Some Inconvenient Facts About Social Security

[Hector12]

Letter to Edgar Newton Eisenhower, November 8, 1954​

by Dwight D. Eisenhower

Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas.4 Their number is negligible and they are stupid.

Letter from Dwight D. Eisenhower to Edgar Newton Eisenhower (1954)

teachingamericanhistory.org

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The Republican Party has become what the Democrat Party used to be in the South: it has become the party of the white majority. However, it consists of two constituencies with very different economic interests.

There is the Republican Donor Class. These have been getting quite a bit richer since 1980. They do not need Social Security.

But the rest of the country has not been getting richer. Moreover, there are not enough people in the Republican Donor Class to win elections for the Republicans.

Most Republicans are white blue collar workers, or retired people who were white blue collar workers. Most of these either do not make enough money to save for retirement, or they did not before they retired.

If it becomes a choice between de funding Social Security or re establishing steeply progressive taxation, which choice do you think most Republican voters will make?

 

[Blues Man]

SS is what it is. It was never meant to be more than that. You’re free to build any retirement you desire.

It was also never meant to take 3% of your pay and a 3% match from your employer not to exceed $3000 a year

That is is what it was meant to be

So let's start by going back to that which was promised in it's inception.

 

[initforme]

We need people retiring earlier than 55, not later. Especially during these times.

 

[Blues Man]

We need people retiring earlier than 55, not later. Especially during these times.

If they could own their own SS accounts they could.

 

[initforme]

We have a labor excess right now. It's hard to find decent paying work when it's too easy to find labor.

 

[80zephyr]

There are more than two choices here. Its not just keeping SS or getting rid of it,

There is also the choice of revising it.

 

[Blues Man]

There are more than two choices here. Its not just keeping SS or getting rid of it,

There is also the choice of revising it.

Which is what I'm saying but the government lackeys say it's impossible to change

 

[Hutch Starskey]

We need people retiring earlier than 55, not later. Especially during these times.

55?

 

[Hutch Starskey]

There are more than two choices here. Its not just keeping SS or getting rid of it,

There is also the choice of revising it.

Sure.
At whose expense though?

 

[Hutch Starskey]

Which is what I'm saying but the government lackeys say it's impossible to change

What changes do you have in mind and who’s on the hook for the financing?

 

[80zephyr]

Sure.
At whose expense though?

Maybe partially the government. Not sure, but somebody should be studying it already.

 

[Blues Man]

What changes do you have in mind and who’s on the hook for the financing?

I've laid that out already.

And the government is on the hook because it's the government's broken promises that have got us to this point.

Put Americans first for once and stop wasting billions defending other countries who won't defend themselves. Stop giving billions to foreign countries, stop propping up other governments.

The fact that SS will collapse unless people are forced to pay into it is proof that it is a Ponzi scam and is not being run as it was intended

 

[miketx]

Virtually all of the aged denizens of this great nation express similar opinions on Social Security regardless of political affiliation, to wit: “I paid into Social Security. It’s MY money. I am entitled to get it back when I retire.”



I know you were “promised” this benefit by the federal government, and that you donated 6% of your gross earnings to this purportedly noble system in good faith. Therefore, you are willing to fight tooth and nail to protect this program. I get it. Your feelings are understandable. It is the fair thing to occur.



However, maybe it is time for older Americans to consider Social Security benefits in a very different light. Instead of viewing Social Security as a good faith pact between contributors (forced contributors) and big daddy government, who knows what’s best for you; perhaps try considering Social Security as an elaborate, government sanctioned Ponzi scheme you were drawn into and fucked by.



There is no real Social Security trust fund. You have been lied to in order to gain your trust. Your SS contributions go into the general federal fund. You pay into a fungible fund, the feds draw from said funds to, inter alia, buy weapons, build roads to nowhere, and to finance tranny education in Pakistan. Then Congress authorizes spending a certain amount of SS funding in its periodic appropriations bills. Thus, the federal government receives your “investment”, spends it on whatever, then will pay you a “return” on your investment as funds are available to do so. When funds are no longer available to pay you a return, then you are fucked and there is nothing you can do about it. This is the heart of all Ponzi schemes.



Moreover, the monthly payments you SS trough feeders are receiving today is not YOUR money. YOUR money was spent decades ago. Your benefits are from the money being forcibly taken from people today. Your benefits are being doled out somewhat loosely based on the amount you have “paid in” (I.e., had taken from you involuntarily) over the years. But that is the only nexus between you and the money the government is giving you.



