The case against Social Security.

[Andrew77]

So on another thread, I had a guy post the following about social security.

Best government plan ever conceived. People don't save, therefore need a 'forced' retirement income plan that ensures at least some security. Tweaking the numbers will solve the problem. Politicians just need to allow the administrators of SS to do their job and stop using SS as a political football.

This shows just how little people know about social security, and why social security is such a massive danger to this country.

Now there will be people who will refuse to believe anything I am about to say, but it is the truth. Christians are supposed to be about the truth. We're not supposed to act like the pagans, and believe lies, simply because we don't like the truth. So you want to argue with me, you had better be able to prove it. Because I can prove what I'm about to tell you.

Social Security is not a retirement plan, or insurance.

This is not up for debate. It's a fact. Social Security is simply a tax.... and a welfare benefit.
It's nothing different than your income tax... and food stamps... an income tax... and welfare.... an income tax... and public housing, or Obama Phones, or anything else.

I can prove this. It was never an investment program for retirement, from the first day that it was signed into law. In 1937, the Supreme Court ruled that Social Security was a welfare program, like any other. That's why it was constitutional.

A retirement system was unconstitutional. There is no clause in the constitution for a retirement program.

FDRs legal team itself, argued it isn't a retirement program... and it isn't. It's an income tax, and a welfare program. Not any more connected together, than income tax and food stamps. Exactly the same thing.

There is no account with your money, nor any investments.

Your social security money, is tax. That's all. It's just a tax. It goes to pay the same things all taxes pay for. When the IRS collects your social security tax, it is sent to the same place as all other taxes go. It is given to the US government, and spent.

Some of your money goes to the military. Some to food stamps. Some to the EPA. Some to health care. And some of your money goes to pay existing Social Security recipients.

But all of that money that was collected, is spent, and gone.

It is all gone. There is no account with your name on it. There is no investment. There is no mutual fund, or assets, or anything. It is all spent, and gone.

The High Cost of Good Intentions: A History of U.S. Federal Entitlement Programs

There is no legal assets, no legal retirement savings, and you have no legal rights.

With any real retirement, you would have legal assets. When i purchase stock, I have a legal right to the asset that I purchased. It is something that I legally own.

When I purchase an investment property, I have legal ownership of that property.

When I purchase shares in a mutual fund, I have legal rights to the assets in those funds.

If someone tries to deny my access, I can take them to court, and get some, or all, the money from those assets I have legal rights to.

Not with Social Security.
Flemming v. Nestor - Wikipedia

The Supreme Court has already ruled that you have no legal right to Social Security, no matter how much you paid into it.

Which of course makes sense. Remember, Social Security was justified as just being an income tax, and welfare program, back in 1937.

So would you demand a right to have a tank? Because your tax money paid for tanks? No. No one would think that.

Well you have no more of a right to social security, than a military tank, just because you paid for both out of your income taxes. Just because we label one income tax "Income tax" and label the other income tax "Social Security Contributions" does not change the fact tha both are legally just.... income taxes.

You have no legal right to social security. It can be removed at any time. It can be cut at any time. It can be eliminate at any time. You have no legal assets, no legal claims, no legal anything. It is a welfare program, and can be cut whenever the government decides.

Social Security is broke.

Social Security is literally, 100%, broke. There are no assets in Social Security. All money that is taxed away, is spent.

There is no account with Social Security money in it. The idea that social security has treasury bonds in it, is a joke.

It would be the same as you, holding a $50 dollar bill in your left hand. Then using your right hand, to write out on a note "I owe You $50". Then replacing the $50 in your left hand, with the IOU note you yourself wrote out with your right hand.... and then saying to yourself.... ok now I have an investment.

You.... owing.... you.... money, is not an investment.

In fact, even those IOUs that Social Security "buys" are fake. They are not even real.

A real Treasury bond, has value on the open market. We call them "marketable bonds".

What that means is, if you buy a bond, and the bond matures in 10 years, but you find that you really need the money in 5 years... you can sell that bond on the open market, and get money for it. It has value. Thus, it is a "marketable bond".

The 'treasury bonds' that Social Security has, are not even real bonds. They are in fact nothing more than paper saying the government, owes the government, money.

