jf - the Federal government will never have a fund that just banks the money for future use. They will always find a crisis to use it on and pass the problem down to the next guy.
That is basically my entire issue with Social Security.
Some people believe that there is some account out there with all of the money that they have paid in, sitting in.
If they did some research they would realize that Social Security is actually a pyramid scheme, sponsored by your Federal Government.
Social Security's $2.5 trillion surplus
Social Security has built up a $2.5 trillion surplus since the retirement program was last overhauled in the 1980s. Benefits will be safe until that money runs out. That is projected to happen in 2037 — unless Congress acts in the meantime. At that point, Social Security would collect enough in payroll taxes to pay out about 78 percent of benefits, according to the Social Security Administration.
The $2.5 trillion surplus, however, has been borrowed over the years by the federal government and spent on other programs. In return, the Treasury Department has issued bonds to Social Security, guaranteeing repayment with interest.
The government has all kinds of funds that bank money for future use... actually what happens is a large lump sum sits in an account and draws intereset... the interest is then allowed to be spent.
By the way Social Security originated with no one paying money into it. So of course there isn't a big account with money sitting in it... the money gets used as soon as it gets put in to pay for the older generation.
By the way... I don't think SS classifies as Pyramid Scheme. In fact, i can't see any relation to it other than your attempts to fear-monger.
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There is also one other way to fix SS... don't rely on the younger generation to pay for the older generations anymore. This would require a near total break in anyone receiving SS for near 50 years. Then the program could be restructured so that each generation paid for their own SS.
Of course thinking further this solution cannot be implemented because Social Security doesn't have 50 years to allow time for a generation that has no expectation of it.
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The government has all kinds of funds that bank money for future use... actually what happens is a large lump sum sits in an account and draws intereset... the interest is then allowed to be spent.
By the way Social Security originated with no one paying money into it. So of course there isn't a big account with money sitting in it... the money gets used as soon as it gets put in to pay for the older generation.
By the way... I don't think SS classifies as Pyramid Scheme. In fact, i can't see any relation to it other than your attempts to fear-monger.
jf - help my education. What government funds bank money for future use?
I could be wrong, as I am not intimately familar with all parts of the governmental budget.
Also, at one point, there was an account with money sitting in it, until Congress decided to "borrow" the money for itself.
In my opinion SS is a pyramid scheme and here is how.
Retirees are the ones on the upper levels. They have already put there money in, but it has been paid out to others, already. They are totally reliant on new money that is coming in to fund their payouts.
That is a pyramid scheme.
Then, I have to bring up your personal attack again.
Why call me a fear-monger?
Have I attacked you?
This is the second post that you have attacked me, personally.
Can you not address the issues raised without this?
Again, typical liberal response to a valid issue.
Do you believe that SS will be there when you retire?
I do not believe it will be there when I do, and have not for my 25 or so years in the work force.
jf - help my education. What government funds bank money for future use?
I could be wrong, as I am not intimately familar with all parts of the governmental budget.
Also, at one point, there was an account with money sitting in it, until Congress decided to "borrow" the money for itself.
In my opinion SS is a pyramid scheme and here is how.
Retirees are the ones on the upper levels. They have already put there money in, but it has been paid out to others, already. They are totally reliant on new money that is coming in to fund their payouts.
That is a pyramid scheme.
Then, I have to bring up your personal attack again.
Why call me a fear-monger?
Have I attacked you?
This is the second post that you have attacked me, personally.
Can you not address the issues raised without this?
Again, typical liberal response to a valid issue.
Do you believe that SS will be there when you retire?
I do not believe it will be there when I do, and have not for my 25 or so years in the work force.
If any of us were to create an "investment" scheme like Social Security we'd be prosecuted and jailed. Yet, the federal government can create just this sort of scheme and then MANDATE that we all participate!
Even Bernie Madoff couldn't force people to buy into his Ponzi scheme. Yet we have to participate (with very few exceptions) in SS.
There has been a lot said about how this next generation will probably not live as well as their parents - for the first time in American history. The reason for this is because beginning with the Social Security generation, our parents have been living off the future savings of their children and grandchildren. Our parents and grandparents have benefited at the expense of their children.
