Social Security is Not a Ponzi Scheme, Mr. Perry

[Raoul_Duke]

Please don't actually read this thread. It'll break your little 10 year old heart..

Perhaps you could point out to me where you think I'm wrong.

You can start by looking at CBO figures and see in 2037 the light go out on SS. Then check the assumptions made to make it last that long and see we will not do that well.

The light does not go out in 2037. The worst that happens is that SS can only pay 75% of projected benefits. And because SS is indexed to wages, and because wages go up faster than prices, 75% of 2037 benefits will afford 2037 retirees a higher standard of living than 2011 benefits give 2011 retirees.

And all we have to do to fix SS for the next 75 year long term projection is raise another 0.6% of GDP. This can be done with small phased in payment increases and benefit cuts over the next 20 years, or removing the payroll tax cap, or a whole bunch of other measures.

 

[Raoul_Duke]

Here you come waltzing in late and haven't read the assignment and you want me to give you the Cliff Notes version??

.

Try and put something in your own words. I asked you to actually point out yourself where you think I'm wrong, in your own words. Then I'll have something to reply to.

 

[Raoul_Duke]

According to the SS actuaries, we are going to be paying out more money we take in from now until 2037, at which point the fund will be exhausted and the income will only support 75% of promised payouts. That is not the worse case scenario, and actually assumes a pretty rosy economic future that includes a 4% growth rate per year and that we do not extend the current payroll tax cuts. Obama not only requested an extension, he wants to expand them by giving people another 2% tax cut, and wants to throw in an employer side tax cut, and another cut if employers hire unemployed people.

FYI, the fact that something works is not evidence that it is not a Ponzi scheme. How long did Bernie Madoff run his scheme before it fell apart? Did the fact that it worked all that time make it not a Ponzi scheme?

The difference between insurance and SS has been covered in this thread, go educate yourself.

We're not going to be extending any payroll tax cuts indefinitely so we don't have a problem until 2037. Can you explain the difference between insurance ans SS to me please, I don't feel like wading through 50 pages. And a Ponzi scheme like Madoff ran claims to invest investors' money and pay them on the earnings of those investments. SS makes no such claim -- it has always taken in money and paid it out immediately to recipients. And it has always done this transparently, with every penny in and out accounted for. I'm pleased you seem to be agreeing with me that SS works. Excellent.

Insurance is paying someone to assume the risk, SS is not.

Are you saying that if I ran a Ponzi game that actually told people that I was not investing money the government would not have me up on charges of running a Ponzi scheme? If so, I have some ocean front property I need to sell.

As has subsequently and I'm sure previously pointed out to you, that is indeed the case. You pay the SS fund money and that insures you against, for instance, disability leaving you in chronic poverty. And it also provides you with retirement income. And it operates much like any insurance scheme. You pay premiums and the insurance company pays out claims with the premiums and keeps some as profit. Except SS doesn't take a profit so there's an actual difference between SS social insurance and standard insurance.

What I'm saying is quite clear. A Ponzi scheme operates by defrauding investors. It claims that the money it's paying out is from profits it made investing investors' money, but this is obviously not the case. SS never makes such claims. And every penny in and out is publically accounted for by insurance actuaries in public reports every year. So SS (public, transparent) and Ponzi schemes (private, fradulent information and claims only issued) are two entirely different things. What part of this don't you understand?

 

[flacaltenn]

Perhaps you could point out to me where you think I'm wrong.

You can start by looking at CBO figures and see in 2037 the light go out on SS. Then check the assumptions made to make it last that long and see we will not do that well.

The light does not go out in 2037. The worst that happens is that SS can only pay 75% of projected benefits. And because SS is indexed to wages, and because wages go up faster than prices, 75% of 2037 benefits will afford 2037 retirees a higher standard of living than 2011 benefits give 2011 retirees.

And all we have to do to fix SS for the next 75 year long term projection is raise another 0.6% of GDP. This can be done with small phased in payment increases and benefit cuts over the next 20 years, or removing the payroll tax cap, or a whole bunch of other measures.

The problem is NOT in 2037.. The problem has ALREADY ARRIVED.. Soc Sec annual books went NEGATIVE in 2010.. Read the thread. Learn something.. There is NOTHING OF VALUE in the Trust Fund. This payback of interest from "investments" is a fiction.

