’s depending on her social security and her “safe” T-bill funds, and even if the laws of economics make it impossible for her to see all that retirement wealth, “the centrist and disproportionately-elderly voters will decide that it’s immoral to pay her anything” seems far less likely than any combination of “hyper-inflation will make her payments worth less”, “means testing will make her payments nominally smaller”, and “magic elves will save us”.
roystgnr wrote: “This same moral calculus applies to some extent to every federal liability.”
I think that’s why Thomas Jefferson wrote, in 1789, that:
“But with respect to future debt; would it not be wise and just for that nation to declare in the constitution they are forming that neither the legislature, nor the nation itself can validly contract more debt, than they may pay within their own age, or within the term of 19 years.”
“The morality of fulfilling these promises does seem to hinge on the fact that the shareholders get a chance to opt out, but the kids don’t.”
I think that’s right. It’s one of the fundamental differences between private and government action: imposition by force. That’s what distinguishes a government from any other social institution: that its acts are ultimately backed by enforcement by the police.
“Truth in Lending” – I am retired and receive Social Security. I understand and agree with the point that current and future generations should not have to pay for a portion of my retirement when they are not likely to enjoy similar benefits. However, there are a couple of points that deserve some consideration. For many years I have received statements from the Social Security Administration promising a sum of benefits to be paid given my length and amount of taxes paid as contributions to the OASDI. I understand the Supreme Court Ruling that I have no legal claim to those payments. However, consider the other holders of promises to pay – such as the governments of China, Japan, and U.S. Citizens who hold bonds. If the government defaults on promises to its own citizens, how confident would you be as a holder of government debt? What are the implications of that issue on other government debts now and in the future?
For myself, I am willing to stop any benefits if the President of the United States, the Senate Majority and Minority Leaders, the Speaker of the House and the House Minority Leader would publicly agree that Social Security is bankrupt and apologize for the lying charade that they and their predecessors have promulgated. If they will agree and state that Social Security is nothing more than a welfare plan, I will be happy to get out of it and consider my payments as nothing more than robbery that I have no recourse to recover.
>If the government defaults on promises to its own citizens, how confident would you be as a holder of government debt? What are the implications of that issue on other government debts now and in the future?<
Holder of "government debt" aka BONDS. I would probably be more confident since my concern would be the ability of the government to PAY off my BOND as well as PAY the interest on it. That the government is shortchanging its citizens by changing a law regarding payments to citizens is of no particular import since the two obligations (bonds vs social security) are not the same.
OTOH, if the government went the other way — defaulting on its bonds while keeping social security as is — that would be workable though the default on bonds would impact the costs of borrowing money, (most if not all borrowing) since the default would be taken as increasing risk for the lender for which they'd want more interest to compensate, to make the payments on social security.
“Lockbox!” –Al Gore
“D’oh!” –Homer Simpson
If FDR, (or any Congress or President for that matter), after enacting the Social Security Program in 1935, had formed an administration, such as the Federal Retirement Thrift Investment Board (1986), or the U.S. Railroad Retirement Board(1935), Social Security would be just as solvent as these programs.
The fact that no oversight authority was ever appointed, indicates that this program was intended to be a slush fund, and misappropriated.
It’s not as if they were simply ignorant of fiscal administration. The Railroad Retirement Board, founded in 1935, indicates they were not.
This has become nothing but another employment tax, under another name, that “We The People” have let slide through the hands of these Congress Criminals for way too long.
At least Homer Simpson got to enjoy those donuts he borrowed from himself. We are unlikely to be that lucky.
Even if Social Security had not become the Ponzi it has evolved into, it still would have become unsustainable, although just not as fast. Social Security was predicated on an expected life of 65 years and a growing population. Expected lives are reaching 80 and the population is growing slowly, and then only because of immigrants. Those immigrants, though, are preponderantly low income (with many being off the books because they are illegal). (Note that Medicare has only exacerbated the Social Security issue.) So what do we do without causing a major calamity for all concerned?
