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Guest Post: The Lie That Is Social Security

Tyler Durden's picture





 

Submitted by Lance Robert of StreetTalk Advisors

The Lie That Is Social Security

The problems facing the U.S. economy are daunting especially when it comes the issues of Government spending and the current deficit. We recently wrote about the dependency on Government programs which is currently making up as much as 35% of personal incomes. Social Security, Medicaid and Medicare make up the largest portions of the current spending requirements of the Federal Budget. The current administration has promised that cuts will not be made to government "entitlement" programs but is that a promise that any administration can actually keep?

When it comes to Social Security the facts are rather alarming. By 2017 the Social Security Administration will pay out more in benefits than it takes in. This is not surprising given that in the 1950's there were roughly 5 workers for every retiree. Today, it is roughly half of that. With 78 Million "baby boomers" moving into retirement the demands on social security are set to spiral higher in the coming years ahead. Is it really any wonder then that with demographics heading in the wrong direction, not to mention a much slower growth economy, that the Social Security Administration has moved up its estimate that the Social Security Fund will be exhausted entirely by 2033?

With these rather stark points in mind it was much to my dismay that Smart Money published an article by Alicia Munnell entitled "Social Security: The Cheapest Annuity In Town" which stated: "The Center for Retirement Research at Boston College has just released a new study that shows that the best way for people to turn their 401(k) balances into a stream of income is to 'buy' an annuity from Social Security. Many people don't recognize that Social Security is in the annuity business, but it is and it has the cheapest product in town."

The premise is that as individuals approach retirement they should use 401k and IRA asset's first to live on and postpone drawing Social Security for as long as possible. ?She states: "A much better alternative is for the household to 'buy' an annuity from Social Security. They can make this 'purchase' by using their savings to pay current expenses and delaying claiming to get a higher monthly benefit at an older age. The savings used is the 'price' and the increase in monthly benefits is the annuity it 'buys.'"

This sounds great on the surface. She uses the following example: "Consider a retiree who could claim $12,000 a year at age 65 and $12,860 at age 66 - $860 more. If he delays claiming for a year and uses $12,860 from savings to pay the bills that year, $12,860 is the price of the extra $860 annuity income. The annuity rate - the additional annuity income as a percent of the purchase price - would be 6.7 percent ($860/$12,860). Remember that Social Security benefits are indexed for inflation, so the retiree is buying a real annuity."

The proverbial "fly in the ointment" was brought forth by Jim Horney at the Center on Budget Priorities where in an USA Today article he exposed the lie that is Social Security: "It's not easy, but it can be done. Retirement programs are not legal obligations." Read that last sentence again. While we have all been led to believe that there is some "lock box" in Washington that are safeguarding the semimonthly payments that are drafted from our paychecks — the reality is that this is simply not the case. This is why Mr. Horney stated that Social Security should not count as part of the deficit because, unlike businesses, the Government can change what it owes by lifting taxes and cutting benefits.

Therein lays the problem with Ms. Munnell's article. The "cheapest annuity in town" may also be the worst possible investment. Why? Because the money you pay into Social Security is not yours. Politicians can confiscate those dollars at their discretion such as when the Clinton Administration used the dollars from Social Security to balance the budget. They can raise the retirement age thereby shortening the number of dollars that must be paid out. Moreover, as we have seen over the past decade, they can eviscerate their obligations by debasing the dollar. In other words, by spending your saved retirement dollars today, which could be invested in assets that will produce an income stream in the future, in the hopes of a better "annuity" stream in the future there could likely be very negative ramifications. This is especially the case when you consider that the average American is woefully under-saved for retirement and two nasty bear markets during this century alone has all but insured that many Americans will be working far longer than they originally planned.

Combine those issues with the reality that eventually the government will have to take steps to begin to deal with the problem that is Social Security.  While there has been much discussion of the issue of cutting the deficits, reducing spending and raising revenue to return to a path of prosperity — the simple fact is that nothing can be accomplished without attacking the 800-lb guerrilla that is entitlement spending.

federal-balance-sheet-in-2011My friend Doug Short wrote an excellent commentary on this very issue which is worth reviewing in the context of this article. The simple fact is that while "By law, the federal government can't tell the truth," according to Sheila Weinberg of the Chicago-based Institute for Truth in Accounting, the "math" doesn't lie. The entitlement programs alone consume more than the entire tax revenue for the year which is why the current Federal Debt levels have now surpassed 100% of GDP.

The trend is clearly unsustainable and something will have to ultimately give. While Ms. Munnell believes that Social Security annuities are a better deal than those in the private market the major difference is that the government has no "legal" responsibility to pay what is currently owed. In the coming years the currently under-saved and aging "boomer" population may be faced with the tough decisions of working longer and reducing their standard of living. For those that are currently working and paying into the system — the best advice still remains to save more, spend less and be self reliant for your retirement because the truth is that "social safety" net may just turn out to be a big fat lie. 

 


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Mon, 06/04/2012 - 17:48 | Link to Comment Seasmoke
Seasmoke's picture

now that could cause a dangerous situation

Mon, 06/04/2012 - 17:51 | Link to Comment Hard1
Hard1's picture

The lie that is Social Security,  The lie that is the treasury, the lie that is the FED, the lie that is .....  Still, the market sneezes and everyone wants treasuries.  At 0% I'm sure that the US will at least make the interest payments!

Mon, 06/04/2012 - 17:56 | Link to Comment Clint Liquor
Clint Liquor's picture

If everyone wants treasuries why does the FED have to buy them. Would the 10Y be 1.5% without the FED?

Mon, 06/04/2012 - 18:15 | Link to Comment CPL
CPL's picture

The old, if someone threw a big booze filled party and no one came.  Does that make it a failed party or an alcoholic making an excuse to drink?

 

I'm hesistant to say there was a FED party and more like pigs licking the last of the sugar from the bowl.

Tue, 06/05/2012 - 01:17 | Link to Comment Cadavre
Cadavre's picture

Social security is solvent. Social security does not contribute to the deficit. social security is not an entitlement, it is a trust fund. The 2.1 Trillion (booked) principal "borrowed" by the congress with special, 4.5%,  non marketable Treasuries + the promised coupon payments, does not represent a failure of SS to meet it's obligations. Congress has failed (again - and never surprised). Can't remember the last time the US pretended to operate under a budget - those magical "continuing resolutions" just keep on continuing on for ever, SS does not contribute to deficit. It runs a surplus. Congress snatched 69 Billion in 2010, and over a hundred billion in 2011.

And these zero twit K-Street putas wanted to use SS for a really really super big equity balloon pump couple years back.

And now they run down the only constitutionally authorized (by the founders, no less) brick and mortar government service, the post office and is sending bunches of them pink slips to trim, what amounts to 1 week fuel expense for [just] marines in Afghanistan, from the postal service budget. Lately, some congressional panelists are rolling the drums and stasrting to hint and laud the benefits of replacing the post office with fed ex. guessing FED EX has some very useful photos of hot and heavy hat room frolic with a page or an alter boy de juer.

And that's the way things usually get done in DC.

If ya think about it, the postman is the only representative of the US gov most of us interact with on almost a daily basis. The postman is the only tangible evidence that there may still be a functioning "united states". allegorically speaking, the postman binds the commons together.

The problem is not social security. the problem is not our government employees. the problem is us, the employers of our government employees. we been so busy  wearing ourselves out tugging the dragon , we've set aside our responsibilities. it's not because we made a conscientious decision to be, or "were" born weak and apathetic pussies, our employees had the benefit of the latest new and improved high tech Gooerbbelesque carrots. we bit. and we sucked like favor returned when a dime bag is offered to a 42ed street whore. we knew what they were doing when we allowed them to call us (their employers) "consumers". we let it pass. we were induced to become dragon tugging addicts. we deluded ourselves that it would fix itself - self regulate - that pressing a button on a voting machine really means anything more than missing another chance to flog the bling "lizard" or that the pressed button is even really tallied to anything other than our personal citizen pretense score card - wait ... hold on ... almost .. golley lolley miss molley, just one more stroke and this shot of dragon snop is just for you.

save the whales pro-life - pro-choice - africanized bees - raw milk - screw israel - love israel - global warming - global warming hoax - bin did,  bin didn't - red pill - blue bill with us or against us - ad infinitum. The big question is why have we segregated ourselves into so many litlle useless powelerless mainingless demographic comfort zone "mounds". when we were "one mound", even g*d wouldn't dare to f*ck with us. this sh*t will get fixed when we accept we are a one mound hive. that thw important things - like the begets upon begets after we've fed the worms,  will have access toevery aspect of the "magic" of life and still be solid custustodians of humanity- is why we need to focus on exactly what it means to be an American.

Tue, 06/05/2012 - 02:10 | Link to Comment oldman
oldman's picture

Cadavre

Well said.

It appears that you are preaching a great sermon to the blind, deaf, and dumb, though. There is a definiter lack of thoughtfulness here tonight---actually, it gets worse every night.

Who are these people and where do they come from?

Thanks for your righteous frustration and anger

It is 'us' and not 'them'

SOLIDARITY is still a word without a home in the US

om

Tue, 06/05/2012 - 06:25 | Link to Comment francis_sawyer
francis_sawyer's picture

 "We're America!... We're 10-1"!

Tue, 06/05/2012 - 03:20 | Link to Comment vh070
vh070's picture

Nonthinking; blindfaith; conditionedstupidity — all single words in my dict.