It is the SAME taxpayers who had their excess FICA ripped off for 30 years that are paying AGAIN for the "interest and principle" from the Trust Fund..

And NO -- it is NOT invested. There's a big diff between

A) ...taking the 1998 excess FICA payments and actually buying EXISTING REAL treas bills from the open market and placing them into the Trust Fund (did not happen) AND

B) Spending the surplus. Placing a non-transferable, non-negotiable IOU in there that's backed only by a promise to issue FUTURE DEBT and interest on the backs of some of same taxpayers who got robbed.

There you lazy poster. I've given you the Cliff Notes and the answers on the test. Think you can pass the quiz now???

 

[OohPooPahDoo]

That you are content with such a lack luster security is pitiful. A regular savings account with 2% interest would serve a person better-and remember it too is backed by a bond of 250k and it isn't forced upon you!

That's not even true. 2% interest doesn't even keep up with inflation. Your analysis fails basic scrutiny.

 

[OohPooPahDoo]

We're not going to be extending any payroll tax cuts indefinitely so we don't have a problem until 2037. Can you explain the difference between insurance ans SS to me please, I don't feel like wading through 50 pages. And a Ponzi scheme like Madoff ran claims to invest investors' money and pay them on the earnings of those investments. SS makes no such claim -- it has always taken in money and paid it out immediately to recipients. And it has always done this transparently, with every penny in and out accounted for. I'm pleased you seem to be agreeing with me that SS works. Excellent.

Insurance is paying someone to assume the risk, SS is not.

Are you saying that if I ran a Ponzi game that actually told people that I was not investing money the government would not have me up on charges of running a Ponzi scheme? If so, I have some ocean front property I need to sell.

As has subsequently and I'm sure previously pointed out to you, that is indeed the case. You pay the SS fund money and that insures you against, for instance, disability leaving you in chronic poverty. And it also provides you with retirement income. And it operates much like any insurance scheme. You pay premiums and the insurance company pays out claims with the premiums and keeps some as profit. Except SS doesn't take a profit so there's an actual difference between SS social insurance and standard insurance.

What I'm saying is quite clear. A Ponzi scheme operates by defrauding investors. It claims that the money it's paying out is from profits it made investing investors' money, but this is obviously not the case. SS never makes such claims. And every penny in and out is publically accounted for by insurance actuaries in public reports every year. So SS (public, transparent) and Ponzi schemes (private, fradulent information and claims only issued) are two entirely different things. What part of this don't you understand?

I think the part he doesn't get is where you tell him something that's the opposite of what his teabagging overlords told him.

 

[flacaltenn]

Raoul_Duke:

What I'm saying is quite clear. A Ponzi scheme operates by defrauding investors. It claims that the money it's paying out is from profits it made investing investors' money, but this is obviously not the case. SS never makes such claims. And every penny in and out is publically accounted for by insurance actuaries in public reports every year. So SS (public, transparent) and Ponzi schemes (private, fradulent information and claims only issued) are two entirely different things. What part of this don't you understand?

You need to be MUCH more careful about your assertions if you want to get credibility and traction in this debate. That bolded line above is hysterically naive and WOULD be funny if it wasn't so wrong..

 

[Political Junky]

You can start by looking at CBO figures and see in 2037 the light go out on SS. Then check the assumptions made to make it last that long and see we will not do that well.

The light does not go out in 2037. The worst that happens is that SS can only pay 75% of projected benefits. And because SS is indexed to wages, and because wages go up faster than prices, 75% of 2037 benefits will afford 2037 retirees a higher standard of living than 2011 benefits give 2011 retirees.

And all we have to do to fix SS for the next 75 year long term projection is raise another 0.6% of GDP. This can be done with small phased in payment increases and benefit cuts over the next 20 years, or removing the payroll tax cap, or a whole bunch of other measures.

The problem is NOT in 2037.. The problem has ALREADY ARRIVED.. Soc Sec annual books went NEGATIVE in 2010.. Read the thread. Learn something.. There is NOTHING OF VALUE in the Trust Fund. This payback of interest from "investments" is a fiction.

