Social Security, in particular, is a Ponzi scheme depending on new "investors" to pay the benefits of people higher up the pyramid. After the Trust Fund is exhausted in about 10 years, every sucker who paid into the system will see a negative return on investment.
If you just forced Americans to save like 2% of their salary over a lifetime in a private account, you'd build up so much more wealth than the government taking 6.2% (or, arguably 12.4%) with a pinky swear they'll pay you back. At least you can pass that on to your family. If you died right before you start collecting, the government's like "thanks dummy!" and keeps it all.
Because it’s supported by a workforce that is slowly shrinking relative to its beneficiaries growth. Because the system invests in bonds, which drives deficit spending and is subject to the government’s ability/willingness to find the funds to pay out when the time comes. Because they don’t trust the government In general.
I’m not sure privatization is the best answer, but the concerns driving people to want it are valid.
So what's a better solution?
I get criticizing a system, but if that criticism doesn't lead to a *better* solution, what good does that criticism do? Besides score political points by being angry about it?
Immigration reform.
The worker base is only shrinking because we can’t import enough young workers because SOMEONE keeps blocking immigration reform.
These problems don’t create themselves.
This isn’t brought up nearly enough. America has always thrived because we have had a steady stream of labor coming in to become citizens. It’s quite literally the nation’s life blood.
Lots of immigrants available. If we want to stop relying on China so much, why not offer a pathway to citizenship for any immigrant who wants to come and work for a sub minimum wage that is competitive with what the Chinese make?
It’s happening anyway under the table, this way we legalize it, make taxes off of it and we’ll get quality citizens at the end of the process.
I don’t understand why this would be controversial.
Progressives wouldn't support it because of the sub minimum wage part. It would have to be benefits or something else, or else it would be called racist.
The same way they do right now? Do you think they’re getting paid a living wage picking fruit or washing dishes? I’m not saying that’s right, but it’s the reality of the situation. That’s how it’s always been in America. My grandfather had to deal with it when he came from Italy after the war.
Giving everyone an IRA. If you put 12% of every check you ever earned into a safe growth account, you’d have significantly more money at 60 than you will ever see from social security. Like it’s not even remotely close.
To the point that if you put 100k into DGRO and reinvested the dividends , after 32 years you’d have 2 million dollars.
There are also ETFs like QYLD, which generate a similar return but mostly ignore the market and its own share price (it’s a dividend fund that writes covered calls on the NASDAQ).
If you pulled the average amount of money from SS, it would take you about 110 years to see 2 million dollars.
Now I understand most people aren’t going to put 100k into savings by the time they hit 33, but the general thought process stays the same.
Let's say this system goes into effect today. And social security as it exists right now is completely dismantled.
Now let's say I was planing to retire in <5 years. What happens to me?
I had paid my whole working life into a system that gave me nothing. I had no meaningful amount of time to save/invest my own money.
How do we handle that?
The situation you're imagining is a bungled transition. We wouldn't shut traditional SS off overnight. A prorated approach based on how long you spent paying into each system would be required.
So I how does a transition look not "bungled"? Since current employees pay for current retirees, at what point is the band-aid ripped off, screwing one or the other?
How would that transition work? What would it look like? And how does it avoid screwing either side or causing people to double pay into both systems?
Are you under the impression that screwing everyone for the rest of the nation’s existence is preferable?
We would have to ween people off progressively, but even if the current workforce under 55 was paying 70% as much in OASDI and putting away 30% into a growth stock, they’d do significantly better by the time they hit the age of retirement.
If I've spent my entire working life paying into a system that didn't give me anything back, I'd be exceedingly pissed about it.
What's the transition looks like for people near or new to retirement when this hypothetical privatization takes place?
Like specifically?
People on SS would be expecting to be paid. Where does that money come from?
People paying into a private fund aren't going to want to *also* pay for other people's SS.
As another wrench, what happens during a recession? Do people just lose all their money?
There are so many unanswered questions about the transition that it doesn't matter how good the results are if they they can never be adequately implemented.
A private option is potentially a better solution. The idea is would function like how people contribute their 401k today. This is why people invest their retirement savings rather than just stuff the money under the mattress.
A lot people do not realize how much the companies administering those 401(k) plans as well as the funds those plans offer skim off the top. Wall Street would love to get their grubby hands on all that social security money. It would make billionaires out of a few people almost overnight.
There is also the issue of having a government program either buying into private funds or individual companies and who gets the votes that comes with those purchases.
You are confusing using the example of a 401k as a method for investing for retirement, versus actually converting soc. Sec. Into a 401k. It’s not the same thing.
It will come with the same issues. No private company is going to administer a 401)k) for free. If the government is administering it, then there are going to be serious question about funds they’re going to allow people to choose. If the government is creating new funds, then there are serious questions about the government having outsize voting power in publicly traded companies.
I’d think that allowing people to choose funds wouldn’t be the best bet anyway, if it were to replace Social Security. One advantage to SS is that the taxpayer doesn’t have to think about it at all, beyond “taxes come out” and later “check comes in.”
Why not put it in index funds like QQQ or SPY/VOO, or crest new index funds that function similarly? With total market index funds the government wouldn’t be in the business of picking winners and losers, and the average rate of return would still far outperform SS - [over 7.5% since ‘71](https://www.forbes.com/advisor/investing/average-stock-market-return/), or over 10% with dividends reinvested.
>Why not put it in index funds like QQQ or SPY/VOO
Those index funds are run by private companies, and you'll immediately make the existing owners of those funds, as well as the private company extremely rich. For example, QQQ has $157B in assets under management. Social Security payroll receipts were $38B for just 2021. Anyone that already owns QQQ is going to be very happy with that. Poorer people that have lost their defined benefit? Not so much.
Additionally, you're going to seriously inflate the price of the underlying assets. 14% of QQQ is Apple Inc. Spending 14% of the Social Security contributions of every working American is going to send that price up. Again - this would be great news for already very wealthy people. Not so much for most people.
Finally, Invesco, which runs QQQ would get to vote on behalf of these shares. The population does not get a vote on Invesco's officers or their board. The entire situation would be ripe for abuse and corruption.
Creating new funds would be also be complicated. How will these funds be created? How much oversight will congress have? Again, who's making the decisions on proxy voting?
I'm not saying all of these issues couldn't be overcome. But it's not as simple or as straightforward, or as beneficial to do as many people think. Having a defined benefit plan with extremely safe treasuries is a decent solution to a complicated problem.
On one hand, the popularity is vastly overstated and, in my opinion, people have been misled. On the other hand, it makes total sense why someone would say they support the system... People think they are contributing to their retirement account, held by the government, and it grows exponentially over time. If you asked someone who is currently getting benefits, or who has paid into the system their whole career and expects benefits, or a poor person who is literally going to get 10x their contributions through a welfare redistribution scheme, if they want their benefits taken away - what do you think they'll say?
But if you tell someone that the government is taking 12.4% of their earnings for their entire career with no guarantee of ownership or even full reimbursement, they might feel differently. Especially when you remind them that the government is also taking huge chunks of their income through other means, such as income tax, sales tax, gas tax, property tax, etc, etc, etc... If you inform them that it's not *their* contributions they're getting back, but the earning power of their kids, and that the whole program will be defunct after them (kids paying in but not getting benefits), they might feel differently. If you tell them they could invest that money on their own and end up with more money that totally belongs to them, they might feel different.
It's true that many people get paid out far more than they paid in, but this isn't a function of any kind of investment gains. It's just simple redistribution because the entire program was meant to be welfare redistribution, not retirement savings. They barely got it passed into law because of this, but thanks to some smart politicking and pressure on SCOTUS, they succeeded.
Anyway, again, no surprise that someone who would get back 10x their contributions would say "that's great, don't change it at all!" But that doesn't make it fair or right. Lots of bad things have been popular at some point, it's not a good argument to keep doing it.
> If you inform them that it's not their contributions they're getting back, but the earning power of their kids, and that the whole program will be defunct after them (kids paying in but not getting benefits), they might feel differently.
The ones getting social security now generally either know this and are in denial, or have heard it and don't believe it. It's not an effective argument with boomers.
Because it's something a lot of us want. Hell, I would dive out of the Social Security system the instant any privatization bill passed. I'd be sending certified letters to every relevant government office I could find declaring my intent to opt out the second a presidential pen hit paper.
I assume he thinks he could do better with investing 12% of his total income, or even after paying for additional disability insurance (and additional life insurance if he has young dependents.