Social Security theoretically should not “go broke”. Every person is forced to give up 6% of their gross incomes. Recipients become eligible for SS payments at 65 (62 if you agree to reduce the monthly payment to which you are “entitled”. Thus, you have revenue funneled into the system by working folks, then being paid out to old, dying folks. If there was a “trust fund” being administered solely for retirement payments, then they could tweak the system to keep it solvent (e.g., increase contribution requirements; raise age of eligibility; reduce benefits; invest corpus of trust in conservative assets - e.g., municipal bonds - that have low risk but will grow the fund; etc…). But this is not how it works. There is no trustee administrator with a fiduciary duty to payees like there is with a private trust. The effective “administrator” of this fake “fund” is 535 senators and representatives who have no fiduciary interest to manage your Social Security benefits in a manner to ensure YOUR best interests are accounted for. A true trust fund would mot be subject to political interests.



If a real trust fund goes broke, then there is a big problem in terms of law and ethics. Somebody is either going to prison or will be subject to civil liability. However, there is no such redress if the fake SS fund “goes broke”. The only redress is political.



As mentioned, there is actually no trust fund to “go broke”. Rather, it boils down to projected spending. The “contributions” to SS (I.e., the 6% involuntary deduction taken from your gross pay) are going down while the benefits payments are increasing, all based upon changing demographics. Moreover, the out of control federal spending is causing the value of the dollar to decrease. This exacerbates the spending shortfall.



So, the nonexistent “fund” is not running out of money. Rather, projections show that it will be impossible to sustain the Social Security hand-outs -which accounts for a HUGE portion of the federal budget - at current revenue levels. In short, you retired Americans who rely upon this scheme to make ends meet are fucked. Perhaps you should go back to school and learn to code?



Don’t feel bad. I understand your anger. This is not the first time big government has lied to its subjects. Most older Americans are essentially dependent upon their Social Security payments. They are economic slaves on the plantation. They were promised Utopian retirement years, free of all obligations so they could spend their golden years fishing, knitting, and catching the “early bird special” down at the Country Buffet. But in reality they are economic slavery. They are made to fight tooth and nail to keep this financial boondoggle in place. They need their meager SS payment, and the government wants this large source of revenue. This is why it is so taboo, and politically destructive, to talk about common sense solutions to this coming disaster.



Americans need to get over their aversion to admitting that the federal government duped them into the Social Security Ponzi game. You were TAXED involuntarily for SS; you did not “contribute”. It is not “your money”, it’s the federal government’s money and they will spend it according to appropriations bills. And YOU let it happen this way.



When you look at this rationally it is clear that we are going to have to make big changes to this program. It cannot be avoided. SS represents a huge part of our budget. We should not run from this challenge. It fact, it is morally indefensible to ignore this. Politicians have been content to kick the can down the road lest they are portrayed in campaign ads as pushing grandma off the cliff.



There’s ways to address this. You can offset SS payments by giving tax cuts and deductions to families who take care of elder family members, in whole or in part. This costs us nothing. Rather, it can be “paid for” (a very misleading political term in this context) by cutting spending elsewhere. Further, it will make the nursing and assisted living homes more competitive and, thereby, lower costs. Hell, cutting Medicaid grants to states will do this too.



Innovation and capitalism will solve this issue, not big daddy government. But attitudes must change. Social Security is a big old socialist government clusterfuck that is not sustainable. Like most big government socialist clusterfucks it was always doomed to fail. Don’t blame the boomers either. SS is the brainchild of leftist Judeo-Christian guilt-think and is not based upon sound economic principles.

15% was paid liar.

 

[WorldWatcher]

Maybe partially the government. Not sure, but somebody should be studying it already.

Actually I don't have a problem with the idea of transitioning from a "pay-as-you-go" retirement program (current SS Model) to an "individual lock box" retirement program (future SS model).

However some using this as what I call a "bumper sticker" solution with no meat on the bones are how to transition from the current model to a future model. They refuse to address HOW to transition because they have difficulty thinking beyond the slogan stage to the actual implementation stage.

