Social Security is Not a Ponzi Scheme, Mr. Perry

[mudwhistle]

the Hard Right arguements here make no sense at all.

They do in the context of the rightwing mindset that nothing the government does can work,

unless it's war.

Well, National Defense is the primary function of the Federal Government.

The rest can be done at the state level custom fitting it to each state's needs.

 

[flacaltenn]

I understand that "special issuance bonds" are NOT the same as public issuance bonds...but they are backed with the same guarantee.

No -- NOT the same guarantee. You think that the market for US Treasuries would be doing as well as it is if the $5Trill SS liability was EQUALLY backed with what they are buying? Most economists will tell you that if push comes -- the T-Bill will be paid first and the Treasury will go to Congress and tell SSA to either increase FICA or reduce the benefits immediately...

You've got to understand that about 40% of the $14TRIL debt is owed to the govt itself.. That include SS liabilities. You think REAL bond holders (the other 60%) are going to let the govt pay itself FIRST???

Think again.. Ask China or Japan...

What do you mean "let?"

What is China going to do, invade?

Nationalize American assets in China? Let the Yuan float to a more China favorable place?

Seriously -- THEY don't have to do a thing. The international markets would pummel the T-Bonds and the Dollar because of our insistence on "paying ourselves first". You think the EU is allowing GREECE to honor all it's internal commitments FIRST?

 

[OohPooPahDoo]

Actually, it isn't.

Insurance is a pool that people pay into in case they need help. Social Security is a fund people pay in for when they retire. The first is obviously not going to pay out to everyone, the second is actually designed to pay out to everyone.

Calling it insurance just proves you do not know what insurance is, which probably explains why politicians call it insurance.

Its called Old Age and Survivors Insurance.

An ANNUITY is also an insurance product that people use to retire. But its not a retirement FUND.

Like all insurance - whether or not you get more out of it than you pay into it depends a lot on chance and luck.

The difference is simple. A retirement fund is an account you have in your name and it has in it what you (or others) have put in it plus earnings and gains.

Old age insurance is an insurance policy. Like an annuity - it represents an obligation to pay X amount of dollars over Y time period - regardless of the assets that may back it.

The government calls the newest attempt to reform patents the Patent Reform Act, even though it doesn't reform patents. Why should a law that called SS insurance when it passed decades ago be any more accurate?

I suppose we could base our decision on the accuracy of calling old age and survivors insurance insurance on some other unrelated government law the government passed - or we could look at its actual attributes. Like the fact it pays X amount of dollars should Y condition occur, in exchange for Z cashflows in from the payee - which makes it - INSURANCE.

FYI, insurance is the transfer of risk from one party to anther in exchange for payment. The government assumes no risk in Social Security, and I transfer no risk to it when I pay my taxes. That means SS is not insurance, no matter what the government, or the politicians that decide what to call things, says.

Social Security assumes part of the risk that you will be old or that you will become disabled. When you pay, you have partially covered your risk of disability or your risk of being too old to work.

Its really not that hard to understand.

 

[NYcarbineer]

Social Security is a Ponzi scheme!!! was the Right's lament back in 1983 too.

Then Reagan AND the Democrats fixed it.

Ponzi ponzi ponzi is nothing more than baseless rightwing fearmongering.

No. It is a slight bit of hyperbole concealing a very ugly underlying truth.

And it's the fact that the claim is founded upon truth that burns your lib ass so badly.

Was it true in 1983, 28 years ago? That's quite a Ponzi scheme. 28 years ago the Right is calling it a Ponzi scheme, 28 years later it's in better shape than it was back then.

Do any of you knuckledraggers even know what a Ponzi scheme is?

Read a book or something.

 

[flacaltenn]

I understand that "special issuance bonds" are NOT the same as public issuance bonds...but they are backed with the same guarantee.

No -- NOT the same guarantee. You think that the market for US Treasuries would be doing as well as it is if the $5Trill SS liability was EQUALLY backed with what they are buying? Most economists will tell you that if push comes -- the T-Bill will be paid first and the Treasury will go to Congress and tell SSA to either increase FICA or reduce the benefits immediately...

You've got to understand that about 40% of the $14TRIL debt is owed to the govt itself.. That include SS liabilities. You think REAL bond holders (the other 60%) are going to let the govt pay itself FIRST???

Think again.. Ask China or Japan...

lol, what Congress is going to pay China and fuck American seniors?

See comments above to Toro..

No -- I think they will fuck current workers, taxpayers and anyone else they can bend over at that point. And redefine the program from FDR vision of UNIVERSAL retirement insurance for EVERYONE --- into just another redistribution scheme.

Perhaps NYorker -- I want to save the original INTENT of Soc Sec more than you do....

 

[NYcarbineer]

Social Security is a Ponzi scheme!!! was the Right's lament back in 1983 too.

