graycan wrote:The email he sent me that I posted above was his response!
Okay, then I'll go through his claims and give them a thorough rebuttal (I gave it a skim and actual hadn't read it).
BARRY says:
While technically those comments have some merit in actuality our SS funding and a Ponzi scheme have the same basic effect.
Not really. One is unsustainable, fraudulent and illegal, the other is standard operating procedure of a pay-as-you go system put in place by democratically elected representatives and is sustainable indefinitely. It's also quite popular.
Why? Because both schemes rely on an stable ratio of adding new payers to the system.
So when people decide to stop having children, we'll have a problem. Course if that happened, civilization would end anyway. No problem.
When SS started there was a very comfortable ratio of 16:1 workers which imposed a small burden on the working men & women.
Changes in demographics and the need to adjust for this was understood from the beginning.
With the changing demographics, namely our generation of baby boomers beginning to retire, as you have recently done, the ratio has dropped to only 3:1 and is quickly heading toward just 2:1.
Since 1955 we've gone from about 8/1 to 3/1. Here is a chart:
Social Security fast facts. Note, this means
for the last half century (1960), the ratio hasn't changed very much at all.
This has put an enormous burden on today's working men & women and most politicians have no ideas other than to impose an even heavier burden on our children's generation.
It's not that big of a burden. Tax collection is at it's lowest in 60 years. SS was adjusted under Reagan and can easily be adjusted to pay full benefits for decades with only slight adjustments (for instance, raise the $106k cap after which the wealthy are excluded from paying).
What is the burden? A growing % amount has been coming out of working people's paychecks through the decades to offset the declining amount coming out of the paychecks of the people working due to so called reforms to save the system.
And that is as it should be. No problem. And it is solvent, note:
"Thanks to hikes in the Social Security payroll tax in the 1980s designed to create a surplus to handle the crunch of baby-boomer retirements, the program's trust fund is projected to grow steadily for nearly 20 more years — until 2027.
After that, officials estimate there will be sufficient money to pay 100 percent of benefits until 2041, when the surplus is expected to be exhausted. From that year on, payroll tax revenue alone should be able to meet 78 percent of the program's obligations — even if no changes are made."
http://www.ohio.com/news/american_dream/27325314.html
Those numbers have changed some with the Great Bush Recession, but not too much. Easily fixable (medicare a different issue).
All the past increases in SS taxes do is prove the recipient generation must collect more & more from the paying generation as the ratio of makers to takes declines.
Standard, well understood changes in demographics.
Recall that in 1937 the SS tax started out at just 1% of the 1st $3,000 that each person made.
The numbers in 1937 aren't really relevant to today, for this and many other things.
(By the way this removal of money from the 1937 economy was a large contributing factor to the depression within the depression that occurred in 1938. Bet you did not know that little historical gem that FDR's apologetic biographers never mention.)
They don't mention that because it's complete nonsense. The Great depression started in 1929 and ended in the late '30s.
SS is a form of socialism begun in this country by one of the most over rated presidents in American history, FDR.
Mere opinion. One could just as easily say he is underrated. His SS program is extremely popular,
even in the republican party. As one republican president put back when republicans had some sense:
"Should any political party attempt to abolish social security,
unemployment insurance, and eliminate labor laws and farm programs, you
would not hear of that party again in our political history. There is a
tiny splinter group, of course, that believes you can do these things.
Among them are [a] few other Texas oil millionaires, and an occasional
politician or business man from other areas. Their number is negligible
and they are stupid." -- President Dwight D. Eisenhower, 11/8/54
It's almost like he was predicting Bush.
FDR learned about this scheme from a program that was developed in Germany during the late 19th century (1870's - 1910's) and early 20th century.
Right. Another successful system that has been going for 120 years. From the article referenced above:
***
Ponzi vs. Social Security
Social Security is and always has been either a "pay-as-you-go" system or one that was partially advance-funded. Its structure, logic, and mode of operation have nothing in common with Ponzi schemes or chain letters or pyramid schemes.
