In contrast, PolitiFact says SS is not a Ponzi scheme. Who is correct?
Fact-Checking PolitiFact
Please consider the PolitiFact Tact Check on Social Security
During the three-hour Feb. 28 appearance, Musk said, “Social Security is the biggest Ponzi scheme of all time.”
Critics of President Donald Trump and Musk, a White House adviser, used Musk’s comment as evidence that Trump was looking to cut Social Security, something that Trump repeatedly said he would not do in his second term.
[A White House advisor used Musk’s comment as evidence Trump would cut SS? Can I have a fact check on that?]
“Social Security is a transparent, legally mandated, government program that can remain solvent through adjustments to both funds flowing into the system and flowing out of the system,” said Eric R. Brisker, finance department chair of the University of Akron’s College of Business.
The PolitiFact Rebuttal
No. 1: Social Security is not fraudulent.
A Ponzi scheme “is a fraud intended to mislead investors,” said Christina C. Benson, an Elon University associate professor of business law. “Social Security is a legally mandated system that has been in place since the 1930s to serve as a critically important social safety net that allows working Americans to save towards retirement.”
In fact, “nearly every major developed country in the world has a similar safety net and retirement system in place,” Benson said.
No. 2: Social Security’s operators do not take a cut.
Unlike with Ponzi schemes, Social Security is not a profit-generating operation, and the officials who run it do not “cream off money for themselves,” Steuerle said.
No. 3: Social Security is operated in the open.
“Social Security is a transparent, government-run program with clear funding mechanisms, compared to Ponzi schemes, which are fraudulent and based on deception,” Brisker said.
No. 4: Social Security has built-in oversight.
Unlike a Ponzi scheme, Social Security has “many layers of oversight, regular auditing, regulation, and legal and financial systems in place to ensure accuracy and transparency,” Benson said.
PolitiFact Ruling
Social Security is not fraudulent, is transparent, has multiple layers of oversight and doesn’t promise unrealistic returns. Congress can act to address the program’s fiscal imbalance.
We rate the statement False.
Rebuttal #1: When the Population Grows No More
Dr. Paul A. Samuelson, a Nobel laureate and professor emeritus of economics at the Massachusetts Institute of Technology has chimed in.
Please consider the New York Times 2002 article When the Population Grows No More
Wealthy countries may find more problems than solutions as their populations begin to plateau or decline. Because of advances in medicine, smaller populations are also older populations. Fewer people are being born, and the elderly in need of support are growing in number.
These dynamics can cause havoc in pay-as-you-go retirement programs, where younger workers pay for their elders’ benefits through taxes. In 1958, Dr. Paul A. Samuelson, a Nobel laureate and professor emeritus of economics at the Massachusetts Institute of Technology, demonstrated what is sometimes called the ”biological rate of return.” The benefits paid can keep rising, as long as each generation grows in size.
“The pay-as-you-go systems work as a nice Ponzi game when you have a big increase in population,” Dr. Samuelson said in an interview last week. “Everything goes in reverse when you’re in a declining population.”
Rebuttal #2: Social Security Chimeras
Also consider the January 11, 1999 NYT article in which Milton Friedman’s discusses Social Security Chimeras
Social Security has become less and less attractive as the number of current recipients has grown relative to the number of workers paying taxes, an imbalance that will only get bigger. That explains the widespread support for individual investment accounts. Younger workers, in particular, are skeptical that they will get anything like their money’s worth for the Social Security taxes that they and their employers pay. They believe they would do much better if they could invest the money in their own 401(k)’s or the equivalent.
But if that is so, why replace only part and not all of Government benefits? The standard explanation is that this is not feasible because payroll taxes — or part of them — are needed to pay benefits already committed to present and future retirees. That is how they are now being used, but there is nothing in the nature of things that requires a particular tax to be linked to a particular expenditure.
Security Administration calls a social insurance program is equivalent to private insurance; that, in the Administration’s words, ”the workers themselves contribute to their own future retirement benefit by making regular payments into a joint fund.”
Balderdash. Taxes paid by today’s workers are used to pay today’s retirees.
