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View Diary: WI-Sen: Social Security is a Ponzi Scheme (166 comments)

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  •  I'm hoping (1+ / 3-)
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    kalmoth, homogenius, Valdearg

    SS wasn't "designed" for a 2:1 worker to recipient ratio? The "insurable event" old age is not rare or unexpected. Insurance companies must build up adequate reserves. Insurance companies invest their reserve so someone else has to pay the principal and interest. And insurance companies aren't allowed to borrow the reserves and spend it.

    The insurance analogy is too broken for use.

    Another thought just occurred to me. A couple changes make your statements much more accurate:

    Social Security A ponzi scheme is designed as straight transfer from today's workers investors to today's retirees yesterday's.

    There's no investment in the core program a ponzi scheme at all.

    Same as an insurance company most scams. Each year's premiums pay for the same year's expenses.

    •  right-wing talking points... (3+ / 0-)
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      alkatt, martydd, dmhlt 66

      straight from the horse's mouth... wait, it's from the other end.

      What a load of horseshit.

      •  well, i'm about 2 standard deviations to the (0+ / 0-)

        left of the Daily Kos mean, so it's a bit problematic that i more or less agree with GOPFL. talking points? that's a definitive ad hominem argument. just because an argument comes from the right, doesn't prove that it is false. so ... exactly which word substitutions in GOPFL's comment do you question?

        the problem is straightforward, and is founded on three premises, any of which is open to debate, and if you can persuasively rebut at least 2 of the premises, you can make a good case against the Ponzi claim:

        a. the payout, in terms of real purchasing power, exceeds the pay-in. that is, on average a social security recipient will receive more in benefits (in terms of real purchasing power) than the recipient paid in. under the current law and at this point in the scheme, this isn't a huge effect -- on average the system will pay out about 2% more in real purchasing power than it collects. nonetheless, somebody is responsible for producing that 2%.

        b. productivity is going to decline as energy becomes more expensive and as various natural resources are destroyed by an indifferent, greedy civilization. which means it will take ever more work by the benefactors to satisfy that real purchasing power than was performed by the beneficiary retirees in earning it.

        c. the federal government is sinking under an enormous load of debt. some of that debt is held by the Social Security Trust fund. people are fond of saying, "We owe this money to ourselves," but that is not quite accurate. more accurately, "Our grandchildren owe this money to us." much of the rest of the debt is held either by foreign investors (either private, or sovereign investment funds) or by domestic plutocrats.

        but money, of course, is just ... money. you can't eat it, you can't wear it, it won't keep you warm in the winter, it won't get you back to the midwest to see the grandkids. those things -- those tangible goods and services -- those things are in limited supply. the meaning of the debt, including the debt owed by our grandchildren to us via T-bills held by the Trust fund, and owed by our grandchildren to all of the other people we've borrowed from, is that an ever larger share of what our grandchildren can produce is going to be owed to other people -- it will not be theirs to consume.

        and here's where things get really dicey: a whole lot of what "we" have been "producing" is total fucking bunk to begin with. it's nothing. it's "financial services". it's phony, inflated "added value" -- like brand-management and marketing and other BS -- on real goods that have been produced by people working in mexico or indonesia or china or malaysia or india. yet we set aside 14% of that bogus added value and loan it to ourselves to spend on crazy stuff like "taking out saddam" -- with the extra trick that we loan it to ourselves, but we tell our grandchildren to pay it back -- to us. WHAT A FUCKING RACKET!

        so what happens when:

        a. all the other folks who have loaned us money want to get paid back.
        b. none of the other folks want to work for peanuts anymore -- i.e., our grandkids can no longer exchange an hour of delivering pizza for one full week's worth of work by some southeast asian peon?

        "We" -- the folks to whom our grandchildren will owe this huge debt -- have not been doing what we need to be doing in order to enable our grandchildren to support both themselves and us. We've been living high on the hog, borrowing trillions from foreign workers, squandering resources on weapons and self-indulgence. We won't even pay for their education. Unlike our grandparents, we are demanding that our grandchildren drive themselves deep into college-finance debt in order to gain the education that will, theoretically, make them capable of supporting both themselves and us.

        This is where I see the Ponzi aspect of it all. This is what I mean when I talk about the failure to "invest" the money. Sticking "money" in the "bank" does nothing to ensure that there will be sufficient productivity and resources in order to support Social Security beneficiaries without completely impoverishing the working public.

        From an ethical standpoint, I can't really see why they shouldn't tell us to stick it -- why they shouldn't just say, "Um, right, okay, so here's the thing: you folks could have been investing in education and mass transportation and renewable energy and housing for the elderly and health care infrastructure and an eldercare labor force and so on. Instead, you were running around the world blowing shit up, slaughtering other people's grandchildren, waging a pointless war on drugs, poisoning the planet, drinking bottled water, driving 12 mpg SUVs, etc etc etc, and refusing to pay the tab. So, yeah, you've got all those T-bills that say we owe you that money, but the way we see it, you owe us all the money you borrowed from china and india and the plutocrats in order to lay waste to the planet. So we'll be taxing your Social Security benefits until those debts are paid off."

        To put the torture behind us is, inevitably, to put it in front of us.

        by UntimelyRippd on Fri Sep 17, 2010 at 08:23:01 PM PDT

        [ Parent ]

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