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Exactly right FICA will keep going to up to support FICA. Is it a Ponzi scheme, yes it is. Then again if the government would not have raided SS years ago and let the account grow on a simple savings account, it would be huge by now. Stealing is illegal in the USA unless of course you are the government.
A ponzi scheme promises large returns on investments, misleads about sources of those returns, and eventually always collapses when it runs out of new participants. Social security does none of that, it promises a certain benefit based on wages/longevity that might not even be a net gain for those who contributed, it's quite transparent, and it will never run out of participants as long we keep having babies that develop into workers.
It is simply user funded , no different than most of Medicare or any insurance .Incoming money pays benefits for previous users .User funded is not a ponzi scheme
Interesting article that illustrates how social security can still survive the upcoming baby boomer retirement. But I think the point should still be that millennials shouldn't depend on SS to save them.
It will never run out of money as long as the pool of people paying into it doesn't shrink or incomes shrink substantially.
Wife and I planned to have enough in case SS fails but I don't see that happening. I plan to start taking it soon at age 62 or 63.
A ponzi scheme promises large returns on investments, misleads about sources of those returns, and eventually always collapses when it runs out of new participants. Social security does none of that, it promises a certain benefit based on wages/longevity that might not even be a net gain for those who contributed, it's quite transparent, and it will never run out of participants as long we keep having babies that develop into workers.
I usually agree with your posts, but I disagree with you here. Your argument is that technical differences preclude SS from rising to the definition of Ponzi scheme. Tell me, how long would SS last without new participants? Social Security IS structured like a Ponzi scheme and the fact that it is legally mandated does not diminish the similarities between the con and the program people rely on.
The thousand pound, mean gorilla is national debt and personal debt which is beyond imagination. There is no part of our lives that will not be ultimately affected by it. The party is in high gear. The bar is open and the drinks are flowing. The only bummer is that the party is abroad a ship named Titanic.
I am old and may not see the water flow into the hull but it will happen. Some few might get into lifeboats but most are going down with the ship.
The government knows it. The congress knows it. They just cannot act. The rest of us pretend someone will solve the mess. Keep hoping.
Interesting article that illustrates how social security can still survive the upcoming baby boomer retirement. But I think the point should still be that millennials shouldn't depend on SS to save them.
This author does not understand actuarial science. The author does not understand even the basics of government funding.
For example, in the quote from the article that you posted:
Quote:
The second recurring source of revenue is the taxation of benefits. Signed into law in 1983 and implemented in 1984, the taxation of benefits allows recipients earning above certain thresholds – adjusted gross income plus one-half benefits above $25,000 for individuals and $32,000 for couples filing jointly – to have a portion of their Social Security benefits taxed at federal ordinary income-tax rates. In 2017, the taxation of benefits led to $37.9 billion being collected.
Taxing away benefits does happen, but is irrelevant. The federal income tax revenue generated from taxing social security benefits does not go to the Social Security trust fund. Nor should it. As with all federal income tax revenue, it goes to the Treasury and is spent by our esteed Congress. It never goes to the Social Security Trust Fund.
The Motley Fool article printed by USA Today is not economic analysis. It is not financial analysis. I can't believe anyone reads this tripe, let alone writes it.
The time at which the SSA no longer has a reserve (in ~15 years more or less depending on a bunch of factors) is when the federal government has paid back every cent of money borrowed from SSA with interest. At that point, as the USA Today article says, the SSA will only have the current year's revenue because all of the surplus from all of the years there was a surplus will have been spent by the SSA to pay benefits and by no one else for any other purpose.
At that point in time, inflows will be insufficient to cover outflows.
I usually agree with your posts, but I disagree with you here. Your argument is that technical differences preclude SS from rising to the definition of Ponzi scheme. Tell me, how long would SS last without new participants? Social Security IS structured like a Ponzi scheme and the fact that it is legally mandated does not diminish the similarities between the con and the program people rely on.
So according to your definition every annuity or insurances are ponzi
schemes since they are user funded and use current payments to meet obligations.
The definition of a Ponzi scheme is where big profits are promised from investing in goods or services but actually come from luring in new investors and not the investments .
That is not social security
Last edited by mathjak107; 11-11-2018 at 11:02 AM..
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