When the benefits that are due exceed the proceeds from payroll taxes, as they will in the not very distant future, the difference will have to be financed by raising taxes, borrowing, creating money or reducing other Government spending. And that is true no matter how large the ”trust fund.”
The present discounted value of the promises embedded in the Social Security law greatly exceeds the present discounted value of the expected proceeds from the payroll tax. The difference is an unfunded liability variously estimated at from $4 trillion to $11 trillion — or from slightly larger than the funded federal debt that is in the hands of the public to three times as large. For perspective, the market value of all domestic corporations in the United States at the end of 1997 was roughly $13 trillion.
The economist Martin Feldstein, in a 1995 article in The Public Interest, argued that contributions must be mandatory for two reasons. ”First, some individuals are too shortsighted to provide for their own retirement,” he wrote. ”Second, the alternative of a means-tested program for the aged might encourage some lower-income individuals to make no provision for their old age deliberately, knowing that they would receive the means-tested amount.”
The paternalism of the first reason and the reliance on extreme cases of the second are equally unattractive. More important, Professor Feldstein does not even refer to the clear injustice of a mandatory plan.
The most obvious example is a person with AIDS who has a short life expectancy and limited financial means, yet would be required to use a significant fraction of his or her earnings to accumulate what is almost certain to prove a worthless asset.
More generally, the fraction of a person’s income that it is reasonable for him or her to set aside for retirement depends on that person’s circumstances and values. It makes no more sense to specify a minimum fraction for all people than to mandate a minimum fraction of income that must be spent on housing or transportation.
I find it hard to justify requiring 100 percent of the people to adopt a Government-prescribed straitjacket to avoid encouraging a few ”lower-income individuals to make no provision for their old age deliberately, knowing that they would receive the means-tested amount.” I suspect that, in a voluntary system, many fewer elderly people would qualify for the means-tested amount from imprudence or deliberation than from misfortune.
I have no illusions about the political feasibility of moving to a strictly voluntary system. The tyranny of the status quo, and the vested interests that have been created, are too strong. However, I believe that the ongoing discussion about privatizing Social Security would benefit from paying more attention to fundamentals, rather than dwelling simply on nuts and bolts of privatization.
Let’s sum of the cases.
Understanding the Ponzi Debate
- PolitiFact mostly rests on the fact that Social Security is government sponsored. Government can always extract more taxes to pay for the program.
- Samuelson and Friedman note the demographic time bomb in which taxes paid by today’s workers are used to pay today’s retirees and we are running out of people to pay the benefits promised.
Who has the better argument?
When Will the Social Security Trust Fund Be Depleted?
The Center on Budget and Policy Priorities discusses What the 2024 Trustees’ Report Shows About Social Security
- The trustees estimate that if policymakers take no further action, Social Security’s combined Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) trust fund reserves will be depleted in 2035. This is one year later than projected in last year’s report.
- While most of Social Security’s benefits are funded by the payroll taxes collected from today’s workers, the program has also accumulated $2.8 trillion in trust fund reserves over the past three decades. During that period, Social Security’s income exceeded its costs, and the program invested the surplus in interest-bearing Treasury securities. Over the next 11 years, those reserves will make up the difference between Social Security’s income and costs.
- After 2035, Social Security could still pay roughly 83 percent of scheduled benefits using its tax income even if policymakers took no steps to shore up the program.
There Is No Trust Fund
For starters, there is no Trust Fund. It’s all been spent and then some.
If there was a Trust Fund, then US government debt would not be over $36 trillion and rising rapidly. ($29 trillion debt owed by the public).
The Trust Fund is a “shell game” in and of itself. It is an accounting mirage that does not exist.
What Are You Entitled To?
Assume you are about ready to retire or already have.
Would you say that you are entitled to your benefits because of all the money you have paid in?
If so, that’s logically inconsistent with the notion that Social Security is a Ponzi Scheme in which paxes paid by today’s workers are used to pay today’s retirees.
You don’t fund your retirement, you fund someone else’s. Logically, the sad reality is you are only entitled to what someone else agrees (is forced) to pay for yours.
Are you in favor of making everyone to pay more for you, so you can get what you are allegedly entitled to?