Tue, 06/05/2012 - 01:50 | Link to Comment Helix6
Helix6's picture

Ummmm... actually, I buy treasuries through variuos funds...

Mon, 06/04/2012 - 18:16 | Link to Comment TimmyB
TimmyB's picture

No kidding.  It's a lie to claim Social Security is a lie.  Here's a clue to tell when somone is lying about Social Security: they conflate Medicade and Medicare with Social Security to support their argument.  Here, the author brings in both Medicade and Medicare, along with the deficit, when Social Security hasn't contributed a single dime to the deficit. 

I also enjoy the author's horror when he tells us all that Social Security will be paying out more than it collects in the future.  That was the plan all along.  Reagan changed the program from being pay as you go to having current workers pay more than is spent so there would be a SS trust fund for when baby boomers started to retire. 

Finally, "the government could change the law at anytime" argument is silly.  Here's another clue for the author--the government could change any law at any time.  It could triple your taxes, it could make fish the national currency, it could do just about anything.  Here, the operative word here is "could."  Could doesn't mean likely.  Flying saucers could land on the White House lawn, but I don't think its likely. 

 

  

 

 

Mon, 06/04/2012 - 19:14 | Link to Comment Spacemoose
Spacemoose's picture

because it seems self evident to me, i'm going to assume that you and your up arrowers would agree that:

1. government cannot redistribute wealth that society fails to produce and

2. government can only provide goods and services to one group of citizens if it takes surplus wealth from another group of citizens (or borrows wealth from the citizens of another country to be repaid with the surplus economic production of future generations).

based on the tenor of your argument it seems that you believe that government can meet its future obligations by cutting certain spending programs and by taking a greater share of the surplus economic production of those workers who are generating a surplus now and (in the case of borrowing) from those workers who will generate an economic surplus in the future. 

clearly you don't believe that merely by printing money, goods and services spring into existence.   also, i'm certain you would agree that for the health of the economy and future job creation, a certain amount of the country's surplus economic production must be invested (in factories for instance) rather than directed towards pure consumption (as would be the case with most ss checks). 

unfortunately, the sad fact is that regardless of the defense budget, or of interest rates, or of deficits, the obligations coming due in the future simply exceed the productive capacity of the nation.  our problem is a productivity problem.  there is a maximum amount of wealth (goods and services) we are capable of producing and meeting our promised (and soon to be defaulted on) obligations requires productivity in excess of this amount.  when thinking of productivity keep in mind that 40% of the "productive" workers in this country work either in the FIRE sector or for government.  i would be hard pressed to conclude that they are producing goods and services with a value in excess of the value of the goods and services they consume.  we are so doomed ...     

 

 

 

  

 

Mon, 06/04/2012 - 20:00 | Link to Comment Matt
Matt's picture

TimmyB made three points:

1) it is disingenous to talk about a specific program, then start combining the costs of that program with other programs to make them seem like one program

2) Social Security was intended to take out more than it puts in, once the Boomer Wave peaks

3) Government COULD change Social Security, but that government could change any laws anyways, so worrying about hypothetical future laws is a waste of energy.

 

Personally, I am not familiar enough with the structure of SS and the Reagan Administrations changes to have an opinion on #2. I agree with the principles of #1 and #3.

Nothing in your post has anything to do with any of these three points.

Mon, 06/04/2012 - 20:45 | Link to Comment Spacemoose
Spacemoose's picture

so your position is that, as TimmyB said, it is a lie that social security is a lie because of the three points you have reiterated?  my friend john the greek used to say that there are three irrefutable replies to any argument: "so what, who cares, and big deal".  those replies apply in spades to TimmyB's three points because in the real world, ss benefits are not going to be paid as promised.  do you seriously disagree with that point?  really? REALLY?   do you actually think that TimmyB's three points have any impact whatsoever on the likelyhood of ss being paid in the future? 

do you think that the fact that "Government COULD change Social Security, but that government could change any laws anyways, so worrying about hypothetical future laws is a waste of energy" has more of an impact on whether or not ss benefits are paid than does medicare obligations?  i know you don't.  

perhaps you have a different interpretation of what is meant by "ss is a lie". my point, is that ss is a lie because, in the real world as we know it (and not in some imaginary world where "intent" has some magical effect on funding), it is going to be impossible for government to make good on its obligations.  now i would agree that it might be an interesting intellectual exercise to separate ss out of the equation and treat it as a free standing program free and clear of any outside pressures imposed by other funding requirements.  but you and i both know that is not realistic.  in the real world, ss benefits will be cut, either by inflation or by legislation, but they will be cut.    

 

 

 

Mon, 06/04/2012 - 21:19 | Link to Comment TimmyB
TimmyB's picture

What evidence do you have that Social Security will not be paid as promised, especially when it has been paid as promised since the 1930s? 

 

 

Mon, 06/04/2012 - 21:37 | Link to Comment FMR Bankster
FMR Bankster's picture

OK Timmy I'll bite. I'm 56 and my benefits have been increased in my lifetime (1969 and 1971) and decreased in my lifetime.(1983 with the social security reform)In addition, my social security taxes have been increased (over and over again as a result of the 1983 overhaul) and decreased the last two years. This system is nothing but a tax. They tax you now and pay you welfare later. And how they tax you and what they will pay you is nothing but politics.

Mon, 06/04/2012 - 21:54 | Link to Comment TimmyB
TimmyB's picture

I don't see it the same way you do.  Your future SS retirement benifits increased as you earned more and worked longer.  Each year you pay in entitles you to a larger check.  The more you pay in every year, up to the cap, the larger check you get at retirement. 

I do agree its a tax.  You can call it welfare if you want, but because its based upon how much you paid in every year and how many years you paid into the system, I can't agree. 

I can't dispute that politics is involved.  Everything the government does comes down to politics.         

If you were trying to make a larger point, then I'm sorry, but I don't understand what you are trying to say.  

   

 

 

 

 

 

 

         

Tue, 06/05/2012 - 09:00 | Link to Comment mrdenis
mrdenis's picture

The simple reason it increases the longer you work ,or the longer you delay taking SS is your life span is decreasing as well .....or it's supposed to anyway 

Mon, 06/04/2012 - 21:52 | Link to Comment A Nanny Moose
A Nanny Moose's picture

About minus 15.7 Trillion reasons. How's that investing disclaimer go???? Past performance is no indication of future returns?

Goverment however is pretty reliable in its application of force when Other Peoples' Money runs out. Beneficiaries will be the first to feel the pinch.

Mon, 06/04/2012 - 22:24 | Link to Comment Crisismode
Crisismode's picture

You are so full of shit it is beyond belief.

 

Go away and leave us alone.

 

 

Tue, 06/05/2012 - 00:43 | Link to Comment StychoKiller
StychoKiller's picture

"But, but...I paid into that fund!  They owe me!"

[Quote from a Bernie Madoff Investor, or Social Security Recipient, take yer pick!]

Mon, 06/04/2012 - 20:57 | Link to Comment TimmyB
TimmyB's picture

This is 2012, not 1950.  Thus, the surplus produced by workers doesn't go to workers.  Instead, it goes into the pockets of factory owners.  This ties in to your other point about the need to invest in manufacturing.  Well, since the owners of this counrtry decided to invest in manufacturing by placing factories outside the U.S., I would rather the surplus produced by Chineses peasents go to our government's coffers, instead of remaining in the hands of factory owners.  

I do find the claim that SS checks are pure consumption to be interesting.  Are you claiming we should let seniors who paid into the SS system their entire working lives starve because they consume, while on the other hand we should be investing SS money on factories?  Sorry, but I disagree.

Finally if everyone pays into Social sEcurity and everyone is entitled to a Social Security check when they retire, exactly what group is paying for another group?  Didn't the group currently getting checks already contribute to the system?   

  

Tue, 06/05/2012 - 00:46 | Link to Comment StychoKiller
Mon, 06/04/2012 - 21:16 | Link to Comment TimmyB
TimmyB's picture

comment deleted by author

  

Mon, 06/04/2012 - 21:45 | Link to Comment Lednbrass
Lednbrass's picture

They contributed, but only a fraction of what they will receive.  The closer they were to the start of the Ponzi, they bigger the payout.

Yes the group now getting checks contributed- but the govenment spent the excess money on other things. They bought a huge military and massive social spending with the money and those contributing paid no attention, and unfortunately what those now retired and those going to retire expect and what those behind them will be able to pay are miles apart. The reality is that their lives were a party fueled by borrowing vast sums on top of the terrible misallocation and waste of what they did pay into the system, and they expect their kids and grandkids to pay the bar tab and make up the difference.

We went from 16 workers per retiree in the 50's to about 3 now and it will be down to 2 next decade.

Take a look at what comes back based on income and when people retired. Huge win for the early entrants, diminishing returns after that-

http://www.urban.org/UploadedPDF/social-security-medicare-benefits-over-lifetime.pdf

 

Tue, 06/05/2012 - 00:48 | Link to Comment StychoKiller
StychoKiller's picture

Cm'on, can't you find just one more layer of suckers for the pyramid, please?

Tue, 06/05/2012 - 01:55 | Link to Comment Matt
Matt's picture

"They contributed, but only a fraction of what they will receive.  The closer they were to the start of the Ponzi, they bigger the payout."

