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The ‘Ponzi’ Sound Bite on Social Security

Written on Tuesday, September 20, 2011 by

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Many in the media and in politics have gone ballistic over the fact that Texas Governor Rick Perry called Social Security “a Ponzi scheme.”

Although many act shocked, shocked, as if Rick Perry had said something unthinkable, Governor Perry is not even among the first thousand people to call Social Security a Ponzi scheme. Not only conservatives, but even some liberals, have been calling Social Security a Ponzi scheme for decades.

Moreover, neither the media nor the politicians who are carrying on over the use of the words “Ponzi scheme” show the slightest interest in any hard facts that would tell us whether Social Security is or is not a Ponzi scheme. It is a “gotcha” moment, and that is apparently what some people live for.

What makes this nonsense become fraud is the insinuation that calling Social Security a Ponzi scheme means advocating that people who are depending on Social Security be abandoned and left with nothing to live on in their retirement years. That is the big scare — and the big lie.

People getting Social Security checks are going to keep on getting those checks. Nobody has advocated anything else, or would dare to cut off a financial lifeline for millions of people.

What is at issue is the particular mechanism through which people can be provided for in their retirement years. Some politicians loudly proclaim that they want to “save Social Security.” But programs exist for people — and it is the people who should be saved.

Whether or not the checks that retirees continue to get say “Social Security” is beside the point. The point is that they keep on getting the money they need to live on, whether that money comes from a different institution or from Social Security.

The fundamental problem of Social Security is that the irresponsible way its finances are set up, and the changing demographics of the country, mean that there is simply not going to be enough money in its trust fund to pay today’s young people what they are legally entitled to, when time comes for them to retire.

The money is just not there, some of it having been spent for unrelated purposes. Making up a growing shortfall, as baby boomers stop paying into the system as they retire, and start drawing money out of the system, would mean ever-increasing burdens on the taxpayers that the taxpayers are unlikely to put up with.

Social Security worked fine when the small generation from the 1930s received pensions from the money being paid in by the larger and more prosperous “baby boom” generation that followed. It worked fine when the average life expectancy of the first generation was not long enough for most of them to collect Social Security checks for more than a few years — if at all.

Declining birth rates and greatly increasing lifespans have created havoc with Social Security’s finances, which are based on having the first generation’s pensions paid with money collected from the second generation — and the second generation’s pensions paid by the next generation, etc.

Any private financial scheme set up in a similar way would be illegal. That is why Charles Ponzi went to prison.

The politically expedient way of dealing with the situation is to “save Social Security” with short-term fixes that kick the ever-growing shortfall down the road for some later Congress to deal with — or to be overwhelmed by, when voters refuse to pay ruinous tax increases to keep the system going.

Another way to deal with the problem is to give younger workers the option to set up privately-owned retirement accounts instead. These accounts would be beyond the reach of politicians, and based on each generation setting aside money for its own retirement. Studies have shown that private accounts would pay retirees far better than Social Security.

Meanwhile, people currently depending on Social Security can continue to get what they were promised, even if that requires taxpayer subsidies for the current generation of retirees — as distinguished from subsidizing unending generations to come.

These are the kinds of options that need serious discussions, instead of “gotcha” sound bites. Sound bites are usually not very sound, and they are an irresponsible way to discuss serious issues.

To find out more about Thomas Sowell and read features by other Creators Syndicate columnists and cartoonists, visit the Creators Syndicate Web page at www.creators.com. Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University, Stanford, CA 94305. His website is www.tsowell.com.

COPYRIGHT 2011 CREATORS.COM

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  • brunch20

    I am nearing retirement and have been paying into social security my entire working life (45 Yrs). My Social Security is considered part of my retirement and is required to support both my wife and myself. I do not consider Social Security a Ponzi Scheme. It is no different than most company retirement plans where retirement is considered part of the package that is included when we select the companies that we work for. This money was set aside for retiremnt support and is protected for our retirement. However, Social Security money has been unprotected and taken from that system to fund other government programs. I believe that we need to not only stop government waste, we need to stop the unnecessary spending and support we provide to forgin countries at the expensie of our own. We have invested in our retirement and should expet a full return on that investmnt.

    • alex

      it really doesn’t matter wheather you consider s/s a ponzi scheme on ,thats what it is. if the money had been invested as it was supposed to be there would be plenty there but you dont get interest on iou;s

    • Wayne937

      Alex, social security is not a ponzi scheme regardless of who says that. Earlier I figured this up on a person working for 47 years paying in $3750 per month making $25,000 per year. Remember, between the employee. and the employer. the government gets 15% of the persons wages. I used a retirement calculator and the amount of money being invested at 6% (this was on the low end of the scale for several years) a person would have earned $962,116.98 in their retirement. This would amount to $6167.41 per month, or over $70,000.00 per year for the social social recipient. Of course we have to take in all kind of variables as we know that some people do not work this long for various reasons. However, since the inception of the SS program people used to work many years at one job. My brother worked over 40 years paying into SS. I have know 0thers who have worked in excess of 45 years at their job. After paying out 15% for all these years toward SS, I feel those people on social security earn every penney they get. If they government had invested this money wisely (had not used it for the general fund) this fund would still be in good shape. It is those good for nothing Congress Member who wastedm this money. Be diligent of the Congress Member you will be voting for. Voting for Congress Members should be more important than voting for a president.

    • VARENA BARBER

      True, the money should be there; but my son
      has been paying into social security all of
      his working years and when he is illegible
      for retirement, unless the government pays
      back some of those IOUs he will never
      receive social security.
      The truth does hurt.
      use my nickname – Queen Bee

    • QUEEN BEE

      MY COMMENT WAS SUPPOSE TO USE QUEEN BEE.
      PLEASE REMOVE MY NAME. THANKS

    • Lone Star

      Wayne937, you are living in ‘La-La Land’. Social Security is not only a real live Ponszi Scheme, it is a slush fund with which to buy votes. Have you ever been in your local Social Security office? MOST of the people in there are looking to set up Social Security payments for disabilities or because they are “Poor, struggling, illegal aliens needing help”. How much did these folks pay into the system? Unless you can get a window installed in your belly button, you’d better pull your head out of there or you’ll bump into things. The constitution gives the Federal Government only TWO mandates…Postal Service and National Defense. Why does anyone think they can manage ANYTHING ELSE? How’s that Post Office thing working for ya? How ’bout that Education Department? How d’ya like that Department of Energy?