I have several proposals, some short-term and some long-term. The short-term proposal is to raise the retirement age to 70 for anyone under 55 and to 72 for anynone under 35. Another short-term proposal is for the Federal government to begin selling off Federally owned land in the West, the proceeds from which would go to fund Social Security in the short-run. (Secondarily, the unified budget should be done away so that Social Security can be walled off from the rest of government expenditures. That way, the deficits Social Security will generate will not bend the whole budget process out of shape.)
Finally, my long-run proposal is to phase-out Social Security as currently constituted. To do that, I would increase the retirement age by one month every year for every individual turning 21 in that year. (For example, those turning 21 in 2012 would retire at 72; those turning 21 in 2013 would retire at 72 + 1 month; those turning 21 in 2014 would retire at 72 + 2 months, etc.) Eventually, the retirment wage would exceed the expected age at death or could actually exceed the oldest person on earth so no one will ever get Social Security.
Those proposals would buy time to allow us to come up with other retirement mechanisms that are not the defined benefit plan that Social Security is. I am, however, uncertain what kind of plan would accomplish something comparable to the goals of Social Security.
You have so many misunderstandings in your statement, I cannot, within reasonable space, address them all.
I will address this “defined benefit plan” idea.
Social Security is as far from a “defined benefit plan” as you can get. Most people my age have been saying for years, that they hope S.S. would be there for them when they retire. They had hardly any idea of what they would receive in benefits.
Defined benefit plans are as simple as; You put away X amount, and you will get X amount upon retirement.
Do you really think S.S. is anything like this?
Being that the Railroad Retirement Board was founded the same year as Social Security, and the RRB is still functioning without the problems that S.S. has, indicates that Social Security was always intended to be just another employment tax, albeit with a distracting title.
Cybergeezer – It’s defined benefit plan in the sense that you put in money and you are promised a certain amount of money based on your wage. Of course, we can quibble about what to call Social Securit. If you have better name for it, then by all means, share it with me and I will use it. (BTW – A defined benefit plan is what your company tells you you’re going to get on retirment; of course, if the company goes belly-up, you would get nothing [until ERISA came along].) In any event, beside the disagreement about what to call Social Security, what about the substance of my proposals?
So; You think they’ll pay you X amount for having X amount deducted from your pay for 40 years?
If you have any X-wives, they may have an entitlement to your benefits. One of your kids could, also. If you get any Federal Pension, that will reduce whatever benefit, etc. etc.
There are NO GAURANTEED BENEFITS.
The ‘estimates’ they send are ‘ideal’ estimates.
Social Security has become a colossal FRAUD. It’s like crack cocaine for Congress; They’ll never kick that habit. Rename it, maybe, but NEVER kick the habit.
Cybergeezer – I know there are no guaranteed benefits, but neithr are there on a defined benefit plan (at least until ERISA). Remember Studebaker? They had a defined benefit plan until Studebaker went belly-up.
But again we’re quibbling.
Here’s my plan in a nutshell:
1: Increase retirement ages
2: Temporarily fund Social Security by selling off land owned by the US governme nt
3: Discard the unified budget and wall-off Social Security (and possibly Medicare) from the administrative budget so it does not distort the budget process
4: Put in place a methodology for ever-increasing retirment ages to phase-out Social Security
5: Replace with an alternative system (TBD)
Jack:
“1: Increase retirement ages”: Already a formula for this.
“2: Temporarily fund Social Security by selling off land owned by the US governme nt”: And have the Chinese own MORE U.S. assets? Maybe Saudi Arabia; Iran?
“3: Discard the unified budget and wall-off Social Security (and possibly Medicare) from the administrative budget so it does not distort the budget process”: Creating a “Board” such as the Railroad Retirement Board, or The Federal Retirement Thrift Investment Board, could develop S.S. into a viable program.
“4: Put in place a methodology for ever-increasing retirment ages to phase-out Social Security”: (see suggestion for #1 & 3).
“5: Replace with an alternative system (TBD)”: I’d hate to think of the atrocity that would be created by the felonious bunch in Congress today. I think, in reality, creating a unique authority to administer this program is the most efficient solution.