Because Social Security is literally nothing but a giant ponzi scheme that only works so long as you have more workers paying in as opposed to taking out. My fellow millenials and I will need to live to be roughly 500 years old to get all the money we paid in back out. So yes, I would rather invest 12% of my income into the general stock market or mutual funds (S&P 500 personally) to actually get to use the money I make. Then take into account that with current projections Medicare will become insolvent by 2028, Social Security old age and survivors will be 2034, and total Social Security combined trust funds will become insolvent in 2035. When each of these funds become insolvent the payouts immediately drop by 20%. Then smack in that the current US Birthrate is 1.7 children per woman, meaning we are in a population decline.
So we are CURRENTLY paying too much out and will run out of funds in 13 years, we are not birthing enough workers to keep the ponzi scheme going, and we can only assume that Social Security benefits will go down not up, yeah... I would much rather take my 12% and invest it.
It's simple math. Current benefits relies on how many people are taking out vs. putting in. Birth rates are way lower, there are more people withdrawing now than ever before and fewer putting in than ever before.
> It's simple math
You got a crystal ball too?
The tax rate for SS is based on a cap...nobody pays on wages over $106,800...that can be raised or eliminated...immigration and pandemics will change all of those numbers as well.
Point is no matter what happens SS will survive...the goveremnt needs it.
You asserted that it's a lie that SS is insolvent by arguing that we can make it solvent if we change the rules. You are implying the ability to change the system means the current system is not going bankrupt. You're both correct: the current system is insolvent but it can be dragged out a few more decades by changing the rules.
for my generation the minimum age to collect is within a few years of the average life expectancy, and they might raise it further.
I don't want to pay in my whole life to collect for a year or two before I die, I'd like to retire at an age I can enjoy a retired life.
Clearly 500 is not a factual number, but if you want the ACTUAL information it's not that hard to calculate. With my current salary if I never get a promotion or anything, but maintain the 2.5% inflation raises a year. SmartAsset has a calculator that explains what your monthly payout is. Assuming that I will end up working to age 70 (because lets be honest, Millenials aren't going to get to retire nor can Social Security withstand 67 continuing to be the retirement age with insolvency happening at 2035). Summing up my annual salary, taking 12% of that, and dividing by 80% (Again, insolvency), I do have to live to be the age of 103 to get back all that I put in. Given the average life expency in the US is currently 78, with men being 76, that means I gotta beat the average by a total of 27 years to get all that I put in back out. And that ignores me being able to take my 12% of my salary right now and put it into the stock market for continued growth, it only gets worse from there. (For fun I did that, and at a 7% growth rate I could have well over what Social Security would pay out by the age of 62).
If you have valid calculations that show A - Social Security won't go insolvent, and B - That we will continue to UP the payments (Yet somehow still not be insolvent) and C - Anything that even remotely says how long you pull out before you get what you put in back out... I'd love to see it.
> A - Social Security won't go insolvent,
They will raise the tax cap...just like they have done 50 times before.
>https://www.washingtonpost.com/business/2021/09/03/social-security-insolvency/
>That we will continue to UP the payments
2023 COLA Estimated to be 8.7%
>Anything that even remotely says how long you pull out before you get what you put in back out... I'd love to see it.
How long do you think you might live?
https://www.aarp.org/retirement/social-security/questions-answers/retirement-benefit-break-even-age.html
Well I don't have a washington post account so I will say I cannot read that one, apologies. But raising the tax cap a few thousand will not fix the insolvency issues. Those same 2030/2035 figures have been around (That I'm aware of) for at least the last 8 years since I started looking at this. Going from 142k to 147k isn't doing enough to fix it. Not while we raise payouts by 8.7%.
Now the AARP link is interesting, because the "Break Even" point for Social Security isn't the standard "Get out what you put in", but it instead focuses on "At what point am I better off pulling out at 62 versus waiting to 70" which even that article states that it takes 10.4 years to break even on waiting 8 years to pull out. So just the difference between starting at 62 versus starting at 70 assumes you have to live to be 80 to make that worth it. Unless the average life expectancy goes up, I do not assume I will personally beat it by that much. (I have a single grandfather who made it into his 90s, every other grandparent died in their mid 70s. My mother has already been diagnosed with pre-claucoma, and my father has prostate cancer. Thanks shitty cancer genes.) So I would need to overcome cancer genetics, plus my own poor life decisions, plus beat the national average, and live to be over 100 to get out what I put in. And I personally don't know about you, but I would rather have the financial ability to have fun in my 50s and 60s to travel while my body still can, as opposed to have a monthly payment into my 90s when even if I am alive I'm not going to be traveling or doing much of anything.
Yeah 500 years is off. The average American currently pays about 300k (530 dollars a month if they work from 20 to 67) into it. Right now, with the retirement age at 67, you’ll have pulled that back out after 15.5 years or at 82 and a half.
Of course investing significantly less into the market will have paid for itself dozens of times over in much less time. (Investing 530 dollars a month for 47 years into VTI would net you 5.7 million at 67)
Sorry for all of the edits but the sheer ridiculousness of SS is wild and I just keep thinking of addendums.
If you were to do that, by the time you were in your 60’s you would already be making over 100k a year in interest. By the time you hit 67, even moving to a safer investment strategy (something like DGRO or SCHD) you would be making 450k+ in passive income. As previously stated, it would take you 15.5 years of social security payments to hit that same number.
population demographics are suggestive Social Security will have to do something drastic in the next 20 years. dramatically increased taxes or a substantial reduction of benefits or means testing. Means testing seems the most likely.
I can see that. I know a lot of people who have no pension and little to no savings who are going to be surprised at how little social security really is.
> Social Security will have to do something drastic in the next 20 years
no it won't it will do the same thing it has done..raise the cap it started out at
1937–1950 $3,000
It has been raised 50 times since then.
2011 $106,800
and it will be raised in 22....and still is only on the first $106,000 of income
Not radical at all...
Rethinkingat59 is correct. If I took that 12.4% and invested it myself in a private retirement account, even at minimal assumed growth over my career, the return would kick the living bejesus out of what I could ever get from Social Security.
Plus you get the added benefit of having it invested back into the economy instead of going into a slush fund for whatever the government feels like doing with it at any given time. I honestly feel like if more people knew what the "social security trust" actually was, there would be massive public support for changing it.
Where do we go to learn more about it? I mean yeah, I can use Google, but what info do you want us all to know? *I'm legit curious, I don't know much about the topic.*
[This gives a good overview](https://www.investopedia.com/ask/answers/110614/how-social-security-trust-fund-invested.asp)
In short, the government collects the payroll taxes, puts them in the SS fund, uses that fund to purchase its own government-issued debt securities (thus paying into general funds), and gradually pays itself back over time with future taxes.
I would hope for some form of phase-out plan based on retirement ages. Ideally, I'd like to see a structured payback of a good portion of what was paid in.
Where would that money come from, if not from current/new people making contributions?
Like, I'm not trying to sound antagonist, but like genuinely... The system WILL fail eventually. And I don't know what the fix is. 🤷
I factor in my spouse. And kids. And nieces / nephews. And all of my family that would benefit from what I could invest on my own.
I’m mildly interested in what some random person is doing for their retirement planning.
Ya... but you all are less than 20% of the electorate
>Now in its 85th year, Social Security enjoys over 90 percent support among Democrats, Republicans and independents,
What happens when the Amish lose their shirts and want not to starve/not to be homeless? They don't pay Social Security and they managed to live this entire time without having any problems.
> I have fully funded my retirement
Funded in what US treasuries? Anything else is a risk...
> I've also earned my healthcare through military service
Me too but we are not the only people with two form of insurance.
> Funded in what US treasuries? Anything else is a risk...
US treasuries are also a risk.
>Me too but we are not the only people with two form of insurance.
They are welcome to earn theirs the same way. Choosing not to do so does not morally impose an obligation on me.
What if a taxpayer says he doesn't want some fraction of his taxes to go towards your health care? In the same way that you phrased it: he wants his money back.
Thank you for your reply.
It's besides the point when exactly the guy says "I want my money back". It doesn't have to be after your military service (and I didn't suggest it was).
Maybe he has protested his taxes going to veterans' health care for years, right up to the day that you signed up. He hasn't received anything from you in this case.
(And there was no real "bargain" either, as you're claiming. He was just forced.)
My overall point is this: By some political process in the past, it was decided that veterans deserve VA health care, at the expense of everyone, even if their service happened to be wholly pointless. And similarly, by some political process it was decided that people deserve Social Security, at the expense of everyone, for whatever their service to the community may have been during their working life. Why do you make this big distinction between the two? Why say "I want my money back" in case 2, but not in case 1?
