Republicans Attack Medicare : Round # 2 (unemployment, ethic, legal, stats)

[Katarina Witt]

Originally Posted by KidArizona

FDR's ponzi schemes are quickly unravelling

80+ years and still going strong, actually!

[SoCalCroozer]

Like anything else the reason medicare is such a black hole is because of it's massive corruption at all levels. The problem with government is they can never adequately police or protect anything without additional massive infusions of capital and money. Look at our borders. Look at the war on drugs. Look at our food supply. Look at our environment. All have billion dollar budgets but are a complete and utter mess in complete disarray.

[Mircea]

Originally Posted by Katiana

80+ years and still going strong, actually!

And your evidence of that is what, exactly?

You have none.

Factually...

Mircea

[sickofnyc]

Originally Posted by KidArizona

FDR's ponzi schemes are quickly unravelling

Social Security is not a Ponzi scheme. Educate yourself to the facts as opposed to the talking points and it will save you from sounding like a parrot. I promise...it will liberate you.

But this week, let’s straighten out the talk about Social Security, entitlements and Ponzi schemes.

An entitlement is not a bad thing by definition. In the context of Social Security and Medicare, entitlements are benefits that you are granted by law. You are entitled to the benefit not because it is welfare, but because you have paid into it over time. You can count on an entitlement because it’s a form of insurance, and it isn’t subject to the judgment of a caseworker or the spending priorities of budget makers.


Social Security and a Ponzi scheme are as different as night and day. The perpetrators of Ponzi schemes lie to their investors; Social Security is an open and transparent system that issues an annual report every year prepared by trustees who project the program’s future 75 years into the future. Suggesting that the program is an unethical fraud or swindle is irresponsible.

What’s more, Social Security has never missed paying a dime’s worth of benefits, and it will be there 25 or 30 years from now. This year’s annual report of the Social Security trustees states that the program has sufficient funds to pay all benefits through 2036, when its Trust Fund is exhausted.

Why Social Security is not a Ponzi scheme | RetirementRevised

[Donna-501]

Originally Posted by Robert_J

Until my father-in-law passed, I didn't know there were other rules as well. My mother-in-law can't collect his SS retirement unless she goes on medicare. That's the .gov rule. She is currently battling cancer and would have to change doctors mid stream. Because of her pre-existing condition she can't get any supplemental insurance either. To make sure she stays healthy, she is forgoing retirement money that he has paid into for 50 years. If she doesn't make it, then it doesn't go to their kids, it is distributed to others. All other types of investments would be able to be passed to the next generation or any beneficiary he had wanted.


I think dictating is too strong a word. It should be no more than a suggestion.

Medicare could be her secondary insurance.

[Donna-501]

Originally Posted by JimMe

Either that or stay home and take care of your own parents. Why are your parents the responsibility of "society?"

Somehow I bet you were never a caregiver.

[mohawkx]

Originally Posted by JimMe

Why is it that any proposal to put Social Security and Medicare on a sound financial footing is described as an "attack?" As currently constituted those two programs are unsustainable and will go broke. That's fact. And yet Obama's budget makes no attempt to deal with those facts. I guess he would rather the programs teeter on the brink of insolvency so that he can use them as props to scare old people as he did last August during the debt ceiling debate when he threatened not to send out the Social Security checks. In Marxist-land the ends always justify the means.

Social Security and Medicare needs to be modified to account for changing demographics and all will be fine but republicans are trying to use the current projections as an excuse to dismantle the programs altogether. It smacks too much of socialism for them to stomach when a nation provides an outlet for the least empowered of it's citizens.

[Mircea]

Originally Posted by sickofnyc

Social Security is not a Ponzi scheme. Educate yourself to the facts as opposed to the talking points and it will save you from sounding like a parrot. I promise...it will liberate you.

You should practice what you preach.

Social Security is a Ponzi Scheme, contrary to your flawed beliefs that are based on emotions and not on facts or law.

One of the ironies here is that the architects of Social Security took great pains to distinguish it from welfare. Instead, it was designed to be social insurance, which pools risk broadly. You pay for protection while you’re working, so that you and your family will be protected when you can’t work.

Okay, I'll accept that at face value as true, uh, because it is. OASI = Old Age Survivor's Insurance (I emphasized the operand for the sake of the stupid).

Now I will savage and embarrass the idiot Mark Miller.

The Merriam Webster dictionary defines a Ponzi scheme as follows:

“An investment swindle in which some early investors are paid off with money put up by later ones in order to encourage more and bigger risks.”

No one gives a damn what Merriam Webster says, least of all prosecutors who prosecute Ponzi Schemes. I don't want to destroy Miller's cow-dung induced hallucinogenic fantasy, but US courts to not rely on Merriam Webster when issuing instructions to a jury.


Miller needs to be schooled in law, so I'll do that.


"The perpetrators of Ponzi schemes lie to their investors..." Sometimes, but not always. However, it doesn't matter because I don't have to prove a lie was perpetrated in order to get a conviction on a Ponzi Scheme.


"Social Security is an open and transparent system that issues an annual report every year...." True, but that is not relevant either. Many Ponzi Schemes also issue annual reports. Bernie Madoff's did. Still, the existence or absence of annual reports neither proves nor disproves Ponzi Schemes.


