Social Security is Not a Ponzi Scheme, Mr. Perry

[saveliberty]

No later than 2040. The way were are headed, 2030 will be way late.

 

[Lakhota]

Pretty much any dictionary or legal reference.

Can you cite at least one credible source?

Ponzi scheme - Wikipedia, the free encyclopedia

"Ponzi" Schemes

Social Security vs. Ponzi schemes in one Venn diagram - Ezra Klein - The Washington Post

 

[Quantum Windbag]

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.

You just defined a Ponzi scheme.

Ponzi schemes aren't transparent. If you want to know how Social Security operates you can go to their website and find out. Ponzi schemes are also designed to transfer all the wealth to one or a small group of individuals. Social security merely transfers wealth from one generation to the one before it.

Go back and read the title of this thread, and remember I wrote it. You are the one describing the workings of a Ponzi scheme. Ponzi schemes use money from a new investor to pay off the "earnings" of the old ones. Transparency is irrelevant to the discussion.

 

[NYcarbineer]

The best part of this discussion is that there is virtually no public support for destroying Social Security, except for that always dependable, ever present fringe element on the Right.

 

[Lakhota]

The best part of this discussion is that there is virtually no public support for destroying Social Security, except for that always dependable, ever present fringe element on the Right.

Amen!

 

[Quantum Windbag]

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.

Social Security does not assume any risk. Everyone gets old, and SSI (the disability you mentioned) is not part of the SS trust fund, even though it is paid out of it.

Want to try again?

 

[saveliberty]

The best part of this discussion is that there is virtually no public support for destroying Social Security, except for that always dependable, ever present fringe element on the Right.

If you don't properly fund it, it will cease to exist. Lack of a change in how social security funds are handled will result in its destruction. I am trying to point out this fact to save it fool.

 

[GWV5903]

The best part of this discussion is that there is virtually no public support for destroying Social Security, except for that always dependable, ever present fringe element on the Right.

Sad to see you're still clueless, time to get with the program, it needs to be fixed dum dum...

 

[Quantum Windbag]

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.

Does that mean that the trustees of SS are lying when they say that, unless Congress institutes the same fix they did under Reagan, SS will be completely bankrupt by 2017? That is the only possible explanation for your argument that it is better now than it was then.

 

[NYcarbineer]

When Reagan appointed the SS commission in 1981, the SS trust fund was projected to run out of money

in AUGUST OF 1983.

Social Security Greenspan Commission

 

[The T]

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.

Does that mean that the trustees of SS are lying when they say that, unless Congress institutes the same fix they did under Reagan, SS will be completely bankrupt by 2017? That is the only possible explanation for your argument that it is better now than it was then.

The funds have to be dwindling with all the unemployment that isn't projected to change until 2014 by the CBO.

 

[The T]

When Reagan appointed the SS commission in 1981, the SS trust fund was projected to run out of money

in AUGUST OF 1983.

Social Security Greenspan Commission

So? Address the NOW...

 

[NYcarbineer]

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.

Does that mean that the trustees of SS are lying when they say that, unless Congress institutes the same fix they did under Reagan, SS will be completely bankrupt by 2017? That is the only possible explanation for your argument that it is better now than it was then.

The fund was 2 years away from insolvency when the Reagan commission was formed.

Enough with the hysteria.

 

[thereisnospoon]

Whose "very definition" of a ponzi scheme...?

Webster

a fraudulent investment operation that pays quick returns to initial contributors using money from subsequent contributors rather than profit

SS absolutely does use the contributions of new workers to pay for the Initial ones. When anything set up like that fails. It will be the New Investors, (in this case young workers) who will get fucked.

How many decades do you chicken littles plan on saying that?

You may not want to believe it. However, it's a fact. And there's nothing you can do about that.

 

[Lakhota]

Social Security does not assume any risk. Everyone gets old, and SSI (the disability you mentioned) is not part of the SS trust fund, even though it is paid out of it.

The Social Security Administration manages the SSI program. Even though Social Security manages the program, SSI is not paid for by Social Security taxes. SSI is paid for by U.S. Treasury general funds, not the Social Security trust funds.

Supplemental Security Income (SSI)

 

[thereisnospoon]

OPYDOO:

Here's a list of investments held by the Trust Fund

Investments held at end of month

Did ya miss the disclaimer at the top of the chart???

Today, the trust funds hold only special issues.

Special issues
(available only to the trust funds)

Those are NOT US Treasury Bonds. They are made up intergovernmental transfers that cannot pay a dime without the Treasury actually issuing NEW debt to cover them..

They cannot be transferred. They cannot be SOLD. They are accounting gimmicks in an elaborate fraud to convince poor souls like you that the US can dip into a pot of gold in the "trust fund"...

Please OPYDOODLE --- don't go anywhere NEAR the market. I really worry about you...