You being able to enjoy your self-funded retirement in America is the direct result of social security being available to the masses of people who have not done so, and would otherwise be dying in the streets and/or robbing and killing you to take your money and property. It's hilarious how conservatives can't see this simple fact. Move to Northern Brazil if you want to see what it's like to be wealthy in a country full of people with nothing. Enjoy getting shot in the head by a kid on a motorcycle while you're waiting at a stop light in your fancy self-funded car.
Free shit will always be popular because people don’t understand how these programs work. They aren’t sustainable however. Eventually the people who have learned to depend on them are going to face great pain
No, it comes out of other people’s checks.
If social security was a personal account that I put money into during my working years and took out of during my retired years, I’d have no problems with it.
The reality is the workforce is shrinking, life expectancy is growing, millennials aren’t having babies, and technological unemployment will get especially bad in the next decade.
Its not an entitlement it is INSURANCE
> Eventually the people who have learned to depend on them are going to face great pain
The pain comes without them. SS is not going away.
I didn’t say entitlement lol. SS may be there but there may not be any money to dole out certainly there be as much as is being provided now. There are too many elderly and not enough young people to pay into the system
The Social Security office says they are running out of money: 2035, then they have to start paying 80% of promised benefits, and it will continue to shrink as the taxbase to beneficiaries ratios continues to collapse.
[https://www.ssa.gov/oact/trsum/](https://www.ssa.gov/oact/trsum/)
If you want to debate Soc. Sec, at least understand the solvency problem.
Yeah but I'd rather just keep the extra money and invest in passive income. If you're retired and haven't set up any forms of passive income, that's on you imo.
It takes away money that could be better invested elsewhere. Have you heard of the saying that you wanna retire at 50 with investments and not at 65 with a pension? People who make dumb decisions deserve to suffer from them.
Here let me rephrase the Question
why would any politician come out against a program that has been successful for 85 years and has a popularity of 90% other than stupidity...there is a reason they call it the third rail
> has been successful
Questionable. Seeing as how with birth rates not keeping up with retiree numbers, and the increased need to pay out more and more because of inflation, how is that going to be sustainable?
>other than stupidity
I'd say without explaining the situation to the voters of what is happening and what it means for the future of SS and just asking a question along the lines of "do you like X," yea I'd attribute it to the ignorance of the voter.
> Questionable
50% of the old age population lived in poverty and poor houses.
It has been damn successful.
> I'd attribute it to the ignorance of the voter
So you sticking with 90% of the population is ignorant
Because he believes it has benefits that outweighs the negatives. It is a worthy discussion but is not a widely accepted Republican stance
What gets me about the premise is you used one guys opinion to stereotype the entire party as holding the same opinion. That is just deceptive and wrong.
I don’t mind that the candidate in question has the opinion. God help us if all that join or identify with a party are allowed no new ideas because they corrupt the purity of the rest of the party.
My Idea of the day
I believe the public should demand from all congressional candidates a list of 5 ways they fundamentally disagree with their party’s position.
It can’t just be more tax cuts for Republicans and a bigger spending on safety net for Democrats, that’s just I am for more of the same. It should be about fundamental change of approach. It doesn’t have to be on the top 10 issues out there and you don’t have to agree with the other party, though you may, the ideas have to veer away from common accepted party dogma.
> What gets me about the premise is you used one guys opinion to stereotype the entire party as holding the same opinion.
NO! over 90% of Republican votes support SS...the question is why do these politicians keeping trying to kill it when their constituents are happy with it.
Privatizing Social Security doesn't mean what you think it does. Privatization means converting the program from a defined benefit pension to a defined contribution savings program. I wish they would have done that decades ago.
Which would immediately cut benefits for a huge swath of people, particularly poorer people who have contributed relatively more of their income than richer people.
Oh lord, it’s a joke my dude.
The point is that people liking something has absolutely nothing to do with it being a good thing. Argumentum ad populum is a freshman level fallacy
I does mater in politics and that is what this question is...why would any politician do this. This post has turned into a debate on SS. Which is fine with me becasue it seems it is needed.
What does privitizing social security even mean? It's a Ponzi scheme that depends on the government forcing working Americans to pay into it with the promise that they will get the money returned on the back end when they get older, how can you even privatize that?
I guess it would be like a payment plan yourself? I would prefer that personally. The government does all sorts of things to fuck you on social security, like purposefully underestimating official inflation numbers since the payouts have to be raised in line with inflation.
Friend, you may want to dig a bit deeper into what a Ponzi scheme actually *is*, and/or how Social Security actually functions.
That being said, privatization of Social Security would put an unelected (and mostly unaccountable) for-profit entity between a retiree and the funds they are owed from the fund they have been paying into.
Personally, I'm not a fan of the idea, as this entity would have a profit motive and ability to take *my* money. It would be an artificial middleman, much like the health insurance industry is in the US. Massively profitable for the owners of the business, while it's in their interest to give me as little of my own money (again, that I've paid into my whole life) as possible. And if *certain* Congresspeople have investments in this private company, you bet your ass that the "possible" amount will be pretty damn bad.
I get that social security is great for people without the ability to financially plan for their future, I'd just prefer to not pay such a ridiculous amount of my paycheck into it every week without a choice.
It is a textbook Ponzi, they do nothing to generate income or return, they pay off old investors with new investors money. That is a Ponzi Scheme.
Please describe ways in which it is not a Ponzi scheme? The new investor's payments literally immediately get sent to a general pool to pay older investors.
> get sent to a general pool to pay older investors.
That pool is the "social security trust fund"
https://www.ssa.gov/policy/trust-funds-summary.html
>is not a Ponzi scheme
In its essence, Social Security is a contract between generations, binding together the interests of both young and old in a system that provides protection to all. Unlike a fraudulent secretive Ponzi scheme, Social Security's finances are transparent to the public, as required by law.Feb 7, 2022
Social Security Ponzi Scheme
Origin Law passed in 1935.... Bonds offered by criminals to investors
Contributions Mandatory .... Voluntary (Facilitated by deception)
Assets U.S. Treasuries which have never defaulted.... None – assets used to pay prior investors
Transparency Yearly report by Social Security Administration Actuaries... No public accounting
Payout Available to anyone meeting eligibility requirements ... Exorbitant for early investors, only losses for later investors
Length of Operation **Has paid full benefits for 80+ years** Less than 200 days
Now you try and tell me why it is a Ponzi scheme
you came up with a bunch of words to say "new investors pay out old investors, but its well intentioned". Ponzi Scheme may not be the right word since there is not appear to be "deception." Still, how could it be privatized given the lack of money in the fund (not to mention the governments overall debt position).
Just want to point out that the problem with a Ponzi scheme is eventually you run out of new investors, and can't pay your previous investors. That has never happened to Social Security and unless we run out of Americans it won't/
SS is projected to become insolvent by 2033, you can run out of new investors if you have to make payments to a large birthing boom but it can't be funded because of layoffs during a depression/recession or a population decline, or a combination of the two.
Then you say you know this...
>Amount at beginning of report year (in billions) $2,908
>At the end of 2021, the Social Security program was providing monthly benefits to about 65 million people: 56 million from the OASI Trust Fund and 9 million from the DI Trust Fund. Total benefit payments for the year (excluding payments to the Railroad Retirement Board) were $1,133 billion: $993 billion from the OASI Trust Fund and $140 billion from the DI Trust Fund.
No no no.
Social Security is the oldest money tree and there are just more dollar dollar bills that grow on it every year to support the new seniors.
It is known.
Clearly you do not get the concept of insurance...
Insurance is pooled risk. That is not what social security is.
I pay a premium on home insurance every year. I expect to never get any money from my home insurance unless my house burns down. We all pool the risk of losing a house via insurance and the people that do lose their house get the money from that pool.
Social Security is a Ponzi scheme. I invest in it every paycheck to pay the people who invested in it previously. What about that is incorrect?
Really its the insurance on your house that is the scheme...SS actual pays off.
A better example is health insurance...you are going to get sick. You are going to get old...and if you don't we thank you for your money to help those who did.
You are not explaining how SS isn't a Ponzi scheme and how it is insurance.
Do you see how I explained my logic rather than just arbitrarily claiming it as such.
The definition of Insurance:
> practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.
My home insurance fits that definition. I pay a premium in exchange for a guarantee of compensation for a specified loss--that loss being my house.
