22-12-2004 06:55									#91
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quote: Originally posted by Dissident I fail to see how it is a pyramid shape. enlighten me.

The really scary part is how the Social Security system is funded. The best way to describe it is a legalized Ponzi or pyramid scheme.

A Ponzi scheme, named after the swindler who invented it, involves an investment swindle in which some early investors are paid off with money put in by later investors, with the person at the top taking in all the money and deciding who gets what (usually less than participants expect). The Social Security system involves the federal government collecting money from those who are still working to pay for early investors (referred to by the SSA as an "intergenerational compact"), while deciding when and how much those retirees get (usually less than participants expect). See the difference?

The similarity to the typical Ponzi scheme is even more dramatic when you consider what the federal government does with the Social Security taxes it takes out of your paycheck. You would think that the money collected goes into a separate fund that earns interest and helps fund Social Security benefits. Think again. Money that comes in either gets directly paid out to retirees or, worse, is loaned to another federal government agency that is financially troubled in exchange for an effectively worthless IOU.
http://www.finance.cch.com/text/c40s05d060.asp

	22-12-2004 06:57									#92
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quote: Originally posted by DinoDoc Do pyramid schemes ever end well for the suckers that contribute to it?

In pyramid schemes, people have the choice if they want to be suckers or not... With SS, we don't have a choice...

	22-12-2004 06:57									#93
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wikipedia doesnt' seem to think it's a ponzi scheme

http://en.wikipedia.org/wiki/Ponzi_scheme

quote: However, while funding for a Ponzi scheme resembles that of a state pension system, the two are fundamentally different. State pension systems lack a number of basic features that define Ponzi schemes including: * The belief that profits are coming from something other than the investments of others. * Growth driven by enticement of high returns over a short period of time and, therefore, typically dependent on rollover of investments.

	22-12-2004 07:34									#94
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quote: I may score libertarian on those internet quizzes, but I'm not really a libertarian. I realize we live in a society. Even though I am responsible enough to invest my money far, far better than the goverment can do, most people cannot. They'd just blow their money. It benefits society that the goverment furnishes irresponsible people with enough money to live when they are older.

Yup, you're liberal. The aroma of elitism surrounds you.

	22-12-2004 08:45									#95
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I know this sounds cynical, but if you eliminate Social Security you can kiss America's #1 industry, and millions of jobs, good bye. I'm talking about the healthcare industry. Medicare still provides the lion sized portion of healthcare funding. If you eliminate it you might as well start kissing your local hospital goodbye. Does your small city have cardiac surgery, cath labs, dialysis and a whole slew of advanced medical facilities? Not any more it won't with Social Security and Medicare gone. Think you can share the cost of Mom's pension between the sibs? How about her healthcare costs? Heart surgery, breast surgery, stroke care, all of these can run you well over $20,000 a shot. Better take out a second mortgage. Oh, and by the way, who is going to take care of you when you get old? Think you can save up for it? Just out of curiosity, in this age of downsizing, mergers and small business failure how long does the average job last? Five years? Ten? What's the average time spent out of work between jobs? 6 months? 12? So do you really think that the average working person can really save up enough to pay for his/her pension and his healthcare? The average male is going to live 8 years beyond retirement, the average female 11 years. They will need 50,000 and 66,000 dollars to substitute for their Social Security pension. Insurance for a person that age will cost around one thousand dollars/month.

	22-12-2004 09:04									#96
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quote: Originally posted by Ming And you think that SS is the cause of this...

Yes, I do. I think that guarenteeing an income and a basic level of medical care for retired Americans increased the quality of life of both those Americans and the rest of the workforce.

Do you not think elderly Americans are better off now than they were in the 1920s? Or do you think that's the result of the magic beans we mix in with their prunes?