Then Reagan AND the Democrats fixed it.

Ponzi ponzi ponzi is nothing more than baseless rightwing fearmongering.

If they "fixed it," then why is it still broken? Mulcting the suckers for more cash doesn't fix a Ponzi scheme. You never fix it. You only make it bigger and screw people even worse than they have already been screwed.

It's not broken. Period.

 

[NYcarbineer]

Ponzi scheme - Wikipedia, the free encyclopedia

"A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.

The system is destined to collapse because the earnings, if any, are less than the payments to investors."

Are you sure he got it wrong?

sounds VERY similar to Social Security to me.

clevergirl's concern is addressed here. The money is more than sufficient if the Congress would keep its hands off of it, Dem and Pub congresses alike. Leave the funding alone, and the ship will right itself.

That is true but their raiding the social security funds (both parties over history) are what makes it look very similar to a ponzie scheme.

Good point though!

They don't 'raid' it. SS invests its money in treasuries. FOR THE INTEREST INCOME.

 

[flacaltenn]

Social Security is a Ponzi scheme!!! was the Right's lament back in 1983 too.

Then Reagan AND the Democrats fixed it.

Ponzi ponzi ponzi is nothing more than baseless rightwing fearmongering.

No. It is a slight bit of hyperbole concealing a very ugly underlying truth.

And it's the fact that the claim is founded upon truth that burns your lib ass so badly.

Was it true in 1983, 28 years ago? That's quite a Ponzi scheme. 28 years ago the Right is calling it a Ponzi scheme, 28 years later it's in better shape than it was back then.

Do any of you knuckledraggers even know what a Ponzi scheme is?

Read a book or something.

Don't need another book.. It's right there in OP.. Plenty of reasons why it's WORSE than a Ponzi scheme. I tend to agree with that.

Only simularity I can see is the STEALING and LYING aspect...

 

[OohPooPahDoo]

SS was a “pay-as-you-go” system, where current tax collections paid for current benefits. The SS trust fund idea gave us the illusion that we were advance funding SS benefits, in a manner similar to the private pension system. In reality, though, SS is still pay-as-you-go, with the difference being that future generations will pay for both the benefits outlay and the repayment of principal and interest on the special government bonds in the trust fund.

The Social Security Trust fund has never attempted to conceal the fact that it mainly holds U.S. Treasury obligations. Its open and free public knowledge. I fail to see how there could have been an "illusion" that anything else was happening except to the ignorant.

Again, there is NO FUND- though it has become normal nomenclature to refer to it as such~ There are T-bills which are used for different kinds of government liabilities, not only SS. T-bills are both a liability and an asset, since they are part of the total federal debt. Basically, one hand of the government owes the other hand, and the investments in the so called “trust fund” are not separate from the entity that sponsors it.

The Treasuries in the Trust Fund are obligations of the United States Treasury to the beneficiaries of Social Security - not to the government. The Social Security Administration merely administers the funds.

Their basic function is bookkeeping - to keep from having to raise or lower the FICA tax every couple years, resulting in constant politicization of the FICA tax. But they represent a real oblgation of the treasury to the beneficiaries. If Congress ordered the Treasury to not pay those obligations, that would result in default.

 

[NYcarbineer]

No, it doesn't mean its currently insolvent. You either don't understand what the word "insolvent" means or what the word "currently" means.

No it isn't.



Your state or local government is free to provide you a substitute program. The teachers into Louisiana pay into the states retirement fund - not SS. The entire city of Galveston, TX, also has opted out.

I know what insolvent means. I also qualified my statement by underscoring what has to happen in order to make it solvent. This is not mere rhetoric I am espousing. link

Selling off treasury bonds cannot solve the problem of tax receipt short falls indefinitely. Right now SS has approximately .73 cents for every obligated 1.00. It is making that up on the backs of younger workers.

SS is not an actual fund- it is an accounting device- There is no actual money in SS, merely IOU's. link

It's like writing "I Owe Me $1,000,000" on a scrap of paper, stuffing it in a jar and then proclaiming that you have a $1,000,000 retirement fund.

No, it's not. SS is funded by the payroll tax and its trust fund belongs to those eligible to receive SS. The bonds that it invests in are obligations of the general fund, which is an entirely separate entity.

 

[OohPooPahDoo]

The only problem today with social security today is the US government. Working people have paid into this program all of their working careers. The government has squandered this money away on everything except for what it was intended for.

That's not even true. The money was spent paying beneficiaries. Social Security is a pay-as-you-go program. When you pay your FICA tax its used to pay current beneficiaries. If there's any left over, they put it in the trust fund, if they're short a little bit, they take some out the trust fund, but on average its pay-as-you-go.

How dense are you really OPiDoo? Are we talking LEAD dense?