Wrong. They are treasury bonds backed by the full faith and credit of the US government.

That they are 'special' is a distinction without a difference.

This is the problem with this issue...a bottomless chasm of ignorance on the Right.

Really?!! OK, where's fuckin money?!!!!!!!
Would you be willing to wager your pay for the rest of you life that you are correct in stating there's nothing wrong the the SS system?

 

[flacaltenn]

Of course it's inefficient.. But if you can't "make a market in it" -- it's not worth much is it? And to outside investors in Treas products -- it can be ignored. Kinda like MBSecurities a couple years ago.

That's not true. Simply because something is illiquid does not mean it doesn't have value. The liabilities in the SS trust are real. It doesn't matter if they can't be sold because they are a liability of the government.

So it was the case with MBSecurities. If the govt had simply waived the accounting rules, they never would have had to "bail out" bad assets. (over time for the market to recover).

I do think that the government will eventually "default" on those liabilities because they will eventually change the terms of SS, i.e. can't get it until 70, etc. And they should.

I agree on the Feds finding a way to wipe out or default on this bookkeeping entry.
Shows how fickle the accounting was. When the Debtor can simply redefine the program and "default" on the "asset". When a single entity owns both the "debt" and "asset" with no market to be in it -- it's an accounting gimmick -- not a fiduciary investment like the SSA is misrepresenting it to be. If a private firm tried to justify that accounting on REAL CASH that it obtained from clients -- there would be perp walks..

 

[Charles_Main]

Whose "very definition" of a ponzi scheme...?

Webster

a fraudulent investment operation that pays quick returns to initial contributors using money from subsequent contributors rather than profit

SS absolutely does use the contributions of new workers to pay for the Initial ones. When anything set up like that fails. It will be the New Investors, (in this case young workers) who will get fucked.

How many decades do you chicken littles plan on saying that?

How many people paying in are there compared to how many are collecting? Huh?

when it started it was like 125 to 1, now it's 2 to 1. If you don't think that people paying in now, are going to get fucked if we don't do something. You are an idiot.

 

[Toro]

So it was the case with MBSecurities. If the govt had simply waived the accounting rules, they never would have had to "bail out" bad assets. (over time for the market to recover).

The did waive the accounting rules. But that misses the point. The reason why the MBS derivatives were worthless was not because they were illiquid but because they were stuffed with worthless mortgages. That's a different issue. The structures that were worth something eventually realized their value.

I agree on the Feds finding a way to wipe out or default on this bookkeeping entry.
Shows how fickle the accounting was. When the Debtor can simply redefine the program and "default" on the "asset". When a single entity owns both the "debt" and "asset" with no market to be in it -- it's an accounting gimmick -- not a fiduciary investment like the SSA is misrepresenting it to be. If a private firm tried to justify that accounting on REAL CASH that it obtained from clients -- there would be perp walks..

The "default" to SS is if the government changes the law. But the government could do the same thing with Treasury bonds by passing a law. In fact, the government has. The US government effectively "defaulted" on its securities after WWII by pegging the long-term rate to 2.5% then running inflation above that rate. That's a stealth default by eroding the economic value of the securities. Don't be surprised if the government attempts to do that again in the future.

 

[flacaltenn]

OPYDOO:

Here's a list of investments held by the Trust Fund

Investments held at end of month

Did ya miss the disclaimer at the top of the chart???

Today, the trust funds hold only special issues.

Special issues
(available only to the trust funds)

Those are NOT US Treasury Bonds. They are made up intergovernmental transfers that cannot pay a dime without the Treasury actually issuing NEW debt to cover them..

They cannot be transferred. They cannot be SOLD. They are accounting gimmicks in an elaborate fraud to convince poor souls like you that the US can dip into a pot of gold in the "trust fund"...

Please OPYDOODLE --- don't go anywhere NEAR the market. I really worry about you...

Wrong. They are treasury bonds backed by the full faith and credit of the US government.

That they are 'special' is a distinction without a difference.

This is the problem with this issue...a bottomless chasm of ignorance on the Right.

Those "ASSETS" are not T-Bonds or T-Bills.. Special IS a very important distinction WITH a difference. They cannot be sold. They cannot be traded. There is no market meaning to them. Bullying and badgering me or the Right isn't gonna to turn them into a REAL asset. Neither thru wishing it so or alchemy tricks.

NO money comes OUT of the trust fund without creating NEW debt obligations. I didn't say that -- Off of Mgt and Budget says that. You can stuff your bluster back into your comfy Lefty confusion..

Go ahead and propagate the myth. The rest of us are gonna watch a UNIVERSAL program, the PRIDE OF FDR and YOUR party, get disassembled (due to bipartisian incompetence and criminality) into an unrecognizable tax bilking scheme where there is NO connection between "contributions" and "benefits".