Eliminate Social Security - Dont 'Privitize it'

[DinoDoc]

Originally posted by Dissident
I fail to see how it is a pyramid shape. enlighten me.

The really scary part is how the Social Security system is funded. The best way to describe it is a legalized Ponzi or pyramid scheme.

A Ponzi scheme, named after the swindler who invented it, involves an investment swindle in which some early investors are paid off with money put in by later investors, with the person at the top taking in all the money and deciding who gets what (usually less than participants expect). The Social Security system involves the federal government collecting money from those who are still working to pay for early investors (referred to by the SSA as an "intergenerational compact"), while deciding when and how much those retirees get (usually less than participants expect). See the difference?

The similarity to the typical Ponzi scheme is even more dramatic when you consider what the federal government does with the Social Security taxes it takes out of your paycheck. You would think that the money collected goes into a separate fund that earns interest and helps fund Social Security benefits. Think again. Money that comes in either gets directly paid out to retirees or, worse, is loaned to another federal government agency that is financially troubled in exchange for an effectively worthless IOU.

http://www.finance.cch.com/text/c40s05d060.asp

[Ming]

Originally posted by DinoDoc
Do pyramid schemes ever end well for the suckers that contribute to it?

In pyramid schemes, people have the choice if they want to be suckers or not... With SS, we don't have a choice...

[Dis]

wikipedia doesnt' seem to think it's a ponzi scheme

http://en.wikipedia.org/wiki/Ponzi_scheme

However, while funding for a Ponzi scheme resembles that of a state pension system, the two are fundamentally different. State pension systems lack a number of basic features that define Ponzi schemes including:

* The belief that profits are coming from something other than the investments of others.
* Growth driven by enticement of high returns over a short period of time and, therefore, typically dependent on rollover of investments.

[Berzerker]

I may score libertarian on those internet quizzes, but I'm not really a libertarian.

I realize we live in a society. Even though I am responsible enough to invest my money far, far better than the goverment can do, most people cannot. They'd just blow their money.

It benefits society that the goverment furnishes irresponsible people with enough money to live when they are older.

Yup, you're liberal. The aroma of elitism surrounds you.

[Dr Strangelove]

I know this sounds cynical, but if you eliminate Social Security you can kiss America's #1 industry, and millions of jobs, good bye. I'm talking about the healthcare industry. Medicare still provides the lion sized portion of healthcare funding. If you eliminate it you might as well start kissing your local hospital goodbye. Does your small city have cardiac surgery, cath labs, dialysis and a whole slew of advanced medical facilities? Not any more it won't with Social Security and Medicare gone. Think you can share the cost of Mom's pension between the sibs? How about her healthcare costs? Heart surgery, breast surgery, stroke care, all of these can run you well over $20,000 a shot. Better take out a second mortgage. Oh, and by the way, who is going to take care of you when you get old? Think you can save up for it? Just out of curiosity, in this age of downsizing, mergers and small business failure how long does the average job last? Five years? Ten? What's the average time spent out of work between jobs? 6 months? 12? So do you really think that the average working person can really save up enough to pay for his/her pension and his healthcare? The average male is going to live 8 years beyond retirement, the average female 11 years. They will need 50,000 and 66,000 dollars to substitute for their Social Security pension. Insurance for a person that age will cost around one thousand dollars/month.

[Rufus T. Firefly]

Originally posted by Ming

And you think that SS is the cause of this...

Yes, I do. I think that guarenteeing an income and a basic level of medical care for retired Americans increased the quality of life of both those Americans and the rest of the workforce.

Do you not think elderly Americans are better off now than they were in the 1920s? Or do you think that's the result of the magic beans we mix in with their prunes?

[Rufus T. Firefly]

Originally posted by Dr Strangelove
I know this sounds cynical, but if you eliminate Social Security you can kiss America's #1 industry, and millions of jobs, good bye. I'm talking about the healthcare industry. Medicare still provides the lion sized portion of healthcare funding. If you eliminate it you might as well start kissing your local hospital goodbye. Does your small city have cardiac surgery, cath labs, dialysis and a whole slew of advanced medical facilities? Not any more it won't with Social Security and Medicare gone. Think you can share the cost of Mom's pension between the sibs? How about her healthcare costs? Heart surgery, breast surgery, stroke care, all of these can run you well over $20,000 a shot. Better take out a second mortgage. Oh, and by the way, who is going to take care of you when you get old? Think you can save up for it? Just out of curiosity, in this age of downsizing, mergers and small business failure how long does the average job last? Five years? Ten? What's the average time spent out of work between jobs? 6 months? 12? So do you really think that the average working person can really save up enough to pay for his/her pension and his healthcare? The average male is going to live 8 years beyond retirement, the average female 11 years. They will need 50,000 and 66,000 dollars to substitute for their Social Security pension. Insurance for a person that age will cost around one thousand dollars/month.