If we all rounded up a gang, and raided the Social Security administration, stealing all the 'treasury bonds' they have... we would walk away with a few dollars worth of paper. They have zero value. They can't be sold.

Which is why if the government stops borrowing, Social Security will be cut.

A ton of people claimed that Obama was lying, back when Obama said Social Security would be cut if the government debt limit wasn't raised.

They said this, because they all still believed the complete myth, that Social Security has investments. Social Security has no investments. Obama was actually telling the truth.

If the Social Security administration seized all the assets of Social Security, and tried to sell them, they would have no money.

If people demanded a test of the "social security trust fund", and said for one month, and only one month, Social Security will collect zero tax, and get zero money from the government. We want them to simply pay out social security checks from the "trust fund". There would be ZERO.... listen.... ZERO payouts. Not one person, would get one penny.

There is no trust fund. There are no assets. All the money you paid in, is spent, and gone.

Lastly, Social Security is the absolute worst retirement possible.

If you put your money into literally ANYTHING, you will be better off than in Social Security.

In the 80s, the government allowed certain groups in Texas to opt-out of Social Security, and were allowed to put their money into private retirement funds.

The absolute worst retirement fund, ended up having a retirement more than double that of Social Security.

This is still true today. A person who works for $50,000 a year, will end up with a social security check of just barely $1,300 a month.

That's almost poverty.

But that same person who is paying $600 a month into social security, if they instead put that money into a private retirement in good growth stock mutual funds, would end up with $5 Million by retirement.

Can anyone say poverty at $1,300 a month, is better than retiring with $5 Million?

Which leads me to the last point, about incentives.

The other poster, said "People don't save, therefore need a 'forced' retirement income plan that ensures at least some security".

The sad pathetic part of this is, before there was Social Security, people saved. Public savings has dramatically fallen since the introduction of Social Security.

He's right the people do not save, but is actually looking directly at the very cause of that, as the solution. The whole reason people don't save, is because they expect government to bail them out.

Even during the decades after Social Security was created, people still had a general idea that it was their own job to pay for their retirement. But as the benefits of Social Security increased, starting in the 60s and 70s, the view changed to that of Government is going to take care of me, so I don't have to.

I have actually heard this directly to my face. I knew a lady that spent every single penny she earned. Literally paid on Friday, broke by Thursday. I confronted her on her irresponsibility and she said directly, just a few more years and she'll collect social security.

When you bailout bad behavior, you end up with more bad behavior. The whole reason we have an entire generation of irresponsible people, is because we bail out their bad choices.

And not only do we encourage bad choices, but we make it harder on everyone else to make good choices. It's harder to save up money, when almost 15% of your check is confiscated from you, to pay for other people's bad choices.

Social Security does not prevent people from ending up poor. It helps guarantee more people will be poor.

Conclusion: Truth.

Social Security is a horrible program, that dooms people to poverty, and is going to eventually have to be replaced.... or.... it will destroy this country.

At some point, now or later, we will have to replace this program, or face devastation.

We have already seen the results of denying the Truth, and living in a fantasy world. Greece is the defining example of our age.

People warned Greece over and over throughout the 1990s, that their pension system was not supportable. That their taxes were too high, that payouts from were to high, that the debts were too high.

And everyone simply refused to believe it. They said the same things we see today being said about our pension system. They said it was the best system in Europe. They said it was the best plan every conceived. They said had worked for decades. They said it was well funded.

Then the bills came due. Then truth hit the fiction. Then reality defeated the myth.

Now Greece is a devastated country, only now, a decade later, stablized.
After a decade of economic crisis, people in Greece 'don't dream anymore'

Nearly half a million Greeks have left, Bank of Greece report finds, Stratos Karakasidis | Kathimerini

And that's with half a million having fled the country.

That could be... and I suggest will be, the US unless we change our course. Only a fool thinks doing the exact same things, will have a completely different outcome.

 

[High Fidelity]

Do you not have to contribute a certain amount through income tax to be eligible for state pension? That's how it is here. 30 years I think it is.

State pension isn't great though which is why employers contribute to your private pension. My employer, for example, contributes 6% of my income each month to my private pension. It soon adds up and makes retirement a lot more comfortable.