This here is the big problem I have with anything a Government calls "insurance". They don't charge enough and they pay out too much. I've been told (not verified) that school teachers around here are eligbile to collect unemployment benefits during the summer months.

I've looked through 7 years of my pay stubs from my previous job, and found I paid in something like $2000 in 7 years, if I had taken unemployment for a year, I would take out 10 to 15 times as much as I had paid in.

This seems to apply to housing and mortgage insurance, pensions, deposit insurance, and any other system created by government. Definitly not ran to the same standards as a for-profit company that has to actually balance the books and generate a return.

Tue, 06/05/2012 - 07:18 | Link to Comment Disenchanted
Disenchanted's picture

"and found I paid in something like $2000 in 7 years"

 

something people never seem to think about or remember is that your employers also matched that amount...so $4000 was paid in on your behalf in 7 years.

 

Payroll taxes are the state and federal taxes that you, as an employer, are required to withhold and/or to pay on behalf of your employees. You are required to withhold state and federal income taxes as well as social security and Medicare taxes from your employees' wages. You are also required to pay a matching amount of social security and Medicare taxes for your employees and to pay State and Federal unemployment tax.

 

from: http://www.alllaw.com/articles/tax/article5.asp

 

I'm 53 in two weeks, I had the first SS deductions from my paycheck to SS in 1973...per the last SS statement I received in March 2011:

 

Over the years I have paid in $82,592 and my employers have paid $82,592 on my behalf, total $165,184.

 

I have also paid in $19,605 to Medicare and my employers have also matched that amount, total  $39,210.

 

Grand total  $204,394

 

Multiply me times millions of working Americans and those monies that should have been earning some sort of interest over the years...WTF have they done with the money?

 

They've blown it and are now blaming us for their fuckups. Same ol shit different day.

 

But hey we've got cool toys(weapons) and a very healthy corporate MIC to 'fight for our freedoms' and 'good friends' like Israel, Pakistan, etc. willing to take a few trillion off of our hands when we've got it to burn.

 

USA...Fuck Yeah!

Tue, 06/05/2012 - 16:45 | Link to Comment Matt
Matt's picture

Ok sure, between me and my employer we contributed $4000. The employment insurance could not grow, because the contributions were used to pay for other people. I could then have taken unemployment out for a year, taking around $20,000. Still 5 times what I contributed.

$40,000 in Medicare at a system that costs ~$7200 per year per person means you and your employer together paid for ~6 years of Medicare for you. If you live more than 6 years without paying in, you are going to cost more than you contributed.

As for the Social Security, let's break it down to $40,000 in contributions per decade and allow for 7% growth, to keep the math simple. That means you would have $40,000 in 1983, $120,000 in 1993, $280,000 in 2003, and ~$600,000 now. If managed properly, and with normal market conditions, this would be an ok pension. 

If the 7% yield continued, and 2% re-invested for inflation, this would leave you with $30,000 per year to live on (scaling with target inflation), which sounds correct. However, you are correct that the money seems to have been squandered on wars, and also with this current environment, it might grow 3% and real inflation is around 12%.

So 2 out of 3 of the examples were clear failures where the programs pay out way more than they take in, and 1 example could have worked, but due to government and central bank policy were completely butchered.

Tue, 06/05/2012 - 02:32 | Link to Comment Revert_Back_to_...
Revert_Back_to_1792_Act's picture

Before the 1965 Coinage act, what people paid in was defined in Dollars of Silver.  There are still people alive who paid in using the silver dollars.  The dollar stayed this way for 172 years.  You could always redeem any paper dollar for 90 percent silver coin and it stayed exactly the same from 1792 to 1964.  You could get two silver half dollars, four silver quarter dollars, or ten silver dimes at any bank or place of business.  The Eagle was the measurment for gold coin - not the dollar.

After the 1965 Coinage act, the Dollar was debased? debauched? not sure what is the right word - eventually to the small dollar coin we have now.  Read President Johnson's comments about the 1965 act.

http://www.presidency.ucsb.edu/ws/?pid=27108

There should still be a huge fund of silver dollars stashed away from those older people - there are still a bunch of them alive that paid in using the dollars defined in silver?  There pretty much has to be because they are not paying out in silver dollars now, Right?

Consider what four 1964 silver quarters are worth.  $20.44 in todays dollars.

http://www.coinflation.com/coins/silver_coin_calculator.html

Isn't the whole problem is the debasing/debauching/changing the value of the dollar coin?!

A government would never change the definition of a gallon, or a foot, or a pound, or any other standard of weights and measures, Right?  It would cause all kinds of chaos.

In essence, any paper dollars, notes, etc were printed against our circulating public silver coin before 1964. 

In 1971, this happened.

http://www.youtube.com/watch?v=iRzr1QU6K1o

It is also interesting to note that President Kennedy was asssasinated in 1963.

The answers to our problems are in the history books and writings of the founding fathers.

Read this old book!

http://archive.org/details/coinsfinancialsc00harvrich

"All the perplexities, confusion and distresses in America arise not from defects in the constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation." - John Adams

more here

http://www.fame.org/NotableQuotes.asp

 

 

Mon, 06/04/2012 - 19:16 | Link to Comment Moe Howard
Moe Howard's picture

Reagan did it.

Haha.

You "could" have a clue, but you don't.

Here is your clue for today: If someone tells you the roof is going to fall on your head, that does not mean that they want the roof to fall, they wish the roof would fall, or that they are causing the roof to fall, nor does the fact that you are counting on the roof to stay up mean that it will.

You sound an awful lot like a person who has not saved anything for retirement and social security is a big part of your "retirement plan". Good luck with that.

Mon, 06/04/2012 - 21:14 | Link to Comment TimmyB
TimmyB's picture

Yeah, Reagan.  Here is the history of Reagan's involvment in increasing Social Security taxes in Reagan's own words.  http://www.ssa.gov/history/reaganstmts.html 

Mon, 06/04/2012 - 19:24 | Link to Comment malek
malek's picture

Repeat after me: "There is no SS trust fund"

It is a lockbox full of empty promises, i.e. non-marketable bonds, which by name implies they can only be redeemed to the government (Treasury), which will gladly pay out the money from... where exactly??

Mon, 06/04/2012 - 20:00 | Link to Comment Rynak
Rynak's picture

Also, his argument that "a gov COULD do" is kinda silly......

a gov COULD rise the primary taxes..... but it would be quite visible

a gov COULD change the SS rules.... still quite visible, but only affects old persons instead of everyone

the fed COULD inflate the dollar..... and almost no one really understands what this actually means

 

So, visibility matters - heck, it looks like ultimatelly most of all those ponzi schemes, primarily rely on obscurity/invisibility/deception.... way more than conventional "force". The more obvious something is, the higher the resistance against it - and the other way around.

HOWEVER, the problem with something like SS is: Here we're not just hoping that the gov wont change the rules NOW.... we bet on the gov not changing the rules for like 45 years after we started to pay in (notice, we dont start paying in at age 1). AND perhaps even more importantly: we do not account for inflation via central banks at all (has anyone ever considered, that it is completely ridiculous that SS cannot pay out the nominal input, considering just how much the dollar has devaluated???)! This is completely nuts!

I may dislike the way SS is abused and mismanaged, may dislike the way it is treated by many ZHers (has way more to do with being a jerk, than disliking a broken scheme)..... but that doesn't stop me from acknowledging, that in an ideal world, SS should never have existed.... this scheme is as braindead as a retirement-plan can get.

Mon, 06/04/2012 - 20:08 | Link to Comment Papasmurf
Papasmurf's picture

There is a lockbox.  It's at Al Gore's home.  It's filled with worthless carbon credits.

Mon, 06/04/2012 - 20:47 | Link to Comment Lednbrass
Lednbrass's picture

Uh huh.

And exactly what comprises this trust fund? A big stack of cash that Uncle Sam has been putting away for a rainy day no doubt?

No, not even close. Uncle Sam spent that money on all manner of stupid things and has been at it since LBJ. It is not different, it is not special, it is jsut a tax like any other and the government spent it like any other money. It has been used to hide deficit spending for over 40 years.  In place of that money, our wonderful leaders put a stack of IOU's called non marketable securities.

Think about this for just a minute. When those IOU's are redeemed, where will the money actually come from? Martian investors? Sales of Unicorn milk? The money fairy?

Nope. It will come from the same place that all the other money comes from- taxes on the population and the sale of debt.  Anyone who thinks that there is any surplus at all has flat out lost their minds- the money was spent.  When the pieces of paper left in their place are redeemed, the money must come from the same place as every other dollar the government spends.

There is no surplus, there is no big stack of cash socked away for a rainy day.  There are only unkeepable promses and lies. Anyone who thinks still this is adequately funded is naive to the point of being infantile. SS is a financial nuke waiting to detonate, it is and has always been a Ponzi, and the time of its inevitable breakdown is coming closer.

Oh, by the way- SS started paying out more than it took in a couple years ago. 2017? LOL! We crossed that bridge in 2010.

Mon, 06/04/2012 - 21:37 | Link to Comment TimmyB
TimmyB's picture

The Social Security Trust Fund is invested in U.S. Government securities.  Sure, you can call them empty promises, but then every other U.S. security is made up of the exact same promise; that the U.S. Government will pay the money due.

Additionally, before you crap all over that promise, take out a U.S. Federal Reserve Note of any denomination out and read it.  What gives that Note value, other than a U.S. Government promise?  In all seriousness, what makes a dollar bill worth $1 and a hundred dollar bill worth $100, other than the different words, numbers and artwork printed on the paper by the U.S Treasury Department?

