The argument set forth concerning the ratio of workers paying into the social security trust and the retirees drawing benefits from said trust is an interesting but invalid point.
The discussion begins with a couple of simple truths that are used to proclaim negatives that do not exist.
For example, the statement is issued, “In 1950 there was 16 workers paying into the system to every 1 retiree. Today in 2005 there are 3 workers paying into the system to every 1 retiree.”
go below (ex-navy)
The statement appears logical and is issued to cause confusion, incorrect assumptions and immediate distraction from the truth being sought. The statement is a tool to create fear and crisis without revealing such intentions.
We went from 16-1 clear down to 3-1? Wow, is it true? Who knows? Who cares?
The better question would be to ask, “What the heck does that mean in dollars and cents?”
1950 1.5% each = 3% social security rate on a $3,000 income cap
2006 6.2% each = 12.4% social security rate on a $90,000 income cap
That’s strange, 3% of $3,000 as opposed to 12.4% of $90,000 dollars.
Which would you rather have? If you have a choice, you need to be aware it is yet based upon incomplete information.
Well, let’s ask this question, “What were the actual dollar amounts collected and disbursed?
Let’s try this link, http://www.ssa.gov/...
1950 - $ 2,928,000,000 payroll tax receipts. $1,022,000,000 total expenditures paid out.
$1,905,000,000 surplus funds invested in negotiable, marketable US Treasury bonds that earn interest in cash which is invested in afdditional negotiable, marketable US Treasury bonds.
$13,721,000,000 total assets.
2005 - $604,335,000,000 payroll tax receipts.
$441,920,000,000 total expenditures paid out.
$162,415,000,000 surplus funds invested in non-negotiable, non-marketable Government Account Series securities that earn interest in additional Government Account Series securities. IOUs earning interest in IOUs.
$1,663,037,000,000 total assets.
The difference in the two types of investments is self evident. Marketable US Treasury bonds can be sold, bought, etc. upon the secondary market. Any investor, bank, foreign country, etc. can buy, sale, trade, pledge, etc. this type of bond.
The non-marketable bonds are used as an accounting entry method. They are worth absolutely nothing on the secondary market. They are a means to keep track of money owed. They are a form of deficit spending. To be as blunt as possible, they represent theft of money held in a trust account and the process is known through out the corporate world as “cooking” the books.
But I digress, let’s examine the plain cold facts.
With a 16 - 1 ratio the bills were paid and $1,905,000,000 in surplus funds are available.
With a 3 - 1 ratio the bills were paid and $162,415,000,000 in surplus funds are available.
The next time anyone gives you the old ratio bull shit, tell them they are either ignorant or guilty of deceit at best.
Next we will examine the “real” rate of taxation concerning the social security trust fund. Another profound lie that is ignored by the working class of America.