 

[Andrew77]

Do you not have to contribute a certain amount through income tax to be eligible for state pension? That's how it is here. 30 years I think it is.

State pension isn't great though which is why employers contribute to your private pension. My employer, for example, contributes 6% of my income each month to my private pension. It soon adds up and makes retirement a lot more comfortable.

I am unaware of how the UK pension system works.

We have two non-governmental retirement programs. One if the 401K, where companies deduct a percentage of your choice into retirement.

The other his an IRA, which is the same thing, just you do it from your bank.

I have both. I deposit 5% of my income into the 401K, and I have money drafted from my bank account into an IRA.

As for the state pension, I think you only need to work for 10 years.

But the pension is absolutely horrible. If you work a low income job, your monthly wage could be as low as only $900 a month. That would be £640 a month. You could earn double that working 40 hours a week at a food joint. If you retire early, before full benefits, you could end up with only $600 a month.

State pension is just terrible. And going broke.

 

[Norbert L]

Now Greece is a devastated country, only now, a decade later, stablized.
After a decade of economic crisis, people in Greece 'don't dream anymore'

Nearly half a million Greeks have left, Bank of Greece report finds, Stratos Karakasidis | Kathimerini

And that's with half a million having fled the country.

That could be... and I suggest will be, the US unless we change our course. Only a fool thinks doing the exact same things, will have a completely different outcome.

When men predict the future, it's not a sure thing. I wouldn't disagree with what you're saying about SS, what it is and what it is not. What I would question is the idea that things would be economically better for a nation without SS.

Prior to it becoming law, America was also devastated even though that population understood they needed to save for their old age. There was no better place to immigrate to, no other place to escape from life's harsh realities. So prior to its' enactment, were people back then any better off or worse because they saved for retirement?

It's hard to predict the future especially a future that was rejected when SS turned into law. It's just as likely that today, without that decision and returning to the past, things could be a lot worse.

However I would also say that the educational system, media and politicians have not put enough emphasis on the idea of saving for the future. Nowadays the majority of the concern is placed on social injustice rather than being economically responsible.

 

[discipler7]

Social Security is not a retirement plan, or insurance.

.
Not really true. ...
When Will Social Security Run Out?

For the Social Security Trust Fund, since 1935 until recent years, its income from FICA taxes has always exceeded its payout to retirees, resulting in a surplus of about US$2.8 trillion in the SSTF today, or US$2,800 billion or US$2,800,000,000,000.
....... The scandal is that the US government has already spent this US$2.8 trillion and left US$2.8 trillion of US Treasury Bonds or IOUs in the SSTF. This debt is part of the US$20 trillion US Federal debt. ...
( The Real Owner of the U.S. Debt Will Surprise You )
So, if the US government goes bankrupt or insolvent or credit-default, so does the SSTF.

In recent years, the payouts by the SSTF has exceeded its income from FICA taxes, resulting in the drawing down of the US$2.8 trillion surplus because more workers have retired, especially baby-boomers. If nothing is done, it is expected the US$2.8 trillion surplus in the SSTF will be zero or gone in 2035.
....... This drawing down of the SSTF will also put a heavy strain on the US government's Federal budget. Hence, there are proposals to increase the FICA taxes, the retirement age and the number of contributors.

 

[Theodoric]

"But that same person who is paying $600 a month into social security, if they instead put that money into a private retirement in good growth stock mutual funds, would end up with $5 Million by retirement."

Nobody who makes 50K a year is paying $600 social security tax. Your numbers are way off there.

 

[essentialsaltes]

Correct, SS is not an individual account, but so what?

The sad pathetic part of this is, before there was Social Security, people saved.

Sure, that's why everyone was fine when the Great Depression happened. Free market capitalism saved the day.

 

[jayem]

"But that same person who is paying $600 a month into social security, if they instead put that money into a private retirement in good growth stock mutual funds, would end up with $5 Million by retirement."

Nobody who makes 50K a year is paying $600 social security tax. Your numbers are way off there.

Yeah, that $600/mo. figure is off. Even if you're self-employed, and paying the full 12.4% SS part of FICA yourself, that comes to $516/mo. If you're employed by someone else, you would pay half of that. Maybe he's adding in the Medicare portion of FICA. A self-employed person earning $50K would pay an additional $1450 annually, which is $121/mo. His total monthly FICA is $637. But most people are employed by a business, which pays half of each employee's FICA.