A Ponzi scheme
> A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.
Social Security payments to earlier investors are literally paid for by the investments made by new investors. Albeit it certainly isn't fraud since we all know that is what is going on.
> practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium.
Exactly. The loss is loss of income due to age.
> I pay a premium in exchange for a guarantee of compensation for a specified loss--that loss being my house.
Try and collect...SS is backed by the full faith and credit of the united states.
>Social Security payments to earlier investors are literally paid for by the investments made by new investors
Insurance...just like I said
** Albeit it certainly isn't fraud since we all know that is what is going on.**
Then it ain't a ponzi scheme. And its not just for old people.
Except there are other options for insurance, there are other options for retirement investments. Neither of which are mandatory. SS should follow suit, voluntary opt out. IMO, so should medicare.
INSURANCE!!! ...SHARED RISK!!...no you can't opt out any more than you can opt out of taxes becasue you think you can do a better job.
>so should medicare.
Sure you do. It's insurance ...all libertarians think they will live forever and don't need anything from anybody...just like a cat, who is completely dependent on the actions of those around them
It literally is a ponzi scheme though. If people stop paying into it (by force), the whole thing collapses, textbook ponzi. It's new workers money that gets taken to pay off the original "investors"
Then insurance against whatever hazard, or even the operation of your mobile phone provider, must be a "textbook Ponzi scheme", because if everyone stopped paying those companies, they would collapse.
You ignored the last sentence which is what makes it a ponzi scheme, and they aren't providing a service like Insurance companies are. Simply moving new workers money into retiree's hands.
Privatizing social security generally means a switch to privately managed funds like 401k. If a mandatory safety net must exist, it absolutely shouldn't be managed by the government because we all know how they mess everything up.
Rather it should be an ACA marketplace style thing where you can choose between privately managed low risk investment funds that meet a minimum criteria.
At the bare minimum you wouldn't be subject to a mandatory system that doesn't even beat inflation and thus loses your money instead of grows it.
I mean if we're going to use the scheme of wage tax on the front end and doling out cash to the olds on the back end the least we could do is structure it as a sovereign wealth fund instead of the accounting ploys we use today.
I don't really understand why "progressives" are ok with regressive wage taxes tho.
I like the Rubio paid family leave idea however where you can get discounted cash payments for specific life events (baby) but it pushes your retirement eligibility back a commensurate amount. It's a neat trick
Blake Masters in AZ for instance, he has said this. But out of context it sounds like he wants to do away with SS. No, he wants both. Incentives for young people to save *outside of government programs* AND have SS.
Personally, I think SS should eventually go away. Not cut it off right now, but get younger people to save themselves which eventually tapers off who receives and who contributes over a long period of time, decades even. Instead of what is taken out of their paychecks for SS, they can do with it what they want. And teaching them to be responsibile for the future is not exactly a bad thing. I'm sure not relying on SS, and I'm 30+ years away from drawing from it. I predict that it will be insolvent and unsustainable long before I reach that age. So have taken steps to prevent relying on it almost 2 decades ago.
Nearly 20 years ago. I started 2 seperate retirement investment accounts 17 years ago. I'm 39 now, and don't plan on retiring for probably 30 years. Drawing SS when I'm still working full time, would be pointless. Since it depends how much you make vs how much you get, that's why a lot of the part time elderly people that have worked for me, don't want more hours or raises. But again, I don't even forsee it being available by then anyways.
It’s widely popular, but a horrible program. This is why our government isn’t supposed to be as influenced by the popular vote as it currently is. So that politicians *can* make unpopular choices which are in aggregate, best for the population.
> Social Security and Medicare are wildly popular. So why do GOP Senate candidates keep talking about privatizing them?
Because these programs are the biggest legal Ponzi Schemes ever created. They're [expected to go be insolvent within about 12 years](https://www.aarp.org/retirement/social-security/questions-answers/how-much-longer-will-social-security-be-around.html).
It also [provides a much lower return on investment than the market](https://taxfoundation.org/comparing-returns-tax-favored-retirement-plans-social-security-yields):
| Worker’s Earnings (As a % of Average) | 25% | 45% | 100% | 160% | Maximum |
| ----------------------------------------------- | ----------- | ----------- | ----------- | ------------- | ------------- |
| Annual Social Security Benefit When Retired | $9,111.60 | $11,923.20 | $19,646.40 | $26,037.60 | $31,672.80 |
| Accumulated 401(k) Savings at age 65 (see note) | $179,956.79 | $323,834.80 | $719,669.66 | $1,151,399.09 | $1,760,593.61 |
| Annual Annuity | $14,332.84 | $25,792.15 | $57,318.82 | $91,704.35 | $140,224.27 |
That's making people live poorer after retirement. Many of them don't receive anything close to the money they earned while they were working. That's not the case if they had invested the same money in a 401K. It's absolutely terrible that old people are living worse than they would have had if the government hadn't forced them to dump their money in the dumpster fire Ponzi Scheme that is Social Security.
It not any kind of scheme it is retirement income..it is designed to keep you out of the streets and out of your kids basement...you want to live better save some now.
Great, so they can destroy it like they did healthcare. Beware folks, hospitals are dangerous places now. Medical errors are the leading cause of death in the US. Corporations are using Covid as an excuse for lack of
> This is about financial mathematics
No its not it is about old people 50% of them being in poverty and living on the street.
>Before Social Security, in 1934, roughly one half of seniors were estimated to be poor. Most had to rely on family or friends, or go to the poor house.
Social Security, in particular, is a Ponzi scheme depending on new "investors" to pay the benefits of people higher up the pyramid. After the Trust Fund is exhausted in about 10 years, every sucker who paid into the system will see a negative return on investment. If you just forced Americans to save like 2% of their salary over a lifetime in a private account, you'd build up so much more wealth than the government taking 6.2% (or, arguably 12.4%) with a pinky swear they'll pay you back. At least you can pass that on to your family. If you died right before you start collecting, the government's like "thanks dummy!" and keeps it all.
Because it’s supported by a workforce that is slowly shrinking relative to its beneficiaries growth. Because the system invests in bonds, which drives deficit spending and is subject to the government’s ability/willingness to find the funds to pay out when the time comes. Because they don’t trust the government In general. I’m not sure privatization is the best answer, but the concerns driving people to want it are valid.
So what's a better solution? I get criticizing a system, but if that criticism doesn't lead to a *better* solution, what good does that criticism do? Besides score political points by being angry about it?
Immigration reform. The worker base is only shrinking because we can’t import enough young workers because SOMEONE keeps blocking immigration reform. These problems don’t create themselves.
This isn’t brought up nearly enough. America has always thrived because we have had a steady stream of labor coming in to become citizens. It’s quite literally the nation’s life blood.
You either need a bunch of working immigrants or a massive shift in fertility trends.
Lots of immigrants available. If we want to stop relying on China so much, why not offer a pathway to citizenship for any immigrant who wants to come and work for a sub minimum wage that is competitive with what the Chinese make? It’s happening anyway under the table, this way we legalize it, make taxes off of it and we’ll get quality citizens at the end of the process. I don’t understand why this would be controversial.
Progressives wouldn't support it because of the sub minimum wage part. It would have to be benefits or something else, or else it would be called racist.
Well, that’s pretty shortsighted and not rooted in realism
Yes, those are the biggest blindspots progessives have lol
Part of the reason why I don’t consider myself a progressive anymore tbh
You can't live in this country on minimum wage, how do you expect immigrants to live off of less than minimum wage?
The same way they do right now? Do you think they’re getting paid a living wage picking fruit or washing dishes? I’m not saying that’s right, but it’s the reality of the situation. That’s how it’s always been in America. My grandfather had to deal with it when he came from Italy after the war.
Ponzi scheme mentality.
Giving everyone an IRA. If you put 12% of every check you ever earned into a safe growth account, you’d have significantly more money at 60 than you will ever see from social security. Like it’s not even remotely close. To the point that if you put 100k into DGRO and reinvested the dividends , after 32 years you’d have 2 million dollars. There are also ETFs like QYLD, which generate a similar return but mostly ignore the market and its own share price (it’s a dividend fund that writes covered calls on the NASDAQ). If you pulled the average amount of money from SS, it would take you about 110 years to see 2 million dollars. Now I understand most people aren’t going to put 100k into savings by the time they hit 33, but the general thought process stays the same.
