Social Security is Not a Ponzi Scheme, Mr. Perry

[Quantum Windbag]

For the SS is not a Ponzi scheme crowd.

One, a Ponzi scheme collects money from new investors and uses it to pay previous investors—minus a fee. But Social Security collects money from new investors, uses some of it to pay previous investors, and spends the surplus on programs for politically favored groups—minus the cost of supporting a massive bureaucracy. Over the years, trillions of dollars have been spent on these groups and bureaucrats. Two, participation in Ponzi schemes is voluntary. Not so with Social Security. The government automatically withholds payroll taxes and “invests” them for you.
Three: When a Ponzi scheme can’t con new investors in sufficient numbers to pay the previous investors, it collapses. But when Social Security runs low on investors—also called poor working stiffs—it raises taxes.

Social Security is Not a Ponzi Scheme, Mr. Perry - Hit & Run : Reason Magazine

Perry agrees with you (on Saturday), he didn't two days ago.

Another flip-flop

Rick Perry Backs Off Social Security 'Ponzi Scheme' Comments

When are you going to learn to check dates? That story is from August, but I did enjoy smashing your position to bits.

 

[Wry Catcher]

Old people selling pencils and apples on the street, eating tuna made for cats; workers injured on the job competing with old people for the best corners.

There is and remains a good reason for Social Security and Medicare/Medicade; not everything should be for profit IMO.

Hyperbole, false dichotomy and platitudes.

Are you on the WH speech writing staff, perchance?

Clearly you're not, odd-one.

 

[OohPooPahDoo]

After paying their FICA, what % can afford a secondary source?

Anyone who can afford a home. If you buy a house, and pay off the note before you retire, then you've reduced the income you'll need in retirement by the amount of your note.

After that - employee 401(k)'s are great, and if you can't do that, a Roth IRA or Traditional IRA would be a good choice.

You could also purchase an supplementary annuity from an insurance company.

Perhaps more important that 401(k)'s though are real assets (that are insured!) - rental property, tree farms, whatever. My grandpa's retirement is funded by his government pension and by income from his tree farm and rental properties.

In other words anyone who doesn't need to rely on SS when they retire?

No. SS is part of a diverse retirement portfolio.

Meaning of course that those same folks are having a portion of their wealth redistributed to those poor suckers, who, never earned enough to be invested in real capital, because their FICA was taken and used in the piss poor accounting instrument otherwise known as SS.

So its wealth redistribution even though you acknowledge they've paid for it. Are you stupid or something?

 

[OohPooPahDoo]

I am really laughing at you right now. You are not giving any credit to the company itself being in better or worse financial shape as a driver of value. You also paint a picture of the average investor as dumb and uninformed. Typical lib thinking.

You honestly believe the day to day swings in the market are driven by actual changes in the underlying companys' financial state? That's laughable.

The majority of stock investors are stupid. They hop on the bandwagon when its rolling really hard and then jump off like rats from a sinking ship when it stops.

That's how the minority of stock investors get rich. Taking advantage of the stupid majority who buy high and sell low.

 

[OohPooPahDoo]

Obamacare was never passed and it doesn't say that.

If it wasn't passed how do you know what it says?

Because I listened to his campaign dildohead. The healthcare plan he laid out in his campaign is clearly very different from the one Congress let him pass.

FYI, the Obamacare/PPACA penalty is not a tax.

It is. Its part of the IRS code.

FYI, a state making it illegal for someone to buy a product from another state would be unconstitutional. Any state that tried to pass a law like that would find itself in court before the ink dried on the law.

That's not even true. A state is free to ban things that are manufactured in other states. One state can manufacture fireworks - and the one next door can ban the sale of fireworks. You're just making shit up now!

 

[Wry Catcher]

maybe you are right. so, whats one step lower on the scale of awfulness below Ponzi scheme? that fits.

Old people selling pencils and apples on the street, eating tuna canned for cats; workers injured on the job competing with old people for the best corners.

There is and remains a good reason for Social Security and Medicare/Medicade; not everything should be for profit IMO.

you are a strawman king.


so its SSI or the highway. got it. thx for nothing.

You're a jerk. You asked a question, I answered it. A straw man it is not (Don't use words you don't understand, it makes you appear to be a fool).

