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Actually, there is only one Element of Proof necessary to prove a Ponzi-scheme.
A prosecutor need only demonstrate that the scheme requires new entrants to maintain viability, because the underlying scheme is defective.
The majority of crimes require more than one Element of Proof, but Ponzi-schemes do not.
Ponzi-schemes have similar characteristics, but the characteristics are not Elements of Proof. For example, Ponzi-schemes often offer high returns on investment, but that is not an Element of Proof, and people have been convicted for operating a Ponzi-scheme when they offered absolutely nothing on return, because the only Element of Proof is that the scheme requires new entrants to be viable.
Technically, Social Security is a Ponzi-scheme, because the underlying financial scheme cannot operate without new entrants.
Without new entrants, Social Security would collapse on its face.
OASDI is not a financial scheme. It's social insurance, not an investment.
People wanting to opt out and invest their own money is one thing but that doesn't make OASDI a mutual fund or other investment vehicle.
Why not? My defer-to-70 Social Security benefit is almost $44K and it's largely tax-free. Inflation-adjusted, my employers and I have contributed far more than I'll ever get back. The impact of progressive payout when you're high income. I'm 60 now. Why shouldn't I just stop working and spend much of my retirement savings now while I'm healthy and active? It's not like I'm going to be using my ski condo or my sailboat when I'm 80. At 80, my father was sitting on the sofa in Florida with vascular dementia watching Baywatch reruns. At 80, my mother's life had contracted to pretty much never leaving town and she was in assisted living with dementia by age 82. I'd rather spend most of it now while I can enjoy it and live on a COLA-protected $44K when I've hit geezer-dom where I'm collapsed down to just my house and the early bird buffet. I still have my house as my long term care policy if I do the assisted living to memory care to nursing home path.
Why do you think there's a FIRE movement these days? I know plenty of middle age people who are able-bodied but retired, living on peanuts while drawing on welfare benefits. Lots are just fed up with the system and realize they won't be recouping what they put in, so they are sucking things dry as much as they can.
Why do you think there's a FIRE movement these days? I know plenty of middle age people who are able-bodied but retired, living on peanuts while drawing on welfare benefits. Lots are just fed up with the system and realize they won't be recouping what they put in, so they are sucking things dry as much as they can.
Fedup with the system, they can move back to Canada. Nobody will stop them. Don’t like the cold, move to Mexico. Best yet, move to Venezuela if you totally fed up.
That's not what I meant. What's going to happen as the cash flow with Social Security turns negative is that the Federal government will simply borrow the difference. Right now, the 'trust fund' has a $2.89 trillion dollar balance. Between now and 2034, we're going to pay out $2.89 trillion more in benefits than we take in. Unless we raise taxes, that $2.89 trillion is going to be borrowed from some other source. The national debt today is $21 trillion. The GDP is $19 trillion. At some point, the interest payments on all that debt choke the Federal budget. Rather than default, the government inflates it away. Recall what hyperinflation did to retirees in the 1970s and early 1980s. Social Security is indexed to inflation but most other things aren't.
Take it up with Congress. The SS trust fund is pretty trivial compared to the $17 trillion to $20 trillion worth of red ink they are prepared to hose us with in the same time period. Yes, inflation is their only path out of the money pit. It worked for the Roman Empire, three times. Eventually, Roman coinage was almost worthless. The US dollar has already lost 90% of its value. If we do that again, 90% of the national debt will go away.
As always, don't keep your money in money. Spend it on stuff that won't end up in a landfill.
Why do you think there's a FIRE movement these days? I know plenty of middle age people who are able-bodied but retired, living on peanuts while drawing on welfare benefits. Lots are just fed up with the system and realize they won't be recouping what they put in, so they are sucking things dry as much as they can.
Why not ?
In my own case, after working 49 years, starting SS at age 70, after 4 years & 1 mo I have just now (last Aug at age 74) recouped what I paid in SS payroll tax, adjusted for inflation using SSA inflation adjustment numbers, and my SS Earnings Statement.
Tax total = 149500 , adjusted for inflation. (about 88000 actual dollars)
age 70 avg monthly benefit = 3051 x 49 = 149499
Plus what about a spouse that gets spousal benefits off your record .what about the fact multiple spouses can also collect off your record . Then there are survivor benefits that can be paid even after you are gone .
In fact the less someone makes the easier it is to get back what you put in as ss is means tested . Lower incomes get a bigger percentage of what they earned as a benefit .
What most people don’t know is that our employment tax dollars don’t all buy the same amount of future benefit. Some of our employment tax dollars buy six times as much in benefits as others.
According to the most recent Trustees Report, for instance, the first $767 of “average indexed monthly earnings” (a complex formula that adjusts earnings over time) is credited at a 90 percent rate, assuring the lowest wage workers of a retirement benefit nearly equal to their earned wage.
Wages of more than $767 a month but less than $4,624 a month are credited at a 32 percent rate. This means retirement benefits increase at a much lower rate. The benefit pinching, however, does not end there.
More means less
For wages of more than $4,624 a month up to the wage base maximum ($113,700 for 2013), the crediting rate is only 15 percent. Thus, all the wages earned — and employment taxes paid — over that $55,488-a-year “bend point” gain benefits at only one-sixth the rate of the lowest wage earners.
In effect, the Social Security benefits formula functions as a sharply graduated benefits “tax,” reducing the benefits that accrue to higher wages by 85 percent. The higher your means, the lower your benefit.
It annoys me to no end how people go on and on insisting that SS is a retirement account that should pay out what you put in and more. It is not a retirement account and never will be. It's a perpetual misconception. It is a social program. Then there is the myth about the account being raided because it is backed by bonds that pay interest (and have never defaulted on payment) instead of sitting in a vault earning nothing. Yet another persistent somewhat related myth is that SSA revenues are spent on things outside of SSA expense. All of the information on receipts and expenses is publicly available; simple calculations using the numbers will compute the balance so that you can easily see the money is all accounted for. Yes, some of it is owed by the federal government and they have never missed a payment. Yes, they try to put the squeeze on expenses so they have to pay it back at a slower rate but it is partly because they realize they will have to fund it when it goes in the red.
There are a lot of legitimate gripes about how they conduct business and the things proposed to make the budget smaller. But the things that many people scream about the loudest are fabrications.
EDIT - Oh yeah, it's been mentioned but since the age thing has been brought up again, I will bring up the rebuke again; increasing the age for full benefits does not increase the average age of retirement; it just shrinks the average benefit. An increase in average life span does not have a corresponding increase in overall population health in advanced age. It's partly driven by less people dying young and so they don't bring the average down as much and partly driven by medical advances allowing people with debilitating conditions to live longer. There is some increase in overall population health at an advanced age but not enough to drive participation in the work force significantly higher, especially when age discrimination exists (legally or not).
Last edited by ReachTheBeach; 11-13-2018 at 09:44 AM..
It is easy to pull the wool over the public’s eyes with all this political crap. Few understand how anything really works so never let facts get in the way of a good story
Take it up with Congress. The SS trust fund is pretty trivial compared to the $17 trillion to $20 trillion worth of red ink they are prepared to hose us with in the same time period. Yes, inflation is their only path out of the money pit. It worked for the Roman Empire, three times. Eventually, Roman coinage was almost worthless. The US dollar has already lost 90% of its value. If we do that again, 90% of the national debt will go away.
As always, don't keep your money in money. Spend it on stuff that won't end up in a landfill.
Nah. I’m just going to spend it. I should have made a very large dent in it 10 to 15 years from now. I figure that by the time I’m 75, my big discretionary spending years are behind me. My max Social Security check should cover the bills.
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