This is getting pretty messy, isn’t it? But we are really just getting started with the mess.
Government-Sponsored Ponzi Schemes
Whether or not a Ponzi-Scheme is government sponsored, at some point the payback is negative, and hugely so.
Is anyone ever entitled to anything for participating in Ponzi schemes?
Let me ask again: Are you in favor of making everyone to pay more for you, so you can get what you are allegedly entitled to?
If not, then what?
Donald Trump on Social Security
President Trump says “I will not lay a finger on Medicare or Social Security. … These are benefits for our seniors. We are not going to touch it. There are many other things we can do.”
And in 2023, candidate Trump said “Under no circumstances should Republicans vote to cut a single penny from Medicare or Social Security.”
Fact Check on Not Touching Social Security
Trump has proposed not taxing Social Security payments. If enacted, this would increase the deficit and bump up the date on which full benefits can be paid.
Is Social Security is the Biggest Ponzi Scheme of all Time?
If you answer “yes”, then you agree that President Trump is voluntarily expanding the biggest Ponzi scheme of all time.
As noted … “The tyranny of the status quo [now led by Trump] is too strong to attempt to fix.”
But hey, don’t worry, Trump will be gone in four more years. Then it will be someone else’s problem.
Meanwhile, expanding the Ponzi scheme makes perfect political sense today, and forever into the future, until it blows sky high, because eventually all Ponzi schemes do by definition.
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Trump simultaneously promotes a strong and weak dollar, and proposes we collect huge tariffs while reducing imports.
We will allegedly balance the budget by running huge deficits while having a Detox recession and not having recession.
March 21, 2025: Trump’s Tax Hike ‘Liberation Day’ Day Begins April 2. Expect to Suffer
The pre-shocks have begun. But the big shock is on deck.
Lutnick Says Tariffs Can Eliminate the IRS and Balance the Budget
On March 12, I commented Lutnick Says Tariffs Can Eliminate the IRS and Balance the Budget
Lutnick: “We’re going to make the External Revenue Service replace the Internal Revenue Service.”
I ran the math on that ludicrous idea. Team Trump only needs to bring in $7 trillion in tariffs on $3.3 trillion in total imports.
Then we need to faithfully collect 200 percent tariffs on everything with of no trade frictions, no retaliations, and full compliance.
In Trumperland, contradictions have no meaning, so this is entirely possible.
See above link for detailed analysis.
Addendum
Please consider How the Supreme Court upheld Social Security
On May 24, 1937, the Supreme Court decided in two separate but related cases that the Social Security Act of 1935 was constitutional. In Steward Machine Co. v. Davis and Helvering v. Davis, the Court upheld the Act as a proper use of the spending power.
The Court’s March 1937 decision in West Coast Hotel v. Parrish upholding Washington’s minimum wage statute has been most often connected to the “switch in time” whereby the Court’s majority began upholding New Deal legislation under threat of court-packing from President Franklin Delano Roosevelt. Shortly after that decision came out, Steward Machine Co. v. Davis and Helvering v. Davis saw the Court continue to uphold broad national power—this time, to tax employers to pay for benefits under the act and for Congress to use its spending power to push states to pass laws to fund unemployment compensation.
Justice Benjamin Cardozo wrote the Court’s majority opinion, determining that the power of Congress to tax was as extensive as the plenary power of states to tax.
Helvering focused on Title II of the Social Security Act, which authorized grants of money for “Old Age Benefits” in order to assist states in the administration of their unemployment compensation laws. It was the product of a suit by a shareholder of the Edison Electric Illuminating Company, asking for the company to be enjoined from making payments under the law because the taxes on the employer and the employees were unconstitutional.
Again, Cardozo wrote the majority in a 7-2 decision, upholding the Social Security Act as a proper use of the spending power for the “general welfare”— and in this case, Justice George Sutherland did not dissent. Cardozo stated:
Social Security is thus considered a tax, not an iron clad guaranteed of anything. Congress can change that at will, but won’t.
Eliminating Income Taxes on Social Security
Penn Wharton discusses Eliminating Income Taxes on Social Security
Eliminating taxes on Social Security benefits reduces incentives to save and work while increasing federal debt.