Would you feal better about the Social Security Trust Fund if instead of having government IOUs the government filled up rooms and rooms with trillions of dollars in Federal Reserve Notes instead?  To me there is little difference.           

Mon, 06/04/2012 - 22:02 | Link to Comment Lednbrass
Lednbrass's picture

Think about this for a minute, the difference is huge.

If they had filled a vast underground complex with stacks of money, they could literally just hand it out and it would not deplete anything going on right now.

Because that money was used up, when one of those securities is cashed in now it can only come from one of two sources-

1) Current tax intake

2) Sale of debt

Option #1 removes money that would be spent elsewhere, #2 burdens the future even more. We already spent 450 billion on interest in 2011, how much more do we need to pour down that hole?

I suppose it could be argued that we could just have the Fed monetize it like they do everything else nowadays but this will only further undermine the currency in the ever less distant future- at which point they get nothing.

Mon, 06/04/2012 - 23:13 | Link to Comment Chump
Chump's picture

You are dumber than a bag of hammers.

Tue, 06/05/2012 - 14:34 | Link to Comment malek
malek's picture

Yep, there is little difference.

When that filled up room is starting to get emptied, it will debase all existing dollars already in circulation. Which perfectly describes the way all those promises will get "paid".

And then you will also get paid your SS, just as promised.
At least nominally.

So, are you happy and relieved now?

Mon, 06/04/2012 - 21:50 | Link to Comment TexasAggie
TexasAggie's picture

You must still be using your tax program to do your taxes and owe "0". The SS TF Administrators have different dates for each of the three funds, SSTF, Medicare, and SS Disability. So do more homework.

Tue, 06/05/2012 - 06:28 | Link to Comment francis_sawyer
francis_sawyer's picture

