Explain to me why we should pay your social security!

So, in other words, a government run Ponzi Scheme.

This is strange timing. I made that same point to a running buddy today. I estimate that I have paid $200k into social security. I would be happy to sign in blood that I would take $100k and walk away. Everyone comes out ahead because the Government won't have to pay me $24k every year for the next 30 years and I get $100k today.

YersiniaPestis wrote:

tumbler wrote:

There is certainly nothing stopping people from saving above and beyond what they pay into social security, and most people do that. It is really designed as a safety net for those that cannot or did not save. It seems better for people to be forced to pay into social security than to have a lot more old people on welfare or homeless.

You have a very strong hold on the obvious.

I do save for retirement, anyone so dumb as to think SS is the best retirement vehicle is probably pretty stupid and probably pretty poor and will remain so.

Id be fine if I could have just kicked in half of what I pay in SS, but not get any of it so the dolts can live on it, and let me save the other half. I would have come out MUCH better.

It's not an issue whether or not you would come out much better. Of course if you invested everything - or even half - of what you paid into SS over 40-50 years you would come out ahead.

As I said, SS is not a retirement plan, it is a safety net for those that are more vulnerable. But SS only works if everyone pays into it. If we allowed people to opt out there would not be enough to fund it and we would have to pay to support millions of elderly people through higher taxes - unless you propose that we just let them live on the street.

Your social security withholdings are not put into an account that earns interest for you to draw on later.

It goes into a fund that pays benefits to people currently receiving social security.

Money you receive in the future will come from future withholdings of others.

Again, there is no interest earned.

More social security has been collected through paychecks than has been paid over time.

The general fund borrows form that and the SS fund accrues interest.

The transactions of social security is just just numbers on a spreadsheet.[/quote]

Agree - I stated what the original intent was. But have acknowledged that it is not the case and that current withholdings are now being used to pay people drawing on SS, and we are not earning anything on it.

I'd be fine with getting the roughly 12% of my salary that I and my employers have paid in over the last 40 years, with interest along the lines of what they have paid on the 30-year t-bills over that time. I'm my case that would be more than the $60K/year I expect to get.

The problem is that lower earners would get considerably less than SS promises because of the curved payout structure. So it would be a nasty bait and switch for the neediest retirees.

Instead, we will just borrow or print money and let inflation do the job, effectively taxing money hoarders and current owners of our debt/treasuries.

CrispyChicken wrote:

So, in other words, a government run Ponzi Scheme.

No, not with population growth.

In a Ponzi scheme, you constantly need new investors and keep up.

With social security, people keep dying and the new workers make more money than the retired ones did years ago.

It's more like how we need income tax revenue to keep fundding an ever growing military budget.

The "why" is the same for every other tax, and that is if you don't keep the starving hordes at bay, they will take what you have by force. Your choice.

Your money is a social compact with the government that prints it and declares it valuable, and your possession of your real wealth depends entirely on the protection of that government. Can you afford a military? Then you better pay the government.

The problem has been the government dipping into it as a previous poster said.

After the boomers are through the rest of us might not get what we even put in.

Keep in mind that for every dollar that was taken out of your paycheck that went to SS or Med an equal contribution was made from the company that you worked for.

So basically for every 100k you have earned 15.3k has gone into the system on your behalf. 12.4K for SS and 2.9k to Med.

Let’s say the average Joe earns 2 million over their lifetime. That means at least 248k should be there in social security even with absolutely 0 interest when you retire. But will it be there?

.It worked when they originally set it up and nobody was pulling from it. Everyone was contributing. It would have been a great system had they not robbed from it. It’s horrible to think about.

CrispyChicken wrote:

X-Runner wrote:

Your social security withholdings are not put into an account that earns interest for you to draw on later.

It goes into a fund that pays benefits to people currently receiving social security.

Money you receive in the future will come from future withholdings of others.

Again, there is no interest earned.