The policy primarily benefits high-income households nearing or in retirement while harming households under thirty and all future generations across the entire income distribution.
Thus, If you side with Musk, then you logically agree that President Trump voluntarily supports and seeks to expand the biggest Ponzi scheme of all time.
Supreme Court ruled long ago that your Social Security “contributions” are nothing more than another income tax. There is no property right. Perhaps not strictly a Ponzi, more like the fraud you’re forced to participate in or the Granny “Gets It”.
Thank you for reiterating the little-reported truth that the “Trust Fund” is little more than a pile of IOUs that are a call on current tax revenues.
Without changes to its structure such as upping the retirement ages. Upping the SS integration wage threshold. Upping payroll taxation to employees and employers or by lowering the monthly benefit or as they say In mediation where everyone leavies the table unhappy —a combination of all of the above.
I see many future challenges to this ruling if they (ostensibly we) just wait and let the shit hit the fan.
Privatize it would be better in the long run. For US mutual fund complexes chosen to administer it and capital markets that benefit from it. And the new social security accounts now invested in it.
Hello… no memory of the stock market crash 2008, 2009…?? Great Depression…1929 stock market crash? Even rich people were throwing themselves out of windows because they lost it all. Sure sounds great. Casino retirement for the less wealthy americans. What could go wrong?
Agree there are risks. I suppose we could be forced to invest part of it inÀ ‘lower risk’ US debt. Still 50 years is a really long time horizon and most would be fine.
I am unsure why we can’t raise the SS income bracket for the uber rich going forward. It’s stuck at a low rate that completely protects billionaires from contributing. Now we have billionaire musk saying ordinary Americans are spoiled with their social security checks. Seriously, what is wrong with conservatives who support this indulgent twat of a man.
The social security system has chugged along for a serious amount of time. Naysayers everywhere. If it’s a Ponzi scheme, it’s been the best deal for people at the bottom of the so-called scheme. That’s not how Ponzi schemes generally work.
The “social security trust fund” is merely an accounting entry on the government’s books.
Well, if you call the Trust Fund only “a pile of IOU’s”, then you are engaging in a long-used way to belittle something, just because you do not like it.
So, let us look at government bonds. A bond is an IOU. The value of an IOU varies based on the government’s ability to pay it back, or to at least meet the agreed upon minimum payment on it.
Again, what does this ability to meet payment requirements rest on?
Well, for a government, it rests on it’s ability to collect taxes. That’s true for
any government in the world.
Now, lets go further: What does the ability to collect taxes depend on?
It depends on the quality and value of the production of all people working in a given
country. This is called the GDP, a.k.a the Gross Domestic Product.
Assuming that you don’t know what the difference between Gross and Net is, I explain this as follows: “What is the French Eiffel Tower? It is the Empire State Building after taxes!” Now we know that difference!
Next step: What does the value of produced stuff depend on?
Answer: It depends on its usefulness, both on how much it is wanted, and how much
it is really needed.
And how is that determined: In a market economy, it is determined by how much a willing buyer is willing and able to pay a willing seller. Both the need and the ability to pay play a role here. For the seller, the cost and investment into producing a good
play an essential role in the sellers willingness to sell. If it costs you more to make something, including your reasonable profit, than you can sell it for, then you tend to
go broke.
So, now go back to the beginning and read again, then start asking questions about
IOU’s, taxes, value of production, Gross and Net, GDP, usefulness, want vs need,
and accounting for the cost of something.
If anything, I want you to admit that an economy is a machine with many moving parts, and that it is more complicated than you thought.
Further, admit that it is easy to talk something down, but really hard to build something up. Systems don’t work by themselves, they need to be maintained.
And now I am going to propose that any anthill has more combined knowledge and ability to maintain a system, compared to any one of us alone, including you alone.
It’s easy for you to trample an anthill! But I’ll say that you can’t build one yourself.
A hill of beans is probably more within my and your powers to accomplish. But not something as primitive and simple as an anthill. Think about that!