	22-12-2004 09:05									#97
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quote: Originally posted by Dr Strangelove I know this sounds cynical, but if you eliminate Social Security you can kiss America's #1 industry, and millions of jobs, good bye. I'm talking about the healthcare industry. Medicare still provides the lion sized portion of healthcare funding. If you eliminate it you might as well start kissing your local hospital goodbye. Does your small city have cardiac surgery, cath labs, dialysis and a whole slew of advanced medical facilities? Not any more it won't with Social Security and Medicare gone. Think you can share the cost of Mom's pension between the sibs? How about her healthcare costs? Heart surgery, breast surgery, stroke care, all of these can run you well over $20,000 a shot. Better take out a second mortgage. Oh, and by the way, who is going to take care of you when you get old? Think you can save up for it? Just out of curiosity, in this age of downsizing, mergers and small business failure how long does the average job last? Five years? Ten? What's the average time spent out of work between jobs? 6 months? 12? So do you really think that the average working person can really save up enough to pay for his/her pension and his healthcare? The average male is going to live 8 years beyond retirement, the average female 11 years. They will need 50,000 and 66,000 dollars to substitute for their Social Security pension. Insurance for a person that age will cost around one thousand dollars/month.

Great analysis, Doc!

	22-12-2004 09:07									#98
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quote: Originally posted by Dr Strangelove I know this sounds cynical, but if you eliminate Social Security you can kiss America's #1 industry, and millions of jobs, good bye. I'm talking about the healthcare industry. Medicare still provides the lion sized portion of healthcare funding. If you eliminate it you might as well start kissing your local hospital goodbye. Does your small city have cardiac surgery, cath labs, dialysis and a whole slew of advanced medical facilities? Not any more it won't with Social Security and Medicare gone. Think you can share the cost of Mom's pension between the sibs? How about her healthcare costs? Heart surgery, breast surgery, stroke care, all of these can run you well over $20,000 a shot. Better take out a second mortgage. Oh, and by the way, who is going to take care of you when you get old? Think you can save up for it? Just out of curiosity, in this age of downsizing, mergers and small business failure how long does the average job last? Five years? Ten? What's the average time spent out of work between jobs? 6 months? 12? So do you really think that the average working person can really save up enough to pay for his/her pension and his healthcare? The average male is going to live 8 years beyond retirement, the average female 11 years. They will need 50,000 and 66,000 dollars to substitute for their Social Security pension. Insurance for a person that age will cost around one thousand dollars/month.

	22-12-2004 09:19									#99
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I say eliminate all of the SOCIAL SECURITY TAXES on the poor and fund a SS program for seniors and disabled people with money taxed from the rich.

	22-12-2004 09:24									#100
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quote: Originally posted by Rufus T. Firefly Do you not think elderly Americans are better off now than they were in the 1920s?

I think the elderly are far better off because of better meds and healthcare. I also think it's a shame that some of the young members of the family don't seem to give a damn about there aging parents.

If people had been forced to save their money (ala SS but not in the government scheme of you are really paying for somebody else and you will never get back all you put in) in safe insured accounts... once we got over the hump of all the old people that weren't covered, the basic system would have been in place. Those that really needed help would be provided for like a welfare system... and less people would need that help because of a better retirement planning system. We would be FAR better with this type of system than the current SS system. And the standard of living for them would be a lot better than it is today.

	22-12-2004 09:39									#101
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quote: Originally posted by Ming I think the elderly are far better off because of better meds and healthcare. I also think it's a shame that some of the young members of the family don't seem to give a damn about there aging parents.

Which they can afford -- sort of -- thanks to SS/Medicare.

I don't disagree with the rest of your analysis; compulsory saving accounts would have been a much better system, though it wouldn't have solved the immediate problem SS addressed in the 1930s. IBut just because SS is an imperfect -- even wildly imperfect -- system doesn't mean it isn't a force for good.

	22-12-2004 10:02									#102
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quote: Originally posted by Ming I think the elderly are far better off because of better meds and healthcare. I also think it's a shame that some of the young members of the family don't seem to give a damn about there aging parents. If people had been forced to save their money (ala SS but not in the government scheme of you are really paying for somebody else and you will never get back all you put in) in safe insured accounts... once we got over the hump of all the old people that weren't covered, the basic system would have been in place. Those that really needed help would be provided for like a welfare system... and less people would need that help because of a better retirement planning system. We would be FAR better with this type of system than the current SS system. And the standard of living for them would be a lot better than it is today.

