Social Security is a Ponzi scheme

[kodydog]

Check out this article by Andrew P. Napolitano, a former judge of the Superior Court of New Jersey

http://www.foxnews.com/opinion/2012/04/26/social-security-iisi-ponzi-scheme/?intcmp=trending

This is the real reason the gov. doesn't want you to invest your own SS money.

All the money I "invest" in SS (including what I match) will not be there when I retire.  >:(

Every person who says, I paid into SS and now I deserve the money I get from it, should read this.

[DBR1957]

Ponzi scheme,

Seek investors promising a guaranteed return.
Take money from new investors to pay the return promised to first investors.
Eventually it all catches up and the ponzi scheme is revealed.

Sounds like the SS system to me. Only worse. We don't have a choice to avoid
the scheme.

There is another point here. If the company managing your retirement account
used those funds the way the gov't does, that company would be brought up
on charges.

Makes you go HMMMMMMMMM.

[bobbin]

I believe SS is a very worthy program.  I believe that it must be maintained.  I believe many of the present "problems" with it can be attributed to a basic lack of understanding about what its initial goal was and the unwillingness of legislators and the great American public to amend the program to keep pace with changeing times. 

Most Americans naively believe that there is an "account" set up for them.  Wrong! SS is a "pay as you go" system.  That means that those of us now working, in conjunction with contributions from our employers, provide the revenue that pays benefits to current recipients.  The tax required to fund the SS system has increased markedly from the inception of the program.  Why? because our population is no longer increasing!

At its inception the "retirement" age was set at 65 yrs. old.  If memory serves me corrrectly that was 2 or 3 yrs. beyond the average age of death (1937?).  It's important to remember that 1937 was basically still "the Depression" and there were many people who had lost everything and were barely able to feed themselves.  My parents remembered the bread lines and being scolded for "staring" at them.  My grandmother would  have been in in one of those lines (with her 3 kids) had it not been for her 3 sisters who "circled the wagons" and subsidized her after her husband's suicide in October 1929.  My grandmother was one of the "reasons" SS was signed into law.  The intent of the program was to keep people from starving (a very real possibility in the Depression).  Read Steinbeck's masterpiece, "The Grapes of Wrath" while you're at the beach this summer. 

You will note that in all the years hence there has been no increase in the age at which benefits are paid to ever greedier recipients.  That must change!  I believe we now live into our late 70s.. women live longer and get to spend more years in poverty for their seeming advantage... Nor has there been any serious consideration of "means testing".  That, too, needs to change.  Do you seriously think  the wealthiest  in our country need to collect a benefit when so much of their income is never even taxed for SS?  Recall that SS tax is not charged on incomes in ater the first 109K.   How "fair" is that?  But they still get to collect their monthly check!  Why? "because they paid in"!  And thanks to a recent Supreme Court judgement they can now pay as much as the wish into superPACS.  You think the 1% isn't setting the agenda?  Keep watchin' Fox...

Furthermore, the basic precept of the entire program was that it would be considered, "insurance".  Insurance againts starvation and abject povery.  It was never intended to be a sole income in "retirement".  But that, too, is what so many recipients have come to believe.  Lost in the entire dicussion is any sense of responsibilty  to save for old age/"the rainy day".  NO! the gov't. will take care of meWhere has person responsibility gone? where has "ownership" in our personal welfare gone?  Where has "financial literacy" gone?  We're on our own. 

[byhammerandhand]

My observations are two:

1.  For the last 30 years, I've contributed to an IRA, then later, when available, a 401(k).   Never a nickel of employer contributions.   I will probably get more out of these two than the last 45 years of Social Security contributions that were significantly higher than any of my contributions (especially when you consider my employer (sometimes me) had to pay in an equal amount).

2. Just how long have we known about a baby-boom and subsequent baby bust?  Don't we have significant demographic data on how many people of what age there are and what the trend will be over the next, oh, 80 years or so?  Seems like those rascals in DC can't figure this out.

[sofadoc]

I worked at an aerospace plant when I was in my early 20's. One of the old farts that worked there took all of us young whipper-snappers aside one day. He told us that if we would have 2% of our pay withheld for investing into an IRA account, we would have enough to live on when we retired.
I've talked to some of those whipper-snappers in recent years, and asked them how that advice is working out 30 years later.......it isn't. Sure, they have a nice little "nest egg". But not one that will outlive them.
Bobbin makes a good point that SS originally was intended only to keep you from starving in your old age. It was never intended to maintain the same lifestyle you enjoyed in your productive years. But when my Grandmother "officially" retired in '75, she actually DID receive enough SS benefits to eke out a comfortable existence. Try doing that now.

[kodydog]

You will note that in all the years hence there has been no increase in the age at which benefits are paid to ever greedier recipients.  That must change!  I believe we now live into our late 70s.. women live longer and get to spend more years in poverty for their seeming advantage... Nor has there been any serious consideration of "means testing".  That, too, needs to change.  Do you seriously think  the wealthiest  in our country need to collect a benefit when so much of their income is never even taxed for SS?  Recall that SS tax is not charged on incomes in ater the first 109K.   How "fair" is that?  But they still get to collect their monthly check!  Why? "because they paid in"!  And thanks to a recent Supreme Court judgement they can now pay as much as the wish into superPACS.  You think the 1% isn't setting the agenda?  Keep watchin' Fox...

All good points Bobbin. There are way to many people on SS that don't need to be. There is no choice but to reform it. But that spells political doom for any politician who suggests it. Just look at Gov. Rick Perrys demise. Not all caused by his statement but it was the beginning of the end.

Could you imagine Obama or Romney suggesting SS reform.

[JuneC]

Well put, Bobbin. 

In a former life I worked for an accounting firm for a short while and several clients were US citizens who had retired abroad, married a much younger local resident and had a few kids.  Those children were collecting Social Security, in addition to the parent, and will continue to do so till they are 18 years old.  The spouse will also be eligible when they reach retirement age.  How is this financial model sustainable???  IMHO, it's no wonder young "hoochie mamas" want to marry an old American dude... 

  http://www.socialsecurity.gov/retire2/yourspouse.htm

June

[Mike]

One idea i have is a criend of mine is a teamser his dad was a teamster with his pention he will get sbout 3k a month and then also be able to colect ss maybe a 1500 more as dose his dad   Why can they colect. 3k and also get ss i belive there a small limit one can earn( whats the difference) and stll collect so much till youe 70 or somthing there got to be millions of people like this also. Just not riight to me

[SoInTrouble]

Take a look at what has happened to retirement in the past 40 years.  American companies and the government used to have pension plans.  They are gone now.  Wall Street has become the only game in town.  The problem is there is a lot of money in the market and a lot of people who spend their time trying to tap that money.  Where do you think day traders and bankers profits come from.  It comes out of the money you have in your 401K.

Killing social security would be a disaster.  Of course Wall Street is in favor of it.  They will never turn down a wad of cash.