Great analysis, Doc!

[Traianvs]

Originally posted by Dr Strangelove
I know this sounds cynical, but if you eliminate Social Security you can kiss America's #1 industry, and millions of jobs, good bye. I'm talking about the healthcare industry. Medicare still provides the lion sized portion of healthcare funding. If you eliminate it you might as well start kissing your local hospital goodbye. Does your small city have cardiac surgery, cath labs, dialysis and a whole slew of advanced medical facilities? Not any more it won't with Social Security and Medicare gone. Think you can share the cost of Mom's pension between the sibs? How about her healthcare costs? Heart surgery, breast surgery, stroke care, all of these can run you well over $20,000 a shot. Better take out a second mortgage. Oh, and by the way, who is going to take care of you when you get old? Think you can save up for it? Just out of curiosity, in this age of downsizing, mergers and small business failure how long does the average job last? Five years? Ten? What's the average time spent out of work between jobs? 6 months? 12? So do you really think that the average working person can really save up enough to pay for his/her pension and his healthcare? The average male is going to live 8 years beyond retirement, the average female 11 years. They will need 50,000 and 66,000 dollars to substitute for their Social Security pension. Insurance for a person that age will cost around one thousand dollars/month.

[Sava]

I say eliminate all of the SOCIAL SECURITY TAXES on the poor and fund a SS program for seniors and disabled people with money taxed from the rich.

[Ming]

Originally posted by Rufus T. Firefly
Do you not think elderly Americans are better off now than they were in the 1920s?

I think the elderly are far better off because of better meds and healthcare. I also think it's a shame that some of the young members of the family don't seem to give a damn about there aging parents.

If people had been forced to save their money (ala SS but not in the government scheme of you are really paying for somebody else and you will never get back all you put in) in safe insured accounts... once we got over the hump of all the old people that weren't covered, the basic system would have been in place. Those that really needed help would be provided for like a welfare system... and less people would need that help because of a better retirement planning system. We would be FAR better with this type of system than the current SS system. And the standard of living for them would be a lot better than it is today.

[Rufus T. Firefly]

Originally posted by Ming


I think the elderly are far better off because of better meds and healthcare. I also think it's a shame that some of the young members of the family don't seem to give a damn about there aging parents.

Which they can afford -- sort of -- thanks to SS/Medicare.

I don't disagree with the rest of your analysis; compulsory saving accounts would have been a much better system, though it wouldn't have solved the immediate problem SS addressed in the 1930s. IBut just because SS is an imperfect -- even wildly imperfect -- system doesn't mean it isn't a force for good.

[Dr Strangelove]

Originally posted by Ming


I think the elderly are far better off because of better meds and healthcare. I also think it's a shame that some of the young members of the family don't seem to give a damn about there aging parents.

If people had been forced to save their money (ala SS but not in the government scheme of you are really paying for somebody else and you will never get back all you put in) in safe insured accounts... once we got over the hump of all the old people that weren't covered, the basic system would have been in place. Those that really needed help would be provided for like a welfare system... and less people would need that help because of a better retirement planning system. We would be FAR better with this type of system than the current SS system. And the standard of living for them would be a lot better than it is today.

Not all of us have access to decent investment advice. After my mother died I had a chance to invest a decent chunk of change in Microsoft and Walmart. Do you know where my broker put my money? Tyco and a number of other losers. You can guess how my investments have fared.

[Berzerker]

Doc, SS and Medicare are separate programs, eliminating one doesn't eliminate the other. And you say the healthcare industry can't survive as we know it without Medicare? Then why do so many hospitals shift their losses from dealing with Medicare onto private insurers? Without Medicare private insurers would cover old people just as they did before Medicare.

[chequita guevara]

Originally posted by Berzerker
Without Medicare private insurers would cover old people just as they did before Medicare.

Exactly, they wouldn't cover them at all.

[Apocalypse]

I'd like to eliminate SS, but that would mean old people staying in jobs longer, which would mean less jobs for me when I get out of college in a couple years, which means less money. Possibily less than I'd get even with SS taxes.