 

[Albion]

So on another thread, I had a guy post the following about social security.

Best government plan ever conceived. People don't save, therefore need a 'forced' retirement income plan that ensures at least some security. Tweaking the numbers will solve the problem. Politicians just need to allow the administrators of SS to do their job and stop using SS as a political football.

This shows just how little people know about social security, and why social security is such a massive danger to this country.

A certain amount of what you say is correct. SS is funded by tax monies because the government does not have a legal right to run an insurance program (or at least that was the understanding prior to Obamacare).

But it is insurance of a sort. The "sort" being what is called social insurance to differentiate it from ordinary insurance. You are taxes on your income--which is parallel to premium payments--and you are guaranteed a return in case whatever it is happens, again much like ordinary fire or auto insurance. The Congress has "borrowed" the monies received over the years, but it still guarantees the payments upon your retirement or disability. Could it default? Possibly. But the chances are less of that happening that that the private insurance you hold and have paid for will stiff you when you have a claim or that the company itself will go out of business.

The reason for social insurance is, of course, that most people will NOT provide for their invalidity or old age/loss of income. A minority can and will, but the average family today has only a few thousand dollars that it has put aside voluntarily to meet possibly twenty years in retirement. And if they were to run out of funds--as certainly would happen--do you suppose that the government would not put them on some sort of welfare program in order that they not die in the streets? Of course that would not happen, so SS makes them provide for their non-working years instead of the alternative.

 

[DaisyDay]

Be prepared for more attacks on Social Security and Medicare as the national debt rises because of the Republican tax law change. The money is going to have to come from somewhere.

 

[wing2000]

That could be... and I suggest will be, the US unless we change our course. Only a fool thinks doing the exact same things, will have a completely different outcome.

...and that course would be?

 

[DaisyDay]

A certain amount of what you say is correct. SS is funded by tax monies because the government does not have a legal right to run an insurance program (or at least that was the understanding prior to Obamacare).

But it is insurance of a sort. The "sort" being what is called social insurance to differentiate it from ordinary insurance. You are taxes on your income--which is parallel to premium payments--and you are guaranteed a return in case whatever it is happens, again much like ordinary fire or auto insurance. The Congress has "borrowed" the monies received over the years, but it still guarantees the payments upon your retirement or disability. Could it default? Possibly. But the chances are less of that happening that that the private insurance you hold and have paid for will stiff you when you have a claim or that the company itself will go out of business.

There is going to be an increase pushed for "privatization", especially if the stock market continues bearish.

The reason for social insurance is, of course, that most people will NOT provide for their invalidity or old age/loss of income. A minority can and will, but the average family today has only a few thousand dollars that it has put aside voluntarily to meet possibly twenty years in retirement. And if they were to run out of funds--as certainly would happen--do you suppose that the government would not put them on some sort of welfare program in order that they not die in the streets? Of course that would not happen, so SS makes them provide for their non-working years instead of the alternative.

Some people depended on their contractual pension from their employers - take a pay cut in exchange for staying with the company and getting a guaranteed pension. Then, in the eighties, what happened was corporate raiders looked for companies with fully funded retirement plans, bought those companies by borrowing against the money in the plans, then withdrew the funds and replaced them with junk bonds of similar, nominal value - the value didn't hold, of course, because they were well-named "junk", but by the time they lost their value, it was too late - the money was gone, chances were good that the original company had been sold off in pieces and the employees and retirees were plumb out of luck.

Nowadays, companies don't have that kind of retirement plan. Some local and state governments do - and they are increasingly at risk through the same kind of bad faith - changing the terms of the payout of the contract 30 years after people put in the agreed upon work for the agreed upon pay (which included the retirement benefits as a major incentive for lower pay).

 

[DaisyDay]

Yeah, that $600/mo. figure is off. Even if you're self-employed, and paying the full 12.4% SS part of FICA yourself, that comes to $516/mo. If you're employed by someone else, you would pay half of that. Maybe he's adding in the Medicare portion of FICA. A self-employed person earning $50K would pay an additional $1450 annually, which is $121/mo. His total monthly FICA is $637. But most people are employed by a business, which pays half of each employee's FICA.

