Congressional Budget Office: Social Security is a Joke

The key statement from the CBO report:

For people born in the 1940s or later who have household earnings in the second quintile or above, the present value of taxes will be, on average, more than the present value of scheduled benefits.

Just to be clear: 80% of the people who contribute to SS get less than what they paid in. Only the bottom 20% of income earners have a chance of breaking even.

Of course, that's not the only reason why this outrageous program of mass theft needs to be abolished. The elderly, as a group, are the wealthiest class of citizens in the United States. Obviously they have had their entire lives to accumulate wealth, so it only makes sense that they have the most assets.

It is a myth that the money which is taken from you in taxes is set aside for your future retirement. The program operates on the principles of a Ponzi scheme, whereby payments into the system by new participants (young workers) are used to make the monthly payouts to the people receiving benefits (the retired elderly). So in effect, grandma and grandpa are robbing their own grandchildren, while at the same time, chances are that grandma and grandpa are far wealthier than their grandchildren.

Further, since all Ponzi schemes are by definition insolvent, the entire system could collapse the moment that payouts exceed pay-ins. For example, if the number of kids being born drops below the rate of those retiring, not enough workers will be around to fund the future payouts. Of course, this is happening right now. The U.S. does not have the demographics or productivity to sustain this insanity.

CNS News is reporting that Social Security's unfunded liabilities now top 86 trillion dollars, or $73,167.83 per household. That is the equivalent of around 6 times the present annual GDP of the entire nation. This can only end in disaster.

Don't even get me started no Medicare. That program is so screwed its not even worth commenting on.

Imagine the repercussions of ended social security abruptly. Thousands if not a million or two would be homeless and hungry. After that it wouldn't be long before they destroy Medicare/obamacare and then what foodstamps and t.a.n.I.f.?

Rich politicians don't believe in pubic assistance because they simply don't need it and they don't associate with "middle class"

reply to post by AnarchoCapitalist


It has been widely known as such for decades. I guess if it's acceptable depends on ones point of view. We have known for quite a long time that the younger pay in generations were shrinking while the older pay out generations were growing larger and living longer.

In other words, The younger pay in generations were shrinking and earning less while the older pay out generation were growing and requiring more due to the cost of living and simply living longer so they can afford to live out their last days.

I've thought it was always understood by most that Social Security was a retirement supplement.
Not a retirement program.

reply to post by AnarchoCapitalist

It doesnt matter.

Its already paying out less than it takes in. It will be depleted by 2027?

Another fine example of a government program.

The government destroys/bankrupts/mismanages EVERY program. Name ONE that is successful. Yet people argue that we should give them MORE of our money... WOW

Originally posted by otie1
Imagine the repercussions of ended social security abruptly. Thousands if not a million or two would be homeless and hungry. After that it wouldn't be long before they destroy Medicare/obamacare and then what foodstamps and t.a.n.I.f.?

Rich politicians don't believe in pubic assistance because they simply don't need it and they don't associate with "middle class"

I'm sure that they will solve it by feeding the homeless to the hungry. Two birds with one stone.

reply to post by SLAYER69


I've though it was always understood by most that Social Security was a retirement supplement. Not a retirement program.

Social security is for the elderly only? Was this the original plan?

Everyone I know on SS is just disabled in a way. None of which are elderly.
Why would social security be a supplement for retirement? Don't they have retirement checks and a 401k?

I know money is getting tighter and tighter for the elderly. I hear it from my grandma all the time. Maybe I should tell her about this elderly social security program haha

Originally posted by otie1
reply to post by SLAYER69

 

I've though it was always understood by most that Social Security was a retirement supplement. Not a retirement program.

Social security is for the elderly only? Was this the original plan?

Everyone I know on SS is just disabled in a way. None of which are elderly.
Why would social security be a supplement for retirement? Don't they have retirement checks and a 401k?

I know money is getting tighter and tighter for the elderly. I hear it from my grandma all the time. Maybe I should tell her about this elderly social security program haha

The original purpose of social security was to act strictly as a state sponsored retirement program. Originally, all money that was put into the trust was to remain untouched for any other use besides making SS payouts. After it was established, politicians quickly began to raid the trust, drawing down its account, using the money to fund all manner of wars, welfare, and crony capitalism.

When Social Security was turned into a general welfare program, it had the effect of driving private charities out of the market. Prior to state run welfare, the vast majority of the poor and disabled were cared for by private charities and family members. Now the welfare system has created massive swaths of dependent people, something that private charities naturally work to avoid. Private charities have an incentive to help people get off of charity payments, state run programs have the exact opposite incentive.

Originally posted by AnarchoCapitalist
The key statement from the CBO report:

For people born in the 1940s or later who have household earnings in the second quintile or above, the present value of taxes will be, on average, more than the present value of scheduled benefits.

