Social Security Surplus

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Quote mauiman58:

Social Security is the largest Ponzi scheme in history. I am still waiting for soemone to throw some numbers at me to prove that statement wrong. You didn't even bother to try.

Explain how a program that has successfully payed 100% of it's benefits over 70 years and will continue to do so for another 25 years be a Ponzi Scheme. By the time that 25 years comes around, we may have to reduce benefits or raise the retirement age if we don't rectify the structural problem of raising the cap on taxed income. A Ponzi Scheme by definition intends to get something from nothing as a primary goal, whereas Social Security has some secondary issues that need to be addressed in order to maintain it as the successful social safety net that it has been for over 70 years. Where are your numbers proving Ponzi Scheme?

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Laborisgood
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Jul. 31, 2007 4:01 pm

Its a ponzi scheme because the money you invested is not the money you are getting its the money im paying in. This is textbook definition of a ponzi scheme using new investors funds to pay the dividends of the older investors. I dont believe that when I retire i will get what i payed into that system I would rather opt out right now at the beginning of my career so i can keep more of my money and invest it wisely to grow my own nest egg.

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Quote chilidog:

"Based on the maximum payment by a worker retiring at the end of 2010 at the “normal” retirement age of 67 after working since age 21 the total Social Security taxes paid by the worker would total $113,173 and the same amount for the employer for a total of $222,346. Had the money been invested, like millions of other investors have, in U. S Treasures at 5 percent, the tax payments over the entire time should have grown to $497,270."

http://www.withdrawtaxfree.com/newsletter-sample.htm

I don't know who Jim Jorgensen is. Based on his specificity to the DOLLAR I have to assume that he put more work into his analysis than you did. (Although 113k times 2 is 226k, not 222k. On the other hand, it appears to me that before 1984 the employer contribution was less than the employee contribution, so it's possible he's overstating total contributions.)

He makes the same assumption you do, that someone right out of college is earning at the highest pay for maximum Social Security, and continues at that rate for his entire career, and also working for 45 years.

He's also giving you 16 more years of contributions, from 1965 to 1981. And he still comes up with only $497k.

I don't see anything in his analysis that indicates he is assuming purchases of 10 year bonds.

If you insist on using 7% please provide a link to someone else's analysis to support it. I understand that "$6,500 inversted every year for 45 years at 7% return will grow to just under 2 million dollars" You couldn't contribute $6,500 before 1991. Which was not 45 years ago.

It's not that hard. Make your own spreadsheet. In your particular case we're only talking about 40 pieces of data: just put in the maximum contribution for the year, starting with $2,415 in 1982, and put in the yield on the 30-year bond at the end of the year (what the hell put it as of the beginning of the year.)

chilidog
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Jul. 31, 2007 4:01 pm

Two things chilidog:

Here is the link to find out what the T bill rates were over time. I have given it before:

http://www.federalreserve.gov/releases/h15/data.htm

Also remember when I talk about contribution I include the employer match, which until this year was dollar for dollar.

But since I have time now I will set up a spreadsheet using the max contributions and the 30 year t bill rate for the year of the donation.

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Jan. 6, 2012 6:45 pm

OK Chilidog, here are your numbers for the time period 1970-2010, 40 years. max SS contribution, and the tax rate of the year in question. I did notice that the rate did not hit the full 12.4% until much later than I thought. And as I am sure you realize, the max wage base creeps up every year. I then took the max possible contribution and assumed a rate of return untilt he end of 2010 at the 30 year t bill rate at the year of the donation. If the time period was longer than 30 years, I did reduce the returns of all years over 30 to the t bill rate 30 years later.

Here are the numbers:

Total contributions: $257,000

Account value, end of 2010: 1.3 million ( this is what he should have)

Social Securty for this poor soul: $28,000 a year (correct me if I am wrong here)

Same conclusion, a terrible deal via the federal government. A total Ponzi scheme where everyone in the system now is getting screwed!

Can I attach my spreadsheet somehow?

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Quote CollegeConservative:

Its a ponzi scheme because the money you invested is not the money you are getting its the money im paying in. This is textbook definition of a ponzi scheme using new investors funds to pay the dividends of the older investors. I dont believe that when I retire i will get what i payed into that system I would rather opt out right now at the beginning of my career so i can keep more of my money and invest it wisely to grow my own nest egg.

Ponzi schemes are run by people intent on commiting fraud, and taking all the money for themselves. This is why pyramid programs typically are also Ponzi schemes.