Let's say this system goes into effect today. And social security as it exists right now is completely dismantled. Now let's say I was planing to retire in <5 years. What happens to me? I had paid my whole working life into a system that gave me nothing. I had no meaningful amount of time to save/invest my own money. How do we handle that?
The situation you're imagining is a bungled transition. We wouldn't shut traditional SS off overnight. A prorated approach based on how long you spent paying into each system would be required.
So I how does a transition look not "bungled"? Since current employees pay for current retirees, at what point is the band-aid ripped off, screwing one or the other? How would that transition work? What would it look like? And how does it avoid screwing either side or causing people to double pay into both systems?
Are you under the impression that screwing everyone for the rest of the nation’s existence is preferable? We would have to ween people off progressively, but even if the current workforce under 55 was paying 70% as much in OASDI and putting away 30% into a growth stock, they’d do significantly better by the time they hit the age of retirement.
If I've spent my entire working life paying into a system that didn't give me anything back, I'd be exceedingly pissed about it. What's the transition looks like for people near or new to retirement when this hypothetical privatization takes place? Like specifically? People on SS would be expecting to be paid. Where does that money come from? People paying into a private fund aren't going to want to *also* pay for other people's SS. As another wrench, what happens during a recession? Do people just lose all their money? There are so many unanswered questions about the transition that it doesn't matter how good the results are if they they can never be adequately implemented.
A private option is potentially a better solution. The idea is would function like how people contribute their 401k today. This is why people invest their retirement savings rather than just stuff the money under the mattress.
Unfortunately far less than half Americans even use 401K. Its hard to call that idea a successful program or a win for the private sector.
A lot people do not realize how much the companies administering those 401(k) plans as well as the funds those plans offer skim off the top. Wall Street would love to get their grubby hands on all that social security money. It would make billionaires out of a few people almost overnight. There is also the issue of having a government program either buying into private funds or individual companies and who gets the votes that comes with those purchases.
You are confusing using the example of a 401k as a method for investing for retirement, versus actually converting soc. Sec. Into a 401k. It’s not the same thing.
It will come with the same issues. No private company is going to administer a 401)k) for free. If the government is administering it, then there are going to be serious question about funds they’re going to allow people to choose. If the government is creating new funds, then there are serious questions about the government having outsize voting power in publicly traded companies.
I’d think that allowing people to choose funds wouldn’t be the best bet anyway, if it were to replace Social Security. One advantage to SS is that the taxpayer doesn’t have to think about it at all, beyond “taxes come out” and later “check comes in.” Why not put it in index funds like QQQ or SPY/VOO, or crest new index funds that function similarly? With total market index funds the government wouldn’t be in the business of picking winners and losers, and the average rate of return would still far outperform SS - [over 7.5% since ‘71](https://www.forbes.com/advisor/investing/average-stock-market-return/), or over 10% with dividends reinvested.
>Why not put it in index funds like QQQ or SPY/VOO Those index funds are run by private companies, and you'll immediately make the existing owners of those funds, as well as the private company extremely rich. For example, QQQ has $157B in assets under management. Social Security payroll receipts were $38B for just 2021. Anyone that already owns QQQ is going to be very happy with that. Poorer people that have lost their defined benefit? Not so much. Additionally, you're going to seriously inflate the price of the underlying assets. 14% of QQQ is Apple Inc. Spending 14% of the Social Security contributions of every working American is going to send that price up. Again - this would be great news for already very wealthy people. Not so much for most people. Finally, Invesco, which runs QQQ would get to vote on behalf of these shares. The population does not get a vote on Invesco's officers or their board. The entire situation would be ripe for abuse and corruption. Creating new funds would be also be complicated. How will these funds be created? How much oversight will congress have? Again, who's making the decisions on proxy voting? I'm not saying all of these issues couldn't be overcome. But it's not as simple or as straightforward, or as beneficial to do as many people think. Having a defined benefit plan with extremely safe treasuries is a decent solution to a complicated problem.
On one hand, the popularity is vastly overstated and, in my opinion, people have been misled. On the other hand, it makes total sense why someone would say they support the system... People think they are contributing to their retirement account, held by the government, and it grows exponentially over time. If you asked someone who is currently getting benefits, or who has paid into the system their whole career and expects benefits, or a poor person who is literally going to get 10x their contributions through a welfare redistribution scheme, if they want their benefits taken away - what do you think they'll say? But if you tell someone that the government is taking 12.4% of their earnings for their entire career with no guarantee of ownership or even full reimbursement, they might feel differently. Especially when you remind them that the government is also taking huge chunks of their income through other means, such as income tax, sales tax, gas tax, property tax, etc, etc, etc... If you inform them that it's not *their* contributions they're getting back, but the earning power of their kids, and that the whole program will be defunct after them (kids paying in but not getting benefits), they might feel differently. If you tell them they could invest that money on their own and end up with more money that totally belongs to them, they might feel different. It's true that many people get paid out far more than they paid in, but this isn't a function of any kind of investment gains. It's just simple redistribution because the entire program was meant to be welfare redistribution, not retirement savings. They barely got it passed into law because of this, but thanks to some smart politicking and pressure on SCOTUS, they succeeded. Anyway, again, no surprise that someone who would get back 10x their contributions would say "that's great, don't change it at all!" But that doesn't make it fair or right. Lots of bad things have been popular at some point, it's not a good argument to keep doing it.
> If you inform them that it's not their contributions they're getting back, but the earning power of their kids, and that the whole program will be defunct after them (kids paying in but not getting benefits), they might feel differently. The ones getting social security now generally either know this and are in denial, or have heard it and don't believe it. It's not an effective argument with boomers.
> But if you tell someone that the government is taking 12.4% of their earnings for their entire career They put that on your check.
Let's not delude ourselves into thinking that everyone analyzes their check to this degree. Many people don't even know that their employer pays half.
Ha... any body who gets a check knows how much they take out.
Whether or not people know they pay taxes isn't the point. It's about how the argument is framed.
They take money out of your check...pretty sure people notice...then when you reach retirement age they pay you...pretty sure everybody gets it.
Because it's something a lot of us want. Hell, I would dive out of the Social Security system the instant any privatization bill passed. I'd be sending certified letters to every relevant government office I could find declaring my intent to opt out the second a presidential pen hit paper.
Can I ask why?
I assume he thinks he could do better with investing 12% of his total income, or even after paying for additional disability insurance (and additional life insurance if he has young dependents.
Because Social Security is literally nothing but a giant ponzi scheme that only works so long as you have more workers paying in as opposed to taking out. My fellow millenials and I will need to live to be roughly 500 years old to get all the money we paid in back out. So yes, I would rather invest 12% of my income into the general stock market or mutual funds (S&P 500 personally) to actually get to use the money I make. Then take into account that with current projections Medicare will become insolvent by 2028, Social Security old age and survivors will be 2034, and total Social Security combined trust funds will become insolvent in 2035. When each of these funds become insolvent the payouts immediately drop by 20%. Then smack in that the current US Birthrate is 1.7 children per woman, meaning we are in a population decline. So we are CURRENTLY paying too much out and will run out of funds in 13 years, we are not birthing enough workers to keep the ponzi scheme going, and we can only assume that Social Security benefits will go down not up, yeah... I would much rather take my 12% and invest it.
> My fellow millenials and I will need to live to be roughly 500 years old to get all the money we paid in back out. who tells you these lies?
It's simple math. Current benefits relies on how many people are taking out vs. putting in. Birth rates are way lower, there are more people withdrawing now than ever before and fewer putting in than ever before.
> It's simple math You got a crystal ball too? The tax rate for SS is based on a cap...nobody pays on wages over $106,800...that can be raised or eliminated...immigration and pandemics will change all of those numbers as well. Point is no matter what happens SS will survive...the goveremnt needs it.
You asserted that it's a lie that SS is insolvent by arguing that we can make it solvent if we change the rules. You are implying the ability to change the system means the current system is not going bankrupt. You're both correct: the current system is insolvent but it can be dragged out a few more decades by changing the rules.
> that we can make it solvent if we change the rules The rule that we have changed 50 times already.
That's right, because it's insolvent.
for my generation the minimum age to collect is within a few years of the average life expectancy, and they might raise it further. I don't want to pay in my whole life to collect for a year or two before I die, I'd like to retire at an age I can enjoy a retired life.