Under the Individual Lock Box program:

• There would still be mandatory contributions similar to current FICA taxes,
• Instead of paying benefits now, funds would go into a restricted access individual account.
• The account would be owned by the individual and all monies deposited are "owned" by the individual. The plan provider nor the employer will have any claim on the principal beyond maintenance fees defined in the law and a portion set aside as "insurance" (more on that later).
• The SS Administration acts as the sole collection agency for deposits. Once "taxes" are collected they immediately transfer the money to the individuals account. Why you might ask? Currently with 401K like plan, the employee is limited to program administrators (Voya, Vanguard, Lincoln, MetLife, TIAA, etc.) that the EMPLOYER selects. Because the SSA is collecting and coordinating payments within a mandated framework, the EMPLOYEE can then choose any approved provider that meets quality guidelines. In other words employees would have a much wider selection of retirement saving administrators.
• Employees would have a wide range of investment administrators and plan options from conservative (low yield, very stable) to more aggressive (higher yield but more volatile.)
• Similar to 401K's contributions to the account are taken "pre-tax", lowering the employees current tax liability and transferring that liability to the future when the funds are pulled for retirement. Disbursements are considered income at the time of withdrawal and taxes paid then.
• Similar to 401K's there would contribution maximums on these tax deferred retirement contributions. (Current caps for 401K's is $22.5K if under 50 years old and $30K for 50 and older. I think that is a little low I think $50K is more reasonable given the tax deferred status and the long term nature of the plan. Individuals that want to invest more for retirement are free to do so in personal non-tax deferred vehicles.)
• At 73 the individual is required to start taking minimum distributions and paying the deferred taxes on the income.

As Safeguards:

• The money is "locked" and not available to the individual prior to 60 years of age. The individual would not have access to the funds for any reason (buying a car, home, vacation, etc.) except for medical diagnosis of terminal illness or major disability.
• Plan providers pay into an "insurance" fund which protects the individual's assets from disappearing during market downturns.
• Once an individual meets certain baseline work requirements (age + required number of years of qualifying work, such as 60 years old with 10 years of qualifying work), then there are certain baseline benefits available. If the status of the account provides for benefits above the baseline, then funds are paid from the account. If the account is depleted (market downturn or very high age), then baseline benefits kick in.
• Plan providers must establish a "non-profit" wing for administering these government mandated "lock box" accounts with executive compensation limitations.
• There would be a "default" government plan such that if the individual did NOT select an approved plan administrator, then there is a default option based on projected retirement age.

How to Pay for it.

• Such a plan would literally take generations of transition so that younger people have the lock-box accounts as the basis for retirement. However the funding problem is how to pay for those already in the current SS model who will not have the funds in a lock-box account to fund retirement.
• As money is diverted from young workers, the benefits earned by current workers will still have to be paid.
• Those that think there is a magic light switch and the transition will be (a) swift and (b) painless are sadly mistaken.

WW

 

[Dr.Know]

Will SS be fiscally viable with a shrinking workforce?

Yes, why do you think we are importing millions of hispanic workers ??? They are going to replace the American woke tard.

 

[Blues Man]

Actually I don't have a problem with the idea of transitioning from a "pay-as-you-go" retirement program (current SS Model) to an "individual lock box" retirement program (future SS model).

However some using this as what I call a "bumper sticker" solution with no meat on the bones are how to transition from the current model to a future model. They refuse to address HOW to transition because they have difficulty thinking beyond the slogan stage to the actual implementation stage.

Under the Individual Lock Box program:

• There would still be mandatory contributions similar to current FICA taxes,
• Instead of paying benefits now, funds would go into a restricted access individual account.
• The account would be owned by the individual and all monies deposited are "owned" by the individual. The plan provider nor the employer will have any claim on the principal beyond maintenance fees defined in the law and a portion set aside as "insurance" (more on that later).
• The SS Administration acts as the sole collection agency for deposits. Once "taxes" are collected they immediately transfer the money to the individuals account. Why you might ask? Currently with 401K like plan, the employee is limited to program administrators (Voya, Vanguard, Lincoln, MetLife, TIAA, etc.) that the EMPLOYER selects. Because the SSA is collecting and coordinating payments within a mandated framework, the EMPLOYEE can then choose any approved provider that meets quality guidelines. In other words employees would have a much wider selection of retirement saving administrators.
• Employees would have a wide range of investment administrators and plan options from conservative (low yield, very stable) to more aggressive (higher yield but more volatile.)
• Similar to 401K's contributions to the account are taken "pre-tax", lowering the employees current tax liability and transferring that liability to the future when the funds are pulled for retirement. Disbursements are considered income at the time of withdrawal and taxes paid then.
• Similar to 401K's there would contribution maximums on these tax deferred retirement contributions. (Current caps for 401K's is $22.5K if under 50 years old and $30K for 50 and older. I think that is a little low I think $50K is more reasonable given the tax deferred status and the long term nature of the plan. Individuals that want to invest more for retirement are free to do so in personal non-tax deferred vehicles.)
• At 73 the individual is required to start taking minimum distributions and paying the deferred taxes on the income.

