Mark Perry at Carpe Diem blog: Social Security IS a Pyramid Scheme (via Newsalert).
posted by Helen at 6:52 AM
Monday, September 05, 2011
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6 Comments:
A ponzi scheme, to be technical.
And in other news, the sun will rise in the east tomorrow morning.
The way it is currently constructed, it is. However, for me personally is technically is not. Some months ago, I calculated all my contributions and using a simple 4% return, calculated that if I lived to 90 (like many of my ancestors) I'd break even.
However, I recently divorce and my ex-wife is entitled to payments equivalent to 40% of my benefit for no discernible reason. That makes it a loss.
All that said, increasing the social security contribution by 1% (split between employee and employer) and raising the max retirement age by a year while reducing the benefit to early retirees would make the system solvent for quite a while.
joe, you can write of a percentage of those payments to your ex... and show her that she's just another tax consumer (welfare case) like all the other ex wives.
but yeah, social security is a pyramid or ponzi scheme...but if you read ponzi's system you will see that he was trading on the difference in a commodity in two markets as the basis for his offering, whereas the government is not using any value whatsoever.
If Social Security was supposed to be a "safety net", then why does everyone who reaches age 65 (or 67, or whatever) get payments, regardless of whether they need them or not? A safety net is for people who *fall*. Those who don't, don't need it.
And I know I could put that $400/month that my employer budgets to my SS taxes (mine and theirs combined) to better use than the Feds do.
Social Security was only partly a a "safety net". The core of social security is OASDI (Old Age, Survivors, and Disability Insurance.) The insurance component is in the same meaning as whole life insurance.
(For the record, were the government to write a check for all my and my employers matching contributions to SS with simple compounded interest at the rate of inflation AND if the companies I work for put both my and their contribution into my 401k, in addition to my current contributions, and I'll gladly opt out of social security.)
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