It is the SAME taxpayers who had their excess FICA ripped off for 30 years that are paying AGAIN for the "interest and principle" from the Trust Fund..

And NO -- it is NOT invested. There's a big diff between

A) ...taking the 1998 excess FICA payments and actually buying EXISTING REAL treas bills from the open market and placing them into the Trust Fund (did not happen) AND

B) Spending the surplus. Placing a non-transferable, non-negotiable IOU in there that's backed only by a promise to issue FUTURE DEBT and interest on the backs of some of same taxpayers who got robbed.

There you lazy poster. I've given you the Cliff Notes and the answers on the test. Think you can pass the quiz now???

You don't trust US Treasuries?

 

[Quantum Windbag]

Being listed on a balance sheet does not make it collateral against anything, it just makes it an asset, just like the other assets listed, including the land the government owns.

LOL! OK, the Federal Reserve just has 11 billion dollars worth of gold (by its accounting) just for fun, right buddy!



You know that thing they issue called "banknotes" ? Do you know what a banknote is? Its a claim on the assets of the issuing bank. Federal Reserve Notes are backed by the assets of the Federal Reserve - 11 billion worth of gold is one of those assets.

Federal Reserve Notes (aka United States currency) are backed by the US government, not the Federal Reserve. That is why the fed can simply print more currency without bothering to actually increase its assets.

If you do not understand simple principles like this why should I even discuss Social Security, which is much more complex, with you?

 

[Quantum Windbag]

Wrong.

FICA taxes are collected and turned over to the General Fund.

Why did you ruin my fun watching Poo display stupid all morning?

Don't worry, simple facts do not matter to him. If they did he would never try to argue that the dollar is backed by gold.

Wrong.

FICA taxes are collected and turned over to the General Fund.

No they aren't.

See what I mean?

 

[Quantum Windbag]

As has subsequently and I'm sure previously pointed out to you, that is indeed the case. You pay the SS fund money and that insures you against, for instance, disability leaving you in chronic poverty. And it also provides you with retirement income. And it operates much like any insurance scheme. You pay premiums and the insurance company pays out claims with the premiums and keeps some as profit. Except SS doesn't take a profit so there's an actual difference between SS social insurance and standard insurance.

Insurance is a transfer of risk. SS is currently a retirement program, not an insurance program.

What I'm saying is quite clear. A Ponzi scheme operates by defrauding investors. It claims that the money it's paying out is from profits it made investing investors' money, but this is obviously not the case. SS never makes such claims. And every penny in and out is publically accounted for by insurance actuaries in public reports every year. So SS (public, transparent) and Ponzi schemes (private, fradulent information and claims only issued) are two entirely different things. What part of this don't you understand?

What I am saying is very clear. SS security works like a Ponzi game in that it takes money from workers and uses it to pay retirees. I can provide links to multiple economists, two of whom have one Nobel Prizes, multitudes of politicians from both parties, and the current sitting president of the US, all of whom agree with me. All you can do is try to parse language and insist that, because SS is honest about being a Ponzi game, and is run by the government, that proves that it is not one.

Please, keep arguing, it is fun.

 

[saveliberty]

Perhaps you could point out to me where you think I'm wrong.

You can start by looking at CBO figures and see in 2037 the light go out on SS. Then check the assumptions made to make it last that long and see we will not do that well.

The light does not go out in 2037. The worst that happens is that SS can only pay 75% of projected benefits. And because SS is indexed to wages, and because wages go up faster than prices, 75% of 2037 benefits will afford 2037 retirees a higher standard of living than 2011 benefits give 2011 retirees.

And all we have to do to fix SS for the next 75 year long term projection is raise another 0.6% of GDP. This can be done with small phased in payment increases and benefit cuts over the next 20 years, or removing the payroll tax cap, or a whole bunch of other measures.

How many retirees are going to make it on 75% of their check genius.

 

[saveliberty]

No they aren't.

Yes they are.

the ss surplus is put in to treasuries.

yes, the gvt can still mask its deficits with the SS surplus monies taken in, but that does not negate that the ss surplus monies is in a trust....SS will be paid..... income tax monies will have to pay back someday, what it essentially borrowed from ss.

There is no current surpluses being added.

 

[JakeStarkey]

(1) Nothing posted factually equates SS with a ponzi scheme.