    • George

      Lone Star, you are right, I’ve seen this in S/S office myself and this is where a lot waste is going. They’re giving our money to people that are not eligible. I’ve seen people apply that look like they’re more well off than me. Expensive cars that I can’t afford and so on.

    • Gar

      Wayne, go to the Supreme Court ruling of 1937, Helvering v Davis. You will discover that the money collected was am income tax and excise tax, not an investment. The treasury collected the revenue and was not allowed to invest it; contrary to some of the thoughts above. Heree is one that will really get to you. The ruling in 1960 stated we do not have a legal right those dollars that were collected.

    • Whackajig

      Yeah, let’s all become government dependent. That will sure relieve the masses of having to think or act on their own behalf.

      WTF ever happened to self sufficiency? What happened to individualism? Oh yeah, now I remember, big government has made those things unnecessary.

      Only the stupidest of people deny the fact that SS is a PONZI scheme, which by definition is a scam where recipients must depend on the payment of monies by new players. Face it “Brunch” your dough was spent a long time ago and if there is no Ponzi, you get no money.

    • Whackajig

      Whackajig says:
      Your comment is awaiting moderation.

      September 20, 2011 at 11:53 am

      Yeah, let’s all become government dependent. That will sure relieve the masses of having to think or act on their own behalf.

      What ever happened to self sufficiency? What happened to individualism? Oh yeah, now I remember, big government has made those things unnecessary.

      Only the stupidest of people deny the fact that SS is a PONZI scheme, which by definition is a scam where recipients must depend on the payment of monies by new players. Face it “Brunch” your dough was spent a long time ago and if there is no Ponzi, you get no money.

    • sid

      it wasn’t intended to be, but politicians TOOK the money, and spent it, and with newly taken ss tax deductions, they pay off the older members. sounds a lot like bernie!!!

    • Wayne937

      Whackajig, Independent people cannot be controlled by the government as easily as those who depend on the government for handouts. This is why the government like to get their tentacles wrapped around people, states and cities. If you accepted their aid you would lose your independence. I worked for a city back in the 60, 70’s and 80’s. I remember having a fellow come to our city telling us that we, the city, should never accept aid from the Federal Government. Guess what? years later they did and the the Federal Government basically took control. I believe this has now happened to all our States and city governments. This is why we as a nation have lost our independence. I don’t believe we will ever get independence for our states and cities again. Once something is taken over by the Feds it is gone forever. As far as I am concerned this is direct Communism to the fullest extent.

    • Paul Wilkes

      Those who “invested” with Ponzi did so voluntarily. Social Security is more like a Chicago protection racket. You pay into it or there will be serious consequences.

    • http://www.daveramsey.com/home/ Scott

      Agreed and thank you. I was hoping I wasn’t the last one on earth that realized the very existence of SS itself is a joke.

      Government: “We don’t think you’re mature/intelligent enough to realize that one day you’ll be old. We’ll save for you.”

      No thanks. They can keep every dime I’ve paid in if they will just promise to take no more. Or at least for the love of Pete privatize it so that the government can’t get to it and it can earn a decent rate of return. Every one of my investments does better than my SS.

      Lets say that SS does work out for you. The average SS check is $1090. Boy that sounds like a swell retirement. I’d like to retire with a little more dignity than that.

      Either way, I don’t factor SS into my retirement planning. My way of looking at it – plan or starve.

    • Patrick Duffy

      Your belief that SS is not a Ponzi scheme does not matter. It’s a fact. There never was and never will be a ‘Social Security Trust Fund’. All payments come out of the ‘general fund’ (they always have from day one), and Ronald Regan made that point clear way back in 1964 when he gave his famous speech, “A Time For Choosing”. Please listen to it. It’s on U-Tube. What you thought you were paying into was nothing more than politicians stealing your money. They didn’t put it in an account with your name. They spent the money, and now you can only rely on their promise to steal from the next guy with taxes to give you what you think you deserve. You didn’t have enough babies to bring in ‘new investors’, to pay for your retirement by taxing the next generation. The ponzi pyramid is shrinking, and the colapse is on the verge. All those years you were paying into the system, you were paying your parents social security, (and other welfare payments decided by politicians to buy their votes). The fact that they used the money for something else, is more proof that your payments were just another tax, and you allowed yourself to be taxed with the promise of a future return, which was based on a lie. It was a tax, and the Supreme Court has ruled as much. The money is gone. You are entitled to nothing.

    • ARMYOF69

      “The most difficult thing to face in life , is TRUTH”

    • ARMYOF69

      Jack Nicholson was right.

    • Wayne937

      Patrick, in the very begining I believe that there was a talk about using a special SS trust fund for that very purpose. I checked and found out the government did in fact create a special social security trust fund beginning in Jan. 1937. I believe you owe me an apology, Patrick. Here is a synopsis of a very small of this website: If they had left the money alone in that fund we would be in a lot better shape than what we are currently in.

      Trust Funds

      After Social Security numbers were assigned, the first Federal Insurance Contributions Act (FICA) taxes were collected, beginning in January 1937. Special Trust Funds were created for these dedicated revenues. Benefits were then paid from the money in the Social Security Trust Funds. Over the years, more than $8.7 trillion has been paid into the Trust Funds, and more than $7.4 trillion has been paid out in benefits. The remainder is currently on reserve in the Trust Funds and will be used to pay future benefits.
      If you would like to read more see this website: http://www.ssa.gov/history/briefhistory3.html
      Go about 1/2 way down and look for “Trust Funds”

    • Mark

      brunch20, so-called “social security” was always a pay-as-you-go program from the very beginning. No money was ever “set aside” as you say. The first woman to receive “social security” paid in $44, however she received $21,000 in ‘benefits’. Other workers paying in at the time covered what was being paid out to her. The money that was taken from them to pay her was not “set aside” for them in the future. Money that they MIGHT receive would be paid for (i.e. taken from) workers in the future at the time that they would receive payouts (i.e. transfers of money from current workers to current non-workers).