And a self-employed person with a good accountant will generally have business expenses such that he will not pay himself a generous salary, if he can help it.

 

[OldWiseGuy]

A certain amount of what you say is correct. SS is funded by tax monies because the government does not have a legal right to run an insurance program (or at least that was the understanding prior to Obamacare).

But it is insurance of a sort. The "sort" being what is called social insurance to differentiate it from ordinary insurance. You are taxes on your income--which is parallel to premium payments--and you are guaranteed a return in case whatever it is happens, again much like ordinary fire or auto insurance. The Congress has "borrowed" the monies received over the years, but it still guarantees the payments upon your retirement or disability. Could it default? Possibly. But the chances are less of that happening that that the private insurance you hold and have paid for will stiff you when you have a claim or that the company itself will go out of business.

The reason for social insurance is, of course, that most people will NOT provide for their invalidity or old age/loss of income. A minority can and will, but the average family today has only a few thousand dollars that it has put aside voluntarily to meet possibly twenty years in retirement. And if they were to run out of funds--as certainly would happen--do you suppose that the government would not put them on some sort of welfare program in order that they not die in the streets? Of course that would not happen, so SS makes them provide for their non-working years instead of the alternative.

There is also a 'hierarchy' of lenders and SS will among the last defaulted on, if ever.

 

[Albion]

Be prepared for more attacks on Social Security and Medicare as the national debt rises because of the Republican tax law change. The money is going to have to come from somewhere.

The government's tax receipts are increasing, even as the tax burden on individuals is eased--or perhaps because of it.

 

[OldWiseGuy]

This is still true today. A person who works for $50,000 a year, will end up with a social security check of just barely $1,300 a month.

That's almost poverty.

The SS benefit is calculated on the highest 35 years of earnings. $50,000 is a figure without a context here. How much did this person earn in the other 34 years, and at what age did he retire?

I have never earned more than $50,000 (in wages subject to SS) but I receive nearly $1700 per month in benefits.

 

[OldWiseGuy]

So on another thread, I had a guy post the following about social security.

Best government plan ever conceived. People don't save, therefore need a 'forced' retirement income plan that ensures at least some security. Tweaking the numbers will solve the problem. Politicians just need to allow the administrators of SS to do their job and stop using SS as a political football.

This shows just how little people know about social security, and why social security is such a massive danger to this country.

Now there will be people who will refuse to believe anything I am about to say, but it is the truth. Christians are supposed to be about the truth. We're not supposed to act like the pagans, and believe lies, simply because we don't like the truth. So you want to argue with me, you had better be able to prove it. Because I can prove what I'm about to tell you.

Social Security is not a retirement plan, or insurance.

This is not up for debate. It's a fact. Social Security is simply a tax.... and a welfare benefit.
It's nothing different than your income tax... and food stamps... an income tax... and welfare.... an income tax... and public housing, or Obama Phones, or anything else.

I can prove this. It was never an investment program for retirement, from the first day that it was signed into law. In 1937, the Supreme Court ruled that Social Security was a welfare program, like any other. That's why it was constitutional.

A retirement system was unconstitutional. There is no clause in the constitution for a retirement program.

FDRs legal team itself, argued it isn't a retirement program... and it isn't. It's an income tax, and a welfare program. Not any more connected together, than income tax and food stamps. Exactly the same thing.

There is no account with your money, nor any investments.

Your social security money, is tax. That's all. It's just a tax. It goes to pay the same things all taxes pay for. When the IRS collects your social security tax, it is sent to the same place as all other taxes go. It is given to the US government, and spent.

Some of your money goes to the military. Some to food stamps. Some to the EPA. Some to health care. And some of your money goes to pay existing Social Security recipients.

But all of that money that was collected, is spent, and gone.

It is all gone. There is no account with your name on it. There is no investment. There is no mutual fund, or assets, or anything. It is all spent, and gone.

The High Cost of Good Intentions: A History of U.S. Federal Entitlement Programs

There is no legal assets, no legal retirement savings, and you have no legal rights.

With any real retirement, you would have legal assets. When i purchase stock, I have a legal right to the asset that I purchased. It is something that I legally own.