Social Security is a national old age, widow and orphan insurance program to mitigate the worst events of life from those no longer able to care for themselves. Will some contribute far more than they take out? Sure, just like any insurance program. Will some receive far more than they contribute? Yes, just like any insurance program.

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Sep. 14, 2010 8:21 pm

Thats not what its builded that way it is billed as a retirment program to help u save so we should get out the whole amount of what we put in and regardless why cant i opt out?

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CollegeConservative
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May. 4, 2012 2:22 pm

If you get to opt out of ss, then do I get to opt out of paying for a bloated military, and a wasteful private prison system?

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Quote Phaedrus76:If you get to opt out of ss, then do I get to opt out of paying for a bloated military, and a wasteful private prison system?
Thats diffrent one is a system that says its taking my money to set up a retirement for me one is an expressed power of the federal government. If i dont pay into social security all it does is effect me unless it is a pyramid scheme and need my money to survive?

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May. 4, 2012 2:22 pm

Those wanting to opt out of SS are actively choosing to discard millions of people for their own selfish gains that they disguise as freedom and liberty. When our gov't (via military) chooses to discard millions of people for selfish gains they also dress it up with freedom and liberty. SS and Military both take our money and use it for some intended purpose. Which one actually delivers any freedom and liberty and who are the recipients? A mere shift of priorities between defense spending and social safety net is all that is required to fix the Ponzi Scheme. When I say Ponzi Scheme, I am referring to our bloated defense budget and NOT Social Security.

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Quote mauiman58:

Sorry again I say that Social Security is yet another beautiful example of the government getting involved in something that it should never have ventured into, retirement accounts.

mauiman58: social security is not a retirement account. It is an insurance program. It insures that the elderly have a miminum standard of living and are not at the mercy of a volitile stock market. If you or anyone else wants to invest your money for retirement then you are free to do so. The government (which by the way is we the people) is just insuring through social security that the elderly don't starve to death. That they stay out of poverty. Today, thanks to social security, the elderly have been cushioned from the banksters" crash of the economy that has so devestated many Americans. I beg to differ. social security is not a ponzi scheme.

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Jul. 31, 2007 4:01 pm

To that I say, TAKE CARE OF YOURSELF!! Don't look to t he government to do it for you. If you want insurance, buy insurance on the open market.

Today thanks to Social Security people are retireing with a with $25,000 a year from social security who should have an account worth 1.3 million instead.

Just another way the bleeding heart liberal progressives are buying themselves votes by getting absolutely as many people dependant on the Federal government as possible. Meanwhile the entire economy is in a downward spiral because of that mentality.

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Jan. 6, 2012 6:45 pm

So I guess that the money I make is not mine to do as I please with, but if you decide that someone needs my money more than I do, you have the right to steal it out of my paycheck? That's what SS is, money stolen out of my paycheck, with little or no return to me.

Sorry it is my money, and I want to give it to those in need (which I do), I should be able to chose who to support.

And we are isolating SS here, not discussing any other programs supported by regular income taxes.

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Quote mauiman58:

So I guess that the money I make is not mine to do as I please with, but if you decide that someone needs my money more than I do, you have the right to steal it out of my paycheck? That's what SS is, money stolen out of my paycheck, with little or no return to me.

Sorry it is my money, and I want to give it to those in need (which I do), I should be able to chose who to support.

And we are isolating SS here, not discussing any other programs supported by regular income taxes.

Basically you don't want to be part of a civilized society, a country of WE THE PEOPLE. You don't want to be a part of a nation that looks after one another. You don't want to be part of a team. Team Maui. That is your right. It is however up to voters in a Democratic Republic to decide whether we benefit better as a nation through individualism or team work. I vote for team work every time.

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Quote scriber1:
Quote mauiman58:

Sorry again I say that Social Security is yet another beautiful example of the government getting involved in something that it should never have ventured into, retirement accounts.

mauiman58: social security is not a retirement account. It is an insurance program. It insures that the elderly have a miminum standard of living and are not at the mercy of a volitile stock market.

One can just imagine that if there was NO program like SS, and millions of poor and/or ill seniors were left to the states or to charity to care for, conservatives would be yelling that there should have been a program they paid into their working lives so they'd not be either a burden on society or left to die.

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Feb. 29, 2012 2:19 pm

Quote mauiman58:Sorry it is my money, and I want to give it to those in need (which I do), I should be able to chose who to support.
I think we all would prefer American's be as independent as possible. Which is why I await your condemnation of the Right's class warfare on behalf of the rich against the working and middle classes. Do you even favor simple steps to foster financial independence such as the minimum wage or to preserve that earning power indexing it to inflation?