Q so, whats one step lower on the scale of awfulness below Ponzi scheme?

A. Old people selling pencils and apples on the street, eating tuna canned for cats; workers injured on the job competing with old people for the best corners.

In my never ending effort to stamp out ignorance I offer the following:

Straw man

Definition: One way of making our own arguments stronger is to anticipate and respond in advance to the arguments that an opponent might make. In the straw man fallacy, the arguer sets up a wimpy version of the opponent's position and tries to score points by knocking it down. But just as being able to knock down a straw man, or a scarecrow, isn't very impressive, defeating a watered-down version of your opponents' argument isn't very impressive either.

 

[OohPooPahDoo]

It assume the risk of old age and disability.

How does SS assume the risk of old age?

If you get old - it pays.

You can't tell me you've never heard of disability insurance?

Are you aware that SSI pays out to anyone who is disabled, even if they never pay into the SS trust fund? Does that really sound like insirance to you?

SSI isn't funded from FICA revenues, and it pays a lot less than the OASDI that people pay for with FICA.

Me being stupid? Aren't you the one that is trying to tell me that SS is insurance for getting old?

Yeah. I am. That I in OASI stands for INSURANCE.

SSDI, like SSI, pays out even if you did not pay into it.

Uhh. NO. I already posted the fucking link, I have to do it again? DO YOU FUCKING READ ANYTHING I POST?

The number of work credits needed for disability benefits depends on your age when you become disabled. Generally you need 40 credits, 20 of which were earned in the last 10 years ending with the year you become disabled. However, younger workers may qualify with fewer credits.

The rules are as follows:

Before age 24--You may qualify if you have 6 credits earned in the 3-year period ending when your disability starts.

Age 24 to 31--You may qualify if you have credit for working half the time between age 21 and the time you become disabled. For example, if you become disabled at age 27, you would need credit for 3 years of work (12 credits) out of the past 6 years (between ages 21 and 27).

Age 31 or older--In general, you need to have the number of work credits shown in the chart below. Unless you are blind, you must have earned at least 20 of the credits in the 10 years immediately before you became disabled.

Work credits needed for disability benefits

IS IT BIG ENOUGH FOR YOU TO READ NOW YOU RETARD?

SSDI ONLY PAYS TO THOSE WHO PAY INTO IT

 

[OohPooPahDoo]

This is the problem with you idiots. You think past returns equal future performance - even though they don't. The fact that the stock market gained X amount in years past says nothing about what it will do in the future. Not only that - but if the market gained X in years past, it would NOT have gained X in years past if FICA funds had been diverted to it, because those funds would have altered the market itself!

The expected return of any stock over a 30 year period from NOW is EXACTLY THE SAME as the return on a 30 year treasury obligation issued today.

Interesting how you have a source that KNOWS what future returns are going to be. I call bullshit just like all the other crap you have laid out in this thread from the beginning.

Don't even need to argue about stock market returns. Even the DOW share value doesn't tell the whole story. There are stocks which are paying 2 or 3% in DIVIDENDS even in a prolonged recession. Not fancy but let's do a quick calculation..

Assume you start at age 18 with a $24K/yr job. Allow 8% of FICA into a private account reserve the rest for MedCare and a stipend to support indigient seniors. That's $160/month going into savings. Assume only a FLAT 2% return. Assume salary matches inflation at a flat 2%.

Guess what you have 45 years later??

$209, 575.23

At an average monthly draw of $1400 and NEGLECTING continuing interest payments. (in other words at retirement you stuck it in a mattress) that's over 12 years of benefits.

In reality with continuing interest as you draw you could probably eek out close to $1600 a month if you didn't want to leave anything to your kids or the Nature Conservancy. Or live to 90 and still equal Soc Sec benefits.

You telling me that those assumptions ARE RISKY? Riskier than the probability of a govt default on some dam thing?

http://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php#results

Run Any dam dismal scenario you want and get back to me..

If the government defaults most any investment you made will fail.

Not to mention you're making assumptions about future returns. which is stupid.

 

[flacaltenn]

Interesting how you have a source that KNOWS what future returns are going to be. I call bullshit just like all the other crap you have laid out in this thread from the beginning.