When I purchase an investment property, I have legal ownership of that property.

When I purchase shares in a mutual fund, I have legal rights to the assets in those funds.

If someone tries to deny my access, I can take them to court, and get some, or all, the money from those assets I have legal rights to.

Not with Social Security.
Flemming v. Nestor - Wikipedia

The Supreme Court has already ruled that you have no legal right to Social Security, no matter how much you paid into it.

Which of course makes sense. Remember, Social Security was justified as just being an income tax, and welfare program, back in 1937.

So would you demand a right to have a tank? Because your tax money paid for tanks? No. No one would think that.

Well you have no more of a right to social security, than a military tank, just because you paid for both out of your income taxes. Just because we label one income tax "Income tax" and label the other income tax "Social Security Contributions" does not change the fact tha both are legally just.... income taxes.

You have no legal right to social security. It can be removed at any time. It can be cut at any time. It can be eliminate at any time. You have no legal assets, no legal claims, no legal anything. It is a welfare program, and can be cut whenever the government decides.

Social Security is broke.

Social Security is literally, 100%, broke. There are no assets in Social Security. All money that is taxed away, is spent.

There is no account with Social Security money in it. The idea that social security has treasury bonds in it, is a joke.

It would be the same as you, holding a $50 dollar bill in your left hand. Then using your right hand, to write out on a note "I owe You $50". Then replacing the $50 in your left hand, with the IOU note you yourself wrote out with your right hand.... and then saying to yourself.... ok now I have an investment.

You.... owing.... you.... money, is not an investment.

In fact, even those IOUs that Social Security "buys" are fake. They are not even real.

A real Treasury bond, has value on the open market. We call them "marketable bonds".

What that means is, if you buy a bond, and the bond matures in 10 years, but you find that you really need the money in 5 years... you can sell that bond on the open market, and get money for it. It has value. Thus, it is a "marketable bond".

The 'treasury bonds' that Social Security has, are not even real bonds. They are in fact nothing more than paper saying the government, owes the government, money.

If we all rounded up a gang, and raided the Social Security administration, stealing all the 'treasury bonds' they have... we would walk away with a few dollars worth of paper. They have zero value. They can't be sold.

Which is why if the government stops borrowing, Social Security will be cut.

A ton of people claimed that Obama was lying, back when Obama said Social Security would be cut if the government debt limit wasn't raised.

They said this, because they all still believed the complete myth, that Social Security has investments. Social Security has no investments. Obama was actually telling the truth.

If the Social Security administration seized all the assets of Social Security, and tried to sell them, they would have no money.

If people demanded a test of the "social security trust fund", and said for one month, and only one month, Social Security will collect zero tax, and get zero money from the government. We want them to simply pay out social security checks from the "trust fund". There would be ZERO.... listen.... ZERO payouts. Not one person, would get one penny.

There is no trust fund. There are no assets. All the money you paid in, is spent, and gone.

Lastly, Social Security is the absolute worst retirement possible.

If you put your money into literally ANYTHING, you will be better off than in Social Security.

In the 80s, the government allowed certain groups in Texas to opt-out of Social Security, and were allowed to put their money into private retirement funds.

The absolute worst retirement fund, ended up having a retirement more than double that of Social Security.

This is still true today. A person who works for $50,000 a year, will end up with a social security check of just barely $1,300 a month.

That's almost poverty.

But that same person who is paying $600 a month into social security, if they instead put that money into a private retirement in good growth stock mutual funds, would end up with $5 Million by retirement.

Can anyone say poverty at $1,300 a month, is better than retiring with $5 Million?

Which leads me to the last point, about incentives.

The other poster, said "People don't save, therefore need a 'forced' retirement income plan that ensures at least some security".

The sad pathetic part of this is, before there was Social Security, people saved. Public savings has dramatically fallen since the introduction of Social Security.

He's right the people do not save, but is actually looking directly at the very cause of that, as the solution. The whole reason people don't save, is because they expect government to bail them out.

Even during the decades after Social Security was created, people still had a general idea that it was their own job to pay for their retirement. But as the benefits of Social Security increased, starting in the 60s and 70s, the view changed to that of Government is going to take care of me, so I don't have to.