      When the ‘program’ started, roughly 145 workers were paying in for every one ‘retiree’. Now, there are three workers paying in for every one ‘retiree’. The bulk of the ‘baby-boom’ generation is about to retire. When that happens, there will be one worker paying in to fund three ‘retirees’. The math just does not work.

      It is a pyramid scheme. The first ones in make out the best. The last ones in get screwed. The number of workers that money is taken from constantly declines, while the number of ‘retirees’ receiving money increases. Eventually, you get past a point where those paying in (i.e. that money is TAKEN from) will never, ever get any money because there are not enough future workers to foot the bill.

    • Wayne937

      Mark, you had better read my post to Patrick. There was a special fund set up for SS back in Jan. 1937. The government had sticky fingers and robbed this fund.

    • Red

      If Roosevelt had been smarter and set the retirement age at 75, rather than 65, SS would be i good shape today an dfar into the future. When Bismark dreamed up the scheme, in the 19th century Germany, he set the retirement age so high that hardly anyone would live long enough to collect any money.

    • brunch20

      I should have provided a clearer reply. In no way am I completly dependent on Social Security for my retiremnt. What I was trying to say was that the government established a program that I paid into that was established to supplemet my retirement. If they can pay for millions of professional welfare recipiants, they sure as hell should meet their commitments to those who worked, invested in the system and paid their taxes!

    • Byron

      But Welfare recipients are their voting base.

    • Red

      Of course they are! Do you expect people to voluntarily cut off their sole source of livelihood!

    • HR

      Sorry, But Social Security is a “Ponzi Scheme” and everyone knows it. To deny it would be to deny gravity. Numerically it can’t hold up. It’s like playing hot potato knowing that the last person is going to get burned and your the last person. We know when SS was started there were 46 contributors for 1 recipient and the facts that SS has continues to raise the contribution from under 2% to 14.5% today and getting closer to 1.75 contributor for 1 recipient. These are the facts and it doesn’t hold well. The problem is it needs to be fixed for everyone, not just your generation. Also, the Government has been robbing from our Social Security by not setting the money aside, like Insurance or Annuity Company would. And why do Gov’t Empoyees get to opt out? Not Right!

    • Wayne937

      HR, it is a government insurance that we all pay into for our retirement. It is not any different than paying into a private investment firm for years and then getting your money when you retire. If SS is a ponzi scheme than so are all other private investments. The only thing different is the fact the government is running it.

    • ARMYOF69

      HUGE DIFFERENCE, Wayne. The insurance companies
      do not steal your hard earned income under threat of law every pay check. You do not have to subscribe to any insurance company plans.

    • Dee

      You are absolutely right. Social Security would have been okay if the damn dumocrats years ago hadn’t put the social security fund in the general fund, so that they could steal from it for their pork projectsl.

    • http://www.reformdc.com nax777

      52 and sick since I was 14 for being forced to invest in a government retirement plan!
      If you are given a choice to place that money in your own savings account or continue to hand it over to the government the fool would hand it to the government!
      SS makes any Pub voter a sucker Lib voter! Again no one wants to take money from the old!
      WHY DO YOU INSIST TO TAKE MONEY FROM THE YOUNG AND POOR?!!!!!!!!!
      DO YOU WANT THE YOUNG AND POOR TO BE IN YOUR SHOES TOMORROW?!!!!!

      Ten million, 20 million, 30 million, 40 million… Hello Sharia flag, for English please press 2!

      http://www.reformdc.com
      P.S. Did you vote this week at “you cut”? http://majorityleader.gov/YouCut/

    • http://www.americagonestupid.com nvrpc

      I agree, most of us have paid into this system for 40 years and now we want what we are entitled too, period, just as all of you who pay SS should and will when you turn 65 + if you’re able to retire.

    • Wayne937

      brunch, I agree with you. The only difference is that we are forced to pay into SS. If the nut cases in Washingto DC had left it alone it would be in good shape today. We all know that a lot of younger folks do not invest in any kind of investments. These are those folks who insurance would be good for since if there was not any SS these folks would go on welfare after they retired and the taxpayers would end up keeping them anyway. At least with SS they will have something to live on. If they had left the money in the SS fund in tack, there would be plenty money left for all of us. You can bame Congress for this. Be aware when you vote for your Congress Members. Try to pick good Congress Members, preferably Republicans, and then follow them while they are in office to see how they are voting. We know that not all Republicans are honest either.

    • DonS

      brunch20, sadly, doesn’t understand that company pensions are NOT funded like Social Security.

      Employees and employers pay funds into REAL ACCOUNTS and are then invested. The combination of funding, interest, dividends and investment growth then fund the employees pension. That is NOT HOW SOCIAL SECURITY WAS FINANCED. There was a similar element of that, as employee and employer taxes were collected and “invested”. But that investment was in government issued instruments (IOUs). Those instruments paid interest, by issuing more government IOUs. The actual money paid in the Social Security taxes went to the General Fund AND SPENT! Payments to Social Security recipients were made from the General Fund. Now, Social Security payments to recipients EXCEED the incoming SS taxes. Thus, the crisis. Our beloved government is spending more than is received in ALL taxes.

    • Lone Star

      Brunch20, Social Security officially became a Ponzi scheme the instant the government dipped into that fund for something OTHER than Social Security and left some nifty IOU’s in the box. Like it or not, the government branded Social Security with the term PONZI when they used that money for things like foreign aid or restoring some really cool Historic Mosque in the Middle East. Calling the plan what it is does not mean you should’nt be paid your Social Security check…you should if you paid into the fund as required. Those two issues are not the same. Calling it ‘PONZI’ is simply the TRUTH. Get over it. No one is threatening to cut your Social Security, but the regime’s reckless spending just may leave us all holding and empty bag.