Don't even need to argue about stock market returns. Even the DOW share value doesn't tell the whole story. There are stocks which are paying 2 or 3% in DIVIDENDS even in a prolonged recession. Not fancy but let's do a quick calculation..

Assume you start at age 18 with a $24K/yr job. Allow 8% of FICA into a private account reserve the rest for MedCare and a stipend to support indigient seniors. That's $160/month going into savings. Assume only a FLAT 2% return. Assume salary matches inflation at a flat 2%.

Guess what you have 45 years later??

$209, 575.23

At an average monthly draw of $1400 and NEGLECTING continuing interest payments. (in other words at retirement you stuck it in a mattress) that's over 12 years of benefits.

In reality with continuing interest as you draw you could probably eek out close to $1600 a month if you didn't want to leave anything to your kids or the Nature Conservancy. Or live to 90 and still equal Soc Sec benefits.

You telling me that those assumptions ARE RISKY? Riskier than the probability of a govt default on some dam thing?

http://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php#results

Run Any dam dismal scenario you want and get back to me..

If the government defaults most any investment you made will fail.

Not to mention you're making assumptions about future returns. which is stupid.

You want to balance that nit-pickin' against the SPECIFIC BENEFIT a 40 yr. old will get at retirement? He's got to survive another 28 yrs of Congresses before that becomes clear.

The actual RISKS involved in projecting whether you'll be eligible, when you'll be eligible, what you're eligible for and what you will have to PAY INTO IT for the next 28 yrs. You got THOSE figures for me???

Now THAT'S stupid..

 

[Quantum Windbag]

Because I listened to his campaign dildohead. The healthcare plan he laid out in his campaign is clearly very different from the one Congress let him pass.

He who?

Just in case you are thinking that Obama actually had something to do with Obamacare/PPACA, all he did was beg people to pass something to help make him look good.

It is. Its part of the IRS code.

You obviously think that you know what you are talking about.

FYI, there is one thing that every single judge that has ruled on has agreed upon, the penalty is not a tax. That means that I have to choose between your opinion, and the unanimous legal opinion of multiple federal and appellate judges.

Guess which one I choose.

That's not even true. A state is free to ban things that are manufactured in other states. One state can manufacture fireworks - and the one next door can ban the sale of fireworks. You're just making shit up now!

Thanks, I needed that laugh.

You are entirely correct that, if a state chose to, it could ban fireworks, that does not make me wrong though. If a state allows the sale of fireworks it cannot legislate that anyone who lives in that state can only buy fireworks from that state. That would be interfering with interstate commerce, which is facially unconstitutional.

Go ahead, try to prove me wrong.

 

[Quantum Windbag]

It assume the risk of old age and disability.

How does SS assume the risk of old age?

If you get old - it pays.


SSI isn't funded from FICA revenues, and it pays a lot less than the OASDI that people pay for with FICA.



Yeah. I am. That I in OASI stands for INSURANCE.

SSDI, like SSI, pays out even if you did not pay into it.

Uhh. NO. I already posted the fucking link, I have to do it again? DO YOU FUCKING READ ANYTHING I POST?

The number of work credits needed for disability benefits depends on your age when you become disabled. Generally you need 40 credits, 20 of which were earned in the last 10 years ending with the year you become disabled. However, younger workers may qualify with fewer credits.

The rules are as follows:

Before age 24--You may qualify if you have 6 credits earned in the 3-year period ending when your disability starts.

Age 24 to 31--You may qualify if you have credit for working half the time between age 21 and the time you become disabled. For example, if you become disabled at age 27, you would need credit for 3 years of work (12 credits) out of the past 6 years (between ages 21 and 27).

Age 31 or older--In general, you need to have the number of work credits shown in the chart below. Unless you are blind, you must have earned at least 20 of the credits in the 10 years immediately before you became disabled.

Work credits needed for disability benefits

IS IT BIG ENOUGH FOR YOU TO READ NOW YOU RETARD?

SSDI ONLY PAYS TO THOSE WHO PAY INTO IT

Really?

I checked the website, and it is theoretically possible for a person to get injured the very first day he is ever employed and still be covered under SSDI. type as large as you want, it will not change the facts.

 

[clevergirl]

Anyone who can afford a home. If you buy a house, and pay off the note before you retire, then you've reduced the income you'll need in retirement by the amount of your note.