The first modern social insurance program began in Germany in 1889 and has been in continuous operation for more than 100 years. The American Social Security system has been in continuous successful operation since 1935. Charles Ponzi's scheme lasted barely 200 days.
LINK
***
In Germany there SS program was developed on the scheme of offering retirement benefits upon reaching the old age of 65 when the average life expectancy was only 42. At the time FDR instituted the same formula in the US the average life expectancy of the average American was only about 48 - 50 years old.
Your numbers are wildly wrong. Life expectancy in '37 was over 60.
LINK
The results ended up that there was so much money building up in the SS funds during the 50's & 60's the Democratically controlled congress from 1954 - 1994 created several more benefits to use those funds to buy a lot of votes in concert with the lessons learned under FDR of "Tax, tax - Spend, spend - Elect, elect.
Yes, because none of those republican presidents signed those laws regarding SS did they? SS has always been pay-as-you go. Surpluses have always been reinvested in society (spent). The republican record of out spending democrats is clear (it's about 2 to 1). I've
detailed it here. Republican presidents have spent at twice the rate and increased the debt twice as fast as demos have. If you would like the congressional comparison, I have that as well.
[snip racial stuff]
SS is a Ponzi scheme and rightfully brought up in the recent Republican debates to shed light on this socialistic endeavor because it involves an inter generational siphoning of life from one generation to the next.
SS is not a Ponzi scheme any more than all of the other ways inter-generational investments overlap. Ponzi schemes are fraudulent and unsustainable, SS is perfectly sustainable as long as society continues. No comparison. Our entire society is based upon one generation reaping the benefits of, and thus being paid back, by the investments of earlier generations. Earlier generations also pass on debt. In fact, you could say this of all civilization. When everything becomes a ponzi scheme, nothing is and the phrase becomes meaningless.
Why do I say life, because now over 7% of my income (not 1%) is confiscated from my efforts, skills & time. Time equals life.
And that's a bargain. The notion that the US over spends on social programs and taking care of it's citizens is absurd when compared to the context of our peer countries:
"The United States currently ranks thirty-fourth(34th) out of the thirty-four(34) members of the OECD in regards to spending on social programs, dead last.
The amount the United States spends is currently only 7.2% of our gross domestic product on programs that make up our social contract with the American people."
LINK
And consider:
"Who Gets Social Security?
About 50 million people collect Social Security benefits each month, and they account for about one in six people in the United States. In about one household in four, someone is receiving Social Security benefits.
About 32 million retired workers receive benefits and another 3 million individuals receive benefits as spouses or children of retired workers. A total of 6.5 million people receive benefits as survivors of deceased workers, and these beneficiaries include 4.2 million aged widows and widowers and 1.9 million children. Another 7.2 million people receive benefits as disabled workers, and 1.8 million people receive benefits as the child or spouse of a disabled worker. A total of 3.1 million children under age 18 receive Social Security and another 0.8 million adults who have been disabled since childhood get benefits as dependents of a retired, disabled or deceased parent.
Total Beneficiaries: 50,417,000
June 30, 2008"
As I mentioned during an earlier conversation that you and I had last year I don't want my children nor your children to have to give up a part of their time (life) to pay for mine.
Well it's too late for that. When Reagan tripled the debt and Bush doubled it again, it was a done deal that they were going to have to pay for the glorious wars and tax cuts for the uber wealthy. Note:
"The only presidents to add to the debt since WWII have been Reagan, GHW Bush and GW Bush... All other presidents since WWII have contributed nothing to the Gross Federal Debt,..."
--carefully explained here:
http://zfacts.com/p/480.html
Families should take care of & help each other just like you are doing for your mother and I am trying to do for my mother.
And when they can't, or won't, society should arrange to have a social safety net which keeps people from falling below a certain threshold of poverty and suffering so they can live a life of dignity. That's what civilized people do, if they aren't so focused on greed that they can't see straight. Fortunately, due to the foresight of FDR, such a system is in place and functioning to perform that role. Republicans like to go on about the "good old days" but this is revisionism. Note:
Poverty rate in 1959: 22.5%
Poverty rate in 2005: 12.6%
LINK