    • Brooklyn Jo Ann

      Let me tell you the truth brunch20, Perry is telling the truth, and why can’t anyone in America handle the truth. I am 59, just fought to get my social security disability, hurt on the job, worked for 42years. And let me tell you, the money we gave in for all those years, are gone gone gone. so you better start learning and start emailing and standing up for yourself, because obummer is stealing your money and giving it to terrorists, himself, his czars, his green jobs, I can go on and on. I am an activist from the 60’s I want my country back, my husband is a very ill9/11 first responder and they get and will get nothing but pennies, this government wants them to die, just like they want us to die, so they do not have to pay you. I fought for 2years to get my pennies every month, you get punished for not being able to work anymore. so Rick Perry is telling the truth, so instead of putting people down, go and tell your socalled government, we are not sleeping anymore and we will not go away. vote obummer out, the repubs are no better, but systems have to be fixed,obummer is trying to make our country a food stamps, welfare country, so wake up. the truth is the truth, so do something, write and phone and become an active American. because you will get pennies.God bless

    • brunch

      I’m 10 or 15 years behind you. At one time, it might have been a worthwhile program. If it had been run according to the original actuarial tables, and adjusted with reality, and not RAIDED, it might be healthy when I reach your age. But I have absolutely no such expectation. There is no trust fund. There is no security. It’s just become part of the big socialist tax and spend program.

      I want to get something out of what I contributed. That won’t happen unless we make drastic changes.

    • Gar

      Before you call Social Security a retirement plan, you need to check out the Supreme Court ruling from 1960. It states that we do not have a legal right to the money we have contributed. Furthermore, that contribution is really a tax on income. Bunch20 I do not mean to burst your bubble, and I am not saying you will not get SS, you just need to be aware of the truth as it relates to Social Security. Also remember it was contribed during the Great Depression.
      How do you found retirement when no one had any savings?

  • Tom Stewart

    Social Security Works And Can Be Called Anything “But Ponzi” When The Politicans Get There Hand Caught-In The Cookie Jar And “Borrow” Like Most Children, Yikeess, Never Pay-Back, That Is Both Sides Of DC. Now All We Do Is “Fire” The Politicans Who Have Been Stealing From The Social Security Fund, Yippee, That Should Cut The Payroll In Half For DC, With Term Limits Too Follow, And The “Good Old Boys Are Gone”. God Bless America And The Tea Party Patriots, With Sarah Palin POTUS.

    • Larry

      Tom you counterdict yourself.All you said is true but one thing.Isn’t that exactly how a ponzi scheme works.The ones who control it steals from it for their own gain and when it can no longer sustain itself cause of no more money it becomes bankrupt.I’m not sure who wrote the billthat alowed congress to take a penny from it with a promissary note for it but anyone who did ought to be sent away and all of their wealth confiscated.Oh ***p I could go on and on.And I mean from all parties.

  • Leo

    It is Ponzi Scheme I’ve been on SS for 8 years now I’ve got all money back now I’m living non yours how does that feel

    • ARMYOF69

      Here’s someone telling the truth at least.
      I would be happy if I got my money back with 2% per annum.

    • Wayne937

      Leo, maybe you did not work long enough to deserve yours. LOL.

  • El Loco

    Another naive, ignorant, self-serving “Gimme” (probably) Democrat. You have a point about SS and Ponzi schemes, the differences between SS and a Ponzi Scheme is that membership in the scheme is voluntary and when the scheme goes broke it is shut down. If your only investment in your retirement is SS, than you have shown a complete lack responsibility and self reliance. My wife and I worked and paid into SS for over 40 years. When she died at age 63, not having applied for SS benefits, she receive a total of a couple hundred dollars for burial expenses for the 4 decades she paid into the system. If she had simply put the same money into a simple interest bearing savings account, she would have left a considerable amount to her heirs. When I retired, my SS benefits were cut by 3/4ths because, since I had saved my whole working life, my SS benefits were considered a “windfall”. But I’m not bitter or whiny about it. The government can stuff their “benefits”. The return on my saving is more than my SS benefits would have [aid anyway. I have no sympathy for those who want to rely on government for personal subsistence and make no provisions for self-sufficiency.

    • http://www.americagonestupid.com nvrpc

      That’s because you chose not to pay into it. Soory, but that being the case, you deserve nothing. If you did pay you 40 quarter + then you will just get a few hundred dollars. Most of us working people paid way beyond our 40 quarters, try 40 years.

    • El Loco

      Obviously you didn’t even read my note. Both my wife and I paid into SS for OVER 40 YEARS! But we also provided ourselves with an additional form of retirement income. Because we exercised that personal responsibility and self reliance I was deemed the recipient of a “windfall” and lost most of my SS benefits. I’m just saying, people who whine about the demise of SS need to shut up and start taking care of themselves.

    • Wayne937

      El Loco, I don’t know whether you are referring to me, or to some one else. If you’re referring to me your dead wrong. If you have followed my post I am most likey one of the most Conservative persona you will ever find. I don’t believe in big government. If by the fact that you call SS a ponzi scheme because you are required to pay into it, instead of it being voluntary, they I will agree with you. If SS would not not have been manatory, people would never have any type of a retirement period. You know as well as I do when people are young they never think about getting sick, or retiring. These would be the type of people the taxpayers would be funding anyway. I do believe that people should have a choice in what kind investments they want, however. Please, when you refer to some one as a Liberal, make sure you have your facts straight.

    • El Loco

      No. I was referring to brunch20.

  • Fred Friendly

    A Ponzi scheme benefits those who get in it first and harms those who come later because it runs out of funds. SS will never run out of funds. Also it pays off by age, unlike a PS. The US dollar may become worthless, but that is not the fault of SS.

    If you read the SS Act of 1935, you will learn that the funds were always designated to go directly to the Treasury. The Secretary was required by law to invest the surplus (over and above immediate needs) SS funds in US Government interest bearing debt instruments. 76 years later that is still what is happening. Nobody raided the lock box because it never existed.

  • lamont cranston

    I’ve posted this before, but the website chose to delete it. So I’ll try again.

    Entitlements & Entitlement Programs

    Entitlements: Where did they get the idea that the Social Security and Medicare Programs are entitlements.

    If I remember correctly the first time that the phrase was used, it was at a Congressional hearing regarding the budget. Laura DeAngela Tyson, who was Clinton’s economic advisor, coined the phrase and apparently it stuck.