I have actually heard this directly to my face. I knew a lady that spent every single penny she earned. Literally paid on Friday, broke by Thursday. I confronted her on her irresponsibility and she said directly, just a few more years and she'll collect social security.

When you bailout bad behavior, you end up with more bad behavior. The whole reason we have an entire generation of irresponsible people, is because we bail out their bad choices.

And not only do we encourage bad choices, but we make it harder on everyone else to make good choices. It's harder to save up money, when almost 15% of your check is confiscated from you, to pay for other people's bad choices.

Social Security does not prevent people from ending up poor. It helps guarantee more people will be poor.

Conclusion: Truth.

Social Security is a horrible program, that dooms people to poverty, and is going to eventually have to be replaced.... or.... it will destroy this country.

At some point, now or later, we will have to replace this program, or face devastation.

We have already seen the results of denying the Truth, and living in a fantasy world. Greece is the defining example of our age.

People warned Greece over and over throughout the 1990s, that their pension system was not supportable. That their taxes were too high, that payouts from were to high, that the debts were too high.

And everyone simply refused to believe it. They said the same things we see today being said about our pension system. They said it was the best system in Europe. They said it was the best plan every conceived. They said had worked for decades. They said it was well funded.

Then the bills came due. Then truth hit the fiction. Then reality defeated the myth.

Now Greece is a devastated country, only now, a decade later, stablized.
After a decade of economic crisis, people in Greece 'don't dream anymore'

Nearly half a million Greeks have left, Bank of Greece report finds, Stratos Karakasidis | Kathimerini

And that's with half a million having fled the country.

That could be... and I suggest will be, the US unless we change our course. Only a fool thinks doing the exact same things, will have a completely different outcome.

You have proven nothing. My statement stands.

 

[OldWiseGuy]

Be prepared for more attacks on Social Security and Medicare as the national debt rises because of the Republican tax law change. The money is going to have to come from somewhere.

Our trade policy is more to blame for our financial problems than anything else. We have an annual trade deficit of about $600 Billion, $50Billion in drug money losses, and another $50Billion dollars sent away by immigrants. Thus we need to borrow this amount each year to supply enough money to maintain the domestic economy.

 

[Albion]

This is still true today. A person who works for $50,000 a year, will end up with a social security check of just barely $1,300 a month.

That's almost poverty.

But it has never been the intention of the SS system or the government to provide--through SS benefits--an adequate replacement for lost wages. From the very beginning, SS benefits have been described as PARTIAL replacements for lost income, a supplement to what the wage earner has put aside in other ways.

But that same person who is paying $600 a month into social security, if they instead put that money into a private retirement in good growth stock mutual funds, would end up with $5 Million by retirement.

...except that most people do not do it and would not do it if there were no SS tax.

 

[OldWiseGuy]

A certain amount of what you say is correct. SS is funded by tax monies because the government does not have a legal right to run an insurance program (or at least that was the understanding prior to Obamacare).

But it is insurance of a sort. The "sort" being what is called social insurance to differentiate it from ordinary insurance. You are taxes on your income--which is parallel to premium payments--and you are guaranteed a return in case whatever it is happens, again much like ordinary fire or auto insurance. The Congress has "borrowed" the monies received over the years, but it still guarantees the payments upon your retirement or disability. Could it default? Possibly. But the chances are less of that happening that that the private insurance you hold and have paid for will stiff you when you have a claim or that the company itself will go out of business.

The reason for social insurance is, of course, that most people will NOT provide for their invalidity or old age/loss of income. A minority can and will, but the average family today has only a few thousand dollars that it has put aside voluntarily to meet possibly twenty years in retirement. And if they were to run out of funds--as certainly would happen--do you suppose that the government would not put them on some sort of welfare program in order that they not die in the streets? Of course that would not happen, so SS makes them provide for their non-working years instead of the alternative.

Here's an ironic twist.
I took SS at 63 to help pay down the mortgage on a rental property that I bought to provide for my retirement. My mortgage at the time was 7 percent, so I was actually receiving 7 percent interest on my SS benefit. It fell to 5.5 percent a few years later but was still a good investment.

I still work and receive annual increases in SS as my wages continue to increase. SS is a great deal for the working person although younger workers don't think so. But as they too approach retirement they'll see the value of the program.