Just to be clear: 80% of the people who contribute to SS get less than what they paid in. Only the bottom 20% of income earners have a chance of breaking even.

Of course, that's not the only reason why this outrageous program of mass theft needs to be abolished. The elderly, as a group, are the wealthiest class of citizens in the United States. Obviously they have had their entire lives to accumulate wealth, so it only makes sense that they have the most assets.

It is a myth that the money which is taken from you in taxes is set aside for your future retirement. The program operates on the principles of a Ponzi scheme, whereby payments into the system by new participants (young workers) are used to make the monthly payouts to the people receiving benefits (the retired elderly). So in effect, grandma and grandpa are robbing their own grandchildren, while at the same time, chances are that grandma and grandpa are far wealthier than their grandchildren.

Further, since all Ponzi schemes are by definition insolvent, the entire system could collapse the moment that payouts exceed pay-ins. For example, if the number of kids being born drops below the rate of those retiring, not enough workers will be around to fund the future payouts. Of course, this is happening right now. The U.S. does not have the demographics or productivity to sustain this insanity.

CNS News is reporting that Social Security's unfunded liabilities now top 86 trillion dollars, or $73,167.83 per household. That is the equivalent of around 6 times the present annual GDP of the entire nation. This can only end in disaster.

Don't even get me started no Medicare. That program is so screwed its not even worth commenting on.

The social security fund is invested in US Treasuries and always has been and they earn a much higher rate of return than current Treasuries do. It is not a ponzi scheme any more than your grocer taking the money you pay for groceries and paying their bagboys with it. Or your bank giving you the cash another depositer just deposited. You have a faulty definition of wyhat constitutes a ponzi scheme.

As for the unfunded liabilities, it does not count the payments that will be coming in over the time period in question. That makes the whole OP intellectually dishonest.

Also if the system pays out less than it take in, how could it ever run out of money, except through fraud which has not been cited?

The simple fact that millions of Americans would have a better standard of living if they invested other things such as Iras, etc.

Social Security has been sold as a safety net, the average monthly check around $1000 bucks for millions.

Social Security has always been a joke, and people need to look up a couple of court cases:

Nestor v. Fleming
Helvering V. davis

www.frumforum.com...

Social Security is a joke, and it is a ponzi scheme. First in first out, leave others holding the bag, more people are taking out than paying in which was already said, and that is true.

It should have never been created all it really is:

A tax for government so it can do whatever it wants.

Originally posted by AnarchoCapitalist

Originally posted by otie1
reply to post by SLAYER69

 

I've though it was always understood by most that Social Security was a retirement supplement. Not a retirement program.

Social security is for the elderly only? Was this the original plan?

Everyone I know on SS is just disabled in a way. None of which are elderly.
Why would social security be a supplement for retirement? Don't they have retirement checks and a 401k?

I know money is getting tighter and tighter for the elderly. I hear it from my grandma all the time. Maybe I should tell her about this elderly social security program haha

The original purpose of social security was to act strictly as a state sponsored retirement program. Originally, all money that was put into the trust was to remain untouched for any other use besides making SS payouts. After it was established, politicians quickly began to raid the trust, drawing down its account, using the money to fund all manner of wars, welfare, and crony capitalism.

When Social Security was turned into a general welfare program, it had the effect of driving private charities out of the market. Prior to state run welfare, the vast majority of the poor and disabled were cared for by private charities and family members. Now the welfare system has created massive swaths of dependent people, something that private charities naturally work to avoid. Private charities have an incentive to help people get off of charity payments, state run programs have the exact opposite incentive.

Wrong again. Social security has always been invested in US Treasury bonds since day one. The only thing that happened was Social Security was put on the government books rather being kept seperately. I think in the 1940's.

Social security is not charity. You even say most people put in less than they get back. So it is all our money in the first place. That would be reverse charity in my book.

Only reason that SS has any funding problems is that returns have not kept up with the cost of living.

BTW I am in favor of individual SS accounts managed exactly like SS is managed today, but with the difference being upon death, the balance in the accounts go to the heirs. Letting people manage their own accounts would just mean we need another program after they lose their money. The vast majority of Americans do not beat inflation with their investments either.

Originally posted by sligtlyskeptical
The social security fund is invested in US Treasuries and always has been and they earn a much higher rate of return than current Treasuries do. It is not a ponzi scheme any more than your grocer taking the money you pay for groceries and paying their bagboys with it. Or your bank giving you the cash another depositer just deposited. You have a faulty definition of wyhat constitutes a ponzi scheme.

As for the unfunded liabilities, it does not count the payments that will be coming in over the time period in question. That makes the whole OP intellectually dishonest.