    Considering that the average income you can expect from Social Security is just $11,510 per year, which means that millions of Americans who are at or near retirement age are headed toward a true nightmare scenario. And with staggering inflation looming ahead, the situation is going to get a whole lot worse.

    Remember, not only did you contribute to Social Security but your employer did as well. It totaled 15% of your income before taxes. If you averaged only $30K over your working life, that’s close to $220,500. If you calculate the future value of $4,500 per year (yours & your employer’s contribution) at a simple 5% (less than what the government pays on the money that it borrows), after 51 years of working (that was me) you’d have $1,043,352.75. If you took out only 3% per year, you’d receive $31300.58 per year, or $2,608.38 per month, and it would last better than 30 years (until you’re 95 if you retired at age 65) and that’s with no interest paid on that final amount on deposit! Can you now see just how badly we, the citizens of this country, are being ripped off? In other words the government has stolen from you $19790 per year over your working life. Also don’t forget the monies left in the system after you die, it reverts to the government, not your family. Just another rip off, since you paid into what was supposed to be a trust fund. And just think, if the system were privatized and you bought an annuity and with the same money that you were putting into SS and it paid, on average 4% per year, you’d have a lifetime income of $2,976.40 per month. And guess what, the remaining monies, after your death, in that annuity would go to your family.

    Entitlements my ass, I paid cash for my Social Security Insurance! Just because they borrowed (stole) my money, doesn’t make my benefits some kind of charity for illegal aliens or handouts to foreign countries! Congressional benefits like free health care, outrageous retirement packages, 67 paid holidays, three weeks paid vacation, unlimited paid sick days: now that’s welfare; and they have the nerve to call my retirement benefits entitlements!

    Someone please tell me what the Hell is wrong with all those people that run this country! No, don’t, I think I know. They’re all on the take.

    We’re broke and can’t help our Seniors, Veterans, Orphans, or Homeless etc.?

    Our retired seniors living on fixed incomes receive no aid. In fact Congress has made it even more difficult for seniors to obtain medications at a reasonable price. All because of the drug lobbies. You can go to Canada and get the same drugs for 60% to 75% less than you would have to pay here. Nor do they get any breaks on what they have to pay for Medicare, while our government gives Hundreds of Billions to Foreign Countries and illegal aliens! And here’s another small tidbit for you to swallow. Eric Holder, the Attorney General, is trying to get passed a law that would prohibit the citizens of this country from obtaining the same medications available here in the U.S. from outside the U.S. And this is the land of the free, yeah right?

    They call Social Security and Medicare entitlements even though most of us have been paying for them all our working lives. And now, when its time for us to collect, the Government is running out of money. Why did the Government borrow (steal) from our Social Security in the first place? Because it was there, and burning a hole in their collective pockets. They have now turned Social Security into the largest Ponzi scheme in the world. They are no better than Bernie Madoff, and should be treated as such. But we all know that will happen!

    Social Security and Medicare should be privatized. If that were to happen the monies going into these programs would be out the hands of those criminals. As an example of what would happen, all you have to do is look at what happened in Chile when they privatized their SS program. Their economy grew by 15% for the next five years. And the health care that was provided became much more affordable. The cost of healthcare declined by 60%. Why? Because it was put on a competitive basis?

    We have many adoptable children in this country who are shoved aside to make room for the adoption of foreign orphans. Why is that? I’ll tell you why! It’s the bureaucracies and red tape (regulations) that make it near impossible to adopt a child born in this country.

    In recent months we have provided aid to Haiti , Chile, Pakistan…home to bin Laden…literally BILLIONS of DOLLARS! Add to that $770 Million to rebuild Muslim Mosques throughout the Middle East, and that to people who hate us.

    AMERICA: a country where we have homeless without shelter, children going to bed hungry, elderly going without needed medication, mentally ill going without treatment, etc., supposedly the most prosperous country in the world. What happened? I’ll tell you, it’s the progressives. I guess I should say this quietly, it’s the socialist.

    Imagine if our Government gave us the same support they give the people who hate us. Sad, isn’t it? The progressives are winning!

    ______________________________________________________________________

    Here is a VERY interesting list of entitlements that is, at the very heart of the dispute, why the Democrats refuse to budge and are insisting on raising taxes. Americans must find out what all this budgetary wrangling is all about, to save money. Most of these entitlement programs have been established during the late 1960’s to early ‘70’s, but the funding for these programs has been increasing steadily over the years. The Nation (we) cannot sustain this wasteful over spending any longer, because, one day, America will default.

    If you believe this, the whole country must know what is going on behind closed doors and in the shadows of this budgetary mockery. All of these programs are funded by our tax dollars, and are usually established for the benefit of some Congressmen’s constituents, or lobbyist.

    There are a number of other programs that are not listed as entitlements, but are also classified as budgetary items that could (should) be examined for further cuts.

    These are all the programs that the new Republican House has proposed cutting. Read to the end.