 "it could make fish the national currency..."

~~~

Well considering that the fish probably ate all the gold that went down in our collective boating accidents, that might be a good idea...

Mon, 06/04/2012 - 18:07 | Link to Comment greyghost
greyghost's picture

just another jackass talking out of their you know what. another discussion about soc. sec. and or medicare as if they were locked in a box all by themselves. no talk about cutting the military budget or black opps cia budgets or federal education budgets or congresional payroll or white house payroll or nasa funding or tree hugger back to picking berries budgets or welfare for the corporations or welfare to the tune of trillions of dollars to keep the top dozen bank zombies in hard to find cash. no just morew and more bullshit about screwing the average joe......endlessly endlessly....on and on...on and on!!!!! left right left right left right same old thinking inside the box. would someone please tape the box shut..............

Mon, 06/04/2012 - 18:11 | Link to Comment dick cheneys ghost
dick cheneys ghost's picture

We just opened our newest Military base in Colombia........Yippee!...............But I thought we were broke??????

Mon, 06/04/2012 - 18:14 | Link to Comment Normalcy Bias
Normalcy Bias's picture

That must mean that we're finally gonna win that 'War On Drugs' any day now!

Mon, 06/04/2012 - 18:31 | Link to Comment greyghost
greyghost's picture

omg...don't get me started on the "war on drugs"!!!! talk about crony job growth! war on cancer, war on poverty.....war on the constitution. all a big waste of time and money. well i have often wondered what would happen should the war on poverty be declared won and all payments were to cease? where would all those people go? to your house...maybe my house? with the perpetual ponzi scheme from the bankers these past one hundred years you need the poverty war or things would go explosive very quickly.

Mon, 06/04/2012 - 19:30 | Link to Comment knightowl77
knightowl77's picture

Panetta is in VietNam we are going to open a naval base there too....We are so screwed

Mon, 06/04/2012 - 20:09 | Link to Comment Papasmurf
Papasmurf's picture

Or it could be harvest time.

Mon, 06/04/2012 - 21:22 | Link to Comment HurricaneSeason
HurricaneSeason's picture

Watch heroin disappear and the country be flooded with cocaine as well as pharmaceutical cocaine at pill mills.

Mon, 06/04/2012 - 18:23 | Link to Comment El Oregonian
El Oregonian's picture

"But I thought we were broke??????"

Yea, they're only broke for you and me...

Mon, 06/04/2012 - 18:40 | Link to Comment barroter
barroter's picture

Yeah, we're all so much better off trusting the Banks and Wall st with our retirements. So sleep assured....sucker!

Mon, 06/04/2012 - 19:15 | Link to Comment Hobbleknee
Hobbleknee's picture

Don't worry guys.  We'll just work until we're 80, so the feds don't have to lie.

Mon, 06/04/2012 - 22:14 | Link to Comment Offthebeach
Offthebeach's picture

TD
About, quote .."...Government programs which is currently making up as much as 35% of personal incomes.....", unquote.

I read that the top 1% make half( ? ) all income. Something like that. Soooo, that " 35% of personal income", could that mean that below say 259K/ye earners, something like half or more of the 99% of Muppets are fedgov wards?

Mon, 06/04/2012 - 17:50 | Link to Comment Rainman
Rainman's picture

Solution is clear....these kids will have to have 4 p/t jobs to pay off all the old geezers til death....after student loans payment

Mon, 06/04/2012 - 18:00 | Link to Comment I think I need ...
I think I need to buy a gun's picture

what part time jobs? Radio Shack, best buy, sony, some of the lesser retailers etc etc are all collapsing, if the exchange rates change it may just be 299,000 for a big screen tv like it is in japan,,,,,,,,actually obama may hire all of them to paint bridges and do gardening work, nevermind ......BULLISH

Mon, 06/04/2012 - 18:09 | Link to Comment Rainman
Rainman's picture

good point about retail......Mrs Rainman is the Imperial Potentate of retail shoppers/suckers...all off an IPad.

Mon, 06/04/2012 - 18:31 | Link to Comment Quisat_Sadarak
Quisat_Sadarak's picture

Well at least it is not just me.... Mrs Quisat Sadarak is quite adept at folding space via our iPad to spend some of our gathered spice at remote Harkonen retail sites too.

Mon, 06/04/2012 - 18:46 | Link to Comment Rainman
Rainman's picture

For the too late file : Never.buy.Ipad. for.wife.on.birthday

Mon, 06/04/2012 - 17:54 | Link to Comment mayhem_korner
mayhem_korner's picture

 

 

unfunded liabilities = unfunded lies

The New Deal is the ultimate hair of the dog...

Tue, 06/05/2012 - 07:32 | Link to Comment kralizec
kralizec's picture

SS was a lie from the get go, the vehicle towards greater government control under many new expansive socialist programs.  It would have been better for it and the rest of the Raw Deal never to have seen the light of day but people were vulnerable and quit caring about themselves and gave control over their lives to government.  It's all gone down the drain since then.  We are merely at the final stages of a script written decades ago by men long dead and it is their latter day zombie progeny keeping us enslaved to a fate we neither wanted or needed.

Mon, 06/04/2012 - 18:02 | Link to Comment Tippoo Sultan
Tippoo Sultan's picture

As an aside,

"Mr. Horney ?"

Mon, 06/04/2012 - 18:05 | Link to Comment Normalcy Bias
Normalcy Bias's picture

Yes, his name is Meso Horney.

Mon, 06/04/2012 - 18:28 | Link to Comment Tippoo Sultan
Tippoo Sultan's picture

"Half of them are serving officers in the Viet Cong."

http://cdn2.mamapop.com/wp-content/uploads/2010/10/hooker-full-metal-jacket1.jpg

Mon, 06/04/2012 - 18:02 | Link to Comment BandGap
Tue, 06/05/2012 - 08:31 | Link to Comment dizzyfingers
dizzyfingers's picture

"Use this and you won't need Social Security:  https://landing.thestreet.com/EXT455_042512_800092PRAA-0258?OID=018931&gclid=CKn9vejKtbACFYuc7QodCnMI6g "

Yeah, "charitable trusts" work nicely for the US Ruling Class.

Mon, 06/04/2012 - 18:03 | Link to Comment fonzannoon
fonzannoon's picture

Counterfeit money can be difficult to get a refund for. A police officer shows fake U.S. dollars in Cali, Colombia, Tuesday Nov. 1, 2011.

Imagine withdrawing money from a bank and then finding out that the money is counterfeit and cannot be refunded.

That recently happened to William Hagman of Morris Plains, New Jersey, the New Jersey Star-Ledger reports.

Hagman withdrew $2,500 from his savings account at TD Bank in February, according to the Star-Ledger. Then he went to Bank of America to deposit the money, only to find out from the teller that one of the $100 bills was counterfeit.

Mon, 06/04/2012 - 18:12 | Link to Comment greyghost
greyghost's picture

take the counterfeit concept and apply it to all the federal reserve notes created. then you will begin to understand that untill we start printing united states notes the ponzi scheme will continue.

Tue, 06/05/2012 - 02:42 | Link to Comment Revert_Back_to_...
Revert_Back_to_1792_Act's picture

I think you will like this video.  Man actually tries to redeem a note at a Federal Reserve Bank.

http://www.youtube.com/watch?v=e5Cp6Me26JA

oh yeah..and this speech is interesting.

http://www.afn.org/~govern/mcfadden_speech_1932.html

 

Mon, 06/04/2012 - 18:04 | Link to Comment Normalcy Bias
Normalcy Bias's picture

Now, I know all of you Gen X'ers and Millennials are going to do your patriotic duty and work like dogs while having over 75% of your income confiscated, so that the Boomers can enjoy retirements that you'll never see, right? /sarc

Mon, 06/04/2012 - 18:18 | Link to Comment Ineverslice
Ineverslice's picture

To you? Not a chance Fred, you Male Prostitute. 

Mon, 06/04/2012 - 22:26 | Link to Comment Crisismode
Crisismode's picture

You are going to pay.

 

Whether you like it or not.

 

Tough beans, compadre.

 

Mon, 06/04/2012 - 18:09 | Link to Comment Catullus
Catullus's picture

Yeah.  Great annuity.  Throw $12k of savings down the drain so you can potentially get paid $70 more a month.  ... which gets taxed at marginal income tax rates. 

Mon, 06/04/2012 - 20:09 | Link to Comment Matt
Matt's picture

Isn't an annuity basically a system where you take someone's money, and give it back to them, minus management fees, in monthly increments until it runs out?

Mon, 06/04/2012 - 20:14 | Link to Comment Papasmurf
Papasmurf's picture

No, an annuity is planned to go BK before the payout is complete. 

Mon, 06/04/2012 - 18:10 | Link to Comment Quisat_Sadarak
Quisat_Sadarak's picture

When I was in high school my fellow students and I have been talking about the *fact* that Social Security will blow up and to not depend on it being there when we get to retirement. This was known to unsophisticated students, it must be known by our sociopathic leaders, and yet they do nothing to fix it. Of course they have their own retirement plan that you and I can't get on, so they don't give a crap about SS! There are two Americas: Political Class & Everyone Else.

As has been said many times before: The social security problems would be fixed instantly if all politicians were by law forced to use it like the rest of us!

Mon, 06/04/2012 - 18:33 | Link to Comment jpmrwb
jpmrwb's picture

The key is when it will blow up? Politicans look at short term solutions to kick the can down the road. The first order of business is to get elected. Oh, the rush of power and the ego feeding frenzy. When the baby boomer bubble is exhausted and the US is still here then you might have the votes to get something done.

Mon, 06/04/2012 - 18:10 | Link to Comment Joebloinvestor
Joebloinvestor's picture

If the fucking government would return all the money it STOLE, there wouldn't be a shortfall.

A law needs to be enacted that this fund is off limits to everything except what it was intended for.

Mon, 06/04/2012 - 18:17 | Link to Comment Quisat_Sadarak
Quisat_Sadarak's picture

How, pray tell, would we fund these endless wars? I suppose they would forced to PRINT more money then.

When printing stops working, then CONFISCATE.
See: Executive Order 6102

Mon, 06/04/2012 - 18:22 | Link to Comment EhKnowKneeMass
EhKnowKneeMass's picture

You pay into the system all your life, but then up to 85% of your benefits may be subject to federal tax.
http://www.ssa.gov/planners/taxes.htm

Man, what a great deal!! Next best thing since FB IPO.

Mon, 06/04/2012 - 18:40 | Link to Comment FeralSerf
FeralSerf's picture

You are also taxed on the money when you "contributed" to SS.  Sounds like double taxation, eh?

Mon, 06/04/2012 - 18:24 | Link to Comment IndicaTive
IndicaTive's picture

Hmmm. I'm a bit slow but, something tells me there may be an upside to borrowing the max from myself (401k) every so often, and purchase something I can put away for a few-teen years if necessary?

Mon, 06/04/2012 - 18:27 | Link to Comment Crab Cake
Crab Cake's picture

You know what, Im operating under the assumption that there is no "social safety net" for my generation; that its a total lie. I figure there will be no such thing as retirement either, and that I will need to make a personal decision about when to pull the plug and exit this world asauming I dont keel over before said circumstances. Somehow.... Im ok with it if it will buy my son a fair shot and a clean slate. However that bastard criminal from aig doesnt get to tell me this unless its from behind bars, where he should be. Also of note, my generation is toast, but if they think theyre getting my kids too, I will start putting holes in people I deem responsible. If my sacrifice of future cant pay for the sins of my parents generation, and my own I guess, then I have no recourse than to attempt to change the course of events in any way and by any means possible. I do not say these things lightly. I will not be lighting myself on the court steps... I will take as many of these criminals to hell with me as I can with no regard to self preservation, if and when I must. Beware TPTB, be-fucking-ware, you live in cozy suburban neighborhoods not far from my own, drive the same highways and streets as me, and I know who you are.

Mon, 06/04/2012 - 19:22 | Link to Comment Moe Howard
Moe Howard's picture

Teach your children how to shoot accurately. They will figure out the "who" part.

Mon, 06/04/2012 - 20:40 | Link to Comment Gunga
Gunga's picture

Dude,
Do you think that the people that are getting rich off of the current system will change voluntarily ? Of course they plan on enslaving your children as they have us.

Tue, 06/05/2012 - 01:04 | Link to Comment LowProfile
LowProfile's picture

 

