Is Social Security A Ponzi Scheme?

[Norseman82]

Here is an interestin[size=4]g[/size] article that appeared in the Chicago Tribune today:

[url="http://www.chicagotribune.com/site/newspaper/opinion/ct-oped-0919-krauthammer-20110919,0,6500656.column"]http://www.chicagotr...,6500656.column[/url]

Edited September 20, 2011 by Norseman82

[ardillacid]

[quote name='MIkolbe' timestamp='1316465919' post='2307174']
believe it or not, the pirate talk makes your posts more coherent.
[/quote]
Well, one would have to spell words correctly for the fiddler to catch them.

[Maggyie]

[quote name='Norseman82' timestamp='1316361998' post='2306249']


But for such policies, the insurance company factors in a "reserve" as part of the premium in order to invest it. I have to question whether the federal government does so with the Social Security trust fund, or whether they factor in enough of a reserve.
[/quote]

I believe your instincts are correct and the government does NOT invest the trust fund. In fact I think that might be highly illegal under the current arrangement. Remember under Bush 43 when they were talking about "privatizing" Social Security and letting people invest in the stock market? Sweet sally, nobody will ever suggest a goober idea like that again.

[Winchester]

[quote name='Maggie' timestamp='1316264156' post='2305797']

See above post: in the USA, taxes including SS taxes are authorized by the people through their representatives.
[/quote]
We have no control over our representatives. The only hope is to vote for an opponent in the next election, and the opponent, being a member of the class that benefits directly from the increased power that comes with tax schemes, is unlikely to be a representative of the rights of the individual over the state. There is virtually no hope of eliminating Social Security, and choosing to simply not participate isn't an option available to most employers and employees. It is not backed by mutual consent of any sort, but by threat of force against those who would choose to keep their property.

[dairygirl4u2c]

grammar and such aside, i accept ya'll's surender.

[quote name='Winchester' timestamp='1316528522' post='2307582']
We have no control over our representatives. The only hope is to vote for an opponent in the next election, and the opponent, being a member of the class that benefits directly from the increased power that comes with tax schemes, is unlikely to be a representative of the rights of the individual over the state. There is virtually no hope of eliminating Social Security, and choosing to simply not participate isn't an option available to most employers and employees. It is not backed by mutual consent of any sort, but by threat of force against those who would choose to keep their property.
[/quote]

that's being a little dramatic about it. they could just as easily tax every one more directly instead of doing it through payroll taxes, and such. most of the chumps opting out of SS would probably end up becoming a blight to society anyway. I mean, i suppose we could just let them go unto their own demise... but.
and yes, it would very much be part of the 'general welfare' per the constitution to lay such taxes for said reasons.

im actually pretty rugged i guess and conservative, cause i would actually considering letting people go to their demiss. my only issue is that most people would opt out cause they ae so poor and somehow squander their money on getting by. we could always make regulations on how to retiain money for retirement, but then it's not much further to just keep SS>
with that said, as even that guy who in that recent link who (wrongly) calls it a ponzi scheme said... social security is 'the most vital, humane and fixable of all social programs. The question for the candidates is: Forget Ponzi; are you going to fix Social Security?'

Edited September 20, 2011 by dairygirl4u2c

[Winchester]

[quote name='dairygirl4u2c' timestamp='1316533558' post='2307606']
grammar and such aside, i accept ya'll's surender.



that's being a little dramatic about it. they could just as easily tax every one more directly instead of doing it through payroll taxes, and such. most of the chumps opting out of SS would probably end up becoming a blight to society anyway. I mean, i suppose we could just let them go unto their own demise... but.
and yes, it would very much be part of the 'general welfare' per the constitution to lay such taxes for said reasons.

im actually pretty rugged i guess and conservative, cause i would actually considering letting people go to their demiss. my only issue is that most people would opt out cause they ae so poor and somehow squander their money on getting by. we could always make regulations on how to retiain money for retirement, but then it's not much further to just keep SS>
with that said, as even that guy who in that recent link who (wrongly) calls it a ponzi scheme said... social security is 'the most vital, humane and fixable of all social programs. The question for the candidates is: Forget Ponzi; are you going to fix Social Security?'
[/quote]
[img]http://www.movietrailerreviews.net/home/wp-content/uploads/2011/01/pulp_fiction_sam.gif[/img]

[MIKolbe]

well allow him to retort......