    * Corporation for Public Broadcasting Subsidy. $445 million annual savings.
    * Save America’s Treasures Program. $25 million annual savings.
    * International Fund for Ireland . $17 million annual savings.
    * Legal Services Corporation. $420 million annual savings.
    * National Endowment for the Arts. $167.5 million annual savings.
    * National Endowment for the Humanities. $167.5 million annual savings.
    * Hope VI Program.. $250 million annual savings.
    * Amtrak Subsidies. $1.565 billion annual savings.
    * Eliminate duplicative education programs. H.R. 2274 (in last Congress), authored by Rep. McKeon, eliminates 68 at a savings of $1.3 billion annually.
    * U.S. Trade Development Agency. $55 million annual savings.
    * Woodrow Wilson Center Subsidy. $20 million annual savings.
    * Cut in half funding for congressional printing and binding. $47 million annual savings.
    * John C. Stennis Center Subsidy. $430,000 annual savings.
    * Community Development Fund. $4.5 billion annual savings.
    * Heritage Area Grants and Statutory Aid. $24 million annual savings.
    * Cut Federal Travel Budget in Half. $7.5 billion annual savings
    * Trim Federal Vehicle Budget by 20%. $600 million annual savings.
    * Essential Air Service. $150 million annual savings.
    * Technology Innovation Program. $70 million annual savings.
    * Manufacturing Extension Partnership (MEP) Program. $125 million annual savings.
    * Department of Energy Grants to States for Weatherization. $530 million annual savings.
    * Beach Replenishment. $95 million annual savings.
    * New Starts Transit. $2 billion annual savings.
    * Exchange Programs for Alaska , Natives Native Hawaiians, and Their Historical Trading Partners in Massachusetts . $9 million annual savings
    * Intercity and High Speed Rail Grants. $2.5 billion annual savings.
    * Title X Family Planning. $318 million annual savings.
    * Appalachian Regional Commission. $76 million annual savings.
    * Economic Development Administration. $293 million annual savings.
    * Programs under the National and Community Services Act. $1.15 billion annual savings.
    * Applied Research at Department of Energy. $1.27 billion annual savings.
    * Freedom CAR and Fuel Partnership. $200 million annual savings.
    * Energy Star Program. $52 million annual savings.
    * Economic Assistance to Egypt. $250 million annually savings.
    * U.S. Agency for International Development.$1.39 billion annual savings.
    * General Assistance to District of Columbia . $210 million annual savings.
    * Subsidy for Washington Metropolitan Area Transit Authority. $150 million annual savings.
    * Presidential Campaign Fund. $775 million savings over ten years.
    * No funding for federal office space acquisition. $864 million annual savings.
    * End prohibitions on competitive sourcing of government services.
    * Repeal the Davis-Bacon Act. More than $1 billion annually.
    * IRS Direct Deposit: Require the IRS to deposit fees for some services it offers (such as processing payment plans for taxpayers) to the Treasury, instead of allowing it to remain as part of its budget. $1.8 billion savings over ten years.
    * Require collection of unpaid taxes by federal employees. $1 billion total savings. WHAT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
    * Prohibit taxpayer funded union activities by federal employees. $1.2
    Billion savings over ten years.
    * Sell excess federal properties the government does not make use of $15 billion total savings.
    * Eliminate death gratuity for Members of Congress. Lord help us!!!!!
    * Eliminate Mohair Subsidies. $1 million annual savings. E-Gads!!!
    * Eliminate taxpayer subsidies to the United Nations Inter-govern-mental Panel on Climate Change. $12.5 million annual savings
    * Eliminate Market Access Program. $200 million annual savings.
    * USDA Sugar Program. $14 million annual savings.
    * Subsidy to Organization for Economic Co-operation and Development (OECD). $93 million annual savings.
    * Eliminate the National Organic Certification Cost-Share Program. $56.2 million annual savings.
    * Eliminate fund for Obamacare administrative costs. $900 million savings.
    * Ready to Learn TV Program. $27 million savings..
    * HUD Ph.D. Program.
    * Deficit Reduction Check-Off Act.

    * TOTAL SAVINGS: In just the first year $8.387 Trillion

    * TOTAL SAVINGS: An additional $2.5 Trillion over Ten Years

    My question is, what THE HELL is all this doing in the budget in the first place? Do you think that these savings just might save this country from default?

    Instead they want to cut Social Security and Medicare for folks who paid for them every working day of their lives!!!

    • am2sweet

      This post needs to be sent to every congressman, senate, president, would be presidents and anyone else in power. They could learn by cutting the spending like this does. SS doesn’t have to be a ponzi scheme. It could be a nice retirement savings if the government didn’t have charge of it. The problem was congress thought since the money is there then let’s use it rather than run short on the pork we want.

    • N.N.

      You are 100% correct.

    • http://www.daveramsey.com/home/ Scott

      No thanks, I’d rather save for myself like a big boy.

      Get debt free folks and it’s easy to build wealth and save for yourself.

      Dave Ramsey for the win.

    • Wayne937

      Lamont, I wrote something similar to what you wrote, earlier. I figured a person working for 47 years at an average of 25,000 for every year for all those 47 year he and his employer would be paying in $3750 per month to the social security trust fund. Had the government invested that money at 6% (on the low end for those years) he would have had earned $962,116.98 at the beginning of his retirement. That would amount to $6167.41 per month, or better than $70,000 per year. What happened to that money? Was it wasted, some one did not know how to make a good investment, or was it stolen from the fund. I suggest maybe all three were responsible. I don’t believe that most people who worked for thirty or more years, and retire at age 65 will ever get their money back unless they live well beyond the average life time age of 78 years.

    • am2sweet

      Thank you lamont for posting it again. I hope you don’t mind that I copied it and am sending it to everyone on my email list. You get the credit of course.

    • ARMYOF69

      Thank you, Lamont.

    • theocapitalist

      Amen!

  • ARMYOF69

    It is what it is, “Robbing Peter to Pay Paul”.

  • http://adrianvance.blogspot.com Adrian Vance

    When FDR designed SSI the average American was living 59 years and seven months. 98% of the contributors were dead before they reached 65. Today we live 77 years and the system cannot support all the recipients, but it can be repaired with means testing and by putting the money in investments instead of letting Congress spend it.

    The Two Minute Conservative at http://adrianvance.blogspot.com has political analysis, science and humor. Daily on Kindle.

    • Wayne937

      Adrian, I think you had use the investment calculator and figure an average time of 30 years a person had worked and money they were making for all those years. I have known some who worked for 50 years. Between the employee and the employer they pay in a total of 15%. Earnings on this money at 6% in a good investment firm over all these years will surprise you. You can find a good investment calculator here: http://www.bloomberg.com/personal-finance/calculators/retirement/

  • Billyc

    THe Social Security trust fund was to be locked up and not touched by any politician. A lot of older people rely on SS in fact I am one of them who also receives Social Security from the UK. Also I get my Companies pension. Perry is a politician who is carrying a lot of socialist baggage for instance amnesty for illegals. To call it a Ponzi scheme is not helping any senior. Has anyone asked this ex Democrat what he would do for the elderly. Suggest Politicians not raid the Social Security Trust fund.One would have thought a penalty reprimand et al be exercised for stealing from the cookie jar.