BBDog was talking about the $3Trill SURPLUS that Soc Sec had run until 2010. ALL of the Surplus was STOLEN and you were given some fairy tale about a "trust fund". He was EXACTLY correct in his statement above.

Actually, he was talking about "Working people have paid into this program all of their working careers. The government has squandered this money away on everything except for what it was intended for." -

"this money" refers to the money "Working people have paid into this program" - then he claims it has been spent on everything but what it was intended for - when in fact it was mostly spent on what it was intended for - paying benefits.

They've never paid a dollar to a recipient "from the trust fund".

That's not even true. They had to dip into the trust fund in 2008 and 2009.

They are just NOW covering overages in liabilities by issuing NEW DEBT

No they aren't. Almost all of social security benefits are covered by the FICA tax.

They've issued that NEW debt BECAUSE of a promise and a handshake..

[SIZE"4"]What the F9o753K will it take? You need links? Did you need a LOBOTOMY? Do you need glasses? Just tell what it would take for you to become RATIONAL on this topic?? [/SIZE]

I've had it with this repeated assertion that everything is all cozy and warm with Soc Sec. Every near-sighted one of you..

Certainly if you just yell loud enough....

 

[NYcarbineer]

No. It is a slight bit of hyperbole concealing a very ugly underlying truth.

And it's the fact that the claim is founded upon truth that burns your lib ass so badly.

Was it true in 1983, 28 years ago? That's quite a Ponzi scheme. 28 years ago the Right is calling it a Ponzi scheme, 28 years later it's in better shape than it was back then.

Do any of you knuckledraggers even know what a Ponzi scheme is?

Read a book or something.

Don't need another book.. It's right there in OP.. Plenty of reasons why it's WORSE than a Ponzi scheme. I tend to agree with that.

Only simularity I can see is the STEALING and LYING aspect...

If you can't think I can't help you.

 

[mudwhistle]

Social Security has not added one dime to the national debt and has a trillion plus dollar surplus and is solvent to 2037.

Depends on your math and your understanding of SS. Right now, SS can pay only 73 cents on the dollar. Current workers are making up the shortfall. In order to balance out the shortfall either a tax increase to workers and employers must happen, a cut in benefits, or a raise in the retirement age (which is also technically a cut in benefits).

In other words it IS going broke unless something is done.

Phasing out the program is also an option-

It was in much worse shape in 1983, but oh my god,

28 years later it's still here!

Ponzi scheme my ass. You people need to grow up.

I think you need to wake up.

A 3rd of my pay goes to FEGLI, Medicare, FEHB, OSDI, and Federal Taxes. Almost all of that is matched by the government and goes into the Treasury. Most of it I will never see again and if Obama or anyone like him is in Washington screwing things up I'll see none of it.

 

[flacaltenn]

clevergirl's concern is addressed here. The money is more than sufficient if the Congress would keep its hands off of it, Dem and Pub congresses alike. Leave the funding alone, and the ship will right itself.

That is true but their raiding the social security funds (both parties over history) are what makes it look very similar to a ponzie scheme.

Good point though!

They don't 'raid' it. SS invests its money in treasuries. FOR THE INTEREST INCOME.

Blatantly False --- go back to post 187 and tell me again about the TREASURIES in the trust fund or that Congress hasn't STOLEN $3Trill in excess payroll FICA..

It's right HERE ------ http://www.usmessageboard.com/4113015-post189.html

Show us how secure this all is..

 

[OohPooPahDoo]

The only problem today with social security today is the US government. Working people have paid into this program all of their working careers. The government has squandered this money away on everything except for what it was intended for.

That's not even true. The money was spent paying beneficiaries. Social Security is a pay-as-you-go program. When you pay your FICA tax its used to pay current beneficiaries. If there's any left over, they put it in the trust fund, if they're short a little bit, they take some out the trust fund, but on average its pay-as-you-go.

Not quite so. Since 1968, SS can be used to pay other government programs.

Only in exchange for a promise from the U.S. Treasury to the beneficiaries of the program.

 

[Toro]

No -- NOT the same guarantee. You think that the market for US Treasuries would be doing as well as it is if the $5Trill SS liability was EQUALLY backed with what they are buying? Most economists will tell you that if push comes -- the T-Bill will be paid first and the Treasury will go to Congress and tell SSA to either increase FICA or reduce the benefits immediately...

You've got to understand that about 40% of the $14TRIL debt is owed to the govt itself.. That include SS liabilities. You think REAL bond holders (the other 60%) are going to let the govt pay itself FIRST???

Think again.. Ask China or Japan...

What do you mean "let?"

What is China going to do, invade?

Nationalize American assets in China? Let the Yuan float to a more China favorable place?

Seriously -- THEY don't have to do a thing. The international markets would pummel the T-Bonds and the Dollar because of our insistence on "paying ourselves first". You think the EU is allowing GREECE to honor all it's internal commitments FIRST?