Not all of us have access to decent investment advice. After my mother died I had a chance to invest a decent chunk of change in Microsoft and Walmart. Do you know where my broker put my money? Tyco and a number of other losers. You can guess how my investments have fared.

	22-12-2004 10:52									#103
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Doc, SS and Medicare are separate programs, eliminating one doesn't eliminate the other. And you say the healthcare industry can't survive as we know it without Medicare? Then why do so many hospitals shift their losses from dealing with Medicare onto private insurers? Without Medicare private insurers would cover old people just as they did before Medicare.

	22-12-2004 11:01									#104
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quote: Originally posted by Berzerker Without Medicare private insurers would cover old people just as they did before Medicare.

Exactly, they wouldn't cover them at all.

	22-12-2004 11:08									#105
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I'd like to eliminate SS, but that would mean old people staying in jobs longer, which would mean less jobs for me when I get out of college in a couple years, which means less money. Possibily less than I'd get even with SS taxes.

	22-12-2004 11:59									#106
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I just wanted to ask one question: The money that is paid to SS, where does it go? because I keep hearing of this "fund", but does it just lie in that fund? or is it invested in treasury bonds?

	22-12-2004 12:33									#107
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it goes to iraq.

	22-12-2004 12:35									#108
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so it's treasury bonds, eh?

	22-12-2004 13:21									#109
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quote: Originally posted by Berzerker Without Medicare private insurers would cover old people just as they did before Medicare.

Before you start making blanket statements like this, you need to look up "market failure".

The whole point behind SS is that it provides goods that people want that the market cannot provide adequately.

Unless you understand and are prepared to counter arguments relating to market failure, you have no business taking any sort of position against welfare. We've had this argument over and over again, and you have yet to come up with any sort of argument as to why the market will succeed in providing products like healthcare efficiently when there is no example I have ever seen of a market system doing so.

Markets tend to suck when it comes to insurance products and that is what medicare is. In fact that's what SS is too - it's just insurance against getting old.

	22-12-2004 13:37									#110
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quote: Originally posted by Agathon Anyone else for a law whereby Libertarians are thrown into jail for no other reason than to see the looks on their faces?

I'll vote for it if you're the one who is required to enforce it.

	22-12-2004 14:00									#111
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quote: I'll vote for it if you're the one who is required to enforce it.

No probs. Libertarians are all nerdy get-sand-kicked-in-your-face types anyway.

Why do you think they spend so much time dreaming about owning assault rifles?

	22-12-2004 17:27									#112
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quote: Originally posted by Urban Ranger So you admit that libertarianism is completely heartless?

Assuming we admit something like this , then you will have to admit that all forms of statism ( socialism , fascism , the precious communism , and welfare-statism ) are completely heart-based , and thus illogical and mindless ? I'd say such an admission would doom your systems to failure , simple because they have no grounding in reality ( in the mind , logic , and reason ) .

In fact , I think that statists are doomed as it is . The more statist you are , the more problems you will invite and inflict on yourselves . Just wait and watch . The collapse of the communist Soviet Union was just the beginning . Soon will come the fall of the unsustainable systems of the welfare-states of the Scandanavian countries , then the fall/decay/consignment to oblivion of China , and maybe the last will be the fall of the American statist systems . Thankfully , the Americans have the sense to abandon a sinking ship ( at least , I hope they have ) , so I hope that the fall of SS will be relatively painless for India .

Just wait and watch . It'll be fun to see this show .

	22-12-2004 17:40									#113
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quote: No probs. Libertarians are all nerdy get-sand-kicked-in-your-face types anyway.

With guns.

	22-12-2004 18:26									#114
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quote: Originally posted by Berzerker Doc, SS and Medicare are separate programs, eliminating one doesn't eliminate the other. And you say the healthcare industry can't survive as we know it without Medicare? Then why do so many hospitals shift their losses from dealing with Medicare onto private insurers? Without Medicare private insurers would cover old people just as they did before Medicare.