The first casualty of war is the plan.

-Kilroy

Mon, 06/04/2012 - 21:00 | Link to Comment Maos Dog
Maos Dog's picture

+10000 for Thomas Ball reference

Mon, 06/04/2012 - 21:33 | Link to Comment Chump
Chump's picture

And you're not alone with that outlook.

Mon, 06/04/2012 - 22:29 | Link to Comment Crisismode
Crisismode's picture

Good luck with that one buddy.

 

Seriously, I wish you all the best,

 

and your children.

 

 

Tue, 06/05/2012 - 01:16 | Link to Comment Crab Cake
Crab Cake's picture

I dont think you understand. I wont need luck. I will need to summon the fortitude to repress the instinct for near term self preservation, the willpower to see the acts through, the means to carry it out, a decent plan that gives me odds for repetition, and targets.

Mon, 06/04/2012 - 18:29 | Link to Comment BlackHorsewithScales
BlackHorsewithScales's picture

There is no unwinding this.  The damage is done, with more to come.  If it continues without a band-aid, the sooner this atrocity should be obvious to even more people.  I'm hoping nobody bothers to "save" it, and prolong the agony.

With nothing in the fund but IOUs from the state anyway, don't people grasp that they pay in multiple times, and/or confiscation of value via inflation?  The public stupidity is extremely frustrating; another achievement for the Teachers Union.

This makes Bernie Madoff look like a rank amatuer.

 

Mon, 06/04/2012 - 18:45 | Link to Comment Quisat_Sadarak
Quisat_Sadarak's picture

Teachers are going get schooled when they find that their pension funds are less funded that the SS trust fund, and the checks stop rolling in. It's for the kids though, so it all good.

Mon, 06/04/2012 - 19:23 | Link to Comment Moe Howard
Moe Howard's picture

Bernie only ripped off fellow Joos. the Government rips us all off.

Mon, 06/04/2012 - 22:40 | Link to Comment Offthebeach
Offthebeach's picture

BM didn't have jump boot,cannot cargo pants shaved head steroid illiterates with guns as collectors like the Department of Edjamakation, and other fedgov crime syndicate families ...er...department s.

Mon, 06/04/2012 - 18:40 | Link to Comment oldman
oldman's picture

Well, It looks like we'll have to give up war.

We need ssa more than all those bases overseas---all the death and destruction, and all of the theft and corruption that goes with these items----and not all of the money is spent in the economy, though it is paid, and certainly a lot of it is never going to be spent here on our little island.

It's obvious that each $ of ssa that comes to us old ones gets spent 100% here in the econmomy and I don't know what that gives as a 'multiplier', bit it stays HERE, and gets 100% SPENT.

There is nothing else to to say except all that 'forced savings' of our working lives have turned out to be some of the best news a sagging economic model has; try pulling it out and how much different things will be for a lot of 'little people'.

Rah, rah, rah for ssa and us old ones who spend every cent of what we paid in --when times are good and when TIMES ARE BAD!!!!!!!!!

You are entirely welcome---we owe to the younger generations to help all we can       om

Mon, 06/04/2012 - 18:49 | Link to Comment Quisat_Sadarak
Quisat_Sadarak's picture

The dollars go right back to China via melamine fortified cat food purchased at Walmart.

Mon, 06/04/2012 - 20:39 | Link to Comment oldman
oldman's picture

dear quisat

I have heard about walmart, but you know the truth is that I've never been to one; and after all the tales about poisons from China---I never will go in one.

No one forces another to buy here or there----one of the last remaining items of 'free choice'.
 I've had cats all my life and only fed two of them commercial cat food----nice cats, those two, but they wouldn't eat anything natural---only commercial cat food; that was enough for me.

To your point, this has been a long way round, but I believe that most old folks understand that it is important to spend our money 'in the 'hood' when possible, and if not----it is not a very difficult sale to make.

Antway, how much defense spending goes to China? This is a real scandal, but i'm not here for that----I'm looking for ideas not resistance.

Thanks for the comment ---it was timely                   om

Tue, 06/05/2012 - 14:46 | Link to Comment Quisat_Sadarak
Quisat_Sadarak's picture

Agree with you on "defense" spending. It's an Orwellian term because we end up doing more "offense" with the so-called-defense program. We as a nation spend way too much on "defense". Eisenhower & MacArthur -- two uber hawks -- warned us to beware of the Military Industrial Complex.

While I am most certainly not in favor of dumping old folks on the streets, we have to face the fact that SSA the mother of all Ponzi Schemes! It is government asserting power where it was never given it (by the constitution). Because of demographics, every successive generation will be receiving less than the last generation (and losses to future recipients will be compounded by increases in retirement age and ever increasing inflation, and increasing future taxes, and bogus COLA calculations on future recipients thus cheating them out of their future payback). Ponzi's are sustainable as long as there are no more suckers to pay in to the scheme to keep it going. It is totally unsustainable in its current structure.

It is morally wrong to take wealth from person A(nt) and give it person G(rasshopper). That should be person A's choice to give. Please re-read the old "The Ant and Grasshopper" fable which teaches a valuable lesson working to prepare for your future, and the consequences of not doing so.

'Spending Money in the Hood' is not necessarily the best use of your money as far as creating wealth goes. Adam Smith wrote in 'The Wealth of Nations' that paraphrasing that one should always purchase goods from the cheapest source all other things being equal, and this leaves more money in the consumers hands to save or purchase more goods. This process is necessary in creating wealth. One also needs to produce and save more than they produce. So while I made a populist dig at Walmart, I do not subscribe to the idea that people should avoid Walmart because the goods come from China... rather I believe that people should purchase the cheapest goods of same quality -- but they may want to buy their food from a more reputable source than China. ;-)

Wed, 06/06/2012 - 13:18 | Link to Comment oldman
oldman's picture

@quisat

Thank you, quisat,

I have no more to say because we believe the same things. The only thing we could accomplish by talking further on this is to have a pleasant lunch together.

Your honesty is refreshing at a table full of trolls                      om

Mon, 06/04/2012 - 19:18 | Link to Comment oldman
oldman's picture

It all of a sudden came to mind that something is wrong with the ssa story, to wit;

"there is only one person supporting ___ssa beneficiaries"; fill in a number, let's say five.

Well, if that's true it also means that there are five consumers of basic materials for each employee, right?

That is a lot of support---$5000-$10,000 per month in income flow should keep bread on the table in a lot of homes in this country. We old dudes pay and you young dudes earn.

It must be a 'systemic' problem because the numbers are there----what am I missing, what are we missing????

Maybe we don't need facebook,aapl,msft---maybe we can just focus on food, shelter,health, and education

I don't know---I just turned the equation around and I think I could design a working machine with what 'is'.

Anyone have a thought on this?            om

 

Tue, 06/05/2012 - 01:02 | Link to Comment StychoKiller
StychoKiller's picture

IF the two to three working stiffs supporting yer Social Security payment are being taxed for a total of $12,500/year, yet yer SS checks total $13,000/year...do the math.

Tue, 06/05/2012 - 01:41 | Link to Comment oldman
oldman's picture

stycho

Not a pissing contest

I know all the resistance stuff---my intention was to look at at half-empty glass and see why it is also half-full

no one is or has ever supported me

i paid my money in for forty years whining about it every payday

i paid for the wars i paid for the schools, bridges, roads, everything

me---the little guys and working stiffs that pay the fucking bills in this disasterAnd I can't do the math because I don't care about winning or proving

I care about living in a healthy and happy place that includes all species

Still a Boy Scout---still a believer in the possible---in the face of so much despair

suspend judgement for a day or so and -----sometimes even old men and women can do it---sometimes

the half-empty glass is always half-full

the best of these two worlds you, stycho                        om

 

Mon, 06/04/2012 - 19:24 | Link to Comment Moe Howard
Moe Howard's picture

The way you talk, you had better vote Ron Paul. Everybody else is in this war a gogo.

Tue, 06/05/2012 - 02:00 | Link to Comment oldman
oldman's picture

R P as an independent, I will vote for unless r n runs again or d k if there is an election and I vote at all.

thanks moe          om

 

 

Mon, 06/04/2012 - 18:33 | Link to Comment world_debt_slave
world_debt_slave's picture

Flemming vs Nestor

1960 Supreme Court Case

The Court ruled that no such contract exists, and that there is no contractual right to receive Social Security payments. Payments due under Social Security are not “property” rights and are not protected by the Takings Clause of the Fifth Amendment

Mon, 06/04/2012 - 18:47 | Link to Comment three chord sloth
three chord sloth's picture

And yet oddly, government workers pensions and negotiated benefits ARE considered property. Kinda lets you know just where you stand in the eyes of your own government... don't it, Mr. Mere Citizen.

Mon, 06/04/2012 - 19:26 | Link to Comment Moe Howard
Moe Howard's picture

But they can take half of that government check and give to your ex-spouse, forever. I guess you don't own it after all.

Mon, 06/04/2012 - 19:02 | Link to Comment sessinpo
sessinpo's picture

Basically anrthing the government produces or is in possession of at a point is no longer the property of any citizen. Ever wonder why we don't have more people fussing about tax payer's money. Because even though it is, by the governments standards, it never was. We citizens simply are borrowing and paying for the priviledge of using their notes for transactions. Same goes for property too. The majority of us are only renters, usually paying an annual rent in the form of property taxes. Government owns everything and only gives us the illusion of owning it.

Mon, 06/04/2012 - 18:50 | Link to Comment traknologist
traknologist's picture

But but but Benmosche said Americans should retire at 80 anyway ;-)

Mon, 06/04/2012 - 18:55 | Link to Comment bigwavedave
bigwavedave's picture

Mitt Romney will privatize social security and convert all retirement savings to 401(k) plans 'managed' by his top campaign donors. Finally.

Mon, 06/04/2012 - 20:09 | Link to Comment Bobbyrib
Bobbyrib's picture

Nah, they will just raise the retirement age until they reach an age where you are lucky to see one dime of the money you put in. Raising the retirement age for social security is another form of wealth redistribution. End the program period.

Mon, 06/04/2012 - 20:50 | Link to Comment crawldaddy
crawldaddy's picture

double

Mon, 06/04/2012 - 20:49 | Link to Comment crawldaddy
crawldaddy's picture

and go back to having the elderly as the largets demographic in poverty in the nation. Great plan genius.  Or better yet, let us all play the stckmarket, yeah lets do that... christ some people around really dont get it.

Mon, 06/04/2012 - 21:06 | Link to Comment Lednbrass
Lednbrass's picture

They are the responsibiliy of their children.

If they were such completely incompetent parents that their own kids wont have them its their own problem.  If they were too busy buying crap and having a good old time in life to bother raising children due to the massive inconvenience to their fun time and did not prepare adequately for heir later years, its their own damn fault.

Mon, 06/04/2012 - 18:56 | Link to Comment sessinpo
sessinpo's picture

I think most here know that SS is a ponzi scheme. First ones in get all the benefits. Last ones in get left holding an empty bag. It's just a forced MLM scheme and each generation people required to contribute has to support a larger beneficiary pool. Upside down pyramid. Nothing new here. The truth is all social programs are that way, including medicare and any government run single payer or universal health system. The main stream public doesn't want to end it because they are ignorant and won't deny a check. Besides, they paid into it, thus the entitlement mentality. Politicians don't want to end it. No way in hell they want to tell their constituents that they've been had and lied to by the very officials they voted for. Besides, it makes a good political football.

