Baby boomers are what's wrong with America's economy

[[DHT]Osiris]

It's definitely not like a Ponzi scheme in any way, shape, or form. It's a pay as you go system, which there are zillions of all over the world.

First, Ponzi schemes are frauds because their investors aren't told what's going on, unlike social security. Second, Ponzi schemes are inherently unsustainable because they require an ever increasing number of participants and there's no way around that. Social Security does not depend on an exponentially growing base of people to be sustainable, it just means the taxes and benefits have to be changed over time to comport with demographics.

Eh, the principal idea of a Ponzi scheme is that those that come after pay those that are there. The end result is that those that got in first are the winners, and those who get in last/near to last are the losers. With SS, I'm *right now* paying for someone who's retired. I'm not putting money into a 'retirement fund' marked '[DHT]Osiris' SS funds' that won't be touched by someone else's wrinkly hands. It's going into a pot, and being divvied out to those getting SS payments right now. Other than the US Govt saying 'it shall be so', there's no guarantee that this system will still exist when it comes time for me to retire, and in fact, it's looking more and more like it won't exist in 30 years when I am looking at retirement age.

Has there ever been a point where SS has needed *less* money to sustain? If 'changing taxes and benefits over time' only happens in one direction, and it has to be done to sustain it in an upward direction wrt funding in order to continue supplying the fund for more retirees, how is that not depending on a growing base of people/funding to be sustainable?

 

[pcgeek11]

Do you think the average boomer could have gotten a similar return on investment without a government guarantee? If not, that's 100% free shit.

I mean if the government passed a law today that said 'fskimospy gets a guaranteed 25% interest rate on all investments he makes for the rest of his life' is that just fair interest I'm getting from the government or is that the government giving me money? I think we both know it's free money.

As far as good people or bad people, what I meant was that people don't like to view the benefits they receive as being 'free' or somehow undeserved, even if they benefit enormously. They are far more willing to see that in others.

You are certainly entitled to your opinions.

So you would accept the 1,100 dollars instead of the agreed 2,000 dollars.

 

[fskimospy]

Eh, the principal idea of a Ponzi scheme is that those that come after pay those that are there. The end result is that those that got in first are the winners, and those who get in last/near to last are the losers. With SS, I'm *right now* paying for someone who's retired. I'm not putting money into a 'retirement fund' marked '[DHT]Osiris' SS funds' that won't be touched by someone else's wrinkly hands. It's going into a pot, and being divvied out to those getting SS payments right now. Other than the US Govt saying 'it shall be so', there's no guarantee that this system will still exist when it comes time for me to retire, and in fact, it's looking more and more like it won't exist in 30 years when I am looking at retirement age.

Unless you're envisioning an end to America there is no 'those who get in last'. I would bet you a large amount of money that it will exist in 30 years when you are looking at retirement age.

There are tons of pay as you go systems throughout the entire world, is every one a Ponzi scheme? That's ridiculous.

Has there ever been a point where SS has needed *less* money to sustain? If 'changing taxes and benefits over time' only happens in one direction, and it has to be done to sustain it in an upward direction wrt funding in order to continue supplying the fund for more retirees, how is that not depending on a growing base of people/funding to be sustainable?

Changing taxes and benefits over time doesn't happen only in one direction because generations in the US are not of equal size. For example, GenX was considerably smaller than the baby boom generation, which is contributing to Social Security's funding problems going forward. The Millennial generation is considerably larger than the GenXers, meaning those pressures will go the other way in the future.

So I guess the answer to your question is simple: 'yes'.

 

[fskimospy]

You are certainly entitled to your opinions.

So you would accept the 1,100 dollars instead of the agreed 2,000 dollars.

You're missing my point, I'm saying it's perfectly fine to accept 'free shit', you should just accept that's what you're doing.

If someone came up to me and handed me $2,000 I would say 'thank you'. I wouldn't pretend it didn't happen.

 

[pcgeek11]

You're missing my point, I'm saying it's perfectly fine to accept 'free shit', you should just accept that's what you're doing.

If someone came up to me and handed me $2,000 I would say 'thank you'. I wouldn't pretend it didn't happen.

No, because it isn't free.

