Some facts about social security that many people don't know

What would happen if your life insurance or health insurance company stopped collecting funds? More would be drawn out than contributed.

Are insurance policies Ponzi schemes?

Don't forget, the government is going to borrow money. What's wrong with borrowing it from SS rather than foreign nations?

What should SS do with it's overpayments? Earn no interest?

 

Cause I didn't have a choice in putting money into a fund that gets syphoned to pay for other people handouts.

 

No. It bills you based on the statistical likelihood that you will need to collect, offset by what it makes in it's investments.

The government is borrowing money needed for operating expenses, with no forseeable end. If the government was a company, it would be bankrupt.

ROTFL. Have you read what I wrote? SSI collects no interest!!!!!!!!!!!!!!!!!!!!!

 

I read what you wrote. You are wrong.

SS does collect interest.

It's not a discussion if you make up facts.

 

Jason: "Q: Which Political Party decided to start giving annuity payments to immigrants?

AND MY FAVORITE:

A: That's right!

Jimmy Carter and the Democratic Party.
Immigrants moved into this country, and at age 65, began to receive Social Security payments! The Democratic Party gave these payments to them, even though they never paid a dime into it!"

Unless you have some evidence, and you don't, I'm calling bull(*)(*)(*)(*) on this. I'm 70-years old, a U.S. citizen, did not pay into SS for the required 40 quarters so I get no benefits. What kind of nitwit thinks you get SS just because you turn 65.

Paying taxes in the U.S. is not privilege limited to citizens. Non-citizens can get SS cards and accounts and will pay FICA taxes and income tax and the plethora of other taxes. A friend of mine is working quite legally in the U.S., pays income tax, pays FICA, and he (*)(*)(*)(*) well deserves to draw SS if he puts in the 40 quarters. Oh, that also gets him Medicare.

If a Mexican had paid into SS for 40 quarters, he gets SS benefits. That's the contract. I realize liberals have no respect for contracts, though, but conservatives generally do.

 

Sort of. It collects interest in the form of increased contributions from future beneficiaries.

Current contributors pay a little over 12%. Soon that will rise as income taxes are used to repay social security debt.

 

ROTFL - Just like your 401k collects interest when you borrow from it.

 

Okay say we except this from you, now you suggesting that 2-3 people would have to support every individual on SS? More then likely two, so each of these suckers will be looking at a SS payment (not taxes or Medicare) 12-15 grand a year! Hope they are making more then Minimum Wage!

 

I can't even follow this flawed logic! Comparing I guess Annuities to SS??? Geez people get a life or some sort of smarts to ya! If you stop paying into a Annuity your pay-out will of course go down or be limited in amount of payments. With an Annuity you have a contract, much like people thought back in the day of Roosevelt when people thought they could believe a politician! I guess some suckers still survive, Oh Hail the Tyrant Washington DC, the saviour of the little guy, down and out loosers of the WORLD!

 

What do you call the interest on the treasury bonds that the SS fund is holding?

You do know that the money the government borrows from the SS trust fund earns interest, don't you?

 

Another person who doesn't understand the basics of SS.

 

Do you think all insurance policies are annuities?

Changing what I said to make your point is not really debating.

Insurance companies don't have the funds to pay off all their policy holders at once. When the economy went south and the insurance companies were not making enough on the investments made with their clients overpayments they had to raise rates.

It sounds just like the way SS is set up. When inflation makes the outgo less than the income changes must be made.

 

Who pays that interest?

The same taxpayers who pay Social Security premiums pay the interest on those government debts.

So, not only are they required to pay their Social Security taxes, but they also have to pay for the government's debt to Social Security. Thus the interest that Social Security collects is in the form of increased payments from current and future contributors.

 

What would you have them do with the SS overpayments? Not lend them out at interest?

The government is going to borrow money. Do you think that we should borrow only from foreign governments?

How would that help?

 

None of that changes the fact that the Social Security interest is in the form of increased payment obligations from current and future taxpayers.

 

Is this about Social Security or is it about the government spending more than it takes in?

Government spending is a whole other thing.

But to look at it another way; insurance companies don't sit on the premium payments they collect. They invest those funds. If they didn't we might not be able to afford insurance.

So it's a good thing that the U.S. government wants to borrow money. I don't know of a more secure debt for SS to hold.