I think you're also missing a simple truth that while it's a compelling myth, virtually NO ONE makes all their money on their own without building on the investments… public and private, of generations before us. I may have asked this question here before… but what's a killer idea worth in an impoverished 4th world nation without the physical, educational, scientific, public health, law enforcement, military, monetary, legal, intellectual property rights etc etc infrastructures we have? The answer is that idea would be worth nothing. When working well, the private and public sectors bootstrap each other to higher levels of prosperity. That interdependence is the tide that lifts all ships. The Right's war on the public sector threatens prosperity for all but the rich.

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Quote mauiman58:

OK Chilidog, here are your numbers for the time period 1970-2010, 40 years. max SS contribution, and the tax rate of the year in question.

Here are the numbers:

Total contributions: $257,000

Account value, end of 2010: 1.3 million ( this is what he should have)

Interesting.

Nowhere near $2 million.

And I'm guessing YOUR account starting in 1982 is nowhere near $1.3 million.

Am I correct?

chilidog
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Jul. 31, 2007 4:01 pm
Quote mauiman58:

Pierpoint, if you going to comment on one of my posts, at least give me the courtesy of reading it first. If you would have taken even 5 minutes to read it, you would have seen that I started the case in 1982, not in the 1970's.

The only logical conclusion that one can come to about you is that you have your mind made up about the situation and refuse to be confused by the facts.

You've constantly been using a 40 year timeline... and I've been using the same... 40 years from 1971 to 2011. So you've started now from a new timeline?

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Quote mauiman58:This is supposed to be a government run pension plan. When a person puts more in, he should get more out. That's how it works in the private sector, and that's the way it should be here.
Nonsense.
Repeat after me Brainiac... SOCIAL SECURITY IS NOT A PENSION PLAN. IT'S A SOCIAL INSURANCE PROGRAM. One can easily complain low income earners get more back than they paid in. That's the case with my mom who gets survivors benefits from my dad's account. And one can just as easily complain high income earners will never get back what they paid in. There is some redistribution inherent in the program. Just because YOU think you're paying too much in over your working lifetime... how do you know YOU or YOUR wife or one of YOUR kids wouldn't be disabled a year or two after starting work and be on SSI for their entire life and WE'D be paying for? Suddenly SS looks like a good idea, right? Two of my friends have MS. It could have been you at age 30.

All you're doing is taking ONE questionable scenario and saying… AH HA, see! SS is a rip-off Ponzi Scheme without considering ALL the possibilities of what SS covers.

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Quote Pierpont:

Repeat after me Brainiac... SOCIAL SECURITY IS NOT A PENSION PLAN. IT'S A SOCIAL INSURANCE PROGRAM. One can easily complain low income earners get more back than they paid in. That's the case with my mom who gets survivors benefits from my dad's account. And one can just as easily complain high income earners will never get back what they paid in. There is some redistribution inherent in the program. Just because YOU think you're paying too much in over your working lifetime... how do you know YOU or YOUR wife or one of YOUR kids wouldn't be disabled a year or two after starting work and be on SSI for their entire life and WE'D be paying for? Suddenly SS looks like a good idea, right? Two of my friends have MS. It could have been you at age 30.

All you're doing is taking ONE questionable scenario and saying… AH HA, see! SS is a rip-off Ponzi Scheme without considering ALL the possibilities of what SS covers.

There may be hope for you yet. Generally agree with your post to to the Good things done by SS. However you only added to the Negatives that Maui is stressing.

Care to address the entitlement (government run pension plan) aspect that Maui is talking about. As I already have said. It was designed as an social insurance program. Yet Bill Gates gets to draw S.S. by virtue of Age. That makes it a Pension plan and not a Social insurance program.

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Sep. 30, 2011 3:51 pm

Chilidog, here are the calculations as they stand:

For a 40 year career ending in 2010, you should have 1.3 million dollars, instead you will be stuck with $25,000 a year

For a 45 year career ending in 2027, you should have 2 million dollars, instead you'll be stuck with about $40,000 a year.

Those number still stand, but different timelines give you different numbers.

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mauiman58
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Jan. 6, 2012 6:45 pm

Pierpoint, for my last calculation I assumed a 40 year career, start Jan 1, 1971. Using that starting point and figuring someone who contributed the max for all 40 years you get the following.