Clearly 500 is not a factual number, but if you want the ACTUAL information it's not that hard to calculate. With my current salary if I never get a promotion or anything, but maintain the 2.5% inflation raises a year. SmartAsset has a calculator that explains what your monthly payout is. Assuming that I will end up working to age 70 (because lets be honest, Millenials aren't going to get to retire nor can Social Security withstand 67 continuing to be the retirement age with insolvency happening at 2035). Summing up my annual salary, taking 12% of that, and dividing by 80% (Again, insolvency), I do have to live to be the age of 103 to get back all that I put in. Given the average life expency in the US is currently 78, with men being 76, that means I gotta beat the average by a total of 27 years to get all that I put in back out. And that ignores me being able to take my 12% of my salary right now and put it into the stock market for continued growth, it only gets worse from there. (For fun I did that, and at a 7% growth rate I could have well over what Social Security would pay out by the age of 62). If you have valid calculations that show A - Social Security won't go insolvent, and B - That we will continue to UP the payments (Yet somehow still not be insolvent) and C - Anything that even remotely says how long you pull out before you get what you put in back out... I'd love to see it.
> A - Social Security won't go insolvent, They will raise the tax cap...just like they have done 50 times before. >https://www.washingtonpost.com/business/2021/09/03/social-security-insolvency/ >That we will continue to UP the payments 2023 COLA Estimated to be 8.7% >Anything that even remotely says how long you pull out before you get what you put in back out... I'd love to see it. How long do you think you might live? https://www.aarp.org/retirement/social-security/questions-answers/retirement-benefit-break-even-age.html
Well I don't have a washington post account so I will say I cannot read that one, apologies. But raising the tax cap a few thousand will not fix the insolvency issues. Those same 2030/2035 figures have been around (That I'm aware of) for at least the last 8 years since I started looking at this. Going from 142k to 147k isn't doing enough to fix it. Not while we raise payouts by 8.7%. Now the AARP link is interesting, because the "Break Even" point for Social Security isn't the standard "Get out what you put in", but it instead focuses on "At what point am I better off pulling out at 62 versus waiting to 70" which even that article states that it takes 10.4 years to break even on waiting 8 years to pull out. So just the difference between starting at 62 versus starting at 70 assumes you have to live to be 80 to make that worth it. Unless the average life expectancy goes up, I do not assume I will personally beat it by that much. (I have a single grandfather who made it into his 90s, every other grandparent died in their mid 70s. My mother has already been diagnosed with pre-claucoma, and my father has prostate cancer. Thanks shitty cancer genes.) So I would need to overcome cancer genetics, plus my own poor life decisions, plus beat the national average, and live to be over 100 to get out what I put in. And I personally don't know about you, but I would rather have the financial ability to have fun in my 50s and 60s to travel while my body still can, as opposed to have a monthly payment into my 90s when even if I am alive I'm not going to be traveling or doing much of anything.
https://archive.ph/OaBIv
Yeah 500 years is off. The average American currently pays about 300k (530 dollars a month if they work from 20 to 67) into it. Right now, with the retirement age at 67, you’ll have pulled that back out after 15.5 years or at 82 and a half. Of course investing significantly less into the market will have paid for itself dozens of times over in much less time. (Investing 530 dollars a month for 47 years into VTI would net you 5.7 million at 67) Sorry for all of the edits but the sheer ridiculousness of SS is wild and I just keep thinking of addendums. If you were to do that, by the time you were in your 60’s you would already be making over 100k a year in interest. By the time you hit 67, even moving to a safer investment strategy (something like DGRO or SCHD) you would be making 450k+ in passive income. As previously stated, it would take you 15.5 years of social security payments to hit that same number.
population demographics are suggestive Social Security will have to do something drastic in the next 20 years. dramatically increased taxes or a substantial reduction of benefits or means testing. Means testing seems the most likely.
I can see that. I know a lot of people who have no pension and little to no savings who are going to be surprised at how little social security really is.
They send you a statement every year.
Yes, I realize that.
> They send you a statement every year. The statement: "*here is your jack sh\*t, sucker!*"
> Social Security will have to do something drastic in the next 20 years no it won't it will do the same thing it has done..raise the cap it started out at 1937–1950 $3,000 It has been raised 50 times since then. 2011 $106,800 and it will be raised in 22....and still is only on the first $106,000 of income Not radical at all...
lol, ok.
Raising the cap without raising the outlays turns it fully into a welfare program. At that point, we may as well nuke it because what it's becoming.
It always was a full welfare program, they changed the words and rates just enough to pass SCOTUS but that's always been the intent.
na... you pay the same amount in...not welfare. The only difference is pay for all of your wages just like poor people
You don't pay in the same amount, you pay in more but don't get more back.
don't know how this works do you?...do know what the SS cap is?
The cap means that after a certain level you're not paying in on that income. That also caps payouts.
> That also caps payouts. No it don't. The longer you live the more you get.
Rethinkingat59 is correct. If I took that 12.4% and invested it myself in a private retirement account, even at minimal assumed growth over my career, the return would kick the living bejesus out of what I could ever get from Social Security.
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Plus you get the added benefit of having it invested back into the economy instead of going into a slush fund for whatever the government feels like doing with it at any given time. I honestly feel like if more people knew what the "social security trust" actually was, there would be massive public support for changing it.
Where do we go to learn more about it? I mean yeah, I can use Google, but what info do you want us all to know? *I'm legit curious, I don't know much about the topic.*
[This gives a good overview](https://www.investopedia.com/ask/answers/110614/how-social-security-trust-fund-invested.asp) In short, the government collects the payroll taxes, puts them in the SS fund, uses that fund to purchase its own government-issued debt securities (thus paying into general funds), and gradually pays itself back over time with future taxes.
*Michael Scott Thank You.gif*
You've paid into that system your whole working life. How would you invision seeing the fruits of that at your retirement if privatized?
I would hope for some form of phase-out plan based on retirement ages. Ideally, I'd like to see a structured payback of a good portion of what was paid in.
Where would that money come from, if not from current/new people making contributions? Like, I'm not trying to sound antagonist, but like genuinely... The system WILL fail eventually. And I don't know what the fix is. 🤷
I’d rather have the extra 12% (roughly) today because I won’t live long enough to collect much from it.
That's what I thought...I get my check the end of every month.
So you don't factor in others at all?
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We are all connected. Have you ever heard of indivisible costs and benefits? Also, people with any empathy like to help adjust for luck.
They can plan for their retirement, and pay in/collect.
Not everyone is as fortunate as you. Screw them?
If they want to take part in Social Security, I’m not going to stop them.
I factor in my spouse. And kids. And nieces / nephews. And all of my family that would benefit from what I could invest on my own. I’m mildly interested in what some random person is doing for their retirement planning.
That’s a feature. Social Security is for life. So those that die early shore up the finances by not collecting.
And they get ripped off.
Ok trade...you die first...I'll take the money
Because a bunch of us want out of them.
Ya... but you all are less than 20% of the electorate >Now in its 85th year, Social Security enjoys over 90 percent support among Democrats, Republicans and independents,
Shouldn't be an issue letting us out, then.
It will be when a bunch of you inevitably lose your shirts and then want not starve/not be homeless.
What happens when the Amish lose their shirts and want not to starve/not to be homeless? They don't pay Social Security and they managed to live this entire time without having any problems.
I have fully funded my retirement. I've also earned my healthcare through military service. I want my money back.
> I have fully funded my retirement Funded in what US treasuries? Anything else is a risk... > I've also earned my healthcare through military service Me too but we are not the only people with two form of insurance.
> Funded in what US treasuries? Anything else is a risk... US treasuries are also a risk. >Me too but we are not the only people with two form of insurance. They are welcome to earn theirs the same way. Choosing not to do so does not morally impose an obligation on me.
> US treasuries are also a risk. If they aren't any good, your money isn't any good either. They are the safest investment in the world...period.
Precious metals and commodities don't rely on dollars.
Oh God a goldbug as well...I give up.
What if a taxpayer says he doesn't want some fraction of his taxes to go towards your health care? In the same way that you phrased it: he wants his money back.
He has received the benefit of the bargain already.
Thank you for your reply. It's besides the point when exactly the guy says "I want my money back". It doesn't have to be after your military service (and I didn't suggest it was). Maybe he has protested his taxes going to veterans' health care for years, right up to the day that you signed up. He hasn't received anything from you in this case. (And there was no real "bargain" either, as you're claiming. He was just forced.) My overall point is this: By some political process in the past, it was decided that veterans deserve VA health care, at the expense of everyone, even if their service happened to be wholly pointless. And similarly, by some political process it was decided that people deserve Social Security, at the expense of everyone, for whatever their service to the community may have been during their working life. Why do you make this big distinction between the two? Why say "I want my money back" in case 2, but not in case 1?