Maybe. But when it looked like the US was going to default and the US was downgraded, Treasury bond prices and the dollar rose.

As for Greece, the end game to your answer ultimately is "yes."

 

[flacaltenn]

That's not even true. The money was spent paying beneficiaries. Social Security is a pay-as-you-go program. When you pay your FICA tax its used to pay current beneficiaries. If there's any left over, they put it in the trust fund, if they're short a little bit, they take some out the trust fund, but on average its pay-as-you-go.

How dense are you really OPiDoo? Are we talking LEAD dense?

BBDog was talking about the $3Trill SURPLUS that Soc Sec had run until 2010. ALL of the Surplus was STOLEN and you were given some fairy tale about a "trust fund". He was EXACTLY correct in his statement above. They've never paid a dollar to a recipient "from the trust fund". They are just NOW covering overages in liabilities by issuing NEW DEBT. They've issued that NEW debt BECAUSE of a promise and a handshake..

What the F9o753K will it take? You need links? Did you need a LOBOTOMY? Do you need glasses? Just tell what it would take for you to become RATIONAL on this topic??

I've had it with this repeated assertion that everything is all cozy and warm with Soc Sec. Every near-sighted one of you..

Actually, he was talking about "Working people have paid into this program all of their working careers. The government has squandered this money away on everything except for what it was intended for." -

"this money" refers to the money "Working people have paid into this program" - then he claims it has been spent on everything but what it was intended for - when in fact it was mostly spent on what it was intended for - paying benefits.

Are you not aware OPDOO,, that for about 25 years, the SS program RAN A SURPLUS -- that was immediately STOLEN every year and spent on "everything but what it was intended for"???

As for your assertion of the qualifier "MOSTLY spent on benefits" == Would you call it a theft if ATT was skimming 25% off your monthly phone bill?

Lower wage workers and the middle class were OVERCHARGED for 25 years and TOLD that the overcharge was being "invested for them".. Are you stupid enough to believe that lie?

 

[flacaltenn]

What do you mean "let?"

What is China going to do, invade?

Nationalize American assets in China? Let the Yuan float to a more China favorable place?

Seriously -- THEY don't have to do a thing. The international markets would pummel the T-Bonds and the Dollar because of our insistence on "paying ourselves first". You think the EU is allowing GREECE to honor all it's internal commitments FIRST?

Maybe. But when it looked like the US was going to default and the US was downgraded, Treasury bond prices and the dollar rose.

As for Greece, the end game to your answer ultimately is "yes."

Strange indeed but I attribute that to the fact that SOMEONE (not to be mentioned) took a stance FINALLY to cut spending. We all knew back in the Clinton days that the onlly way we'd survive the baby boom bubble was to enter the bubble with a sound budget and less debt.. Shouldnt' be a surprise to any one -- except maybe OOPYDOO..

(or maybe circa 2000 --- a lockbox)

 

[LAfrique]

While it is true that the Social Security pays investors (taxpayers) with money from subsequent investors, I do not think the Social Security fails in its goal of being a social welfare and insurance program. Calling the Social Security a "ponzi scheme" and a "monstrous lie" is far-fetched.

 

[Toro]

How dense are you really OPiDoo? Are we talking LEAD dense?

BBDog was talking about the $3Trill SURPLUS that Soc Sec had run until 2010. ALL of the Surplus was STOLEN and you were given some fairy tale about a "trust fund". He was EXACTLY correct in his statement above. They've never paid a dollar to a recipient "from the trust fund". They are just NOW covering overages in liabilities by issuing NEW DEBT. They've issued that NEW debt BECAUSE of a promise and a handshake..

What the F9o753K will it take? You need links? Did you need a LOBOTOMY? Do you need glasses? Just tell what it would take for you to become RATIONAL on this topic??

I've had it with this repeated assertion that everything is all cozy and warm with Soc Sec. Every near-sighted one of you..

Actually, he was talking about "Working people have paid into this program all of their working careers. The government has squandered this money away on everything except for what it was intended for." -

"this money" refers to the money "Working people have paid into this program" - then he claims it has been spent on everything but what it was intended for - when in fact it was mostly spent on what it was intended for - paying benefits.

Are you not aware OPDOO,, that for about 25 years, the SS program RAN A SURPLUS -- that was immediately STOLEN every year and spent on "everything but what it was intended for"???

Lower wage workers and the middle class were OVERCHARGED for 25 years and TOLD that the overcharge was being "invested for them".. Are you stupid enough to believe that lie?

The surplus wasn't "stolen." It was run down as the recession caused a decline in contributions and an increase in payouts.

Nor was anyone overcharged. In fact people were undercharged. That's one reason why the trusts are underfunded.