Ferd, I was thinking that your privatize solution doesn't actually solve the SS problem. #1 is that we pay for the older generations SS benefits and then the younger generation pays for ours. Privatization won't solve anything unless we are paying for our own benefits. Once we are then it will work... but then again if we were paying for our own benefits this whole time then SS wouldn't be in the mess its in now and so we wouldn't even be talking about privatizing it.
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Ferd, I was thinking that your privatize solution doesn't actually solve the SS problem. #1 is that we pay for the older generations SS benefits and then the younger generation pays for ours. Privatization won't solve anything unless we are paying for our own benefits. Once we are then it will work... but then again if we were paying for our own benefits this whole time then SS wouldn't be in the mess its in now and so we wouldn't even be talking about privatizing it.
You are right that I have not addressed the "bridge" aspect here.
my point here was to address the benifits of sticking with the current system vs going to a system where each worker builds their own retirement.
any change will require a bridge. That is a subject for people far smarter than I!
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If any of us were to create an "investment" scheme like Social Security we'd be prosecuted and jailed. Yet, the federal government can create just this sort of scheme and then MANDATE that we all participate!
Even Bernie Madoff couldn't force people to buy into his Ponzi scheme. Yet we have to participate (with very few exceptions) in SS.
There has been a lot said about how this next generation will probably not live as well as their parents - for the first time in American history. The reason for this is because beginning with the Social Security generation, our parents have been living off the future savings of their children and grandchildren. Our parents and grandparents have benefited at the expense of their children.
Unlike a Ponzi scheme, SS can guarantee new investors. Unlike a Ponzi scheme, SS can guarantee that only a certain amount of people can withdraw money from the system at once. These two things make SS much different than a ponzi scheme. These differences make SS much more stable and sustainable than a ponzi scheme. These differences make SS more like a direct pipeline from younger to older workers than a system where a person pays in then gets a nice return by money being diverted from other peoples accounts to his and then he reinvests and his money is then diverted to pay anothers return and so on in an endless cycle. SS is not like this. SS is more like insurance where the premiums you pay (SS payments) are used to cover other peoples claims (SS checks) until you have a claim yourself (reach SS age).
So yes you can compare SS to a ponzi scheme as long as you understand the differences between it and the scheme used by Ponzi, because the differences between the two schemes make them entirely different animals.
Or I can compare it to insurance as long as I understand that there are differences between the two concepts. However, I'd argue that the differences between SS and insurance are minor compared to the differences between SS and a ponzi scheme.
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jf - help my education. What government funds bank money for future use?
I could be wrong, as I am not intimately familar with all parts of the governmental budget.
Also, at one point, there was an account with money sitting in it, until Congress decided to "borrow" the money for itself.
In my opinion SS is a pyramid scheme and here is how.
Retirees are the ones on the upper levels. They have already put there money in, but it has been paid out to others, already. They are totally reliant on new money that is coming in to fund their payouts.
That is a pyramid scheme.
Then, I have to bring up your personal attack again.
Why call me a fear-monger?
Have I attacked you?
This is the second post that you have attacked me, personally.
Can you not address the issues raised without this?
Again, typical liberal response to a valid issue.
Do you believe that SS will be there when you retire?
I do not believe it will be there when I do, and have not for my 25 or so years in the work force.
*Each 1 represents a person and the 1 directly below them represents the person who paid or is paying for their SS benefits. Of course such a diagram illustrates the basics of SS only in a perfect word. In an imperfect world it will resemble the above shape but not perfectly. So is the above a pyramid? Well on technicality sure, it's a pyramid with an n=1 association per level. In a diagram such a thing would look like this:
1
1
1
1
In other words its not an exponential pyramid but instead a linear *pyramid (if such a thing can even be called a pyramid anymore). Now what are the differences between SS and a traditional pyramid scheme? Well, SS can guarantee *near* the same amount of investors as the previous level had. That guarantee is enough to make any linear pyramid scheme very sustainable. This difference makes SS into a much different animal than what we traditionally call a pyramid scheme.
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Linear Mode
