<p>Sorry, don’t concur because of my rule #1: A Ponzi is never good.</p>
<p>That’s stupid. I have invested in ponzis.
Social security is not a ponzi.</p>
<p>Reality check #1: If the source of funds for payment is fully and accurately disclosed, it’s not a Ponzi scheme.</p>
<p>It’s only a Ponzi if you assume you are making an investment.</p>
<p>SS is primarily a pay-as-you-go system. There is no investment, no vesting, no nothing.</p>
<p>It is not a ponzi.</p>
<p>
What’s the source of funds to fully pay the obligations 50 years from now?</p>
<p>PS - I have a bridge to sell in NY, really.</p>
<p>It has the Ponzi-like attribute that current recipients are being paid with the funds of new “investors”, rather than the invested returns of the contributions of the current recipients.</p>
<p>But since SS is not a pension plan, or any kind of investment plan, it’s not a Ponzi.</p>
<p>
So the SS calculator means nothing? If you add the qualifier “no vesting, no nothing”, Bernie should be out too.</p>
<p>There is a difference between “your benefit is loosely based on the taxes you’ve paid and how long you paid them” and “you have a legal, vested right to a certain amount of money”.</p>
<p>The calculator means something - it calculates what the government will give you based on today’s law. But that law can be changed at the stroke of a pen. SS could be eliminated tomorrow, and legally all you could do is vote out the bums who did it.</p>
<p>There are Supreme Court cases from (I think) the '50s, which established that you have no legal right to benefits - there is no vesting.</p>
<p>When people invested with Madoff, they retained ownership of the money. This is not true for FICA taxes.</p>
<p>Dad<em>of</em>3, if you buy a bond from a corporation you’re relying on that company’s future profits to pay you back, too. Are corporate bonds “Ponzi schemes?” Unless future consumers come along to buy that company’s widgets, you won’t get paid. That’s the source of your repayment, and it’s no more guaranteed than the source of Social Security funding.</p>
<p>There’s no guaranty that US Inc. won’t go broke - but odds are that it’s a better investment than Pets.com!</p>
<p>And incidentally, maybe you’re too young to have been around, but the terms and conditions of my social security entitlement were changed back in the 80’s - after I’d been paying in for a decade. I survived.</p>
<p>There’s no comparison between corporate bonds and a Ponzi scheme.</p>
<p>To begin with, there is no fraudulent intent with a legitimate bond.</p>
<ol>
<li><p>What, pray tell, is the “fraudulent intent” behind social security?</p></li>
<li><p>Is a “legitimate bond” like “legitimate rape?” By which I mean, do you use that term so you can except everything that doesn’t correspond to your assertion by simply stating that it’s not “legitimate?” Because my father-in-law took a bath on some RBS paper that looked legit… until they stopped paying the dividends, of course.</p></li>
</ol>
<p>"What, pray tell, is the “fraudulent intent” behind social security?’</p>
<p>How about the pretense that your FICA taxes collected are actually going towards supporting seniors social security payments, while in reality they are merely thrown into the general pot for those in power to disburse as they please?</p>
<ol>
<li><p>Where did I say SS is fraudulent? I didn’t. All I said is that SS is not a pension plan or an investment of any kind. While it may provide you some comfort to think of SS in those terms, that’s not the reality.</p></li>
<li><p>All investments have an element of risk, and the return is driven by that risk. If it had turned out that RBS had misrepresented the investment in some way, or were funneling the money into their own pockets, or committing some other type of fraud, then the perps could be prosecuted or sued. If your FIL took a bath because the business was poorly run, that’s unfortunate, but not fraudulent.</p></li>
</ol>
<p>I am not going to argue whether SS is a pension or not. It is what it is. </p>
<p>Pensions are guaranteed? Nobody’s pension was ever touched?</p>
<p>Who said pensions are guaranteed?</p>
<p>I searched this whole thread, the word “guaranteed” does not appear until your post.</p>
<p>You can argue technicalities and feel good about something because you have vested loyalties to an institution, and don’t like it put under a spotlight, and I understand, but I guess I haven’t imbibed enough KoolAid to feel so great about it.</p>
<p>The bare facts are simple: if you take x dollars today and advertise you’ll pay more than x dollars in today’s value tomorrow, and your only strategy of being able to accomplish this is you can sucker more people tomorrow my promising the same, history has shown you reach a stage where you can never give what you promised. Of course you can argue that if they get a penny that’s more than what was guaranteed, and feel good about it - that’s your choice.</p>
<p>As for bonds, all of us have a choice on whether we want to buy it or not, and if the company has a plan, that’s a risk you take and the additional payments you receive are the rewards. I agree that if you buy a bond from Greece, that indeed may be a worse investment, but I’m not forced to do so. If my power company builds a new plant and projects it will generate money to cover its borrowings, and the numbers aren’t fudged, I have no problem with that - if it didn’t work out that’s the risk in investing. For SS, there is no investing of the money that I put in so that I get more tomorrow. The only plans that I’m aware of are there’ll be an ever increasing number of suckers who can be held up to pay me, or I can be told I don’t need the money, so take x cents on the dollar and stop whining. You may feel the name warranted for such a scheme is not a Ponzi, but to me this smells and tastes and behaves exactly like a pyramid or a Ponzi. I’ll sign off with that.</p>
<p>Ok…,… </p>
<p>What bs… </p>
<p>I wasn’t forced to invest in ponzis, but they were real ponzis.</p>
<p>Some people don’t have a clue what a ponzi is.</p>
<p>If you don’t get a great return, Or a guaranteed return, or somebody gets a better return, that doesn’t make something a ponzi.</p>
<p>If people would look beyond themselves, and look how a program
affects others, how beneficial a program might be to over 200 million people, even if they don’t need the program themselves, they would have a better understanding of the world.</p>
<p>When I first started working I worked for a small firm whose financial director was a very motherly woman. She explained to me that that firm was unusually generous in matching. She made me promise that I would always max out my contribution. I always did and I have almost 500,000 and I’m not even in my late 40s yet. She really did me a favor and I am very grateful. Between that and my husband’s state and city tax free pension and lifetime medical from whenever he retires, we should be pretty stable in retirement. He is planning to retire around 55 and I’m looking at around 65 .</p>
<p>I don’t think it is really meaningful to compare tax-funded government programs with investments, legitimate, Ponzi, or anything else. They are different beasts.</p>
<p>SS in nothing more or less than a transfer of money from one population (working people) to a different population (retired people), using the tax code to collect the money. The benefits have been loosely connected to how much you pay in tax in order to make it appear to be a “pension”, rather than a simple transfer.</p>
<p>Why not just say “every retired person gets $1500/month”, or whatever number, rather than the elaborate set of formulas that exist now? </p>
<p>It’s interesting that every proposal to “fix” SS involves stretching even further the connection between taxes paid and benefits received. People my age already will on average not receive back what we paid in, forget about any return on the “investment”.</p>
<p>And I am actually OK with that, believe it or not, because I think SS’s purpose is to keep old people from starving, and not be some sort of “pension plan”.</p>