"Suggesting that the program is an unethical fraud or swindle is irresponsible." Not if the claim is true, and it is true with respect to Social Security, specifically, it is an unethical fraud. But that has nothing to do with proving or disproving a Ponzi Scheme.



"What’s more, Social Security has never missed paying a dime’s worth of benefits...." That is a patently false statement. Social Security has missed payments. Social Security began missing payments in 2009. Those payments were covered by the General Fund.


"...and it will be there 25 or 30 years from now." That is a misleading statement. If Social Security still exists 30 years from in 2040, it will be with substantially reduced payments.


"This year’s annual report of the Social Security trustees states that the program has sufficient funds to pay all benefits through 2036, when its Trust Fund is exhausted." That is a misleading statement.


Anyone see a pattern here?



2007 2041
2008 2041
2009 2037
2010 2037
2011 2036


The left side is the year of the report and the right side is the year of default for the Trust Fund. The survival of Social Security through 2040 and beyond is predicated on all of the following:


1] An average annual GDP growth of 5.2%


2] A labor participate rate of at least 66.5%


3] An unemployment rate in the 5% range


4] An increasing number of employees


5] An steady increase in wages


GDP growth has been less than 2.89% per year and will not improve; labor force participation rate has steadily declined from 67.3% to the present 63.4%; the unemployment rate (the real rate) has increased; there are fewer employees; and wages have not been appreciating as rapidly as projected.


Those problems which cannot be resolved will cause the default of the Trust Fund far earlier than estimated, sometime between 2025 and 2028.


This is what the CBO projects to be total SSA revenues (in billions) along with the net loss.




2011 $2,654 ($24)
2012 $2,709 ($64)
2013 $2,743 ($131)
2014 $2,762 ($222)
2015 $2,776 ($320)
2016 $2,791 ($419)
2017 $2,807 ($515)
2018 $2,818 ($613)
2019 $2,817 ($709)
2020 $2,802 ($797)


From Social Security's own report on FICA revenues:



2011 $484.1 -11.14%
2012 $623.6 28.82%
2013 $664.1 6.49%
2014 $704.7 6.11%
2015 $744.5 5.65%
2016 $783.5 5.24%
2017 $821.2 4.81%
2018 $860.9 4.83%
2019 $899.3 4.46%
2020 $937.0 4.19%


Social Security is claiming that it's FICA revenues will increase by 28.82% this year. Really? No way. That would only be possible with an unemployment rate of 5% AND a labor force participation rate >66.5%. Because Social Security failed on its revenue assumption for 2012, then the 6.49% increase in 2013 will never materialize, and neither will the remainder. Best case scenario, Social Security suffers a loss of about $1.5 TRILLION by 2020, and unfortunately, the tax-payers will have to pick up the tab through the General Fund, which means there is no possibility of a balanced budget, and also further economic damage due to reduced government spending.


CBO say the tax payers will have to cough up an average $99.6 Billion per year to cover the losses.


Getting back to the Ponzi Scheme.

A "Ponzi scheme" is one "in which earlier investors' returns are generated by the influx of fresh capital from unwitting newcomers rather than through legitimate investment activity." SEC v. Credit Bancorp, Ltd., 290 F.3d 80, 89 (2d Cir. 2002) (internal quotation marks omitted). For a description of the operations of the eponymous Charles Ponzi himself, see Cunningham v. Brown, 265 U.S. 1, 7-9, 44 S. Ct. 424, 68 L. Ed. 873 (1924).


So any scheme that requires new "investors" is a Ponzi Scheme. Notice the court doesn't say anything about lying, or about promising unusually high returns on investment, or missing payments or publishing annual reports.


Put another way, any investment scheme that can stand on its own two feet is not a Ponzi Scheme.


Is Social Security a Ponzi Scheme? Yes.


How do we prove that? What does the law say and what do the courts say? They say that a Ponzi Scheme is one in which the initial investors' payments are created by new investments from new people.


If new people entering the work-force did not have FICA taxes collected and pay into Social Security, what would happen? The whole system would collapse, because as constructed, Social Security cannot stand on its own.



That, is a Ponzi Scheme.


Legally...


Mircea

Originally Posted by mohawkx

Social Security and Medicare needs to be modified to account for changing demographics and all will be fine but republicans are trying to use the current projections as an excuse to dismantle the programs altogether.

It will take a lot more than that. If you eliminate the salary cap, and if you incrementally raise the FICA tax rate 1.4% per year for the next 12 years (to 16.4%) and if you means-test, there is a chance that you can save it through 2040. After that, you will have to make major changes to the system.


Modifying...


Mircea

[shorebaby]

Originally Posted by P Daley

It seems like the Republican Party did not learn a thing after Ryan's last attack on Medicare was soundly defeated. Now they are back again trying to cut Medicare and again we will stand together and defeat the Republicans. They never seem to learn.
New GOP Proposal Aims To Overhaul Medicare, Increase Eligibility Age - California Healthline

Lol, what exactly are you protecting? Or more precisely, who are you protecting? Not your kids or grandkids.

[Robert_J]

Originally Posted by sickofnyc

Social Security is not a Ponzi scheme. Educate yourself to the facts as opposed to the talking points and it will save you from sounding like a parrot. I promise...it will liberate you.



Why Social Security is not a Ponzi scheme | RetirementRevised

So you can name a beneficiary of all the money you put into your account? You will get back only what you put into it plus interest? You will get all of what you put into it back plus interest?