More social security has been collected through paychecks than has been paid over time.

The general fund borrows form that and the SS fund accrues interest.

The transactions of social security is just just numbers on a spreadsheet.

So, in other words, a government run Ponzi Scheme.

Sure, if you don't care about silly things like "definitions". In other words...

From a theoretical economics perspective it’s because having a high level of savings can be detrimental to growth and result in a welfare loss for future generations . It’s been envisioned since the 1940s (or whenever Samuelson started working on overlapping generations models) that the pension system should function as an infinite horizon Ponzi scheme. It’s just that no one really imagined that the fun would end so quickly ( so you’re actually correct in that someone should have hit the breaks once we figured out that growth was slowing and that populations were beginning to shrink in the advanced economies. But then why would boomers want to kill their own “retirement funds”?)

CrispyChicken wrote:

So, in other words, a government run Ponzi Scheme.

You're not wrong but it's impossible to unwind at this point. The very first generation who received SS were the ones who broke the system. They did not pay in but they benefited. Every generation since has paid in and deserves to be paid out. I'm not sure how you ever stop it without cheating people who paid into a system for 40 years only to get nothing.

OH...TX wrote:

CrispyChicken wrote:

So, in other words, a government run Ponzi Scheme.

Sure, if you don't care about silly things like "definitions". In other words...

I mean, I like SS and think it's important but it really does seem like a ponzi scheme. You always need new people to support the current beneficiaries.

I guess the difference is a ponzi scheme collapses without new blood. With SS you can do a lot to prevent a collapse - reducing benefits, raising age thresholds, raising taxes, etc. to ensure viability.

So yes it's different. But still very similar.

If the SS fund ever went negative it would simply owe money to the general fund instead of the treasury owing money to it.

It wound still pay the promised benefits.

sandwich sandwich wrote:

OH...TX wrote:

Sure, if you don't care about silly things like "definitions". In other words...

I mean, I like SS and think it's important but it really does seem like a ponzi scheme. You always need new people to support the current beneficiaries.

I guess the difference is a ponzi scheme collapses without new blood. With SS you can do a lot to prevent a collapse - reducing benefits, raising age thresholds, raising taxes, etc. to ensure viability.

So yes it's different. But still very similar.

You don't need new people to sign up for SS. They just exist. Some people turn 65, new babies keep being born each year, and others turn 18/22. You can tweak the rules to keep everything in balance, but no deception is required. In fact, every detail about the financials of the program are public. It also doesn't claim to be an investment. That is the complete opposite of a Ponzi scheme.

The conditions for the elderly were atrocious prior to 1935. That is what the program was designed to address, and it has done a very good job at reducing abject poverty in seniors. It isn't designed to be an individual investment vehicle. It is a social insurance program.

Monthly disability pay for vets with sleep apnea, diabetes, hbp and other obesity related issues should be eliminated. They should have been discharged as soon as it became clear that they couldn't push themselves away from junk food.

You don't mind paying for endless wars, corporate welfare, Israel....but this you have an issue with?

I am not sure where you get the idea people get back 10 or 20x more than they paid in. This article has different info (even if dated).

https://money.cnn.com/2013/04/14/news/economy/social-security-benefits/index.html

If you think that social security will pay out enough for someone to live comfortably during retirement then you haven’t been paying attention.

It might be enough to pay monthly utility bills and that’s about it.

Shut up man. We live in a country of unconscionable wealth. We’re the luckiest people on earth and we quibble about taking care of the elderly, the sick and the less fortunate. We bristle at paying taxes but guess what I consider myself lucky to pay taxes. I have a job that supports my family and the hope is that my tax dollars help support others in need. We pay massively to defense spending, to politicians and to foreign countries but god forbid you pay an elderly retiree some trifling amount of money every month. It’s embarrassing how much people complain about taxes in this country but don’t bat an eye at donating to politicians campaigns or a city dweller paying $60k for an brand new truck.