And we all know it will end, and end badly.

Mon, 06/04/2012 - 18:55 | Link to Comment Stuck on Zero
Stuck on Zero's picture

But we can afford trillion dollar weapon systems.

 

Mon, 06/04/2012 - 18:58 | Link to Comment bigwavedave
bigwavedave's picture

But those systems pay off when we are attacked by Iraqi's and Afgans flying commercial jetliners....Oh Wait!

Mon, 06/04/2012 - 19:06 | Link to Comment Hedgetard55
Hedgetard55's picture

Ms. Munell = shit for brains skank.

Mon, 06/04/2012 - 19:30 | Link to Comment Stimulati
Stimulati's picture

The political career of any politician that tries to seriously dismantle social security will be short and brutal.  It's a great program and the least of our financial worries.

Mon, 06/04/2012 - 22:12 | Link to Comment TimmyB
TimmyB's picture

The "Sky is Falling" crowd disagrees. 

Tue, 06/05/2012 - 00:53 | Link to Comment CrockettAlmanac.com
CrockettAlmanac.com's picture

It was the "sky is falling" crowd that insisted that SS was necessary in the first place. Government thrives by declaring emergencies and then rehypothecating wealth and power in order to fix problems that never existed.

Mon, 06/04/2012 - 20:40 | Link to Comment grapeape
grapeape's picture

the only way to save ss is to raise the earnings limit. everyone pays  ss tax on 100% of there income. no more cap.  and don't think thats not whats coming next.

Tue, 06/05/2012 - 00:55 | Link to Comment FreeNewEnergy
FreeNewEnergy's picture

It's not just that social security is a myth; retirement in and of itself is a myth, or rather, that a very large segment of the population will be able to provide for themselves with these forced "savings."

My dad used to remind me, whenever the topic of SS became heated, that it was not designed originally to fund retirements in full for everyone. Originally, the 1% tax was supposed to help the desperately poor, infirm, etc. At least that was how it was sold to the public.

Well, 80 years later and countless increases to the contributions has created a mighty fine debt hole by our beloved federal government.

There's a real solution to social security. End it NOW. Make cash settlements to everyone who's paid in to this point, based on age, nothing else. Continue paying those already receiving benefits as promised and gradually decrease benefits so as not to burn an even larger hole in the budget.

Yes, there will be a huge deficit created, but it will be over with in 20-25 years, all along, the additional wealth created by not taxing the crap out of every business and working person in this country will be huge.

Some will save the extra cash in their paychecks, but more will spend and, hopefully, invest in productive enterprises.

Bottom line, it's all relative. If nobody is paying in and nobody is getting benefits, eventually we're all even. Just phase it out.

See, wasn't that easy?

Mon, 06/04/2012 - 20:43 | Link to Comment gnomon
gnomon's picture

Strike One-The New Deal

Strike Two-The Great Society

Strike Three-Obummer Care

You're outta here, SUCKER!!  You done been screwed and tattooed out of a Republic.  So sweet the revenge on all of you morons who went along.  I won't suffer, because it is not in my nature to suffer, but I know all of you weak-minded, gimme drones will die by inches in the coming dictatorship.

Mon, 06/04/2012 - 20:47 | Link to Comment crawldaddy
crawldaddy's picture

sure, you sound like a typical right wing clown on disability to me.

Mon, 06/04/2012 - 20:57 | Link to Comment gnomon
gnomon's picture

The national character has changed since the 1930s because of the multi-generational rot engendered by these gimme programs.  These programs have destroyed and will further destroy this country.  They have destroyed the family and have made vote-buying the main part of election campaigns.  

Look at yourself in the mirror, the enemy is you who have embraced this entitlement mentality.

Mon, 06/04/2012 - 23:30 | Link to Comment Helix6
Helix6's picture

Horse feathers!  Are you saying that the character of the country was somehow superior during the Great Depression than it is now?  And that the changes in character have nothing to do with television, the pill, a slew of pointless wars of choice, increased productivity, the changing nature of work, and a raft of other massive social changes?

The issues with Social Security rest on demographics, not the "entitlement mentality" boogeyman.  People are simply living longer now than when the program was first designed, and the demographic "pyramid" of former eras has given way to a demographic "rectangle".  Obviously, the Social Security will have to be adjusted to align with those realities.  Three straightforward adjustments are removing the cap, raising the age at which one qualifies for the various levels of benefits, and adjusting the benefit amounts.  All of these need to be examined.

Sneering at those who have coughed up anywhere from ten to fourteen percent of their income to support their elders is contemptible.  Social Security has been a highly effective and efficient solution to the problem of supporting the elderly in a mobile society.  One way or another, children have always supported thier elders in their old age, and Social Security has been an important component of that support for more than three generations.  With the adjustments I've suggested above, I see no reason why the program cannot continue to be successul.

From the standpoint of recipients, Social Security has the characteristics of an enforced savings program.  All other things being equal, that money could have been saved or invested, so I can argue that that benefit is, in effect, part of our personal savings.  And, of course, all other things would not remain equal.  I think I can make a case for the cost of everything rising in keeping with increased "disposable income" should the Social Security program be cancelled.  The net effect would be to leave Americans little better off than they are now, but without a Social Security benefit to fall back on when their working years are over.

Your comment strikes me as a modern version of Puritanism.  You know, Puritans in the sense of "people who are anxious that someone, somewhere, might be happy."  Except in this case, anxious that someone, somewhere, might actually have a relatively comfortable old age.

Tue, 06/05/2012 - 14:32 | Link to Comment gnomon
gnomon's picture

The government ponzi in all of its permutations from the gimme programs to the bubble-blowing by the Fed have shaped the character of the American people far more than any other factor that you can name.  To ignore the obvious is to parlay your riposte into trivial details.  

Defining deviancy down (and competency as well) were the direct result  of this hydra ponzi.  Those are the sad facts, and this phenomenon is partly the reason why societies and civilizations repeatedly fail in regular cycles.  

Discerning minds and a toughness of character are not nurtured by the Welfare State, in fact it is actively discouraged so as to keep in power the Plantation Owners.

And you sir, clearly have a slave mentality.

Mon, 06/04/2012 - 20:44 | Link to Comment LMAOLORI
LMAOLORI's picture

I disagree Social Security is a debt owed just like any other debt so unless the U.S. completely and totally collapses this article is nonsense. Social Security is THE largest holder of U.S. debt.

 

The 'Geezers' are right this time

Social Security is an independent, self-funding program. It is not welfare. The workers and their employers pay for all of it. 

About 25 years ago, Social Security taxes were raised above that needed to support current retirees and the surplus put in a trust fund. The goal was to create a buffer to keep the program healthy as the number of retirees grew and lived longer. Left alone, Social Security can pay all promised benefits for the next 20 years and can continue doing so with some minor adjustments, such as raising the cap on income subject to payroll taxes.

Conservatives and “centrists” who call for compromise on the Social Security Trust Fund still don’t get it, so let’s bang the gong again: The trust fund represents real money taken out of workers’ pockets, and the money it loaned the Treasury is really owed.

in full

http://www.theleafchronicle.com/viewart/20120530/COLUMNISTS100/305300007/The-Geezers-right-time

Mon, 06/04/2012 - 21:13 | Link to Comment Lednbrass
Lednbrass's picture

I get it just fine thanks.  The money was taken out and spent on other things, those same workers did nothing about it and spent their lives havin a good ol' time, buying crap and taking vacations while chanting "U-S-A! U-S-A!", and now they expect someone else to make good on it. Unfortunately those people dont have jobs and are in debt to their eyeballs, and the demographics are completely upside down.

There is no Trust Fund, there is a stack of securities that can only be paid with taxation and debt sales. The money was spent.

They may get their money, but the only way to do it is with such an obscenely devalued currency that its purchasing power is vastly reduced.

Tue, 06/05/2012 - 15:04 | Link to Comment Quisat_Sadarak
Quisat_Sadarak's picture

Lednbrass is fully up to speed on the situation. Concur 100% Led!!

Tue, 06/05/2012 - 14:26 | Link to Comment hangemhigh
hangemhigh's picture

@ LMAOLORI 

…….and the money it loaned the treasury is really owed…………

 

Soc sec has been used as a ponzi slush fund since the Reagan era.  When Ronny ‘cut taxes’ the tax cuts were very selective.  The tax rate on the highest earners fell from 70% to 28%, a 60% tax cut, while corporate rates fell from 50% to 35%, a 30% rate cut.

At the same time, based on the Greenspan Commission’s recommendations (1983) social security tax rates for wage earners (and [small]  businesses) rose from  6.7% to 7.6%,  a 13.4 % tax hike spread across a broad segment of the economy.  That increase in social Security taxes, allegedly imposed to pre-pay benefits and maintain the system’s solvency, was never meant to be anything other than a clandestine piggy bank for the kleptocrats.

Now, when the ponzi is threatened by tail risk/systemic failure, and the plunderbund need an exit strategy, “Social Security reform” is run up the flagpole as a political solution.   

In reality, those ‘reforms” constitute nothing more than a selective default on debt issued by and “backed by the full faith and credit of the US Treasury”.   That default would allow the lower forms of life in the political class to masquerade as ‘fiscally responsible’ while at the same time ingratiating themselves with their feudal masters by extending the life of the ponzi.

An additional benefit of selective default would be the continued extraction of revenues from an impoverished, defrauded class of taxpayers to provide funding for the skynet/death star fun and games favored by the imperial families and their storm trooper allies.    

 

Mon, 06/04/2012 - 20:46 | Link to Comment crawldaddy
crawldaddy's picture

SS has worked and continues to work.  You are worried about 2033? really?  what a load of shit.  If they just make one simple change, that is apply SS tax to ALL of the rich's income, not just the first 120,000 or so , all of a sudden SS become stable for 75 years.

 

So save the bullshit buddy.  SS is one program that has worked, and can continue to work.

 

Before SS the elderly in america was over 60% in poverty, We have fixed that.  

Mon, 06/04/2012 - 21:04 | Link to Comment Lednbrass
Lednbrass's picture

Suck my balls you theiving fuck, anyone younger than the boomer locust swarm will start retiring around that time.

It was only "fixed" by taking out payday loans against the future earnings of those not born yet or too young to have a voice. That isnt a fix- its economic child abuse. Your parents are your responsibility, you are your kids responsibility.

Take a look at the last report on SS- the future interest rates they built into their projections are flat out crackheaded insanity.  There is going to be a nine figure shortfall later this decade. Even though ZIRP has been annouced as the known policy for the next few years they built in higher rates of return which has absolutely no bearing on reality whatsoever.

You really wont be happy until you have died eating the next 30 years worth of seed corn will you?

Mon, 06/04/2012 - 22:20 | Link to Comment TimmyB