 

[Puffnstuff]

Eh, the principal idea of a Ponzi scheme is that those that come after pay those that are there. The end result is that those that got in first are the winners, and those who get in last/near to last are the losers. With SS, I'm *right now* paying for someone who's retired. I'm not putting money into a 'retirement fund' marked '[DHT]Osiris' SS funds' that won't be touched by someone else's wrinkly hands. It's going into a pot, and being divvied out to those getting SS payments right now. Other than the US Govt saying 'it shall be so', there's no guarantee that this system will still exist when it comes time for me to retire, and in fact, it's looking more and more like it won't exist in 30 years when I am looking at retirement age.

This is the principal weakness of this pay as you go system. Although I am not eligible to draw from it right now I have already paid in my credits making me eligible when I reach 67 unless the age limit is raised again.

 

[crashtech]

The money paid into SS doesn't earn interest, so any benefit paid to an individual over and above what they paid in is borne by current taxpayers. I don't believe the system was ever designed to pay out in aggregate more than was put in; at it's inception, life expectancies were much lower. Retirement age should be pegged at some factor of average life expectancy, for starts, and should have been so from the beginning.

http://www.washingtonexaminer.com/time-to-raise-social-securitys-retirement-age/article/2560178

 

[[DHT]Osiris]

There are tons of pay as you go systems throughout the entire world, is every one a Ponzi scheme? That's ridiculous.

SS isn't 'pay as you go' the way a phone is 'pay as you go'. I'm paying into a system that I've been promised will still exist when the time comes for me to make use of it, not paying for a system I'm actively using. There's a good chance that yes, once the boomers die off, we'll be rosy, SS will require less money, and we'll all be buying campers or whatever. Unless something comes up, like a financial meltdown requiring the liquidation of that particular govt asset, or the lifetime of the American populace increasing faster than expected, resulting in a LOT more retirement-age boomers being around a lot longer than expected, cutting into those 'Gen-X' funds.

 

[fskimospy]

SS isn't 'pay as you go' the way a phone is 'pay as you go'. I'm paying into a system that I've been promised will still exist when the time comes for me to make use of it, not paying for a system I'm actively using. There's a good chance that yes, once the boomers die off, we'll be rosy, SS will require less money, and we'll all be buying campers or whatever. Unless something comes up, like a financial meltdown requiring the liquidation of that particular govt asset, or the lifetime of the American populace increasing faster than expected, resulting in a LOT more retirement-age boomers being around a lot longer than expected, cutting into those 'Gen-X' funds.

It's pay as you go in the same way that basically every insurance system in the world is pay as you go. The 'premiums' people pay in today are used to pay the benefits for those who qualify to collect.

 

[[DHT]Osiris]

It's pay as you go in the same way that basically every insurance system in the world is pay as you go. The 'premiums' people pay in today are used to pay the benefits for those who qualify to collect.

Yes but it happens actively. If you paid into insurance now, but you only got the benefits of insurance (to include coverage, payouts, protection from $event) only AFTER x timeframe, x measured in decades, it wouldn't pass the sniff test. You pay into insurance, and it pays out actively when $event happens, you're covered NOW, not in the future.

Life insurance works similarly to SS, but the cost of that at least scales upwards to account for required coverage changes, and ironically, actually makes it EASIER to cover more people as they live longer. Life insurance gets more money the longer people live (and are paying into it). SS gets less money the longer people live (and are drawing from it).

 

[fskimospy]

Life insurance works similarly to SS, but the cost of that at least scales upwards to account for required coverage changes, and ironically, actually makes it EASIER to cover more people as they live longer. Life insurance gets more money the longer people live (and are paying into it). SS gets less money the longer people live (and are drawing from it).

Well sure, but that doesn't really matter from a solvency perspective. Life expectancy is actually declining among lower earning Americans, meaning we could be suffering from the same crisis the other way.

 

[[DHT]Osiris]

Well sure, but that doesn't really matter from a solvency perspective. Life expectancy is actually declining among lower earning Americans, meaning we could be suffering from the same crisis the other way.

Indeed, and that could be a 'saving grace' for SS if it goes fast enough, but banking on people dying earlier is a rather morbid way of sustaining SS, don't you agree?

 

[fskimospy]

Indeed, and that could be a 'saving grace' for SS if it goes fast enough, but banking on people dying earlier is a rather morbid way of sustaining SS, don't you agree?

I would agree! I also think it's unnecessary. The important part to remember about Social Security is that it is, in effect, a policy choice just like any other social insurance program we have. The amount we can pay out to seniors every year is based on the amount people paid into taxes that year, the same as with medicare, medicaid, unemployment insurance, whatever else. I think the idea that people were paying into some 'trust fund' was dangerous nonsense from the beginning, as such a trust fund is impossible to create. (barring mass purchases of foreign assets)

We should treat SS the same way we treat any other program, as a policy choice.