After that - employee 401(k)'s are great, and if you can't do that, a Roth IRA or Traditional IRA would be a good choice.

You could also purchase an supplementary annuity from an insurance company.

Perhaps more important that 401(k)'s though are real assets (that are insured!) - rental property, tree farms, whatever. My grandpa's retirement is funded by his government pension and by income from his tree farm and rental properties.

In other words anyone who doesn't need to rely on SS when they retire?

No. SS is part of a diverse retirement portfolio.

Meaning of course that those same folks are having a portion of their wealth redistributed to those poor suckers, who, never earned enough to be invested in real capital, because their FICA was taken and used in the piss poor accounting instrument otherwise known as SS.

So its wealth redistribution even though you acknowledge they've paid for it. Are you stupid or something?

“I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”- Thomas Jefferson

No, you are stupid.

I posted the info that shows, those that pay the least, tend to benefit the most.

SS is not part of an intelligent investors chosen portfolio...rather it is the mandated portfolio by government for suckers...and supported as sound and good by lemmings.

 

[Texanmike]

SS is an investment, a bank account if you will. Wall Street would love to own the allocation
of our personal investment intended for (our) future, not Wall Street's future.

" Ponsi sceme," I think not. Give it to Wall Street and it becomes that...........guaranteed!!

If it is such a good system then make it voluntary.

Mike

 

[Texanmike]

Ponzi schemes don't hold and invest trillions of dollars for the sake of the participants.

'Ponzi scheme' is the 'Death panels' of social security.

Ponzi schemes hold trillions of dollars for the sake of the participants until the very end when there isn't enough money to pay out.

Mike

 

[Texanmike]

And by the way? Taxation should come from taxing commerce...NOT incomes of citizens. That's how the Founders had it set up, and it needs to go back to that way.

What evidence do you have this was the Framers’ intent – cite the case law in support.

Cite case law in support? Why not quote the founders themselves? How about the first tax act ever passed by President Washington. How about Madison on taxation? How about Hamilton? Jefferson? John Taylor of Caroline? Can you find me a reference to a founding father advocating an income tax?

a national revenue must be obtained; but the system must be such a one, that, while it secures the object of revenue it shall not be oppressive to our constituents

In the department of finance it is with pleasure I nform you that the receipts of external duties for the last twelve months have exceeded those of any former year, and that the ratio of increase has been also greater than usual.

The remaining revenue on the consumption of foreign articles,is
paid cheerfully by those who can afford to add foreign luxuries to domestic comforts, being collected on our seaboards and frontiers only, and incorporated with the transactions of our mercantile citizens, it may be the pleasure and pride of an American to ask, what farmer, what mechanic, what laborer, ever sees a tax-gatherer of the United States?

There is no method of steering clear of this inconvenience, but by authorizing the national government to raise its own revenues in its own way. Imposts, excises, and, in general, all duties upon articles of consumption, may be compared to a fluid, which will, in time, find its level with the means of paying them. The amount to be contributed by each citizen will in a degree be at his own option, and can be regulated by an attention to his resources. The rich may be extravagant, the poor can be frugal; and private oppression may always be avoided by a judicious selection of objects proper for such impositions. If inequalities should arise in some States from duties on particular objects, these will, in all probability, be counterbalanced by proportional inequalities in other States, from the duties on other objects. In the course of time and things, an equilibrium, as far as it is attainable in so complicated a subject, will be established everywhere. Or, if inequalities should still exist, they would neither be so great in their degree, so uniform in their operation, nor so odious in their appearance, as those which would necessarily spring from quotas, upon any scale that can possibly be devised.

It wasn't until the 16th amendment, in 1913 that the income tax was instituted. That was not the founders intention.

It is so obvious that the founders did not intend the federal government to incorporate an income tax that it was necessary to amend the Constitution.

Mike

 

[saveliberty]

And by the way? Taxation should come from taxing commerce...NOT incomes of citizens. That's how the Founders had it set up, and it needs to go back to that way.

What evidence do you have this was the Framers’ intent – cite the case law in support.

Hopefully you have picked up on the various tariffs that supported our government in the beginning. Having gained this knowledge do you see income tax in a different light?

 

[Toro]

I posted this elsewhere but I'm going to post it here.