“Efficiency” may be a bad choice of words, with this government. But, if we don’t trend toward more lean and mean administration, the United States is on a death march to third world status.
Cybergeezer, a defined benefit plan is any where it says “you pay in X, you will get Y”. Not what you think, that it means you get to withdraw the contributions in full. That would ruin the idea, that some people cover others. A defined contribution plan is one where it says “you pay in X, and you get the market value of that investment later”. (With lots of conditions of course). SS is definitely a defined benefit plan. Your benefits are supposed to be fixed irrespective of what you paid in.
Problem is, they don’t work when the organisation backing them goes broke. And when that organisation is the US Government, well, we’re all in trouble.
Ltw says;
Wrong; Use the Social Security calculator here:
http://www.ssa.gov/OACT/quickcalc/index.html
Me Thinks He Doth Protest Too Much
================================
There’s something unseemly, even repulsive, at the tone of this essay and the hysteria of the postings. I feel like I’m caught in a pit of vipers or caged within a den of rabid cackling hyenas.
Social Security is here to stay – or at least some form of “retirement” benefit as Chile has (mentioned above). I’m not going to go into “why”…..the reasons are so obvious they don’t have to be discussed. If you are unaware of what they are, it means you don’t want to hear them….they’ve been echoed before here and elsewhere.
However, I have a suggestion for those “against” SS. When it comes time for you to collect – even after having put in 20 years “at the maximum” – as someone above sneeringly put it, why……….just don’t collect !!
After all, if you don’t want to collect there’s no law that says you have to! Just by-pass the local SS office, stick your nose up and feel sorry for all those who must collect out of necessity.
This will greatly benefit the system….might even make it solvent all over again.
Actually, if I were in charge, I’d have a means test. If you’ve been putting in for 20 years or so “at the maximum”, why, obviously you won’t (or shouldn’t) be in need of any SS payments. Since you won’t need ‘em, you won’t get ‘em.
[Then, dear readers, watch the hyenas howl]
The problem with this is Trakker, shouldn’t some or all of those people have been able to invest that money for themselves? The reason they can’t provide for their retirement is that they’ve already provided for someone else’s. 12% of their income has been taken away to pay others current benefits, with the promise that the next generation of workers will pay theirs. Doesn’t work. See my very first post on this at the very top of the thread.
It’s not here to stay. Benefits will get cut. Taxes will be raised. And yes, means testing will happen (that’s the only thing I agree with you on). None of this can be stopped. Because no one has wanted to fix it since it became obvious 30 years ago that it can’t work. There is no money – it’s gone. You get that now?
LTW – your arguments are so flimsy, they’re laughable. You’re not talking to a retard, LTW….you really don’t have to lower your argumentation to that level.
“…..shouldn’t some or all of those people have been able to invest that money for themselves? The reason they can’t provide for their retirement is that they’ve already provided for someone else’s”
Who said these “people” weren’t able to invest that money for themselves? Not me….you did.
I’m always suspicious of people who get hysterical about abolishing SS. There’s something else going on here besides a simple dislike of the system…..somehow, they got screwed somewhere along the line and are carrying a life-long grudge against the system.
Your whole argument – and that of every other poster here – is based on the assumption that “you can do a better job than the govt.”
If that’s the case, then you really should be consistent.
Urging the repeal of SS on the basis that “people should invest for themselves and provide for their old age” is like saying……repeal the taxes we pay for the Dept of Defense and eliminate the armed forces and when Bin Laden strikes again, why, we’ll just take them ol’ rifles out of the case, oil them down and “we can take care of ourselves”.
If you abolish SS, they you should also abolish military retirement pay not to mention the gilded TRICARE retirement health care they get. After all, you can enter the armed forces at age 18, retire at 38 after putting in “your 20″ and then live off the govt. dole for the next 40 years (at least). Talk about inefficiency etc !!
Ditto with the Post Office. It ain’t working so abolish it….and when we have to get a letter to SF from NYC, why, we’ll just start up ‘em pony express systems and get it done that way.