[kamiller42]

[quote name='Maggie' timestamp='1316486181' post='2307352']
I believe your instincts are correct and the government does NOT invest the trust fund. In fact I think that might be highly illegal under the current arrangement. Remember under Bush 43 when they were talking about "privatizing" Social Security and letting people invest in the stock market? Sweet sally, nobody will ever suggest a goober idea like that again.
[/quote]
<sigh> More proof social security is a ponzi scheme. The investors have no idea how the cash flows.

The government DOES invest social security funds in government securities, e.g. federal bonds. This allows the beneficiaries to receive more from the fund than they give. This is how is supposed to work IN THEORY.

What has been happening is Congress has been raiding the trust fund. So how is the government paying current beneficiaries? Two ways: borrowing by selling bonds to investors which pay dividends; dividends to the government is like paying interest on a loan. Second way is to simply print money, aka "quantitative easing."

If you can't watch the whole film, at least watch minutes 16 to 18 in this video.
[media='']http://video.google.com/videoplay?docid=270867650600562607[/media]

For a more entertaining take, here's Crowder.
[media]http://www.youtube.com/watch?v=1Ge5hB6JLfY[/media]

[Maggyie]

The point of QE2 (or QEx at this point) is not to pay SS liabilities.

Your first video (minutes 16-18) accurately describes the tax problem with SS (not enough taxes and too many benefits). Behond, the main reason SS is not a Ponzi scheme. This information about the problems with funding is public knowledge. The data is available and discussed everywhere. What makes a Ponzi scheme a Ponzi scheme (and illegal) is the deception of investors.

And again, SS is not an investment program. It is NOT a 401k program. It is a social program that certain people don't like. However most people like it (and it's quite effective for the elderly), and feel it just needs to be fixed and funded correctly.

The last video, Crowder, I could not watch more than 1:07. He doesn't know what he's talking about. Here's a good site if you're interested in reading about all things economic: [url="http://www.zerohedge.com/"]Zero Hedge[/url]. Warning, it's mostly males in IB so it can be quite salty. It does take a conservative approach but it's people who are actually in the know.

Isn't it interesting how the concept of "SS is a Ponzi scheme" only came up after a candidate for President uttered the words? Funny how nobody was characterizing it that way before. Interesting.

[kamiller42]

[quote name='Maggie' timestamp='1316615627' post='2308088']
The point of QE2 (or QEx at this point) is not to pay SS liabilities.

Your first video (minutes 16-18) accurately describes the tax problem with SS (not enough taxes and too many benefits). Behond, the main reason SS is not a Ponzi scheme. This information about the problems with funding is public knowledge. The data is available and discussed everywhere. What makes a Ponzi scheme a Ponzi scheme (and illegal) is the deception of investors.

And again, SS is not an investment program. It is NOT a 401k program. It is a social program that certain people don't like. However most people like it (and it's quite effective for the elderly), and feel it just needs to be fixed and funded correctly.

The last video, Crowder, I could not watch more than 1:07. He doesn't know what he's talking about. Here's a good site if you're interested in reading about all things economic: [url="http://www.zerohedge.com/"]Zero Hedge[/url]. Warning, it's mostly males in IB so it can be quite salty. It does take a conservative approach but it's people who are actually in the know.[/quote]
Sorry. The video slider at Google Video apparently is not very accurate. That's not the clip I wanted you to see. I found [url="http://www.youtube.com/watch?v=gGgjU-h_xQw"]a 34 second YouTube[/url] which extracted out the part I wanted you to see. (Hopefully editor doesn't strip my media tag.)

[media='']http://www.youtube.com/watch?v=gGgjU-h_xQw[/media]

Social security is a mandated investment program. It is an investment in my retirement future. I periodically get a statement showing what I will get in return (ROI) for my mandatory contributions.

True. It's not a 401k. 401k's are voluntary. That is about the only significant difference.

I browsed your Zero Hedge site. They are disagreeing with you.

Here is what they say about the data being "available and discussed."

[size=3][font=courier new,courier,monospace][color=#404040]The U.S. Treasury and the Congressional Budget Office (CBO), and additional hours searching the Web for other published analyses, I can state with some authority that [b]there are no published analyses or accounts of Social Security which incorporate the actual outlays and receipts from fiscal year 2010 in a context which includes the Social Security Trust Fund.[/b] [/color][/font][/size]

[size=3][font=courier new,courier,monospace][color=#404040]In other words, all published analyses are based either on SSA or CBO estimates, not the actual numbers from the Treasury, and all media reports I could find are simply cut-and-paste repetitions of these estimates. [/color][/font][/size]

[size=3][font=courier new,courier,monospace][color=#404040]I cannot find a single source which provided any evidence of digging through the data and assembling a coherent picture of the Social Security system. [/color][/font][/size]

Source: [url="http://www.zerohedge.com/article/guest-post-how-fix-social-security-4-point-plan-faces-brutal-realities"]This[/url] and [url="http://www.oftwominds.com/blogjan11/Social-Security-fraud01-11.html"]This[/url]

At best, you can say social security is a "borrower-as-you-go" program.