Of course, it's a Ponzi scheme. A ponzi scheme works until you run out of new investors, and that's pretty much what's happening now. There are less new contributors than there are recipients. They are going to have to cut back benefits. Obama, Romney and Perry have all admitted that we have to cut SSI benefits, because the current system isn't sustainable.

I agree that we have to reform SS but you are misinformed on a few fronts, as are most people using this rhetoric, including Rick Perry. (Didn't he get a C in his Econ101 class?)

First, a Ponzi Scheme by definition means there is no economic basis for the returns promised, and usually the returns promised are extraordinarily high. A Ponzi Scheme promises a (usually high) rate of return that is paid entirely out of those who are giving their money to participate. That does not apply to SS because SS is funded out of taxes derived from the economy. When the economy grows, so do the contributions into the fund. Unlike a Ponzi Scheme, which has no fundamental economic basis to promise the returns, the US government has the power to tax economic activity. Thus the power to fund SS is derived from the growth in the economy. You can - like Reagan - reform SS by taxing people more if that's what we so choose. You cannot fund a Ponzi Scheme in any other way than sucking people into the Scheme.

Also, unlike a Ponzi Scheme which promises people returns of 50% or 100% returns, or even higher - that's how they get people to participate in the scheme - SS is crediting people's accounts at a mix of US government bond interest rates, or about 4% today. You aren't going to get anyone into a Ponzi Scheme by promising them returns of 3.75%.

Also, you are incorrect to characterize that we are "running out of new investors." The population continues to grow. The economy continues to grow. That there are fewer new contributors to total recipients is irrelevant because there are always fewer new contributors to recipients. The ratio of total contributors to recipients is still 3:1-4:1. The reason why we have had a dip in the surplus is not because "its bankrupt" but because of the recession. Unless you think the US is growing to grow at 1% a year for the next 3 decades - which it won't - then we will revert back to trend when the economy resumes its long-term trajectory. SS is funded out the growth in the general economy. As long as the economy is growing, there is no problem funding SS. You may have to reform it - which we do - but it is not in structural decline.

The reason why we have to cut back benefits is not because its a "Ponzi Scheme." It's because we are living longer than we currently thought when we created and reformed the system. This is a graph of population projections at various points in time in the UK, but it is similar to what happened in the US.

 

[saveliberty]

You seem to ignore the fact the money is missing. Try being a private company and spend all the investment money on another project.

 

[OohPooPahDoo]

Don't even need to argue about stock market returns. Even the DOW share value doesn't tell the whole story. There are stocks which are paying 2 or 3% in DIVIDENDS even in a prolonged recession. Not fancy but let's do a quick calculation..

Assume you start at age 18 with a $24K/yr job. Allow 8% of FICA into a private account reserve the rest for MedCare and a stipend to support indigient seniors. That's $160/month going into savings. Assume only a FLAT 2% return. Assume salary matches inflation at a flat 2%.

Guess what you have 45 years later??

$209, 575.23

At an average monthly draw of $1400 and NEGLECTING continuing interest payments. (in other words at retirement you stuck it in a mattress) that's over 12 years of benefits.

In reality with continuing interest as you draw you could probably eek out close to $1600 a month if you didn't want to leave anything to your kids or the Nature Conservancy. Or live to 90 and still equal Soc Sec benefits.

You telling me that those assumptions ARE RISKY? Riskier than the probability of a govt default on some dam thing?

http://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php#results

Run Any dam dismal scenario you want and get back to me..

If the government defaults most any investment you made will fail.

Not to mention you're making assumptions about future returns. which is stupid.

You want to balance that nit-pickin' against the SPECIFIC BENEFIT a 40 yr. old will get at retirement? He's got to survive another 28 yrs of Congresses before that becomes clear.

The specific benefit you will get from any investment can't be predicted for more than 30 years in advance.

The actual RISKS involved in projecting whether you'll be eligible, when you'll be eligible, what you're eligible for and what you will have to PAY INTO IT for the next 28 yrs. You got THOSE figures for me???

Now THAT'S stupid..

All I can tell you is that producers in the economy will always have to produce the goods and services those too old to produce need. Can you come up with a system that avoids that?

 

[JakeStarkey]

OK, back to square one.

No reasonable argument has been made that SS is a ponzi scheme.

Let's start again.