 

[[DHT]Osiris]

I would agree! I also think it's unnecessary. The important part to remember about Social Security is that it is, in effect, a policy choice just like any other social insurance program we have. The amount we can pay out to seniors every year is based on the amount people paid into taxes that year, the same as with medicare, medicaid, unemployment insurance, whatever else. I think the idea that people were paying into some 'trust fund' was dangerous nonsense from the beginning, as such a trust fund is impossible to create. (barring mass purchases of foreign assets)

We should treat SS the same way we treat any other program, as a policy choice.

It's different from others though, as it's a policy choice I didn't vote for, am mandated to participate in, and I may not get out what I put in, if for instance, there's a lot less money to go around by the time I retire vs what I'm paying now. There's no guarantee of payoff vs pay-in, just a vague guarantee that it'll still work because it has in the past. I have a problem with that, and zero recourse that doesn't run afoul of the IRS. I don't have an issue with the concept of socialized assistance as a whole, and if I was getting a return *when paying* I'd have no issue either. It's just this whole 'pay now, probably get back later' that makes me nervous.

 

[fskimospy]

It's different from others though, as it's a policy choice I didn't vote for, am mandated to participate in, and I may not get out what I put in, if for instance, there's a lot less money to go around by the time I retire vs what I'm paying now. There's no guarantee of payoff vs pay-in, just a vague guarantee that it'll still work because it has in the past. I have a problem with that, and zero recourse that doesn't run afoul of the IRS. I don't have an issue with the concept of socialized assistance as a whole, and if I was getting a return *when paying* I'd have no issue either. It's just this whole 'pay now, probably get back later' that makes me nervous.

Did you vote for welfare? For unemployment insurance? For Medicare? For CHIP? There's no guarantee of payoff for you from any of those either and there's no return while paying.

 

[Puffnstuff]

Did you vote for welfare? For unemployment insurance? For Medicare? For CHIP? There's no guarantee of payoff for you from any of those either and there's no return while paying.

How true. We all have insurance and just because I have a policy, say auto insurance, that doesn't mean that I want to have an accident so I can use it. On the other hand if I didn't have it and got into an accident where I was the proximate cause then I would be liable to all injured parties Having it and not needing it is far better than needing it and not having it.😀

 

[[DHT]Osiris]

Did you vote for welfare? For unemployment insurance? For Medicare? For CHIP? There's no guarantee of payoff for you from any of those either and there's no return while paying.

Correct, but those were never marketed as a stand-in for retirement, or something that everyone simply will get eventually. The expectation of SS is that you pay in, you get a pay out. Once those terms look shakey, the willingness of people to pay in becomes shakey.

 

[fskimospy]

Correct, but those were never marketed as a stand-in for retirement, or something that everyone simply will get eventually. The expectation of SS is that you pay in, you get a pay out. Once those terms look shakey, the willingness of people to pay in becomes shakey.

Social Security was never marketed as a stand-in for retirement either, it was marketed as a way to keep the elderly out of poverty. (something it is shockingly good at)

I'm at a loss to see why social security is any different than any other type of social insurance like the others I just mentioned. I mean if it's just that we should change the marketing that's fine by me.

 

[[DHT]Osiris]

Social Security was never marketed as a stand-in for retirement either, it was marketed as a way to keep the elderly out of poverty. (something it is shockingly good at)

I'm at a loss to see why social security is any different than any other type of social insurance like the others I just mentioned. I mean if it's just that we should change the marketing that's fine by me.

There's no cap on wealth for eligibility for social security, which means everyone gets it. I'm fine with this (I actually support UBI) but it means right now, my money goes just as much to those in need as those not in need. That's not welfare, that's income redistribution, and potentially unfair redistribution. Since it was never intended as income redistribution, I don't think it was correctly set up to perform that task in the most efficient way.

I agree that it's very, very good at keeping the elderly out of poverty, and it shouldn't go away (or at least the principal concept shouldn't). I was just stating from the outset that SS is in essence, those working paying for those not working due to retirement, regardless of their financial status. That's pretty damned close to a Ponzi scheme. You don't stop getting payouts after x time, are supported by current payers, and your current payments are not guaranteed to be seen later.