As Safeguards:

• The money is "locked" and not available to the individual prior to 60 years of age. The individual would not have access to the funds for any reason (buying a car, home, vacation, etc.) except for medical diagnosis of terminal illness or major disability.
• Plan providers pay into an "insurance" fund which protects the individual's assets from disappearing during market downturns.
• Once an individual meets certain baseline work requirements (age + required number of years of qualifying work, such as 60 years old with 10 years of qualifying work), then there are certain baseline benefits available. If the status of the account provides for benefits above the baseline, then funds are paid from the account. If the account is depleted (market downturn or very high age), then baseline benefits kick in.
• Plan providers must establish a "non-profit" wing for administering these government mandated "lock box" accounts with executive compensation limitations.
• There would be a "default" government plan such that if the individual did NOT select an approved plan administrator, then there is a default option based on projected retirement age.

How to Pay for it.

• Such a plan would literally take generations of transition so that younger people have the lock-box accounts as the basis for retirement. However the funding problem is how to pay for those already in the current SS model who will not have the funds in a lock-box account to fund retirement.
• As money is diverted from young workers, the benefits earned by current workers will still have to be paid.
• Those that think there is a magic light switch and the transition will be (a) swift and (b) painless are sadly mistaken.

WW

As a person that has owned businesses and offered 401k plans to employees I can tell you that it doesn't matter which financial company is used to host the plan as the offerings of investment choices are all very varied and comparable.

I have experience with a couple different financial firms and the main reason they are used is for convenience and record keeping because the government requires some very strict records and reporting.

As far as the investment choices offered by different hosts there really isn't much difference as they all offer a wide variety of mutual funds to fit every person's investment style.

The transition while it may be problematic is not insurmountable. In fact since the government is so horribly bad at actually managing money the end result would be a net savings to the tax payer.

 

[miketx]

Yes, why do you think we are importing millions of hispanic workers ??? They are going to replace the American woke tard.

One thing about Mexicans is that they will work. Most any way.

 

[Captain Caveman]

If it's so great, make participation voluntary.
Oh, wait, it doesn't work unless you force people in? Fuck you.

Well, when you're young you don't kinda take on board retirement and pensions (private and state) etc.. So when I set out working, the first year was YTS (Youth Training Scheme) that paid peanuts as a wage. That meant I earned under the lower earnings limit, not enough to cover my stamp for state pension. I received a letter to say I fell short on some ninety quid for that year but I don't have to pay it, just means it lowers your final state pension. So as a young man I thought, "Pfft, I don't have to pay it so I'm not gonna". On hindsight, I should have been forced to pay it.

My private pension matured late last year, so now I can just work part time, and fully retire when I hit state pension age.

In the UK, if you're employed you are automatically enrolled into your employer's pension scheme, they must provide one and it's up to you to write to the pension regulator to opt out. It's called the, " We're All In".

Imo, it's the start of the UK government scrapping state pensions. Over the decades, the rules will change, you won't be able to opt out, then contribution percentages will increase etc.. over the next few decades. But I can guarantee this, if/when state pensions are scrapped, the tax burden won't be any less. National Insurance contributions may cease on pay slips but it'll just be collected from elsewhere.

 

[YoursTruly]

Virtually all of the aged denizens of this great nation express similar opinions on Social Security regardless of political affiliation, to wit: “I paid into Social Security. It’s MY money. I am entitled to get it back when I retire.”



I know you were “promised” this benefit by the federal government, and that you donated 6% of your gross earnings to this purportedly noble system in good faith. Therefore, you are willing to fight tooth and nail to protect this program. I get it. Your feelings are understandable. It is the fair thing to occur.



However, maybe it is time for older Americans to consider Social Security benefits in a very different light. Instead of viewing Social Security as a good faith pact between contributors (forced contributors) and big daddy government, who knows what’s best for you; perhaps try considering Social Security as an elaborate, government sanctioned Ponzi scheme you were drawn into and fucked by.



There is no real Social Security trust fund. You have been lied to in order to gain your trust. Your SS contributions go into the general federal fund. You pay into a fungible fund, the feds draw from said funds to, inter alia, buy weapons, build roads to nowhere, and to finance tranny education in Pakistan. Then Congress authorizes spending a certain amount of SS funding in its periodic appropriations bills. Thus, the federal government receives your “investment”, spends it on whatever, then will pay you a “return” on your investment as funds are available to do so. When funds are no longer available to pay you a return, then you are fucked and there is nothing you can do about it. This is the heart of all Ponzi schemes.