What the person should have in the bank- 1.3 million

What the person will get from social security- $25,000 a year

My other calculations were for a 45 year career starting Jan 1, 1982. You will get different numbers for that case.

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Jan. 6, 2012 6:45 pm

look Im 22 i dont want it, why cant I as a private citizen decide not to pay in because i can invest my money better and grow that more than the government can. The other thing it was not designed to last this long it was a bridge for the elderly in the great depression iwas not made to replace personal responsibility.

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Quote Capital:Yet Bill Gates gets to draw S.S. by virtue of Age. That makes it a Pension plan and not a Social insurance program.

So in your mind getting something for retirement is NOT a form of "social" security? While there's some redistribution inherent in the program doesn't mean it's total redistribution. Some aspects of SS are an entitlement, some some are NOT. Aspects like old age are somewhat dependent on contributions. If a rich person could NOT collect after contributing for his working life, the program might have faced more opposition the past 70 years. I can hear the Right screaming about that now.

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Feb. 29, 2012 2:19 pm

wouldn't the system benefit from not having people that can provide from their own retirement? If i don't want it why is it forced on me?

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Quote CollegeConservative:

look Im 22 i dont want it, why cant I as a private citizen decide not to pay in because i can invest my money better and grow that more than the government can. The other thing it was not designed to last this long it was a bridge for the elderly in the great depression iwas not made to replace personal responsibility.

You SAY you can invest your money better... but who's going to pick up the tab for you gallant souls if the stock market or whatever hits a peak and starts 30 years of stagnation or actual decline? Who then is going to be screaming that the government should have better protected "investors" against the predators or declines in the market? After all, what's pumped up the stock market the past 30 years... after about a quarter century of stagnation, were two main factors... government policy to make IRA contributions tax deferred, and the Baby Boom demographic. What if that tax policy changes? What if GenX or GenY stop propping up stock prices when Baby Boomers start to cash out? The growth in the market is predicated on a small percentage of increased demand over the desire to sell. It doesn't take much to discover all one has is wealth on paper. The point of Social Security is SECURITY.

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Feb. 29, 2012 2:19 pm

I have the freedom to fail in this country,if i go broke it is no ones fault or responsibility of the government to prop me up. I take the risk i reap the reward or the consequences why don't we allow tha.

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Quote mauiman58:

Pierpoint, for my last calculation I assumed a 40 year career, start Jan 1, 1971. Using that starting point and figuring someone who contributed the max for all 40 years you get the following.

Your claim of more realistic numbers is suspiciously close to your original claim based on wildly unrealistic numbers. And just what percentage of workers ever paid the maximum contribution? So what's your point? That for a small percentage of high income workers, about 10% of workers, the retirement benefit of SS MIGHT be unfair for them? Of course that still leaves out the other benefits of SS. Like I asked before... what if you or someone in your family became disabled at age 25 and never really contributed to SS. Would that be "unfair" to the rest of us to pick up your tab?

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Quote CollegeConservative:

I have the freedom to fail in this country,if i go broke it is no ones fault or responsibility of the government to prop me up. I take the risk i reap the reward or the consequences why don't we allow tha.

Yup... sounds great! And that's what all those brave independent souls who say they don't need health insurance... then get sick and end up getting free ER care or on Medicaid. As for the "risks and rewards" part, just remember that such markets function in large part because of government oversight. Conservatives believe in a myth of independence that just doesn't exist outside the wild west. How many people would get rich on inventions or works of art if not for government protection of intellectual property rights? How many could make money exporting overseas if government didn't build harbors? How many could make money shipping to the 50 states if government didn't build highways? Conservatives are blind to all the ways they or the family are dependent on something government has done. It reminds me of the Parable of Joe The Republican

http://www.nobeliefs.com/RepublicanDay.htm

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Feb. 29, 2012 2:19 pm

Pierpoint two things:

Run the numbers yourself. I have told you how I based the calculation, I am even willing to send you my spreadsheet if you want to check the calculations. You just refuse to face reality.

The point is that SS is a total rip off. Yet the bleeding heart liberal want us to believe it is the greatest thing since sliced bread. We simply cannot funtion without government help, and the more government the better. And remember, all I am doing is investing in T Bills here, so all this hystaria over what happens if the stock market crashes is just a smoke screen, a diversion from the only conclusion anyone can draw here, SS IS THE BIGGEST PONZI SCHEME IN HISTORY!!

And yes to you and everyone else who screams at me that SS has other benefits, yes it does, but that can be replaced by something that the private sector has called disability insurance. And disability insurance equivalent to what SS provides can be had at a fraction of what you have to pay into SS.