The whole attitude and approach pathetic and it’s harebrained. It’s also dangerous and I’m going to fight it every inch of the way.
Wow Trakker. You obviously didn’t read my first comment or you would know I’m Australian and not in SS. And, yes, on this issue I think I can do better than the government. My equivalent of FICA taxes has gone into a private account that belongs to me. It’s invested in real assets are accumulating and that will generate income for me. Whereas SS receipts have been spent and there’s nothing to show for them. Where’s the investment portfolio backing those promises? They’re going to get broken, all you get to choose now is how.
LTW:
1. If you’re an Aussie, then in my opinion you shouldn’t even be part of this “conversation”.
2. However, being an Aussie in no way precludes you drawing from the SS fund when you retire. All kinds of “aliens” draw SS benefits monthly.
One of the reasons there are 10s of millions of Mexicans working in the US is precisely so that they can eventually draw SS benefits after working 10 years. True, as aliens, they won’t get much…probably about $250/month since there are all kinds of deductions made from the benefits of aliens who do not live in the USA……But in Guadalajara and places South, you’d be amazed how far $250/month guaranteed can go.
3. As far as your other comments: again, they’re totally pie in the sky. “Yes, I can do better” blah blah blah…..But what if you don’t? What then? Then you’ll be the first at the gate of your SS equivalent in good ol’ Sydney banging at the gates demainding “compensation”.
If that day ever comes, I’ll be guarding that gate and not letting you in….and holding a copy of your postings here and banishing you to the “Bush country”…..and laughing while I do it.
Whether I’m entitled to something or not has nothing to do with it. I’m not, but I can still comment that there are alternatives. I was just trying to point out we fixed something you apparently can’t. Good luck collecting your benefits, because they ain’t there. Get it into your head Trattor, the money isn’t there. It’s gone. Screaming “your arguments are lame” won’t provide it for you. My retirement is under control. I’d be very worried about yours if I were in your position. They’re not going to pay out. There won’t be enough coming in. You won’t see it, moral or not. Did you miss the bit about outlays barely being covered by incoming payroll taxes?
Generating a 0% return on trillions of dollars over decades is impressive though. SS receipts and outlays are roughly balanced now, and there’s no assets there to fund future obligations. What do you think should happen then Trakker?
“However, I have a suggestion for those “against” SS. When it comes time for you to collect – even after having put in 20 years “at the maximum” – as someone above sneeringly put it, why……….just don’t collect !!”
Just as a matter of basic rational principle, you cannot substantiate the argument that making a free choice is the proper resolution to a problem arising from the use of force against you. As Ayn Rand put it, “Morality ends where a gun begins.” As long as the system is in place and being enforced by government *at gunpoint*, refusing compensation would amount to choosing to be a self-sacrificial dupe to no good end. After all, it’s not as though the system is set up to reduce payroll taxes if the draw on the system decreases. That money will *still* be stolen from today’s workers, thrown into the general fund and spent, and more “special issue” IOUs put into the “trust fund” in its place. You won’t end up helping anyone, and only make a martyr out of yourself. That is why fundamentally reforming (preferably eliminating) the system for everyone has to be such an important priority.
What you appear to want is to have your moral cake and eat it, too. That is: to sidestep the moral dilemma of having some people looted for the benefit of others, and still be able to sanction the looting. It doesn’t work that way. You either have to eliminate the system, or sanction people drawing from it as well as being forced to pay into it. There’s no “middle ground” there.
Tony Donadio: Thanks for your comment. Here’s my rebuttal.
1. Ayn Rand is dead. Altho she had admirable qualities, she remained a selfish, grasping, repulsive Soviet verminous traitor till the last. Even her sister couldn’t stand her and returned to the USSR after a short visit to Ayn’s USA residence. Whatever she said has no validity in the real contemporary world.
2. I have nothing against “reforming” SS. I know there are “problems” but abolishing the system is going to destroy our country. Lemme repeat that…..abolishing the system is goig to destroy our country. You may as well call for the establishment of Sharia Law to replace the Constitution. After all, a true Islamic state can take care of all our old-age needs.