Moreover, the monthly payments you SS trough feeders are receiving today is not YOUR money. YOUR money was spent decades ago. Your benefits are from the money being forcibly taken from people today. Your benefits are being doled out somewhat loosely based on the amount you have “paid in” (I.e., had taken from you involuntarily) over the years. But that is the only nexus between you and the money the government is giving you.



Social Security theoretically should not “go broke”. Every person is forced to give up 6% of their gross incomes. Recipients become eligible for SS payments at 65 (62 if you agree to reduce the monthly payment to which you are “entitled”. Thus, you have revenue funneled into the system by working folks, then being paid out to old, dying folks. If there was a “trust fund” being administered solely for retirement payments, then they could tweak the system to keep it solvent (e.g., increase contribution requirements; raise age of eligibility; reduce benefits; invest corpus of trust in conservative assets - e.g., municipal bonds - that have low risk but will grow the fund; etc…). But this is not how it works. There is no trustee administrator with a fiduciary duty to payees like there is with a private trust. The effective “administrator” of this fake “fund” is 535 senators and representatives who have no fiduciary interest to manage your Social Security benefits in a manner to ensure YOUR best interests are accounted for. A true trust fund would mot be subject to political interests.



If a real trust fund goes broke, then there is a big problem in terms of law and ethics. Somebody is either going to prison or will be subject to civil liability. However, there is no such redress if the fake SS fund “goes broke”. The only redress is political.



As mentioned, there is actually no trust fund to “go broke”. Rather, it boils down to projected spending. The “contributions” to SS (I.e., the 6% involuntary deduction taken from your gross pay) are going down while the benefits payments are increasing, all based upon changing demographics. Moreover, the out of control federal spending is causing the value of the dollar to decrease. This exacerbates the spending shortfall.



So, the nonexistent “fund” is not running out of money. Rather, projections show that it will be impossible to sustain the Social Security hand-outs -which accounts for a HUGE portion of the federal budget - at current revenue levels. In short, you retired Americans who rely upon this scheme to make ends meet are fucked. Perhaps you should go back to school and learn to code?



Don’t feel bad. I understand your anger. This is not the first time big government has lied to its subjects. Most older Americans are essentially dependent upon their Social Security payments. They are economic slaves on the plantation. They were promised Utopian retirement years, free of all obligations so they could spend their golden years fishing, knitting, and catching the “early bird special” down at the Country Buffet. But in reality they are economic slavery. They are made to fight tooth and nail to keep this financial boondoggle in place. They need their meager SS payment, and the government wants this large source of revenue. This is why it is so taboo, and politically destructive, to talk about common sense solutions to this coming disaster.



Americans need to get over their aversion to admitting that the federal government duped them into the Social Security Ponzi game. You were TAXED involuntarily for SS; you did not “contribute”. It is not “your money”, it’s the federal government’s money and they will spend it according to appropriations bills. And YOU let it happen this way.



When you look at this rationally it is clear that we are going to have to make big changes to this program. It cannot be avoided. SS represents a huge part of our budget. We should not run from this challenge. It fact, it is morally indefensible to ignore this. Politicians have been content to kick the can down the road lest they are portrayed in campaign ads as pushing grandma off the cliff.



There’s ways to address this. You can offset SS payments by giving tax cuts and deductions to families who take care of elder family members, in whole or in part. This costs us nothing. Rather, it can be “paid for” (a very misleading political term in this context) by cutting spending elsewhere. Further, it will make the nursing and assisted living homes more competitive and, thereby, lower costs. Hell, cutting Medicaid grants to states will do this too.



Innovation and capitalism will solve this issue, not big daddy government. But attitudes must change. Social Security is a big old socialist government clusterfuck that is not sustainable. Like most big government socialist clusterfucks it was always doomed to fail. Don’t blame the boomers either. SS is the brainchild of leftist Judeo-Christian guilt-think and is not based upon sound economic principles.

The SS system isn't a bad system. It's the people who are running it that needs to be changed. It does need to be separated. And if it ever falls short, then money from the general funds need to be added, and other things cut to keep it solvent. Like not paying for gender studies in Afghanistan and Pakistan or roads to no where.

Americans first.

 

[YoursTruly]

One thing about Mexicans is that they will work. Most any way.

Every job I ever had where Mexicans were working, would work circles around most of us.