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Jan. 6, 2012 6:45 pm

What made this country great was that people had the freedom to suceed or fail. When we look at the growth of the country we see that when we have more freedom we have more growth but when the government coddles us innovation starts to decline and growth stagnates. The things like the train,auto mobil, telagraph networks, tv, radio, cable all things produced by industries taking wild risks some were rewarded others failed but that made us stronger. Look at the telagraph for example the first 2 offices were set up in 1940 by 1960 you could send messages almost to any major city in the world by telegraph. Look now it takes half that time just to surevey land for a pipeline or decide on a desig for the new trade centers goverment is not advancing us its slowing us down in beauracracy.

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STILL ignoring my questions,

Quote mauiman58:

Run the numbers yourself. I have told you how I based the calculation, I am even willing to send you my spreadsheet if you want to check the calculations. You just refuse to face reality.

I don't have time to dissect your spreadsheet. But you should be able to post some of the numbers so we can spot-check what you've done. After all, given your original wildly unrealistic numbers, and your attitude, I honestly don't trust you.

But the reality here... if your latest numbers are even correct your "total ripoff" conclusion is based on as little as 10% of the workforce making what is now over $110k? Is all your reasoning based upon drawing such general conclusions from such extreme cases?

And yes to you and everyone else who screams at me that SS has other benefits, yes it does, but that can be replaced by something that the private sector has called disability insurance.
There you go again, assuming everyone has the means to pay for such insurance... and policies usually don't cover lifetime disability... but usually 1-5 years of partial income.

BTW I haven't made any statements that SS is the best program in the world. I've tried to bring some balance to your rabid Right anti-SS rant. What I DO object to is your total condemnation of it. YOU are the irrational extremist here, not I.

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Quote Pierpont:

There you go again, assuming everyone has the means to pay for such insurance... and policies usually don't cover lifetime disability... but usually 1-5 years of partial income.

So its the goverments responsibility to subsidize for that? No we have personal responsibility in this country it means that some fail and that sucks but thats life its not fair. Charities like churches and other organizations can take up this slack if they want but it is not a responsibility or power of the government.

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Quote CollegeConservative:

What made this country great was that people had the freedom to suceed or fail. When we look at the growth of the country we see that when we have more freedom we have more growth but when the government coddles us innovation starts to decline and growth stagnates.

Anyone talking about making us all dependent on government for everything? You're listening to too much Rush. I believe there's a moral hazard for such dependence. Sure... I'm all for taking risks... and believe we're not innovative enough. A topic for another thread. How much innovation do we lose because some potential inventor is afraid strike out on their own due to a fear of losing their employer-based health insurance because of a pre-existing condition? The Right loves to claim a simplified tax code could free employers to do other things. So could going Single Payer. We could free up all those millions of private health insurance bureaucrats to do productive work.

The things like the train,auto mobil, telagraph networks, tv, radio, cable all things produced by industries taking wild risks some were rewarded others failed but that made us stronger.
For someone who claims to be a 22 year old "college" conservative... you certainly write like an illiterate. And you're STILL ignoring the fact that without government patent protection... there'd be less motivation for innovation and less ability to monetize it. And let us not forget that few ever innovate on their own. They usually just add the last piece to a puzzle.

Look at the telagraph for example the first 2 offices were set up in 1940 by 1960 you could send messages almost to any major city in the world by telegraph. Look now it takes half that time just to surevey land for a pipeline or decide on a desig for the new trade centers goverment is not advancing us its slowing us down in beauracracy.

Really? We could do all that by 1960? At that rate we'll have spell-checkers by 2047!

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Feb. 29, 2012 2:19 pm

Quote CollegeConservative:

Quote Pierpont:

There you go again, assuming everyone has the means to pay for such insurance... and policies usually don't cover lifetime disability... but usually 1-5 years of partial income.

So its the goverments responsibility to subsidize for that? No we have personal responsibility in this country it means that some fail and that sucks but thats life its not fair. Charities like churches and other organizations can take up this slack if they want but it is not a responsibility or power of the government.

Sure it's a responsibility of government. Try reading the Preamble or Article 1 sometimes. Government has the power to tax for the General Welfare. James Madison during the First Congress was seeking federal money to build lighthouses and hospitals for disabled seamen. That power didn't have to be directly enumerated.