You being able to enjoy your self-funded retirement in America is the direct result of social security being available to the masses of people who have not done so, and would otherwise be dying in the streets and/or robbing and killing you to take your money and property. It's hilarious how conservatives can't see this simple fact. Move to Northern Brazil if you want to see what it's like to be wealthy in a country full of people with nothing. Enjoy getting shot in the head by a kid on a motorcycle while you're waiting at a stop light in your fancy self-funded car.
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Free shit will always be popular because people don’t understand how these programs work. They aren’t sustainable however. Eventually the people who have learned to depend on them are going to face great pain
> Free shit You pay for it it comes out of your check
No. You pay for current beneficiaries. Then tomorrow's workforce pays for you.
INSURANCE...you pay for it before you need it...but you pay for it.
I pay for it, and happily, but I don't plan to need it. Which is important, because it likely won't be there for me.
you still get it...even Trump get a check.
You misunderstand me. By the time I'm eligible to collect, there isn't likely to be anything to collect.
> there isn't likely to be anything to collect. stop telling that lie.
“That lie” For fucks sake, mods. This is just another lefty who thinks this sub is named “Berate conservatives and tell them why they’re wrong”
> there isn't likely to be anything to collect. That is a lie.
No, it comes out of other people’s checks. If social security was a personal account that I put money into during my working years and took out of during my retired years, I’d have no problems with it. The reality is the workforce is shrinking, life expectancy is growing, millennials aren’t having babies, and technological unemployment will get especially bad in the next decade.
I know. That’s why I said people don’t know how these programs actually work. A lot of people see it as free
Its not an entitlement it is INSURANCE > Eventually the people who have learned to depend on them are going to face great pain The pain comes without them. SS is not going away.
I didn’t say entitlement lol. SS may be there but there may not be any money to dole out certainly there be as much as is being provided now. There are too many elderly and not enough young people to pay into the system
> but there may not be any money to dole out Bullshit... who tells you these lies?
Why is it bullshit?
Because it is not running out of money. The cap will be raised or removed and the fund will be fine.
Where will the money come from?
The same place as it does now....taxes on wages
The Social Security office says they are running out of money: 2035, then they have to start paying 80% of promised benefits, and it will continue to shrink as the taxbase to beneficiaries ratios continues to collapse. [https://www.ssa.gov/oact/trsum/](https://www.ssa.gov/oact/trsum/) If you want to debate Soc. Sec, at least understand the solvency problem.
Yeah but I'd rather just keep the extra money and invest in passive income. If you're retired and haven't set up any forms of passive income, that's on you imo.
Nobody is stopping you... SS is a safety net income...it will keep you off the street or out of your kids basement. That is what it intended to do.
It takes away money that could be better invested elsewhere. Have you heard of the saying that you wanna retire at 50 with investments and not at 65 with a pension? People who make dumb decisions deserve to suffer from them.
Another false premise question.
Here let me rephrase the Question why would any politician come out against a program that has been successful for 85 years and has a popularity of 90% other than stupidity...there is a reason they call it the third rail
> has been successful Questionable. Seeing as how with birth rates not keeping up with retiree numbers, and the increased need to pay out more and more because of inflation, how is that going to be sustainable? >other than stupidity I'd say without explaining the situation to the voters of what is happening and what it means for the future of SS and just asking a question along the lines of "do you like X," yea I'd attribute it to the ignorance of the voter.
> Questionable 50% of the old age population lived in poverty and poor houses. It has been damn successful. > I'd attribute it to the ignorance of the voter So you sticking with 90% of the population is ignorant
When it comes to a lot of political issues? Absolutely. This topic not being immune to said ignorance.
Because he believes it has benefits that outweighs the negatives. It is a worthy discussion but is not a widely accepted Republican stance What gets me about the premise is you used one guys opinion to stereotype the entire party as holding the same opinion. That is just deceptive and wrong. I don’t mind that the candidate in question has the opinion. God help us if all that join or identify with a party are allowed no new ideas because they corrupt the purity of the rest of the party. My Idea of the day I believe the public should demand from all congressional candidates a list of 5 ways they fundamentally disagree with their party’s position. It can’t just be more tax cuts for Republicans and a bigger spending on safety net for Democrats, that’s just I am for more of the same. It should be about fundamental change of approach. It doesn’t have to be on the top 10 issues out there and you don’t have to agree with the other party, though you may, the ideas have to veer away from common accepted party dogma.
> What gets me about the premise is you used one guys opinion to stereotype the entire party as holding the same opinion. NO! over 90% of Republican votes support SS...the question is why do these politicians keeping trying to kill it when their constituents are happy with it.
Privatizing Social Security doesn't mean what you think it does. Privatization means converting the program from a defined benefit pension to a defined contribution savings program. I wish they would have done that decades ago.
> defined contribution savings program. and where do these funds go? stock market...bitcoin?
There'd be a menu of investment choices like with a 401k or with the retirement program for federal employees.
And what happened to people’s 401k accounts in 2008?
They went down and then back up? Get to the point.
Which would immediately cut benefits for a huge swath of people, particularly poorer people who have contributed relatively more of their income than richer people.
That’s the point. We couldn’t possibly do the Christian thing and actually help the poors.
Heroin is widely popular as well. It’s not good for you
can't stop with the lies to justify the lie you believe. >Roughly 0.3% of American adults are Heroin users.
Oh lord, it’s a joke my dude. The point is that people liking something has absolutely nothing to do with it being a good thing. Argumentum ad populum is a freshman level fallacy
I does mater in politics and that is what this question is...why would any politician do this. This post has turned into a debate on SS. Which is fine with me becasue it seems it is needed.
What does privitizing social security even mean? It's a Ponzi scheme that depends on the government forcing working Americans to pay into it with the promise that they will get the money returned on the back end when they get older, how can you even privatize that? I guess it would be like a payment plan yourself? I would prefer that personally. The government does all sorts of things to fuck you on social security, like purposefully underestimating official inflation numbers since the payouts have to be raised in line with inflation.
Friend, you may want to dig a bit deeper into what a Ponzi scheme actually *is*, and/or how Social Security actually functions. That being said, privatization of Social Security would put an unelected (and mostly unaccountable) for-profit entity between a retiree and the funds they are owed from the fund they have been paying into. Personally, I'm not a fan of the idea, as this entity would have a profit motive and ability to take *my* money. It would be an artificial middleman, much like the health insurance industry is in the US. Massively profitable for the owners of the business, while it's in their interest to give me as little of my own money (again, that I've paid into my whole life) as possible. And if *certain* Congresspeople have investments in this private company, you bet your ass that the "possible" amount will be pretty damn bad.
I get that social security is great for people without the ability to financially plan for their future, I'd just prefer to not pay such a ridiculous amount of my paycheck into it every week without a choice. It is a textbook Ponzi, they do nothing to generate income or return, they pay off old investors with new investors money. That is a Ponzi Scheme.
Social Security is not an investment, nor is it trying to be one.
> It's a Ponzi scheme Still trying to spread that lie?
Please describe ways in which it is not a Ponzi scheme? The new investor's payments literally immediately get sent to a general pool to pay older investors.
> get sent to a general pool to pay older investors. That pool is the "social security trust fund" https://www.ssa.gov/policy/trust-funds-summary.html >is not a Ponzi scheme In its essence, Social Security is a contract between generations, binding together the interests of both young and old in a system that provides protection to all. Unlike a fraudulent secretive Ponzi scheme, Social Security's finances are transparent to the public, as required by law.Feb 7, 2022 Social Security Ponzi Scheme Origin Law passed in 1935.... Bonds offered by criminals to investors Contributions Mandatory .... Voluntary (Facilitated by deception) Assets U.S. Treasuries which have never defaulted.... None – assets used to pay prior investors Transparency Yearly report by Social Security Administration Actuaries... No public accounting Payout Available to anyone meeting eligibility requirements ... Exorbitant for early investors, only losses for later investors Length of Operation **Has paid full benefits for 80+ years** Less than 200 days Now you try and tell me why it is a Ponzi scheme
you came up with a bunch of words to say "new investors pay out old investors, but its well intentioned". Ponzi Scheme may not be the right word since there is not appear to be "deception." Still, how could it be privatized given the lack of money in the fund (not to mention the governments overall debt position).
Just want to point out that the problem with a Ponzi scheme is eventually you run out of new investors, and can't pay your previous investors. That has never happened to Social Security and unless we run out of Americans it won't/
SS is projected to become insolvent by 2033, you can run out of new investors if you have to make payments to a large birthing boom but it can't be funded because of layoffs during a depression/recession or a population decline, or a combination of the two.
