www.byzcath.org Forums General Discussions Town Hall Let's fight the AARP Scam

I have a qustion:

Why must we continue to fund what even some economists admit is a thinly veiled Ponzi scheme? The whole concept of SS as operated requires a continually larger input base to meet the payout demands. This is what got Ponzi in trouble. He couldn't get enough new (later) investors to pay in to support the demands of his earlier investors.
If our economy is based on inflation, without even a slight inflation, what drives COLAs (Cost Of Living Adjustments)? but if inflation drives COLA increases then so too must the SS payout rise to meet the COLA hence the need to collect ever more money from a new generation to pay a previous generation.

Dan wrote: Handouts from our children. That's what those programs our. Young families need to be able to function. They don't need a bunch of old selfish farts like us robbing them blind. Moreover, the whole SS stinks to high heaven. What other investment would anyone tolerate that only returns 1%? Lord, have mercy.

Have you looked at typical BANK savings returns lately? seems we have been suckered into believing that we are getting oh so much return on our investment! Not likely when compared to the inflation rate, that number that the FED chairman looks at every single day.

Personally, I don't expect SS to be there when I retire. I will have to have something prepared ahead of time of my own doing.

This country fights Socialism with one hand and protects its own brand of Socialism with the other.

just my 2 Rubles.

Steve

P.S just looking at my SS statement it states that I pay 6.2% and my employer pays 6.2% for a total of 12.4% of my salary.

The previous page shows me great numbers that come out to 38.3% of my current salary a monthly payments to me when I retire at 67 by which time the value of a dollar has gone down due to inflation. Still 12% in 38% out, where does the difference come from???
Maybe someone who is more economic-math driven could explain these numbers.

Administrator,

I missed the offending post. I am most thankful for your consistent and quick action against offensive and childish posts.

Dan L

Steve,

I'm not a mathmetician, or statiticaian, or even an accountant. All I have is common sense in this area.

We know that only a couple of years ago both parties agreed that SS was facing a crisis. As both the Dems and the Repubs explained it it made great sense to me.

Suddenly, one party which is known for raiding the system and after the other party proposes a plan suddenly says there is no crisis. Yet none of the projections have changed. Common sense tells me that the party that made a 180 degree turn on the issue has done so for other reasons than honest policy change.

Common sense also tells me that if the system started with a large number of payers but now have only 2 payers per receiver that the must be in grave danger of collapsing. Before it collapses unless serious changes are made the SS taxes are going to have to rise to ever greater heights. At what point do the people rise up and say, "We can't do this anymore?"

Let's privatize some of the system. I think 4% is way to small but perhaps it is necessary to start that small in order to make the needed changes without leaving anyone out. Let's cntinue to increase the age at which full reception can be made. I believe we ought always to have some of the system as it is now. The younger set aside something for the oldsters That seems a good thing. But, let's face it, the bulk of the wealth in this country is not controlled by 30 year olds with 2-4 children. It's controlled by the retirees. Why should the poor pay the bulk of retirement for the retired wealthy?

For practical and ethical reasons this system must be changed.

Dan L

We've been through this before, with links to assessments of the financial situation. So first, let's agree that if NOTHING is done, then not until ~2045 will benefits need to be reduced, and even then the system could pay out benefits at at 80% of present agreements indefinitely.

Such a cut is not desirable - there is bipartisan agreement on that. One possibility raised to address the problem was to dedicate budget. surplusses (remember them) to the fund. Bush thought otherwise, and suggested his privatization scheme. This scheme does nothing to address the near term problem noted above. In fact, it exacerbates the problem, drawing the system into deficit ~20 years earlier. This is what happens when you divert the revenue stream.

While there has been bipartisan support in recent years for shoring up the SS system, and for incentives to increase provate retirement investments, there has never been any significant bipartisan support for Bush's particular plan.

There is no veil at all. This is a largely a pay as you system, not an investment system. What got Ponzi in trouble is that he did not have the resources of the US government.

Dan, your common sense is failing to take enhancements in productivity into account. By example, this line of thinking would suggest that we are having an food supply collapse since, IIRC, the ratio of farmers to total workers has dropped by nearly a factor of one hundred over the past ~century.

Must we do this? Of course not. We could go back to the pre SS system and accept rampant poverty among retired folks. I would prefer the Singapore solution: if your parents are improverished, then you, as a thankless child, can be sent to jail. In fact, there are many things we could do to rid ourselves of the burden of people no longer employed.

But maybe we are a little better than that.

Steve: we fought atheist totalitarian terrorist govenrments that fancied themselved socialistic. I don't recall that engaged in much of a fight with, e.g., Sweden, or any similarly minded Western European governments.

Unfortunately, AARP is NOT an insurance company. There is a company that AARP has an exclusive contract with to sell insurance under their umbrella name, but AARP is no more an insurance company than the Elks or Masons. Lobby group might be a better descriptor.

I suppose the numbers bear out the premise of three (myself and two others) paying in to the system per one payout. What happens to those other two when their retirement comes? they will need two extras paying in, etc. The growth of the input base must be considerably larger than the payout. A system based on continual nonlinear growth as this cannot survive. There will be a limiting point where the payouts exceed input. Economist have been arguing over when this point occurs for the past several years!

When social security was first started things were very different in America. If the fund hadn't been plundered by so many politicians over the years, it might have held out considerably longer. But eventually there still would be the problem of how many need to pay in to satisfy the needs of those receiving payouts?

AARP is an orginisation set up to focus on the needs of retirees. If they don't focus enough on now, their constituents will be hurting. If they don't keep focus on later, the next generation of constituents will be hurting. Either way it's a tough battle to please at least one side.

I still say to all: Don't count on SS to actually be a significant income in retirement. Plan ahead.

...my two Lira (or other typically undervalued currency)worth.

Steve

Here is some reading that gives actual facts on the subject.

www.ssab.gov/Publications/Financing/report5.pdf [ssab.gov]

I myself plan to depend on the kindness of strangers.

You might actually fare better.

djs,

Thank you for that link. It would appear that people have known for sometime that a new approach is needed. I doubt that we will ever want to eliminate the system that has younger people helping the older but it appears that we need to shift that a bit in order that younger people today have some funds available to them when they retire.

Dan L

duplicate, sorry.