The problem with letting the private sector handle charity work is that poor areas tend not to be able to afford it... any more than they could fund quality education. Again, the Right is utterly blind to the role of government in developing the nation. Think poor, sparsely populated, states could afford rural electrification or highways on their own? Even now phone users are taxed to pay to develop rural internet service. Think government had no role in providing railroads their right of ways? Think government had no role in developing the NTSC TV standard? Conversely, Reagan left it to the market to develop AM Stereo and the effort was a complete failure. Sometimes the private sector not only fails, but sets back innovation. Government has many roles and one is the redistribution of wealth. Interestingly, many of the so-called Red states are the biggest receivers of government money with Blue states being the donors. Sarah Palin's fiercely independent welfare state of Alaska was in 2005 getting about $1.80 from Washington for every $1 they paid in taxes.

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Feb. 29, 2012 2:19 pm

The power to tax and the power to redistribute wealth are two diffrent things. Article ! states that congress has the power to tax for general welfare within the structure for enumerated powers like the commerce clause that built the errie cannal and defense. The constitution does not give government the right to take from the rich and give to the poor in fact Madison himself said that when the goverment started making handouts we would no longer have democracy in this country but mob rule. With 50% of the country not paying income tax and 60% getting some form of assistance we are fastly approaching that time. Back to the power to tax even if we say the goverment can redistribute how is it not a violation of the 14th amendment to have me pay a higher percentage then the recipiant? Are we not all equal? I say maybe we need to go back to the reverse of our forefathers mantra no representation without taxation.

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May. 4, 2012 2:22 pm

Probably when a few have 90% of the wealth, the few willl pay 90% of the taxes....and still come out smelling like roses while the rest grub in their dumpsters for a meal.

The Constitution was written for an agricultural country where the majority of the non-slave population owned their own business, farm or craftsman's shop or cottage. . It wasn't written for an industrialized corporate era and definately not for a society of financialized capitalism where the focus of making monetary claims on the products of society is in trading financial paper....gambling rather than producing anything of tangible value. Parasitical.

We learned a long time ago that when huge wealth disparities exist under our peculiar application of capitalism that economic collapses follow. That wasn't known at the nation's founding. Fortunately, the Founding Fathers created a way to peacefully address the unforeseen by providing the means to amend the Constitution or scrap it entirely and start over from scratch.

The Constitutional means to address a coming merging of economic, resource and environmental collapse is there if we care to use it The Founding Fathers weren't twits..

Of course, if you're a "college" conservative, you should already know all of that if you paid attention in class..

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 4:01 pm

Then change it through the amendment process not back room deals and disguised legislation, but untill then our tax system is a violation of the 14th amendment.

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CollegeConservative
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May. 4, 2012 2:22 pm

You can have so called "mob rule", power distributed amongst many or you can have a dictatorship like we are headed for now. It's sad to see that even the young are entering the adult life with facism and plutocracy as their aspirations. I know that the gigantic propoganda machines have a huge influence on young minds but I also used to believe that every generation was apt to be more intelligent than their previous genration.

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Jun. 25, 2011 7:53 am

Im intelligent enough to see the writing on the wall when our presidents new slogan is "forward". Forward meaning onward comrades to socialism which allways = dictatorship. Capitalism isnt fair but its the fairest system there is.

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CollegeConservative
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May. 4, 2012 2:22 pm

OK, I'll throw a few of my spreadsheet lines at you, but after that you are on your own. If you don't want to believe me you won't, no matter what the facts of the situation are.

Max wagesRateTotal ContributionT BillTotal in 20107.88.40.65526.37.29409659799.20.8286.3

8.373941131

The above numbers are 1971 and 1972. Max wages, total contribution, and total in 2010 are in thousands of dollars. Rate and t bill is in percent. To figure the total in 2010, take the total contribution, then figure 30 years of growth at the 1971 rate, then 10 years of growth at the 2001 rate (5.94%). so the formula for that year is .6552 times 1.063 to the 30th power times 1.0594 to the 10th power. That translates to $7,294 in 2010.

The second line is for 1972. Same formula, except now you take the 2002 rate and only take that to the ninth power since you now have only 39 years.

And on and on until 1981

Then in 1981 and beyond you take the t bill for that year and use the following formula:

Contribution times (1+(T Bill rate/100)) to the nth power where n equals the number of years to the end of 2010.

Then you add us all 40 numbers and you will get just under 1.3 million. Try it for yourself.

As far as disability insurance goes, if we did not have so much money stolen out of our paycheck for FICA, we would have plenty of money left over to buy disability insurance. And a whole lot of other things.