[quote]Isn't it interesting how the concept of "SS is a Ponzi scheme" only came up after a candidate for President uttered the words? Funny how nobody was characterizing it that way before. Interesting.[/quote]
I posted a reference to an article outlining previous mentions of ponzi scheme. I addressed it to you and tried to get your attention by putting your name in all caps.

Here is a summary from the [url="http://www.nationalreview.com/articles/276859/perry-and-ponzis-stanley-kurtz"]referenced article[/url] outlining previous mentions of social security as a ponzi scheme:[list]
[*]1967 - Newsweek article by Nobel laureate Johnathan Last in an attempt to defend SS as a sustainable ponzi scheme. He retracted his defense in a 1978 article.
[*]1985 - WSJ on 50th anniversary of SS refers to it as a ponzi scheme.
[*]1987 - In U.S. News & World Report excerpt of Ben Wattenberg's book [u]The Birth Death[/u], Ben, who worked for LBJ & Hubert Humphrey, called SS a ponzi game.
[*]1988 - James Miller, Ronald Reagan budget director, called SS a ponzi scheme in a speech to the National Press Club.
[*]1995 - Michael Barone, a commentator, refers to it as a ponzi scheme.
[*]1995 - Robert Shapiro, principal economic adviser to Bill Clinton in 91/92 campaign amonst other things, titled a section of his article on SS in [i]The New Democrat[/i] "National Ponzi Scheme."
[*]1996 - Pulitzer prize winner William Raspberry called SS "a massive ponzi scheme" in a [i]Washington Post[/i] article.
[*]1996 - Jonathan Alter of Newsweek complements Ross Perot Reform Party candidate Richard Lamm, who called SS "a well-meaning ponzi scheme."
[*]1996 - Matthew Miller of [i]The New Republic[/i] calls SS a ponzi scheme.
[*]1996 - Senator Simpson of Wyoming calls SS a ponzi scheme in interview.
[*]1996 - Well-known liberal Michael Kinsley calls SS a ponzi scheme in a [i]Slate[/i] column.
[*]1998 - Former NY Times executive editor called SS a ponzi scheme, a "massive lie," in a [i]New York Times Magazine[/i] article.
[*]1999 - Standford economists Victor Fuchs & John Shoven in an LA Times Op-Ed.
[/list]
That is a collection of liberal and conservative individuals. No. Perry is not the first.

Edited September 21, 2011 by kamiller42

[cmotherofpirl]

Social Security had enough money in it until the government put the money (which was supposed to be safely tucked away) into the general fund and spent it. Its doom was sealed by the wanton murder of 70+ million future wage-earners by abortion.
Now its a Ponzi scheme.

[Jesus_lol]

uggg, the fact that it isnt working that well does not make it a ponzi scheme.

[kamiller42]

[quote name='Jesus_lol' timestamp='1316650439' post='2308339']
uggg, the fact that it isnt working that well does not make it a ponzi scheme.
[/quote]
There are differences between a government run ponzi scheme and a private market ponzi scheme. Both are still ponzi schemes.

[Jesus_lol]

[quote name='kamiller42' timestamp='1316651297' post='2308344']
There are differences between a government run ponzi scheme and a private market ponzi scheme. Both are still ponzi schemes.
[/quote]


you never really answered my earlier post.

[dairygirl4u2c]

at worst, it has a ponzi aspect to it, given people are at first getting more than they put into it, but then later, probably not. it still is an operation, that is accomlishing something substantive, that actually exists, that almost surely isn't going to fail, etc etc... see the last big post i made on this. so, it's not a ponzi scheme.
ive not seen anyone give a real analysis of 'here's the definitoin, here's it applied'... except me, and that nobel prize winner who said it's not a ponzi scheme. even poster above who says it is one, only points to one aspect that is ponzi, and doesn't address all the other components... there's no real analysis going on.
maybe those in opposition to me, would argue, that there's merely some components that are not ponzi? maybe, but the components overwhelmingly point to it being nonponzi. at least as ive seen analyzed.

most of the people who call it a ponzi scheme, who are credible and highly respected... are probably talking in nonprecise terms. im sure at some point in exasperation, even i'd ahve aclled it a ponzi sheme. but if asked pointedly, i'd say not exactly, and not really much at all.

Edited September 22, 2011 by dairygirl4u2c