(2) Nothing posted factuall proves that SS cannot survive for decades even without minor tweaks.

(3) Many posts point out that proper way to tweak: means testing, rising retirment age, and dedication of raised funds for the program only.

Plenty of posts posted, showed, the similarities between how SS is used in much the same way a Ponzi scheme is.

It's not about whether or not SS can be "tweaked" it's about how people are forced to pay into a system that they cannot collect until they are almost dead and what they get is a pittance. (due to earlier "tweaking)

Why is it a good thing to force people to pay into a system that returns so little back to them?

Similarities is coincidence not factual equivalence. It is not a ponzi scheme until it cannot payout when it takes in. As long as congress removes funds from the program for costs not related to SS, the problem is congress, not the program.

Before you comments about pittance, you better provide facts on the overall payout to recipients to contributions. Do that and we can talk.

 

[flacaltenn]

The light does not go out in 2037. The worst that happens is that SS can only pay 75% of projected benefits. And because SS is indexed to wages, and because wages go up faster than prices, 75% of 2037 benefits will afford 2037 retirees a higher standard of living than 2011 benefits give 2011 retirees.

And all we have to do to fix SS for the next 75 year long term projection is raise another 0.6% of GDP. This can be done with small phased in payment increases and benefit cuts over the next 20 years, or removing the payroll tax cap, or a whole bunch of other measures.

The problem is NOT in 2037.. The problem has ALREADY ARRIVED.. Soc Sec annual books went NEGATIVE in 2010.. Read the thread. Learn something.. There is NOTHING OF VALUE in the Trust Fund. This payback of interest from "investments" is a fiction.

It is the SAME taxpayers who had their excess FICA ripped off for 30 years that are paying AGAIN for the "interest and principle" from the Trust Fund..

And NO -- it is NOT invested. There's a big diff between

A) ...taking the 1998 excess FICA payments and actually buying EXISTING REAL treas bills from the open market and placing them into the Trust Fund (did not happen) AND

B) Spending the surplus. Placing a non-transferable, non-negotiable IOU in there that's backed only by a promise to issue FUTURE DEBT and interest on the backs of some of same taxpayers who got robbed.

There you lazy poster. I've given you the Cliff Notes and the answers on the test. Think you can pass the quiz now???

You don't trust US Treasuries?

I suppose I do trust US Treasuries that have been issued. The Trust Fund only contains promises to issue FUTURE US TREASURIES, not current ones already bought and paid for.

Read my 2 examples closely again.. No assets were bought in 1998 (or any other year that there was a SS surplus). NEW DEBT has yet to be issued to cover liabilities. YOU pay for all of the "fictional interest" on the IOUs AND the cost of the NEW debt. MOST of which is STILL to be paid for. No investment there at all.. Just an IOU and a TON of missing cash..

 

[OohPooPahDoo]

Being listed on a balance sheet does not make it collateral against anything, it just makes it an asset, just like the other assets listed, including the land the government owns.

LOL! OK, the Federal Reserve just has 11 billion dollars worth of gold (by its accounting) just for fun, right buddy!



You know that thing they issue called "banknotes" ? Do you know what a banknote is? Its a claim on the assets of the issuing bank. Federal Reserve Notes are backed by the assets of the Federal Reserve - 11 billion worth of gold is one of those assets.

Federal Reserve Notes (aka United States currency) are backed by the US government, not the Federal Reserve.

United States Notes - which are no longer circulated - are backed by the U.S. Government. Federal Reserve Notes are indirectly backed by the U.S Government, but they are first backed by the assets of the Federal Reserve.

That is why the fed can simply print more currency without bothering to actually increase its assets.

Wrong. Any currency the Fed puts into circulation must be exchanged for an asset or collateralized by an asset.

 

[kaz]

You are walking around in a fog of ideology

You really are a liar. You say:

1) You were once a "libertarian ideologue," and yet nothing I've ever seen you write has any libertarian principles at all in them. Just a few examples of your most extreme un-libertarian positions:

- Social Security and Medicare are the most anti-libertarian programs in our country's history until Obamacare. Why? They turn every citizen into a subject. Government gives every American a check and controls their access to healthcare. That would scare the snot out of anyone remotely libertarian. Yet you endlessly argue for it.