College Conservative, I feel your pain. I got totally screwed and I am 54 right now. Your situation will be at least one order of magnitude worse than mine.

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mauiman58
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Jan. 6, 2012 6:45 pm

Sorry I tried a cut and paste in the previous post, and it did not work. So let me throw the numbers you need from 1971 and 1972 here:

1971 1972

Max wages $7,800 $9,000

SS Tax Rate 8.4% 9.2%

Max SS contribution $655 $828

T Bill Rate 6.3% 6.3%

Total in 2010 $7,294 $8,374

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mauiman58
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Quote CollegeConservative:

Im intelligent enough to see the writing on the wall when our presidents new slogan is "forward". Forward meaning onward comrades to socialism which allways = dictatorship. Capitalism isnt fair but its the fairest system there is.

I hate to be the one to tell you this but capitalism is a form of socialism in disguise. Do you have any idea how many capitalistic private corporations you subsidize with your tax dollars? Unless you grow your own food, make your own clothes, build your own cars, furnish your house with all home made items you are being "forced" yes forced to pay money to many, many corporations through your tax dollars. These may even be corporations that you never buy a single item from. Wally world is one of the biggest leeches off of the tax dollar that there is. They usually get free land or "grants" from local governments in order to be able to bring you all that precious chinese product. Then there's the oil industry, the nuclear industry, the farming industry, the produce industry and so on and so on. You don't have a choice but to pay for all of this and it's not ending up in the guberments hands.

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Bush_Wacker
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Quote WorkerBee:

Straw man arguments aside, the demographics are what they are and we will be down to a ratio of 2.1 workers supporting each retiree. Is raising the retirement age to 68 or so really that terrible?

.

Soc. Sec. was tinkered with to pay out at a deficit rate for the baby boomers, and return to an equal pay-in/payout system after that point.

Even had that not been the case, what's the problem? The U.S. generates $40,000 per person per year for each man, woman and baby...working or not. Probably an average of $12,000 Soc. Security income out of a $40,000 share isn't going to bankrupt the country.

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 4:01 pm
Quote CollegeConservative:Then change it through the amendment process not back room deals and disguised legislation, but untill then our tax system is a violation of the 14th amendment.
Gee, if the courts made such a decision then the federal government has been in contempt now for how long exactly...?

crickets.

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Pierpont
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Feb. 29, 2012 2:19 pm

Quote CollegeConservative:Article ! states that congress has the power to tax for general welfare within the structure for enumerated powers like the commerce clause that built the errie cannal and defense.
My God, do you get ANY history right? The federal government didn't fund the building of the spooky I mean "eerie" canal... NY state did.

And I prefer reading the actual Constitution rather than your interpretation and Article 1 Sec 8 reads: "The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States;"

The powers to tax and spend for the general welfare is NOT limited. It's really up to each generation and the political process to decide what that is within other constitutional constraints.

The constitution does not give government the right to take from the rich and give to the poor in fact Madison himself said that when the goverment started making handouts we would no longer have democracy in this country but mob rule.
You mean the Madison who during the First Congress wanted to use federal money to build hospitals for disabled seamen? That money had to come from somewhere. As for taxing the income of the rich, that was settled with the passage of the 16th Amendment in 1913... so I guess that meets at least one definition of "constitutional" even if not yours. And it served a second purpose… trying to protect our republic from being more corrupted by Big Money. But then the GOP never trusted control be left to voters. It's always preferred those with money control the political process… just as they do now.

With 50% of the country not paying income tax

And just who's been taking people off the income tax rolls? Bush BRAGGED about removing 5 million people. And this is the way the Orwellian Right works. They take people off the rolls to reduce revenue and create more debt hoping to "starve the beast", then they create resentment against these "free loaders" and whine how unfair the tax code is to the rich... even if THEY got the biggest tax cut, So the remedy is to then raise taxes on the working class so they have "skin in the game" and cut taxes on the rich to make the tax code more "fair". As social engineers, the Right is unsurpassed.

and 60% getting some form of assistance we are fastly approaching that time.

Good, so we agree that GOP should end its war on the working class so they have higher wages to tax? Let's end free trade... bring the minimum wage up to where it should be... adjusted for inflation now about $11-12 an hour. Stop the war on unions. Ah gee... and again we see the duplicity of the Right. They undercut the working class then complain they're poor enough to get gvernment services.

Back to the power to tax even if we say the goverment can redistribute how is it not a violation of the 14th amendment to have me pay a higher percentage then the recipiant? Are we not all equal?

So then you have problems even with Right wing ideas for taxation that exempt or rebate essentials?

