Is Social Security a Ponzi Scheme?


Well,  I  guess, if you consider the way the system works is that we take resources from  one group of people to  enrich another group of people, it is. Since most employees pay in, and not all who pay in live long enough to collect, it could be.    Should this be an issue?  It’s not like it’s a secret that it works on actuarial tables.

We are an urban society.  People no longer live on farms where they grow their own food, or with extended families.  We age and get to a point where we can not work.  In an ideal world, we would have all learned to budget and save money for a  future when we could not work.    We all would have made enough money  working at jobs top do so. We would not have had more children than we could support. We would have made enough to save for retirement.    We could have relied on our living expenses not rising—especuially land rents. Most of us have  learned that we should have  at least  six months of living expenses saved up  for an emergency.  Currently, many of our federally elected officials, not necessarily numerate themselves, who also get  pensions (http://www.factcheck.org/2007/12/congressional-pensions/)  have decided that it is more important to give military foreign aid  to foreign dictators, as well has support a bloated military budget (I do not begrudge soldiers, but  their paraphernalia  and ‘research’), than it is  to fund social security and medicare. Also, while they are complaining about the costs of all this–particularly medicare and medicaid, they do nothing to stop waste and fraud.

When  the Social Security system was initiated during the depression of the 1930’s,  urbanization  had started, and  many old people were losing their farms and  familial support networks.  Most people would NOT  save for retirement if not forced, nor could they make informed investment decisions.  We still are reluctant to even inform ourselves about budgeting, planning, and investing, and more reluctant to delay gratification.  I  continue to be shocked by people under  40 smoking cigarettes, and  people who carry a balance on their credit cards and can’t tell you what they bought.

Now, we hear from the media that the system is unsustainable.   A media controlled by old white men!  The issues are  that our population is not growing—we are not a population pyramid in this country, with many young people.  We are a population column.  At least that’s what they try to have us believe!  It’s too expensive to raise  more than  two kids for most couples.  In fact, most of the urban  world, better educated than  rural people, are choosing to  have smaller families.   The idea that the population is not growing to freed into Social Security is not  the problem, however—just an interesting and  goofy way of framing it.

The problem is that not all wages are subject to Social Security taxes.  The system is  never updated with the cost of living and inflation rxcept for pay-outs.   Were all income taxed, including capital gains, we’d be in fantastic shape.  In fact, if we didn’t allow the politicians to spend out tax dollars on military foreign aid, subsidies to  corporations, including farms, and wars—then claim we have a deficit—we’d be in phenomenal shape.  Also, since we are funding the system with inflated dollars, and salaries are more inflated than they were  when the system started,  were the system equitable,  there would be a huge surplus.  The irony is that the blowhards in Congress—who  do not pay into the system  once they are elected—but  get DEFINED PENSIONS, are telling us what to believe.  Chutzpah!

There is  one more issue: the many  dimwits with no skills, no entrepreneurial mindset, who’ve reached  almost old age, or  have spawned dimwit kids, who go on SSI.  Nobody counted on so many people gaming the system.  The fact of the matter is that if we didn’t pay these people to watch TV, drink,  smoke, and live on junk food, they’d be criminals—robbing us, or we wouldn’t be able to walk dow  a city sidewalk for the beggars.  It’s almost that way in my neighborhood now.    That’s why we have a welfare system–to prevent more of them from being  drains and endangering our lives. Some are good at gaming the system, and get physicians to cooperate. The rest become thugs.

Don’t let them get away with calling Social Security an entitlement.  If Congress can manage to  tax the interest your ‘earnings’ on a  savings account that is now  paying interest of .01%, they can manage to  make all wages/income subject to Social Security.

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