Also if the system pays out less than it take in, how could it ever run out of money, except through fraud which has not been cited?

Everything you wrote is one big fat lie. Stop lying to people on here.

First off, the trust turns over the treasuries it holds. Second, the return on treasuries doesn't even keep pace with real inflation rates. Third, it is a Ponzi scheme by any definition. The trust does not hold enough money on balance to close every account - and that by definition is fraud.

IF ANY PRIVATE INVESTMENT BANK OPERATED A RETIREMENT TRUST THE WAY SOCIAL SECURITY OPERATES, THEY WOULD BE IN PRISON - JUST ASK BERNIE MADOFF.

Last, but not least, the average citizen would get a HIGHER return by stuffing the money they pay into social security under their mattress! If they put it into a regular savings account, they would faaaaaaar surpass what they would get back from social security payments.

Originally posted by AnarchoCapitalist

Originally posted by sligtlyskeptical
The social security fund is invested in US Treasuries and always has been and they earn a much higher rate of return than current Treasuries do. It is not a ponzi scheme any more than your grocer taking the money you pay for groceries and paying their bagboys with it. Or your bank giving you the cash another depositer just deposited. You have a faulty definition of wyhat constitutes a ponzi scheme.

As for the unfunded liabilities, it does not count the payments that will be coming in over the time period in question. That makes the whole OP intellectually dishonest.

Also if the system pays out less than it take in, how could it ever run out of money, except through fraud which has not been cited?

Social Security Investments

Everything you wrote is one big fat lie. Stop lying to people on here.

First off, the trust turns over the treasuries it holds. Second, the return on treasuries doesn't even keep pace with real inflation rates. Third, it is a Ponzi scheme by any definition. The trust does not hold enough money on balance to close every account - and that by definition is fraud.

IF ANY PRIVATE INVESTMENT BANK OPERATED A RETIREMENT TRUST THE WAY SOCIAL SECURITY OPERATES, THEY WOULD BE IN PRISON - JUST ASK BERNIE MADOFF.

Last, but not least, the average citizen would get a HIGHER return by stuffing the money they pay into social security under their mattress!

edit on 10/5/2012 by AnarchoCapitalist because: (no reason given)

Social Security Investments


According to this link the social security fund was earning a 3.9% yield on it's investments at the end of 2012. Nothing matures until next year, so with no additional investments, the rate of return still sits at 3.9%.

How many of you have a portfolio of what is considered the highest safety bonds in existence and are able to earn 3.9%? I would say likely none of you, unless you did what SS did and just bought treasuries year ago for the long term.

Alternatively if the government was to refund the present value of everyone's deposits into social security using that 3.9% rate, the fund would have enough money to pay everyone back in full.

Originally posted by sligtlyskeptical
Social Security Investments

According to this link the social security fund was earning a 3.9% yield on it's investments at the end of 2012. Nothing matures until next year, so with no additional investments, the rate of return still sits at 3.9%.

How many of you have a portfolio of what is considered the highest safety bonds in existence and are able to earn 3.9%? I would say likely none of you, unless you did what SS did and just bought treasuries year ago for the long term.

Alternatively if the government was to refund the present value of everyone's deposits into social security using that 3.9% rate, the fund would have enough money to pay everyone back in full.

3.9% yield is well below the 1980 method of calculating inflation, and barely breaks even with the standard method of measuring inflation. If we assume the method used by Shadow Stats, which incorporates "non core" inflation metrics, we arrive at an inflation rate hovering around 9%.

Of course, how much interest the total fund earns is immaterial to the fact that the average citizen will get less back from the program than they put in! SO FUND INTEREST RATES ARE A RED HERRING! The trust could be earning a thousand percent interest every month, but if the average Joe is losing money on the deal, it doesn't make one bit of difference.

www.shadowstats.com...

Further, I own gold and silver. Since the year 2000, gold has risen from 300 an ounce to 1800 an ounce. So yeah, my "portfolio" is doing a fair bit better than the criminal ponzi scheme you adore. Anyone who's smart is going to horde gold and silver. When the government prints money, the first asset class to rise is gold.

And the trust could not pay back all of the money it owes. I have no idea where you are getting this from! They have 86 trillion in unfunded liabilities!

Originally posted by sligtlyskeptical

Originally posted by AnarchoCapitalist

Originally posted by otie1


Only reason that SS has any funding problems is that returns have not kept up with the cost of living.

Nope. The major reason SS has a funding problem is that the ratio of workers to retirees has drastically fallen. Those of us under 50 can't work enough to fund SS for all the retiring baby boomers. In 1940 the ratio or workers to retirees was 159:1. In 1950 16.5:1. In 2010? 3.3:1. Yep, 3.3 workers turning over their SS taxes to pay out for 1 retiree.