 

You can't separate the two. Social Security is paid for both by Social Security taxes and now by income taxes.

If you look at the way the money moved, you can see that it is a bit of a shell game as well.

Initial contributors paid only about 2% of income toward the program, no money was invested and all money came from that contribution. Every few years the government increased that contribution requirement. So from the beginning, the program was paid for by bigger and bigger contributions from current and future taxpayers.

Then the government got a clever idea on how to get those increased contributions without admitting that they were taking them. They increased the contribution requirement more than was necessary at the time to balance the program. They then "invested" the excess in bonds. The money from those bonds went right back into the general budget.

Here is the kicker - that increased budget revenue provided by Social Security contributions allowed the government to spend as they needed without increasing income taxes. So the people contributing to Social Security had increased contributions to Social Security, but reduced income taxes. If you consider the money by use, rather than by earmark, they paid less than 5% of their income to Social Security.

Recently Social Security expenditures began to equal and started to exceed the receipts. Current taxpayers are paying 6.2% of their direct income to Social Security plus a little of their income taxes. This balance will increase until people are paying 7% or more of their income into Social Security. This is how it is slated to remain solvent.

So the only way that Social Security is able to remain solvent is by taking larger and larger percentages of taxpayers' income.

 

This may be true at this time.

We are also in the middle of an economic depression. Working peoples' pay has been stagnant and not increased in proportion to the increase in the size of the potential work force.

No government program will look good in a sick economy. Let's hope it's temporary.

 

Regardless, it was bound to happen eventually. That was the point of creating the trust fund in the first place: to allow Social Security benefits to exceed its contributions.

That is the part that irritates me - the fact that current and future contributors have to pay a larger percentage of their income to provide benefits to people who contributed less. Many of the people currently collecting never paid more than 5% of their income and paid far less during much of their working lifetime. Yet current workers have to contribute over 6.2% of our income to pay them back.

Basically the workers and politicians of yesterday set up a program that would allow them to pay a tiny percentage of their income to their parents and grandparents but would obligate the next generations to pay a much larger amount back. No one would accept this in any other context. If I paid $1,000 to my neighbor, then came to you and demanded $2,000, you would laugh at me. Yet with Social Security, everyone seems to just accept it.

 

My parents paid $20 for a trip to the grocery store that now costs over $100.

Inflation did that.

But my parents were also able to buy a new car every few years. Workers doing those jobs today will never be able to afford even a late model used car.

The class war waged by the owner class did that.

Social Security isn't the problem. It's a symptom of a greater problem symbolized by the Reagan/Clinton war on the American worker.

If that sounds too left wing for you take a look at income disparity and the wage stagnation of the working class since 1980.

Social Security (and most government programs) is/are dependent on a good economy. Until we do something about that all programs are at risk.

 

The 4hing conservatives don’t want you to know about SS is that it is 25% more efficiency then private retirement accounts, meaning when conservative advocate privatizing SS they are advocating making your retimernt funds 25% lower. Why would they od this you ask? Well because then wall street would get richer

 

SS provides 25% more in returns then other alternatives. So bacially when you rail against Socail security you are wanting to shrink your retirement money by 25%

 

Only if you are one of the few people who are foolish enough to count on Social Security for their primary retirement income or lack the foresight to prepare for your own retirement.

Otherwise, you just see a potential tiny drop in a relatively unimportant part of your retirement income.

More importantly, that rate of return is very biased. It doesn't consider the different rate of return that estates of people who die before retirement see - which is a 100% loss with Social Security in most cases. It also doesn't compare any other possible investments. The rate of return that the average person retiring now sees on their investment is roughly 2%. A person investing in average bonds would see a higher rate of return, even considering any maintenance fees that might be charged. If that same person invested in average mutual funds early on and gradually shifted to bonds, they would see a FAR higher rate of return.

But I'd be happy to risk it. Exempt me from all Social Security contributions and pay me back what I've contributed and I'll give up all claims to any future benefits. I'm sure I'll come out better than under Social Security. I wonder how many people would actually stay in the program if they were given the option to leave. . .

 

If you were to take the same amount of money that goes to SS and invest it ins one private account or stocks then you would end up with 25% less.
So the solution to SS not being solvent is to take all the money people invest for retirement into the private sector and just add it to SS

 

Show a source for that claim. The last report I read shows a 2% return from social security.