Friday, October 08, 2010

Bomertime - Social Security

In Friday’s paper I found a paid advertisement inside the “Boomertime in Northeast Indiana vol3, issue 2, 2010.” The paid advertisement was titled “Social Security What you need to know today for tomorrow and the future.” It states Social Security the most successful domestic government program in our nation’s history. I am not sure of their definition of successful, but mine is one that works, not one that has unfunded liabilities exceeding $23 Trillion, unable to pay full benefits to those after 2037 and then can pay but 73% of promised benefits under current law (no COLA) and requires changing the “rules” after the fact and more. To put it bluntly the article calls Social Security an “Intergenerational Contract.” I never signed a contract to participate in a ponzi scheme. I certainly have not signed my children up to participate in the Social Security ponzi scheme and I will not. It is not right to ask others to pay for a program that we ourselves were not willing to fund ourselves.

The article presented all the things Social Security does, but nothing about the inability, problems it faces in the future without raising the retirement age, taxes, base or cutting future benefits or how these problem will affect you. The only ones Social Security OASI has benefited are those who have retired. They have benefited at the expense of the American Worker who now suffer higher taxes than required to fund their own retirement, lower take home pay, less disposable income leading to longer term mortgages, lower saving rates and dependence on government.

On November 27, 1944, A. J. Altmeyer, Chairman reported to congress; “There is no question that the benefits promised under the present Federal old-age and survivors insurance system will cost far more than the 2 percent of payrolls now being collected. As I pointed out in my testimony of last year, none of the actuarial estimates which have been made on the basis of present economic conditions and other factors now clearly discernible result in a level annual cost of this insurance system of less than 4 percent of payroll.”…“Indeed, under certain assumptions the level annual cost has been estimated to be as much as 7 percent of payrolls. On the basis of a 4-percent-level annual cost it may be said that the reserve fund of this system already has a deficit of $6,600 million. On the basis of 7-percent-level annual cost it may be said that the reserve fund already has a deficit of about $16,500 million.” The payroll tax did not reach 8% until 1968 and by this time Social Security benefits had been expanded even more.

There has been decades of talk The only action taken is raising the payroll tax, base, retirement age, enrolling non covered workers and taxing benefits. The can has been kicked down the road long enough. When do we wake up and face the fact Social Security is the worse failure in American History?

To make things worse the American worker paid Boomertime of Northeast Indiana to print this garbage.


At 12:30 PM, Anonymous Paul said...

Success is a very vague term. As far as being a program that people overwhelmingly support and enjoy, Social Security is probably the most successful government program.

At 2:08 PM, Blogger WilliamLarsen said...

Success is not a vague term.

"favorable or desired outcome; also : the attainment of wealth, favor, or eminence"

Was the Titanic a success?
Was the Hindenburg a success?
Was Chernobyl an success?
Would people who invested with Madoff say their investments were successful? Madoff was successful in pulling off the ponzi scheme for decades.

FDR's goal for social security was:
FDR's Social Security
January 17, 1935
Three principles should be observed in legislation on this subject.

First, the system adopted, except for the money necessary to initiate it, should be self-sustainingin the sense that funds for the payment of insurance benefits should not come from the proceeds of general taxation.

Second, excepting in old-age insurance, actual management should be left to the States subject to standards established by the Federal Government.

Third, sound financial management of the funds and the reserves, and protection of the credit structure of the Nation should be assured by retaining Federal control over all funds through trustees in the Treasury of the United States.

The 1936 Government Pamphlet on Social Security
●2% payroll tax in 1937 increasing to 6% in 1949.
●$25 weekly payroll would pay 50 cents a week for a benefit at age 65 of $53 a month.
●$50 weekly payroll would pay $1.00 a week for a benefit at age 65 of $74.50 a month.
●Death Benefit prior to age 65 was 3.5% of OASI wages.

Required Tax Rate
●A 25 year old making $25 per week was to be paid a benefit of $53 a month at age 65. This required a payroll tax of 8.44% starting at age 21 and continueing till age 65.
●A 25 year old making $50 per week was to be paid a benefit of $74.50 a month at age 65. This required a payroll tax of 5.93% starting at age 21 and continueing till age 65.
●A 55 year old making $15 per week was to be paid a benefit of $19 a month at age 65. This required a payroll tax of 28.8%.

I am not sure what people you speak with, but polls show that over 95% of those under 45 would rather walk away from social security and keep their full SS-OASI tax. Those who are over 65 support keeping it, but a full 20% know the origins and support repealing it.

Social Security is the most successful con ever perpetrated on such a large group of people.


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