Originally they were capitalized by the same fund. Your "Medicare" payments come from the same 14% you used to pay for the 2 together, but now they just parcel them into seperate Medicare and Social Security items on your paycheck.
During the 1970s and 1980s over half the income of the healthcare industry came from the US government. I dare say that a majority of the hospitals in the US today would not be around in their present form without Medicare.

You also have to consider that the healthcare industry hires some of the finest PR minds in the country. Private practitioners may sometimes lose money from some services funded by Medicare, but hospitals don't.

	22-12-2004 19:45									#115
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quote: Originally posted by aneeshm Assuming we admit something like this , then you will have to admit that all forms of statism ( socialism , fascism , the precious communism , and welfare-statism ) are completely heart-based , and thus illogical and mindless?

See, you need a better handle on logic.

Supposing libetarianism is heartless does not mean its opposition is all heart and mindless.

quote: Originally posted by aneeshm I'd say such an admission would doom your systems to failure , simple because they have no grounding in reality ( in the mind , logic , and reason ).

This does not follow from the premise, i.e. libertarianism is heartless.

quote: Originally posted by aneeshm Just wait and watch . It'll be fun to see this show.

Unless you put your prediction in a definite time frame, what you said is essentially meaningless.

	22-12-2004 20:29									#116
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Insurance only works when there is a small chance that the insured will need a payout. With medicare, the chance is almost 100%. Thus, insurance should cost as much as just paying out of pocket. However, this is too expensive for most older people. Thus, the government tries to fix this by forcing the enlargement of the insured pool of people (to include all workers through the medicare portion of the payroll tax). This lowers the chance that the insured will need immediate payout, but the eventual need for payout is still almost 100%. In addition, the ratio of old people to workers keeps getting higher and higher, so the medicare payroll tax will keep needing to be increased to keep up. At some point, this will become unsustainable and old people beyond a certain point will be left to die.

	22-12-2004 20:37									#117
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This is simply an issue of values. The private system will NOT ensure care for every citizen- its not profitable, it won;t happen.

So, are we willing to lower the possible total wealth we create in order to ensure every citizen has a chance for and enhanced quality of life at the end of it, or are we not?

I am all for bettering the lives of all citizens if it means less economic efficiency and lower total wealth.

Obviously many here value money more than people

	22-12-2004 21:53									#118
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quote: Originally posted by Azazel I just wanted to ask one question: The money that is paid to SS, where does it go? because I keep hearing of this "fund", but does it just lie in that fund? or is it invested in treasury bonds?

It doesn't go anywhere. It goes into the general treasury. It's supposed to be ermarked only for SS, but Congress has been "raiding" that portion of the treasury and so it'snot sitting in our government cofferes or being invested or anything like that. It's been spent.

	22-12-2004 21:59									#119
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Can we not simply eat the old and the poor?


"I have been assured by a very knowing American of my acquaintance in London, that a healthy adult well nursed is at sixty five years old a most delicious, nourishing, and wholesome food, whether stewed, roasted, baked, or boiled; and I make no doubt that it will equally serve in a fricassee or a ragout. "

Jonathan Swift: A Modest Proposal 1726


http://www.stevebrown.clara.net/htm...st_proposal.htm

	22-12-2004 23:07									#120
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The only reason SS is a 'pyramid scheme' is beacuse that the baby boomers chose to have a lot less children than their previous generation.

The system works if the workingforce grows at the same rate as the number of pensioners, but as the workforce is going to stop growing due to less children being born then that is what is causing the system problems.


When people like Ming complain that they should get something back out of the system I would like to remind them that their generation (which is also mine I might add) should have had more children, it is due to the baby boomers desire not to spend so much by having less children that the funds for their retirement are lacking.

So basically the problem with SS is due to a lack of investment (specifically in children), which was a choice of the generation that failed to make that investment - unfortunately it looks like they won't be the generation to pay for it.

It is the choices of the 'baby boom' generation that turned a sustainable system into a pyramid.