 

[fskimospy]

There's no cap on wealth for eligibility for social security, which means everyone gets it. I'm fine with this (I actually support UBI) but it means right now, my money goes just as much to those in need as those not in need. That's not welfare, that's income redistribution, and potentially unfair redistribution. Since it was never intended as income redistribution, I don't think it was correctly set up to perform that task in the most efficient way.

I think social security has been intended at income redistribution for a long time now in that the returns on investment you get are dramatically better for lower earnings than for higher ones. While I agree it's not the most efficient means of income redistribution the fact that it is not means tested is in some ways an asset and not a liability. Republicans basically attack the entire social safety net because it primarily benefits the poor and the richer (more frequently voting) people don't see any returns from it. One thing that has contributed to making Social Security an untouchable guarantee is that everyone sees benefits from it. Remove that to make it more redistribution-y and I bet you see Republicans coming for it in no time.

I agree that it's very, very good at keeping the elderly out of poverty, and it shouldn't go away (or at least the principal concept shouldn't). I was just stating from the outset that SS is in essence, those working paying for those not working due to retirement, regardless of their financial status. That's pretty damned close to a Ponzi scheme. You don't stop getting payouts after x time, are supported by current payers, and your current payments are not guaranteed to be seen later.

It is neither fraudulent or inherently unsustainable, which are the two defining aspects of a Ponzi scheme. If it lacks those two things it seems extremely far away from a Ponzi scheme to me, so I guess we will just have to disagree.

Politifact also agrees with me that it is a false description of Social Security, btw.

http://www.politifact.com/truth-o-m...rick-perry-says-social-security-ponzi-scheme/

 

[[DHT]Osiris]

I think social security has been intended at income redistribution for a long time now in that the returns on investment you get are dramatically better for lower earnings than for higher ones. While I agree it's not the most efficient means of income redistribution the fact that it is not means tested is in some ways an asset and not a liability. Republicans basically attack the entire social safety net because it primarily benefits the poor and the richer (more frequently voting) people don't see any returns from it. One thing that has contributed to making Social Security an untouchable guarantee is that everyone sees benefits from it. Remove that to make it more redistribution-y and I bet you see Republicans coming for it in no time.

Very true. I'd rather see the whole thing turned into UBI frankly, but that'll happen sometime after we develop warp technology I presume.

It is neither fraudulent or inherently unsustainable, which are the two defining aspects of a Ponzi scheme. If it lacks those two things it seems extremely far away from a Ponzi scheme to me, so I guess we will just have to disagree.

Politifact also agrees with me that it is a false description of Social Security, btw.

http://www.politifact.com/truth-o-m...rick-perry-says-social-security-ponzi-scheme/

The key tenant at the end of that article is that it's morally opposed to a Ponzi scheme, which I don't disagree with, but it *does* arrive at its train station by many of the same tracks, IF one is looking at it as an eventual 'retirement supplement' program. If it's seen purely as a 'redistribution to help out the old folks' program, yeah, go nuts. Make that part more efficient though, not just based on income, but based on wealth. No reason the Trumps of the world shouldn't be throwing in their 2 bits to help out the old folks, too.

 

[crashtech]

Social Security was never marketed as a stand-in for retirement either, it was marketed as a way to keep the elderly out of poverty...

The government doesn't "market" stuff in the traditional sense; much more relevant to the subject would be the public perception of SS, which is that it will provide everyone with retirement income.

 

[Chaotic42]

No. I'm only asking for what was offered in the deal made long ago. Nothing more or nothing less.

If you loan me 1,000 dollars and I agree to pay you back 2,000 dollars after a year. What about I just pay you the 1,000 I borrowed with a little interest say 1,100 dollars. Would you accept that?

We're being made to. I get letters from the government every once in a while talking about how much I paid in, how much I should get when I retire in 2050, and how much I'll actually get. My guess is that unless something radically changes or I get sick enough to collect it soon, I'll never see a penny. Obviously I have no pension or anything, so let's hope I die early or win the lottery.

 

[fskimospy]

The government doesn't "market" stuff in the traditional sense; much more relevant to the subject would be the public perception of SS, which is that it will provide everyone with retirement income.

Sure, which it will.

 

[crashtech]

Sure, which it will.

I'm at a loss why it was deemed relevant to bring up the original intent, when what matters is what it's used for now.

It's been clear for decades to anyone who examines the problem that changes need to be made; if our people and our politicians had any balls it would have gotten done a long time ago. The longer we wait, the harder the cures get.