In fact, it is one of my core beliefs that Islamism is making such inroads into the West precisely because of people like you. If the poor and downtrodden are going to be crushed by your philosophy, why they’re going to turn to another, more compassionate one.
Our Constitution explicity OKs SS……in it are all kinds of passages that proclaim that the “welfare” and the “pursuit of happiness” are among of the bedrock duties of a government.
3. Besides, as I’ve set before, I’m really suspicious of people who advocate eliminating SS…….there’s simply more to that than just that. I wonder what it really is with you.
TREKKER: I stopped reading your post after the first couple of sentences of your disgraceful ad-hominem attack on Ayn Rand. I will neither read nor respond to anything further that you write here. There is a basic level of intellectual civility and honesty that such a discussion calls for, and your remarks don’t even begin to meet it.
1. Ayn Rand is dead. Altho she had admirable qualities, she remained a selfish, grasping, repulsive Soviet verminous traitor till the last. Even her sister couldn’t stand her and returned to the USSR after a short visit to Ayn’s USA residence. Whatever she said has no validity in the real contemporary world.
===========
Soviet = the real contemporary world
You may as well call for the establishment of Sharia Law to replace the Constitution. After all, a true Islamic state can take care of all our old-age needs.
===========
mask slipping
they’re going to turn to another, more compassionate one.
===========
Warped speed factor 7
in it are all kinds of passages that proclaim that the “welfare” and the “pursuit of happiness” are among of the bedrock duties of a government.
===========
muslims only see what they can take… you seek only the jizya..
Excellent article and well articulated. I totally agree. Eliminate social security and all other entitlements.
Nobe Headings: Not a chance…..SS is here to stay and I’m going to use my considerable powers to make it happen.
I seem to recall hearing that there is a SS regulation making it illegal to refuse to take your SS benefit if you have paid into the system.
I can’t seem to find a reference but most government regulation are gobbltygook so that’s not too surprising.
Anyone know the answer?
Yes, John D. I know the answer. The answer is NO, you don’t have to “draw” your SS. There’s no such law. Ditto with Medicare.
In the case of Medicare, you’re “automatically enrolled” at age 65 (provided you are eligible in the 1st place). But…..and you’ll like this since you won’t be using Medicare…….you don’t have to actually use the system.
When you have your by-pass surgery, you can simply pay the $250,000 or so out of your own pocket!!!! The nurse at the front desk will gladly take your check and will even give you a receipt.
And when your nephew falls down and breaks his arm, they’ll accept his check for $4000 too since, I’m sure, he won’t have a medical plan to cover such an event since “you can provide for yourself without any assistance”.
Any other questions? Ask away….
If you do not enroll in Medicare at the initial enrollment age, and you have to enroll at a later date, you will pay a penalty (higher premium) for not enrolling at the earliest possible date.
CYBERGEEZER: When it comes to “handing out advice”, there’s nothng more dangerous than pretending you know what you’re talking about and have people actually listen to you. Your comment vis a vis Medicare is not just a little wrong…it’s totally wrong.
1. First of all, I don’t know what difference it makes to you and the majority of poster here……since……presumably, according to your vicious posts…..you’re not going to enroll in the program anyway….Your going to pay for your own by-pass surgery to the tune of hundreds of thousands of dollars. (Gee, I wish I had your money!)
2. MEDICARE is basically made up of 2 parts: Part A (hospital insurance) and Part B (medical insurance for example, visits to a doctor)
You don’t have to “enroll” in Part A…..it’s automatically done for you when you turn 65 (assuming, as I said before, that you are eligible for the program….if you’re an illegal immigrant, you’re not eligible). THERE IS NO FEE FOR THIS ENROLMENT.
You have to enroll in Part B……and this costs a certain % of your SS benefit. It’s not free. You have to pay for it….Lemme repeat that….YOU HAVE TO PAY FOR IT.
It’s true that you have to pay a higher premium if you enroll LATER than when you turn 65……but…….this is not going to be problem for all the readers here…since….as I’ve said before…..not a one of them is going to sign up either for SS or Medicare and certainly not for MEDICARE Part B. (You’re going to take care of it all by yourselves, remember).