    • Wayne937

      BillyC, I would never believe what a politician would tell me. The best thing to do is watch how they vote on different bills on different bills. I belileve you can do that one congress.org I hope I have the right website here. At least you can try it and see if it is the right one.

    • Wayne937

      Let me try that again http://www.congress.org and see if it will show up at a website.

  • Moose

    If it looks like a Ponzi scheme, acts likes a Ponzi scheme and smells like a Ponzi scheme, it must be a ……

  • G K

    This should open a national Moral discusion . . . . what is deficit financing if not a scheme to dump debt on future generations?

  • Jim Montgomery

    All we need for the current system to work is more workers. So either we take more off welfare and or let more immigrate. Otherwise here comes the reduced benefits (needed anyway, actually.)

    • Red

      Good point Jim. It will never happen, but that would work. Of course 50% of the wage earners aren’t paying income tax either. When Bush tried to put all the illegals into a program whereby they could work here only if they paid into SS, insurance, and income tax – all hell broke loose.

  • David

    Sowell says “here is not enough money in the trust fund —“. There is no money in the trust fund: It is juat a pile of worthless IOU’s. The government has spent it all and then some.

  • shirley

    IF THE S.S. IS BROKE……I THINK THAT IT HAS ALL BEEN PLANNED TO MAKE US ALL COW DOWN TO A SOCIALIST GOV.THAT WILL HAVE TOTAL RUN OF OUR LIVES………PRES JOHNSON WAS THE DEM. THAT TOOK FROM THE SS FUND FIRST AND FROM THEN ON THEY JUST KEPT STEALING FROM IT……AND I AM MAD AS H— THAT THE ILLEGALS COME …AND FIRST THING HEAD FOR OUR SS OFFICES AND .AND WHY THE H—-CAN THAT BE LEGAL……..WE ARE SCREWED AND NOW IT LOOKS LIKE THERE IS NOT GOING TO BE A QUICK FIX IF EVER OUR COUNTRY IS IN DEEP TROUBLE AND UNLESS WE CAN GET THE RIGHT PEOPLE IN OFFICES…..THERE WILL BE NO FIX……IT WOULD HELP TO KICK THE LIBERAL JUGES OUT ALSO…

  • joybabz

    In 1957, FICA rate was 2 percent–I was earning 50 cents per hour, so I paid 8 cents per day to Social Security Account. The really good thing was that I was earning quarters toward retirement some day–I needed 40 quarters to qualify for SS at age 65.

    In 1996, the FICA rate was 6.2 percent and was paid until the worker earned $62,700. This was matched by employer at the 6.2 percent rate as well, so the total FICA amount was 12.4 percent. After this amount ($62,700) was earned, NO FICA deductions were made for the remainder of the year. I don’t have all information by years, but I do believe the combined employee/employer FICA today is less than 15 percent on wages up to $102,000.

    Anyone who can tell you how much they’ve paid into Social Security and on what earnings for their entire working years is a much better record keeper than I because the rates have changed almost yearly since 1956 when I held my first job (2 percent on wages to $4,800 per year) to present (15 percent on wages to $102,000).

    Rules have also changed again and again. As more people retire and start drawing SS, and we live longer and longer, it really makes no difference if it’s called entitlements, ponzi scheme, or “what is owed me by the government because I paid in all these years,” if the outgo is more than the income, it can’t last. The “kids” younger than 50 better be planning on something other than Social Security for their retirement (at 75 or so), or they are really gonna be in a pickle!!! Social Security is not enough to live on today unless there are other perks to go along with it–like a home and car paid for, a pretty good nest egg that the taxes have already been paid on, and really good health.

  • http://rebelforiam.com m. sharpe

    The money was taken for one reason and used for another-ask Newt G. how it works;He was Speaker when it was used to balance the budget in the ninties. Same as gasoline tax,only the D.O.T. dosn’t promise drivers retirement. These social programs are designed to lure voters and their children for life.

  • Goosed.

    I do’nt remember being asked to pay into SSI.
    The Federal Goverment TOOK IT.
    I’m not asking for a free hand out !
    If you make enought money to pay in and have a personal retire account. Great,
    But many of us are not so lucky to be able to do both.

  • Justice4All

    Perhaps at the early stages of Social Security as well as the Labor Unions were created with the very best of intentions, but unfortunely not totally thought out. History is always the only way to grade any government program. I guess I’m suggesting “hind-sight” to be the best determination of succcess.
    Social Security didn’t start out to be a Ponzi fraud, but, our elected leaders, maybe because of need, greed, or ambition made this into what it is today, a program that will not continue without a serious correction. As it is now,and if this was a private activity, someone would be going to jail.

    GOD Bless The U.S.A.

  • Henry

    Ponzi sceme? Just a fact of life people. You,I, and everyone has been lied to fo years. This is what you get when you “depend” on Government. The facts have been there for ages. Just now people are waking up to reality? Stupidity is not an option.

    obama knew what was coming down the pike. It also fit into his “Plan” for America. Americans are about to experience exactly what Hugo Chavez did to Venezuela. The boot of Marxism will be firmly shoved on the neck of American’s freedoms, liberties, the Constitution, and the Bill of Rights. Just a fact of life people. Reality sucks sometimes people. This is one of those times. Get use to it.

    • Justice4All

      But Henry, is this what we deserve? Should we just lay down now and give in to those that will do further damage? I’m sure that is not what you want or meant by your note.
      I do agree with you that we have some very difficult conditions to correct. It is up to us to do that job. Individually as well as collectively inside groups of like minded people.

      GOD Bless The U.S.A.