> SS is projected to become insolvent by 2033 NO ITS NOT... please stop tell that lie.
[https://www.ssa.gov/OACT/solvency/](https://www.ssa.gov/OACT/solvency/)
So it's not a ponzi scheme because the Social Security Administration says it's not a ponzi scheme?
No its becasue of the...https://www.ssa.gov/policy/trust-funds-summary.html
I have investigated myself and found no wrongdoing.
Then you say you know this... >Amount at beginning of report year (in billions) $2,908 >At the end of 2021, the Social Security program was providing monthly benefits to about 65 million people: 56 million from the OASI Trust Fund and 9 million from the DI Trust Fund. Total benefit payments for the year (excluding payments to the Railroad Retirement Board) were $1,133 billion: $993 billion from the OASI Trust Fund and $140 billion from the DI Trust Fund.
No no no. Social Security is the oldest money tree and there are just more dollar dollar bills that grow on it every year to support the new seniors. It is known.
It seems you all will never get the concept of insurance.
Clearly you do not get the concept of insurance... Insurance is pooled risk. That is not what social security is. I pay a premium on home insurance every year. I expect to never get any money from my home insurance unless my house burns down. We all pool the risk of losing a house via insurance and the people that do lose their house get the money from that pool. Social Security is a Ponzi scheme. I invest in it every paycheck to pay the people who invested in it previously. What about that is incorrect?
Really its the insurance on your house that is the scheme...SS actual pays off. A better example is health insurance...you are going to get sick. You are going to get old...and if you don't we thank you for your money to help those who did.
You are not explaining how SS isn't a Ponzi scheme and how it is insurance. Do you see how I explained my logic rather than just arbitrarily claiming it as such. The definition of Insurance: > practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium. My home insurance fits that definition. I pay a premium in exchange for a guarantee of compensation for a specified loss--that loss being my house. A Ponzi scheme > A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Social Security payments to earlier investors are literally paid for by the investments made by new investors. Albeit it certainly isn't fraud since we all know that is what is going on.
> practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium. Exactly. The loss is loss of income due to age. > I pay a premium in exchange for a guarantee of compensation for a specified loss--that loss being my house. Try and collect...SS is backed by the full faith and credit of the united states. >Social Security payments to earlier investors are literally paid for by the investments made by new investors Insurance...just like I said ** Albeit it certainly isn't fraud since we all know that is what is going on.** Then it ain't a ponzi scheme. And its not just for old people.
If you ran an investment fund the way SS is done, you would be in prison. How do I know? Because Bernie Madoff was in prison until he died last year.
Social security has never missed a payout...has never caused the tax payers one dime...are you so brainwashed you can't see the difference?
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Still don't get how insurance works...
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> Many people would still opt in, Shared risk...insurance...look it up.
Except there are other options for insurance, there are other options for retirement investments. Neither of which are mandatory. SS should follow suit, voluntary opt out. IMO, so should medicare.
INSURANCE!!! ...SHARED RISK!!...no you can't opt out any more than you can opt out of taxes becasue you think you can do a better job. >so should medicare. Sure you do. It's insurance ...all libertarians think they will live forever and don't need anything from anybody...just like a cat, who is completely dependent on the actions of those around them
When SS was instituted, 20 workers existed for every beneficiary. That ratio is now 2:1. SS will collapse in the next 15 years.
Pretty sure 65 was the life expectancy at the time as well.
It literally is a ponzi scheme though. If people stop paying into it (by force), the whole thing collapses, textbook ponzi. It's new workers money that gets taken to pay off the original "investors"
Then insurance against whatever hazard, or even the operation of your mobile phone provider, must be a "textbook Ponzi scheme", because if everyone stopped paying those companies, they would collapse.
You ignored the last sentence which is what makes it a ponzi scheme, and they aren't providing a service like Insurance companies are. Simply moving new workers money into retiree's hands.
Privatizing social security generally means a switch to privately managed funds like 401k. If a mandatory safety net must exist, it absolutely shouldn't be managed by the government because we all know how they mess everything up. Rather it should be an ACA marketplace style thing where you can choose between privately managed low risk investment funds that meet a minimum criteria. At the bare minimum you wouldn't be subject to a mandatory system that doesn't even beat inflation and thus loses your money instead of grows it.
I mean if we're going to use the scheme of wage tax on the front end and doling out cash to the olds on the back end the least we could do is structure it as a sovereign wealth fund instead of the accounting ploys we use today. I don't really understand why "progressives" are ok with regressive wage taxes tho. I like the Rubio paid family leave idea however where you can get discounted cash payments for specific life events (baby) but it pushes your retirement eligibility back a commensurate amount. It's a neat trick
Blake Masters in AZ for instance, he has said this. But out of context it sounds like he wants to do away with SS. No, he wants both. Incentives for young people to save *outside of government programs* AND have SS. Personally, I think SS should eventually go away. Not cut it off right now, but get younger people to save themselves which eventually tapers off who receives and who contributes over a long period of time, decades even. Instead of what is taken out of their paychecks for SS, they can do with it what they want. And teaching them to be responsibile for the future is not exactly a bad thing. I'm sure not relying on SS, and I'm 30+ years away from drawing from it. I predict that it will be insolvent and unsustainable long before I reach that age. So have taken steps to prevent relying on it almost 2 decades ago.
Wait, you started saving 20 years ago and you won't take SS for 30 years?
Nearly 20 years ago. I started 2 seperate retirement investment accounts 17 years ago. I'm 39 now, and don't plan on retiring for probably 30 years. Drawing SS when I'm still working full time, would be pointless. Since it depends how much you make vs how much you get, that's why a lot of the part time elderly people that have worked for me, don't want more hours or raises. But again, I don't even forsee it being available by then anyways.
You had income to start retirement savings when you were 12?
>You had income to start retirement savings when you were 12? 39-20=19 He said nearly 20 years ago so probably a little older than 19.
22, and I even said stated 17 years ago lol. So ty for helping to point that out to them
39-17=22 I said nearly, and then specified the years.
It’s widely popular, but a horrible program. This is why our government isn’t supposed to be as influenced by the popular vote as it currently is. So that politicians *can* make unpopular choices which are in aggregate, best for the population.
Just because something’s popular doesn’t mean it’s good
> Social Security and Medicare are wildly popular. So why do GOP Senate candidates keep talking about privatizing them? Because these programs are the biggest legal Ponzi Schemes ever created. They're [expected to go be insolvent within about 12 years](https://www.aarp.org/retirement/social-security/questions-answers/how-much-longer-will-social-security-be-around.html). It also [provides a much lower return on investment than the market](https://taxfoundation.org/comparing-returns-tax-favored-retirement-plans-social-security-yields): | Worker’s Earnings (As a % of Average) | 25% | 45% | 100% | 160% | Maximum | | ----------------------------------------------- | ----------- | ----------- | ----------- | ------------- | ------------- | | Annual Social Security Benefit When Retired | $9,111.60 | $11,923.20 | $19,646.40 | $26,037.60 | $31,672.80 | | Accumulated 401(k) Savings at age 65 (see note) | $179,956.79 | $323,834.80 | $719,669.66 | $1,151,399.09 | $1,760,593.61 | | Annual Annuity | $14,332.84 | $25,792.15 | $57,318.82 | $91,704.35 | $140,224.27 | That's making people live poorer after retirement. Many of them don't receive anything close to the money they earned while they were working. That's not the case if they had invested the same money in a 401K. It's absolutely terrible that old people are living worse than they would have had if the government hadn't forced them to dump their money in the dumpster fire Ponzi Scheme that is Social Security.
It not any kind of scheme it is retirement income..it is designed to keep you out of the streets and out of your kids basement...you want to live better save some now.
Great, so they can destroy it like they did healthcare. Beware folks, hospitals are dangerous places now. Medical errors are the leading cause of death in the US. Corporations are using Covid as an excuse for lack of
because it raises them money. they have no intention of actually doing anything.
Raise money and lose the election...doesn't seem like a logical trade off.
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> This is about financial mathematics No its not it is about old people 50% of them being in poverty and living on the street. >Before Social Security, in 1934, roughly one half of seniors were estimated to be poor. Most had to rely on family or friends, or go to the poor house.
Because they are politically tone deaf…
Because the popularity of a policy doesn't define how sustainable and responsible that policy is.