- You endlessly allow the distinction that even though Social Security = Federal government and Treasury = Federal government, Social Security is not Treasury. No libertarian I've ever known would consider one federal government agency to be logically separate from another and for there to be a debt. You further allow that while social security overpayments are "debt" the government isn't issuing treasuries and no one ever counts the debt as deficit spending. And you ignore that while you allow one federal agency to "owe" another money, it's all in the General Fund, which you call the "unified budget." Dude, it's just fucked up. I understand every statement you make, it's just stupid.

- You allow parents to give their children their social security bills and the debt (the so called trust fund) and force them to fund it. Libertarians believe in a society of individuals, you are not just un-libertarian, you are anti-libertarian.

2) As for me, while you claim I am an "ideologue" every ideologue I know says I'm not even libertarian. If you were actually an ideologue, you would recognize the many ways that I'm not one. Yet you are completely and utterly unaware that I am not in line with the libertarian's on a range of issues and in their militant enforcement of their ideology, I fail many of their endless tests. The libertarian ideologues are like your liberal ideologues. You're 1% against me, you're 100% against me.

You have no fucking clue what you're talking about with libertarianism and you should shut up because while your liberal friends may like it, anyone who knows what you're talking about knows that you don't and you constantly demonstrate it. I care not how many fools agree or disagree with me. I am perfectly willing to disagree with people who are not fools. But I have no interest in looking like an idiot to a wise man because I'm grandstanding to fools as you constantly do.

 

[Too Tall]

When Perry was asked about why Texas was last in health care, he said if Obamacare didn't force people to have health care, everyone in Texas would. So, less is "more"?

Of course, everyone is forced to have car insurance. Oops.

In some states those that own a car are required to have liability insurance. Not everyone has a car.

 

[Too Tall]

We're not going to be extending any payroll tax cuts indefinitely so we don't have a problem until 2037. Can you explain the difference between insurance ans SS to me please, I don't feel like wading through 50 pages. And a Ponzi scheme like Madoff ran claims to invest investors' money and pay them on the earnings of those investments. SS makes no such claim -- it has always taken in money and paid it out immediately to recipients. And it has always done this transparently, with every penny in and out accounted for. I'm pleased you seem to be agreeing with me that SS works. Excellent.

Insurance is paying someone to assume the risk, SS is not.

Are you saying that if I ran a Ponzi game that actually told people that I was not investing money the government would not have me up on charges of running a Ponzi scheme? If so, I have some ocean front property I need to sell.

As has subsequently and I'm sure previously pointed out to you, that is indeed the case. You pay the SS fund money and that insures you against, for instance, disability leaving you in chronic poverty. And it also provides you with retirement income. And it operates much like any insurance scheme. You pay premiums and the insurance company pays out claims with the premiums and keeps some as profit. Except SS doesn't take a profit so there's an actual difference between SS social insurance and standard insurance.

What I'm saying is quite clear. A thonzi scheme operates by defrauding investors. It claims that the money it's paying out is from profits it made investing investors' money, but this is obviously not the case. SS never makes such claims. And every penny in and out is publically accounted for by insurance actuaries in public reports every year. So SS (public, transparent) and Ponzi schemes (private, fradulent information and claims only issued) are two entirely different things. What part of this don't you understand?

It is my understanding that for about the last year, many wage earners have not paid in one cent to FICA. It is also my understanding that a bill to allow the employers to quit paying their share of FICA is being considered.

My question is, at age 67 will the benefits for these employees be reduced in proportion for the year(s) they didn't pay? My second question is, since they are not paying the insurance premium, are they eligible for disability benefit?

In the real world, if you don't pay the premium, the policy is cancelled.

 

[Too Tall]

Perry is all alone with his ponzi scheme gaff and will pay the price from the biggest voting block - senior citizens.

Only if the senior citizens are as ignorant as you appear to be. Perry explained that anyone presently drawing or within 10 years of retirement would not be affected.

At present there are 1 3/4 people paying into Soc Sec for every 1 person drawing a check. That is unsustainable and needs a lot more than tweaking around the edges for those 25 to 30 year old to expect any return on their Soc Sec 'contribution.'