  • oneAmerican

    This fund was intended for one purpose only, that did not include using it as a ‘slush fund’ for a multitude of ‘pet projects’ that weren’t covered in ‘the’ budget. Congress freely & openly put their hand in this cookie jar & had the audacity to act mortified when they ‘discovered’ no one was re-filling it fast enough. And, yet, continued to justify their bridges to nowhere. Wonder how so many were RE-elected???
    GW had a plan where individuals could be responsible for a portion of their own welfare by investing where Uncle Sam couldn’t reach Frankly, with all the solutions/answers offered by the general population, I’m amazed more were not willing to take on the task of providing thier own future.
    When I earn over 11K annuel, I lose a portion of my check, I pay a monthly premium for medical & prescriptions ($200 mo) & am covered for just the same 80% as a private insurance. I am over 70 & blessed w/ good health. So have not used much of medical. I figure to collect in monthly checks what I paid in will take another 25 yrs unless I’m stricked w/ something catostrophic.
    “Ponzi scheme” is no more than a sound bite that those not liking Perry can lazily latch onto rather than looking for other reasons (& there are afew more important ones)
    I pray I will never become a slave to entittlements

  • ExArmyMP

    Ponzi Scheme: “A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation.” Sure sounds like Social Security to me. While a true Ponzi Scheme is illegal, Social Security is a creation of government (therefore legal), and thus avoids the “illegal” label normally attached to a Ponzi Scheme. That does not change the fact that Social Security IS a Ponzi Scheme, by definition.

  • Patriot

    I guess if Social Security is Ponzi scheme than what is all the Government retirements? They dont have to work 45 years to get a retirement that is worth more than when they worked. Lets cut that out then there will be enough for people that paid into thr Social Security system. YES YES

  • Robert Conner

    By declining birth rates, you mean, “The Pill” (Birth Control) and Abortion!

  • Dodi

    Does it really matter that people are living longer? Isn’t a big part of SS failing that our lovely(?) government decided this was their money to spend and put an IOU in the pot, spend the money and never paid any of it back? It wouldn’t have been the total answer to it not being there for EVERYONE who paid into it but it sure as hell would have helped. It would have helped a hell of a lot more also if illegals weren’t getting some of it. Of course, obummer is trying his best to make all illegals legal.

  • Paul Bushay

    Social Security is NOT a Ponzi scheme, nor is it an entitlement! It is and was designed to be an annuity to SUPPLEMENT your retirement! YOU ARE PAYING INTO IT EVERY TIME YOU GET PAID! Or, if like me, you are retired and no longer work, you PAID for it your ENTIRE WORKING LIFE!! The system is broke only because of what was allowed to happen during the LBJ administration, and the Carter administration! Had it been LEFT ALONE it would be FINE!! Please read the following!!

    Dick Kantenberger
    Gifted Education Writer
    Examiner.com

    History Lesson on Your Social Security Card

    Just in case some of you young whippersnappers (& some older ones) didn’t know this. It’s easy to check out, if you don’t believe it. Be sure and show it to your family and friends. They need a little history lesson on what’s what and it doesn’t matter whether you are Democrat or Republican. FACTS ARE FACTS!!

    Social Security Cards up until the 1980s expressly stated the number and card were not to be used for identification purposes. Since nearly everyone in the United States now has a number, it became convenient to use it anyway and the message, NOT FOR IDENTIFICATION, was removed.

    Our Social Security

    Franklin Roosevelt, a Democrat, introduced the Social Security (FICA) Program. He promised:

    1.) That participation in the Program would be COMPLETELY voluntary,

    No longer Voluntary

    2.) That the participants would only have to pay 1% of the first $1,400 of their annual Incomes into the Program,

    Now 7.65% on the first $90,000

    3.) That the money the participants elected to put into the Program would be deductible from their income for tax purposes each year,

    No longer tax deductible

    4.) That the money the participants put into the independent ‘Trust Fund’ rather than into the general operating fund, and therefore, would only be used to fund the Social Security Retirement Program, and no other Government program, and,

    Under Johnson the money was moved to The General Fund and Spent

    5.) That the annuity payments to the retirees would never be taxed as income.

    Under Clinton & Gore Up to 85% of your Social Security can be Taxed

    Since many of us have paid into FICA for years and are now receiving a Social Security check every month —
    and then finding that we are getting taxed on 85% of the money we paid to the Federal government to ‘put
    away’ — you may be interested in the following:

    ———— ——— ——— ——— ——— ——— —-

    Q: Which Political Party took Social Security from the independent ‘Trust Fund’ and put it into the
    general fund so that Congress could spend it?

    A: It was Lyndon Johnson and the DEMOCRATICALLY controlled House and Senate.

    ———— ——— ——— ——— ——— ——— ——— —

    Q: Which Political Party eliminated the income tax deduction for Social Security (FICA) withholding?

    A: The DEMOCRATIC Party.

    ———— ——— ——— ——— ——— ——— ——— —–

    Q: Which Political Party started taxing Social Security annuities?

    A: The DEMOCRATIC Party, with Al Gore casting the ‘tie-breaking’ deciding vote as President of the
    Senate, while he was Vice President of the US

    ———— ——— ——— ——— ——— ——— ——— –

    AND MY FAVORITE:

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

    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!

    ———— — ———— ——— —– ———— ——— ———

    Then, after violating the original contract (FICA), the DEMOCRATS turn around and tell you that the REPUBLICANS want to take your Social Security away!

    And the worst part about it is uninformed citizens believe it! If enough people receive this, maybe a seed of
    awareness will be planted and maybe changes will evolve.

  • Tom

    Does Social Security pay interest on revenue that you put into the system for 40 years? When I started working in the late 1960’s I only made $2.00 an hour and some of that went to SS. But the all money I paid in back then has lost significant value today. So I guess my contribution back in the 60’s went to the elderly in the 60’s and the people paying into the system today will go to retiree’s today. What happens when 80 million baby boomers all go on SS and the current working class can’t foot the bill? The truth is they can’t and those who contributed for decades won’t collect their share. That is a Ponzi scheme.

  • http://aol.com Claude

    In a way I agree with him.Our Washington elects made ss a ponzi they took money to fill thier pockets.To help thier speacial groups.Replaced it with IOUs.So yes it became a ponzi.Thats not what it was for,And by the way have not paied it back.I wonder can they be sued & get it back.After all they bail out everything .They did steal from SS funds????? At least we could get a ++ return.

  • http://aol.com Claude

    Maybe I should throw my name in the ring everyone is.Im a combat vet and very much a Patriot.I wolld not take any lip lashing&write my own speech and live up to it.

  • http://aol.com Claude

    By the way the word would stand .Oh well just to get a laugh