I say maybe we need to go back to the reverse of our forefathers mantra no representation without taxation.

As a Progressive I've paid taxes the last 40 years and have gotten NO representation for my beliefs in this dysfunctional and braindead 2 party system. Is that what you mean?

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Feb. 29, 2012 2:19 pm

Quote Laborisgood:By the time that 25 years comes around, we may have to reduce benefits or raise the retirement age if we don't rectify the structural problem of raising the cap on taxed income. A Ponzi Scheme by definition intends to get something from nothing as a primary goal, whereas Social Security has some secondary issues that need to be addressed in order to maintain it as the successful social safety net that it has been for over 70 years.
So if SS is a "Ponzi Scheme" then our friends on the Right have to face the fact that Reagan was complicit in keeping it going in 1983. Who would have thought in those dark days of the 80's that the GOP would go so far off the deep end that Reagan would look like a moderate.

BTW, Maui's objection isn't a general observation on SS. It's that for the top 10% of income earners... they might have gotten a better deal elsewhere even as the Right howls that lower income earners are getting TOO MUCH back from SS. To make his case he needs those probably once in a lifetime high TBond yields of the Carter/Reagan era to bring the average yield up... or if looking at private sector investments, how government policy propped up the stock market after about 25 years of stagnation. If Baby Boomers start cashing in, and if government tax policies on IRA changes, or the next generation don't provide the demand to keep stock prices high... it could turn into the biggest debacle in history with millions of retirees stuck with declining portfolios. After all, the money they paid for their stocks is long gone and all they have is are pieces of paper they hope someone will be willing to buy for top dollar. Which is why Wall Street needs SS privatization... not just to prey upon, but to keep the Wall St Ponzi Scheme going.

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Pierpont
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Feb. 29, 2012 2:19 pm

if ss is not a ponzi scheme how is the stock market.

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CollegeConservative
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May. 4, 2012 2:22 pm

Pierpoint, hopefully by now the feeling is that I did not make up my numbers, I "showed my work" and anyone can mimic my preocedure and come up with the same numbers. There are two legitimate objections to looking at the numbers generated and coming to the conclusion that SS sucks.

SS does have a disability provision so that if you become disabled you get benefits.

The case I ran is for someone donating the max for the 40 years, and that only is true for a very small percentage of the population.

Both good, legitimate points, so let's look at both of them.

On the disability insurance, again I say that is only a small portion of the money that get's paid out. I'll bet you could could get a policy similair to what SS offers at 10-15% of what you put into SS. Maybe they those policies are not available now, but the private sector would offer them if SS did not exist. So if you want to discount my 1.3 million dollar account down to 1.1 million that is OK with me, the conclusion still stands. I would still rather have 1.1 million than $25,000 a year.

On the high income objection, it would be interesting to run the same analysis on the yearly median income rather than SS max. Let's assume the median income is half the SS max. Then my 1.1 million dollar figure would drop to $550,000. But what does the SS payout drop to . Does it get cut in half also to $13,000 or so? If it does, obviously my conclusion still stands.

Can anyone tell me what the SS payout would be for someone working from Jan 1, 1971 to Dec 31, 2010 that made half the SS max every year? I'll see if I can come up with that number.

And remember again, these are t bills I am talking about. What may or may not happen in the stock market is totally irrelavent.

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mauiman58
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Jan. 6, 2012 6:45 pm

Quote CollegeConservative:

if ss is not a ponzi scheme how is the stock market.

Leaving aside that inherent in the concept of a Ponzi Scheme is FRAUD, I use the term loosely not in any legal sense. By it I simply mean it's based on an illusion of paper wealth. As long as there is slightly more demand than willingness to sell, then stock owners look at their portfolios and think they're rich. But as soon as some increased percentage tries to cash in on that high price, the price goes down because there's an increased supply available for sale. When the market has high returns like during a bubble, "investors" buy a piece of paper and the money they pay is often extracted from the market. The hope for the "investor" for prices to increase is for demand to increase... as can happen with good economic news, but also because of government policy such as a change in the tax code... cheap money from the Fed which depresses interest rates in safer savings plans, or a demographic bubble where people are told the stock market is essential for retirement planning. But like a Ponzi Scheme there may NOT be any increased demand in the future and those stock prices might easily fall... with "investors" left with pieces of paper. SS, on the other hand has been guaranteed... though I'm sure the GOP wants to sabotage that.

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Pierpont
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Feb. 29, 2012 2:19 pm

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