Is Social Security a form of embezzlement?

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Orwell is correct that the structure is somewhat similar. The government uses new entrants to finance people who have already paid in. The government asks for less money than will be paid out.(each person does not pay for the equivalent of one old person's living expenses in social security, and that's part of the financing problem)

Now it is true that ideally Social Security is not a Ponzi scheme(as those are unsustainable), and it is also true that Social Security was not originally so Ponzi-seeming (back in 1935 people didn't tend to live to/past 65 anyway, so social security really promised little), however, given that many people think that Social Security isn't sustainable today, it really does seem like a Ponzi scheme to them, as they pay in now for promised results later based upon others paying in, but those later results might not be sustainable due to increases in longevity and decreases in population growth. Does that explain this?

That being said, the intertemporal budget constraint is not very informative on whether a particular program is a Ponzi scheme, as if we include the possible existence of policies that are infeasible, it may be the case that a program that is technically sustainable will be scrapped based upon sustainability requiring politically infeasible actions(tax increases, cutting budgets). The issue is that politically infeasible actions are hard to model, but still are relevant for considering something a "Ponzi scheme".

First, there is zero credibility in quoting a government agency defending itself.

Second, a Ponzi scheme is ANY program that pays returns to separate investors from their own money or money paid by subsequent investors, rather than from any actual profit earned.

Social Security does not gain profits or dividends. People coming in today pay for those drawing today. Ponzi schemes WILL last for as long as it can find new suckers to buy into the plan. Social Security is forcibly taken from every worker's paycheck. There is no "fund" with money in it to pay benefits with. It has been stated repeatedly that as the average wages go down, the number of workers to retirees changes, etc., the program is in danger of collapsing. It's a Ponzi scheme. It could go on indefinitely so long as there were more people working than people drawing benefits.

In 1940, there were 159.4 people paying in for every one person getting benefits.

In 1960, there were 5.1 people paying in for every one person getting benefits.

In 2006, there were 3.3 people paying in for every one person getting benefits.

Long before 2006, the Social Security "fund" has been in crisis.

This is just a Ponzi scheme with better funding keeping it afloat.

Do you have a better solution so that old people who cannot get work to support themselves not die untended with disease and lack of food, clothing and shelter?

Last edited by Sand on 23 Mar 2010, 1:21 pm, edited 1 time in total.

I presume the above bit was your content.

First, Social Security IS NOT a retirement plan. It was never designed with those goals in mind. Again, it was just a plan to aid "widows and orphans" in a time when only the man was the breadwinner for a family.

When you had 100+ people paying for every one getting benefits, it worked and was sustainable.

That Social Security has been regulated into a "safety net" for old people with no retirement savings who can't keep working is the result of government mucking up what was perhaps a good intention at best.

Second, there is an ideological issue of what, if anything government OWES people; which I propose it does not.

We could create a program that mandates every person put 10% of their net income into a retirement savings plan that meets federal guidelines for investment safety (not the highest return but not in danger of losing money). This money would be for your retirement and the balance remaining would be paid out to your estate when you die. If you ran out of money, a welfare program would have to carry the balance.

I doubt such a program would be popular or constitutional. The government forcing a person to enter a contract is outside the scope of its authority. I doubt this would work if enacted because it is not society's job to compensate for your poor planning or poor judgment.

I'm not talking about people who can't work because of a disability, but in any case, a person could save a nice chunk of their earnings in a conservative investment fund their whole working life and one injury or illness could take it all away. A market crash (due to government being fiscally irresponsible) can consume an investment account overnight by loss of value or devaluation of the national currency). Why should you or I be obligated to provide for people who did not plan or prepare? Why should you or I expect anyone to do that for us? How much "freedom" will anyone have if government must mandate we do these things? Do you trust government to responsibly manage your retirement savings?

It's not a matter of choice. I am 84 years old. Without Social Security I would now be dead in a very miserable way.

We are all familiar with the story of the Grasshopper and the Ants. The Grasshopper is a happy-go-lucky bug who lives for the moment, while the Ants are hard working bugs who plan for the future. They work and they save. As the story goes, winter comes early and the Grasshopper has not made any preparations.

Now there are two endings to this story. One is the Democrat Liberal Commie Pinko Stinko ending; In this ending the Ants are obliged to care for the Grasshopper through the winter at their expense. That is because the Grasshopper has a right to livelihood. He has a right to be taken care of and the Ants have a duty to provide that livelihood.

The Conservative ending to the story is different. In the Conservative ending, the Ants hunker down for the winter because they have worked, prepared and saved. They make it through the winter alive and well. The Grasshopper, because he has not prepared freezes to death and good riddance to that lazy mooching bum.

ruveyn

Since you have openly indicated you wish me dead do you expect me to compliment you on your conclusion?

I wouldn't expect you to, but now I am tempted to make a compliment.

Since your comment is totally ambiguous I cannot respond appropriately.

Your knowledge of entomology is quite limited. In fact, ants are dormant through the winter. They hibernate completely and eat nothing.

The social structure of ants is communistic in the extreme. There is no special haven where ants go to retire when they reach old age. Once they are no longer of use to their society, their life is over.

Grasshoppers are much more self-sufficient, and are a tasty and nutritious food source in many parts of the world.

How or whether grasshoppers make it through the winter--I don't know, but there are always more grasshoppers the following summer.

The idea of ants actually feeding grasshoppers during the winter, when ants are dormant anyway, is completely false. I don't know where you found that in the Bible--possibly one of the apocryphal texts?

Maybe ant society could improve if they did provide a special haven for ants who were old or disabled. They would all be dormant through the winter, but able-bodied ants could come and feed them during part of the day during the summer.

the question of social security is "am i my brother's keeper?"


my position is "yes."

if you're looking for maximum efficiency, you could always replace social security at age 65 with a bullet to the head.


....seems kinda rude, though...


then again, it's apparently not very hard to convince americans that this is the plan.

Well, just being literal here, if you were dead, I doubt "miserable" would apply, but I get where you are headed with that thought.

I don't know what your life was like regarding ability to work, amount you earned, the opportunity you realistically had to save for the time when nobody would hire you because of your age.

I do know that I, myself, am mostly dependent on what my folks might leave behind to help carry me in my elder years. I already expect that I will work until I die because I will never be wealthy enough to not have to work anymore...well, to believe otherwise is to deny the reality going on around me.

Now, would it be NICE if there was a national retirement program to ensure I didn't have to worry about any of this? Yes.

Would I want government, as I know it to actually operate and manage affairs, to do this for me? Hell no.

It's easy to talk about all these "social programs" with idealistic visions of how it would be, but history bears out that government makes a mess of everything it touches, and most every program they create does more to enslave those who accept it than it ever gives in benefits.

It's this very issue going on in the health care reform debate. Everyone knows we need to reform how health care is done in the USA, but nobody who is familiar with how government operates wants the government involved with the reforming process. The latest garbage passing through Congress is more about the government taking more and more power for itself than actually helping people. What makes you think retirement would fare any better?

Actually, Soylent Green would be more efficient. We just eat them. This is what ants do when colony members get old. This is exactly what Ruveyn would have, since he really likes the way that ants socialize.

As much as I loathe GWB, I can't put this one on him. Any nation that provides tax breaks to corporations to move their operations overseas and pay that money into another country's economy instead of their own is inviting fiscal disaster. An economy, in this day and age, cannot be a closed system... but it need not be porous and self-destructive, either. The balance between population growth and monetary inflation is near impossible to maintain; a different system is ultimately needed.


M.

No? So the people who spent their entire lives paying money into Social Security are not entitled to receive any of that money back?