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View Diary: Bloomberg: 'Social Security Greatest Transfer of Wealth in History" (37 comments)

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  •  All pensions allocate from workers to retirees (0+ / 0-)

    "All this time I thought workers were putting aside part of their paychecks into the Social Security fund to pay for their retirements."

    No that is not how it works.

    Your taxes pay current retirees.

    Your earnings entitle you to have some future workers paying for your benefits (provided the law does not change). Of course you can both work and collect benefits.

    If there are fewer workers per retiree then something must give. Benefits can stay constant if  revenue per workers  increases (either by applying taxes to more income or by raising the rates). Or revenue per worker can stay constant if retiree benefits fall.

    •  so is it a 'transfer of wealth'? (0+ / 0-)

      "I'm sculpting now. Landscapes mostly." ~ Yogi Bear

      by eXtina on Sat Nov 12, 2011 at 09:33:39 AM PST

      [ Parent ]

      •  is that important? (0+ / 0-)

        It is technically an income transfer.
        Wealth is what you have left if anything after consuming your income. Social security taxes probably reduce some people's wealth since they might have otherwise saved a part of it. It's hard to imagine that social security adds much to anyone's wealth, since it is mostly consumed. most retirees are dissaving.

        i took the phrase to be rhetorical not technically accurate.

        •  it's a highly charged phrase (0+ / 0-)

          it's obviously very deliberately designed and intended to get a rise out of someone that their rightful wealth is being transferred to someone else.

          "I'm sculpting now. Landscapes mostly." ~ Yogi Bear

          by eXtina on Sat Nov 12, 2011 at 06:07:03 PM PST

          [ Parent ]

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