Historical SS ratios

According to this link the social security fund was earning a 3.9% yield on it's investments at the end of 2012

This is the biggest thing that irks the hell out of me It is ok for "governemnt to invest" your money, but they don't want you to invest your money...........in the same damn place Wall Street.

Guess people just love begging the Feds for their own money, and the kicker is they would earn more.

Originally posted by AnarchoCapitalist

Originally posted by sligtlyskeptical
Social Security Investments

According to this link the social security fund was earning a 3.9% yield on it's investments at the end of 2012. Nothing matures until next year, so with no additional investments, the rate of return still sits at 3.9%.

How many of you have a portfolio of what is considered the highest safety bonds in existence and are able to earn 3.9%? I would say likely none of you, unless you did what SS did and just bought treasuries year ago for the long term.

Alternatively if the government was to refund the present value of everyone's deposits into social security using that 3.9% rate, the fund would have enough money to pay everyone back in full.

3.9% yield is well below the 1980 method of calculating inflation, and barely breaks even with the standard method of measuring inflation. If we assume the method used by Shadow Stats, which incorporates "non core" inflation metrics, we arrive at an inflation rate hovering around 9%.

www.shadowstats.com...

Further, I own gold and silver. Since the year 2000, gold has risen from 300 an ounce to 1800 an ounce. So yeah, my "portfolio" is doing a fair bit better than the criminal ponzi scheme you adore. Anyone who's smart is going to horde gold and silver. When the government prints money, the first asset class to rise is gold.

And the trust could not pay back all of the money it owes. I have no idea where you are getting this from! They have 86 trillion in unfunded liabilities!

edit on 10/5/2012 by AnarchoCapitalist because: (no reason given)

Don't you realize those liabilities are all the payments for the next 100 years or so and that it doesn't include what Americans will paying in over the next 100 years? That makes the statistic pure garbage. And all those liabilities are contingent on how soon people die as well.

Are you proposing that the social security fund invests in precious metals instead of treasuries? 6-7 years ago were thinking it should be invested in real estate or 13-14 years ago in technology stocks?Or even that individual americans invest their retirement funds in gold? I know you think Gold is different but it's not.

If we started paying people decent wages in this country then they would pay more into social security and it would ebcome much more sound. The biggest problem is that wages have not kept up with inflation by a large percentage and thus expected payments into social security have not kept pace. Add in the unemployed and we are where we are. It's not because social security is diseased, the disease lies within the economy which social security operates.

Originally posted by sligtlyskeptical
Don't you realize those liabilities are all the payments for the next 100 years or so and that it doesn't include what Americans will paying in over the next 100 years? That makes the statistic pure garbage. And all those liabilities are contingent on how soon people die as well.

Are you proposing that the social security fund invests in precious metals instead of treasuries? 6-7 years ago were thinking it should be invested in real estate or 13-14 years ago in technology stocks?Or even that individual americans invest their retirement funds in gold? I know you think Gold is different but it's not.

If we started paying people decent wages in this country then they would pay more into social security and it would ebcome much more sound. The biggest problem is that wages have not kept up with inflation by a large percentage and thus expected payments into social security have not kept pace. Add in the unemployed and we are where we are. It's not because social security is diseased, the disease lies within the economy which social security operates.

No, it does not make the statistics garbage. The stats show us that unless the retirement age is raised drastically, or tax revenues increase drastically, the trust will not be able to make its payments without borrowed (ie. printed) money.

Of course, if the retirement age is raised or if taxes are hiked, the 80% of people who lose money on the deal will turn into 99%!

Stop lying to people! LIAR!

And hell yes to SS holding gold! If they are going to continue this insanity, it would be far better to hold an asset class that keeps pace with the rate of money printing!

Further, your idea that all we need to do is raise wages is patently absurd. If all it took was raising wages, why not raise the minimum wage to 100.00 an hour right now? Wouldn't that solve all our problems?

Oh yeah, there's that little problem of employers NOT BEING ABLE TO AFFORD IT!

And hell yes to SS holding gold! If they are going to continue this insanity, it would be far better to hold an asset class that keeps pace with the rate of money printing

That would be awesome considering that gold was around 787 at 2008 and is it well over 1700 right now and it is projected to hit 2400 next summer.

By the end of 2016 it will be well over 2000 an ounce.

reply to post by neo96


Which calls into question...

Is there really anything left over at Fort Knox?

reply to post by SLAYER69


Rumor has it nothing really, What Roosevelt sold, was replaced with the gold confiscation during his presidencies, then what was left of that Johnson, sold.

Most attempts at a Fort knox audit have always meant resistance which begs the question WHY?

Honestly think there is nothing there just like SS.