A pox on all of you!!!
karma is a bitch..
…just as someone who had been physically abused by his parents does not somehow gain the “right” to abuse his children in turn.
“Her” children, not “his.” By far, most child-abusing parents are female. A physician ought to know that, Dr. Paul Hsieh M.D. Tsk, tsk.
Cybergeezer – Thanks for replying. BTW I can’t link to your comment so we may have to start a new thread.
On point number 1: I know there are discussions about increasing the retirement age but I don’t think there is a formula in place for that at this moment. What you may be referring to is the increase of the retirement age to 67 years of age for cohorts below a certain age. I am suggesting further increases beyond that.
On point number 2: If we are not going to go broke funding Social Security, the alternative is to sell off assets or sell off claims to future income (i.e., increase the size of the debt). If we choose to continue debt finance, then we’ll end up selling it to China and Saudia Arabia anyway. I’m betting plenty of Americans would buy up the land the Feds own out West. Of course, I may be wrong. (Note: If the Chinese and/or Saudis do buy land, that makes them all the more vulnerable to having their assets confiscated if they misbehave.)
On point four, I don’t know whether you remember, but it was LBJ who unified the Social Security budget and the Administrative budget on the grounds that money is fungible (and because at the time Social Security was generating a surpluse while the Administrative budget was in deficit. Of course, now both are in deficit. My point is to separate them because my proposal is to fund Social Security by a different method. You’re idea of a board is not bad, but it does not get to the root problem, which is that some of the fundamental assumptions on which Social Security was established are no longer operative.
So, we come to my point four, which is to phase-out Social Security. My point 1 is a stop-gap. My point 4 aims to kill the beast (although it will be a long, slow, drawn-out death, to ease the pain for all concerned).
On your answer to my point 5, I must beg to differ. Nothing the US government will do can create an efficient solution. Indeed, there was a unique authority. It was called the Social Security Administration. What we need is something like a private, defined contribution plan that the Feds can’t get their hands on, but I am uncertain as to the best way to get there. That was why I said that was something to be determined.
Jack:
How about combining a couple of your ideas? There are many properties that the Federal Government owns. How about giving the S.S. Beneficiaries a fiduciary interest in a fraction of the property, equal to their percentage of S.S. deductions paid? (Could be renamed and called “The American Investment Fund”).
Beneficiaries would be partial administrators for the property, and recover a percentage of the property income as their benefit.
This could be like a board of directors for your average condo, (yikes!), but, could have the effect of properties being updated and upgraded since there would be a financial interest in the success of the property.
This would eliminate the Federal Government as ‘middle man’ in using our tax money to administer these properties.
There would have to be property insurance backed by the U.S. Govt. There already is insurance of this type.
I think it would be cool to be a part owner of a building in D.C., or Bryce Canyon, or the Virgin Islands, and get free admission, plus a benefit check from their revenues.
People not wanting this risk could contribute to a program like FERS. or opt out altogether.
Cybergeezer -
I think your idea is a good one. But we still have to get over the funding problem, and I still would like to phase out Social Security. On the funding problem, my aim is to keep beneficiaries as whole as possible without increasing taxes on the current generation of workers.
Good news! Since SS is in effect a “pay as you go” function, its contribution to the National Debt up to the time of its “bankruptcy” – as an “inter-governmental” debt of about $4 trillion? – can be erased!/sarc.
The problem with social security is that it is financed by taxes on the working class who have nothing to begin with. All of the money is controlled by the top 1% richest. Social Security could be made solvent if we abolished the FICA and tax as it is and replaced it by a 50% income surcharge on all income of one million dollars a year.
The non-existence of original mal-intent is a frail excuse for Social Security. The behemoth began life with good intent, but transitioned into fraud over the years. Politicians now secretly realize that Social Security functions ‘effectively’ a Ponzi scheme, but most are too gutless to tell the American public.
Read More;
http://www.SocialSecurityPonziScheme.com/