TimmyB's picture

Things will look real different to you when you grow up.  Every generation is taught to believe that Social Security won't be there for them when they retire.  However, when the program keeps going and going, and you get older and older, you learn the "Chicken Littles" were wrong.  The sky isn't falling.  Social Security will be there for you too.         

Mon, 06/04/2012 - 22:56 | Link to Comment Lednbrass
Lednbrass's picture

Im on the front end of Gen X age-wise, we arent getting anything. My teenage son will be screwed even worse because people like yourself seem to feel that hanging out on playgrounds shaking down kids is a valid economic plan.

You seem fundamentally incapable of doing or understanding even the most basic mathematics and instead rely on "well, things have always been a certain way for me, therefore they will always be that way". This is the intellectual equivalent of sticking your fingers in your ears and yelling "LALALALALALALALA"! Its normalcy bias run amok coupled with willful ignorance and a complete failure to understand how funding for this program works and where it comes from.

Answer a simple question: Where does the money to pay SS come from? Does it come from current tax intake and the sale of debt, or is it paid from what you paid into the system? Are you capable of admitting that you slept and partied when your contributions were squandered elsewhere, and must now be paid by a much smaller population group behind you that already has massive problems?

Tue, 06/05/2012 - 14:54 | Link to Comment TimmyB
TimmyB's picture

Guess what?  As a Gen-Xer, you are one of the thieving fucks you complained about above.  What exactly are you doing to ensure that the excess paid into SS today, and during every other year of your working life so far, was kept in a lock box, instead of being spent so you could pay lower taxes?  Sleeping and partying, no doubt.

On another note, do you call your parents "thieving fucks" because they paid lower taxes due to the SS surplus?  Obviously someone as self sufficient as you must have moved out of your parents home and began fended for yourself the day afer you were born.  Those thieving fuck parents of yours didn't spend of their money feeding you or keeping you clothed, did they?  Didn't you tell them they shouldn't spend a dime on you and instead should be paying higher taxes instead of allowing the government to spend the SS surplus?     

Thank God you had the resolve at such a young age to set them right.  And I'm sure you tell your kids the same thing as they go naked and hungry into the world: "I'd like to provide for you, but I'm using all of our family's resources to get the government to stop spending the SS surplus so I won't be stealing from you in the future."

What a joke. 

 

 

 

Tue, 06/05/2012 - 15:08 | Link to Comment Lednbrass
Lednbrass's picture

The day after I was born? No. I moved out at 16 after I graduated from high school and began working full time the next day.  A few months later I was out after paying rent starting with my first check.

The higher taxes argument is silly because the government shouldnt be in that business in the first place. I most certainly told them since the late 80's once I looked at the subject that their expectations were way out of line for what they would get, and that either they had to pay more or prepare to get less.  They, like many, thought that the government would always provide. If you think the government should be doing it, higher taxes would be correct, I fundamentally deny that it is within the scope or intent of the US federal government to do this in the first place.

You seem unable to differentiate between private (parents caring for ther children, and those children caring for their parents later) and government (forced taking of money from everyone in pursuit of social programs).  They arent the same. It is up to me to care for my parents, not you. It is up to your kids to care for you, not mine.

I would be happy to opt out and give up everything I have paid in so my kid doesnt get screwed even worse because you chose the grasshopper survival strategy.  Why shouldnt your children have responsibility for you instead of mine? Were you too busy having a good ol' time to bother raising someone to replace and care for you?

In the end, you believed a lie. The money is not there, no matter how you twist and turn it is gone. That you expect someone else who does not have the resources to make you whole for being deceived is the problem.

Tue, 06/05/2012 - 15:21 | Link to Comment Quisat_Sadarak
Quisat_Sadarak's picture

Could not have said it any better. Bravo!

Mon, 06/04/2012 - 21:04 | Link to Comment gnomon
gnomon's picture

"fixed that" at the cost of a Republic.  It was all part of the Ponzi, part and parcel with the successive bubbles that the Fed engineered.  A society must be knocked back on its heels every second generation in order to stay strong, in order to keep the rot from seeping in.

No society is so productive that it can be as prosperous as we pretended to be.  We never were, and now all is revealed.

Mon, 06/04/2012 - 21:08 | Link to Comment gnomon
gnomon's picture

"fixed that" at the cost of a Republic.  It was all part of the Ponzi, part and parcel with the successive bubbles that the Fed engineered.  A society must be knocked back on its heels every second generation in order to stay strong, in order to keep the rot from seeping in.

No society is so productive that it can be as prosperous as we pretended to be.  We never were, and now all is revealed.

Mon, 06/04/2012 - 21:11 | Link to Comment louisricci
louisricci's picture

Social Security is like lots of the other Taxes, Tolls, Etc. that are collected by our Governments and Agencies, but not really set aside for what they were charged or collected for. Instead, many Agencies, etc. borrow or use those taxes and Fees for other things and then say the current Collections are not sufficient for their ongoing obligations.

Let’s get with it and stop allowing our Politicians to steal from those various funds and set asides.

It happens frequently and then we’re all lied to and told we need to raise taxes to meet our obligations.

Mon, 06/04/2012 - 21:12 | Link to Comment Contrary Casanova
Contrary Casanova's picture

Teast post:  No comment Harry S Dent lays it out very well were all doomed.

Mon, 06/04/2012 - 21:33 | Link to Comment Centurion9.41
Centurion9.41's picture

Social Security was never set up as a retirement program.

It's the tail end Baby Boomers who need to worry.

The first part of the wave will continue to vote for the $ they are "entitled" to; a lie, but one still believed by too many.

The end part of the Baby Boomer wave, will each month see but a fraction of what they promised themselves, and 30 cans of cat food.

The sad fact is the Baby Boomers, after leading the charge into "if it feels good do it" & tossing morality into the ash heap of relativism, & not paying for the promises they voted themselves, will reap the rewards of the culture they created & the progeny they raised to be for all intents and purposes pagens.

And they will hear via that great anonymous megaphone, the vote, "sorry, but I'm not paying for your meds and all the other stuff you never set aside for...."

Mon, 06/04/2012 - 23:40 | Link to Comment Helix6
Helix6's picture

Hello?  Kicking in 15 - 20% of our incomes to fund Social Security and Medicare doesn't count as setting aside money that we'll need in our old age?

Tue, 06/05/2012 - 00:02 | Link to Comment Lednbrass
Lednbrass's picture

Well, if you are self employed and got hit that hard, you have my condolences.  Nothing else for it, that sucks.

Unfortunately you got burned by the government. It got spent- on ships, jets, Section 8 housing, Homeland Stupidity, studies to determine if the Lesser Speckled Mosquito was in danger, a failed educational system, an army of useless bureaucrats, etc.

This is the core of it- nothing was set aside.  This has been public knowledge for years, and nobody cared.  The problem now is that people expect everyone behind them to make good on it, and they cannot. Not only are there not enough people, they are too broke and make too little to do it. It boils down to a generation getting suckered in a Ponzi scheme, and expecting people that will not benefit from it or have anything like that to make good on what that generation promised themselves.

 

Tue, 06/05/2012 - 01:47 | Link to Comment Helix6
Helix6's picture

Conspicuously absent from your list of wasted government expenditures was -- wait for it -- social security for the current beneficiaries.  And as far as there being "nothing set aside", what is it about Social Security being a "pay-as-you-go" program that people find so difficult to comprehend?

And then there's the "ponzi scheme" meme.  Of course, the difference is that the ponzi scheme is aimed at feathering the nest of the person running the scheme, whereas social security is aimed at supporting the elderly by tapping those of working age, a function societies have been performing since ancient times.

First we are children to our parents, then parents to our children, then parents to our parents, then children to our children.

Or not.

Tue, 06/05/2012 - 08:52 | Link to Comment dizzyfingers
dizzyfingers's picture

" supporting the elderly by tapping those of working age, a function societies have been performing since ancient times"

Provide historical proof please. I don't think so.

Tue, 06/05/2012 - 13:11 | Link to Comment Helix6
Helix6's picture

Sure!  You can simply look up "Elder Care" in Wikipedia, for example.  Or see, for example, http://hkag.org/Publications/AJGG/V4N2/OA2009-62.pdf.

I omitted references in my original post because I thought it obvious that societies take care of their elders in their declining years.  I've observed this first hand in most places I've been in long enough to make such an observation.  I have also read reports from archaeological sites that skeletons showed signs of healed broken limbs, indicating that the infrim were cared for in ancient times.  Furthermore, in most traditional societies, elders are revered.  It therefore seems likely to me that elders were cared for in ancient times, as they are in the present.

Tue, 06/05/2012 - 14:55 | Link to Comment Lednbrass
Lednbrass's picture

"Societies" didnt do it, their children did. In doing genealogical research I came to realize that pretty much every generation of my family from the 1700's through mid 1900's lived in 3 generation households. After that the school of thought developed that older folks should be allowed to live in the style to which they were accustomed on their own for the rest of their days, which is fine but completely ignored demographics and didnt anticipate that a later generation of taxpayers would be aborted. Choices have consequences.

Were the elderly cared for? Yes, by their own as it should be. Once I hit my 20's and was working steadily I told my parents and all grandparents that no matter what happened they would always have a place in my home- it might not be fancy but food and a roof would always be there. It is not the place or responsibility of government to ensure this.

Yes, SS money was paid out, you are correct- but there were a vastly larger number of workers than there were retirees.  The problem is twofold- more was paid out to people than they put in by a huge margin and for the last 40 years the government spent the excess intake elsewhere. This is a major problem, you collectively (perhaps not you personally, but in a generational sense) slept and partied while the government blew that cash elsewhere and used it to fund largely illusory "growth" through that and massive deficit spending.

Look at the above link I posted, the closer to the start of the Ponzi the bigger the payout, the further along it goes the worse it gets.

The bottom line is not loving or hating old folks- it is mathematics. Families will need to step up and care for their own, period.

Tue, 06/05/2012 - 02:14 | Link to Comment Helix6
Helix6's picture

@Lednbrass -- we all got hit that hard.  Saying that "the employer paid half" is a distinction without a difference.  From the employer's point of view, it's all part of the payroll gig.  From the employee's point of view, it's all art of the withholding gig.

Oh, wait, I was talking about people who work for a living.  It's labor that gets taxed.  If it comes in by way of Daddy's trust fund, then of course it's a different stoy.  Income from capital is in a totally different class.

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