I would like you to take this insight as a hint to look deeper in your understanding of
the things and systems around you. Any fool can destroy things! It takes the combined effort of all to build things up. Hate destroys. Patience builds up.
So, am I able to change your mind about things? I hope so!
Thank You!
Elon Musk is the biggest welfare tranny of all time.
Letting Congress regulate and oversee the contributions of eventual beneficiaries is like having the fox guard the henhouse as present conditions of “The Fund” have shown.
Under current monetary conditions, it is not possible to save for retirement.
Old people are routinely thrown out of their house at age 90 even though the mortgage was paid off 35 years ago, but property taxes now exceed by far their mortgage payments, and they’re on fixed income. But investing returns are also risky, and Wall Street will always find a way to plunder pension funds and other savings. The EU is even now talking of mobilizing Tr€10 of savings for defense “investments”.
The Ponzi is a result of the demographics.
But any non-government scheme (investments) runs into the same problem as a government scheme; As the economy shrinks, there are less people to raise cattle, collect eggs, raise tomatoes or buy a house from the expanding inventory. Any return on investments decreases since the returns must be produced from current production. Never forget that regardless the scheme, the basic premise is to put aside beef, eggs, and tomatoes for later, but since this is impossible, people rely on the financial or social system instead.
I don’t know if social security is a social contract, legal contract, trustee fiduciary relationship, ponzi scheme, or a political scam etc., etc., but, imo, if social security is not worth anything approaching what was agreed to, then your tbill and stocks probably aren’t worth anything near what you think they are worth either!
SS is not a Ponzi scheme first and foremost because there’s no deception.
A Ponzi scheme requires deception: a company says it will invest in copper mines but doesn’t, instead recycling new investments to old investors as dividends or distributions.
SS program is open about how it works: it takes money from taxpayers and disburses it to people who hit a certain age.
What people really means is that it’s not well run, or that it’s business plan is at risk. True or not that doesn’t make it a Ponzi scheme.
All ponzi schemes work them same they don’t deceive anyone as long as they keep paying. SS problem is they pay out more than they take in that is the deception. They expanded the program it’s government spending they can’t maintain.
no, the deception in Ponzi schemes is that there is no underlying business at all or it’s not enough to cover payouts and this is NOT known by investors.
If you tell someone you are running a crypto mining operation but aren’t and just recycling payments, that’s a Ponzi scheme. it’s like when a public company has a bad year and issues debt to pay dividends (as the oil companies did in 2017-2020 bear market is oil). that’s not a Ponzi scheme because they disclosed they were doing this.
If you tell someone what you are doing, there’s no deception. SS is not a fraud because it’s not hiding the fact that it’s not self sufficient. you know this because it’s public.
The treasury secretary of the United States says seniors won’t miss their social security checks. You have been warned of what’s coming.
https://www.axios.com/2025/03/21/social-security-lutnick-doge-checks
It’ll start with one missed payment then two then three then all of them. You reap what you sow trumpers.
The obvious solution headed right at us: The federal government will take the Social Security tax proceeds and plow them directly into Tesla stock.
I think sometimes we take what people say too literally.
I think he is saying it acts like a Ponzi scheme following the major thesis in that the scheme of other peoples monies are used to pay out to previous “investors”.
It meets that requirement 100%, does it meet every specific requirement to be defined as a Ponzi scheme no.
Cut the guy some slack he has done the work of more than 10,000 elected representatives!
As soon as Social Security becomes a pure PAYGO program it will become a Ponzi scheme, by definition. *At the moment*, it is not a Ponzi scheme. At least 60% of US companies are Ponzi schemes if we are going to use fast and loose definitions like Musk’s.
There are over 2000 publicly traded zombie companies in the US (earnings are not high enough to cover debt service payments). And that is the lowest of low bar needed to qualify (fast and loose) as a Ponzi. This doesn’t even count the huge amount of debt that will be rolled over in the next three years at much higher interest rates.
Means testing benefits would be helpful to extend the system. Phase out benefit payments at maybe the $200,000 income level. You still are vested in the system and receive benefits, if income falls below the threshold. It would be difficult to set a limit, but higher limits means fewer people would be affected. The biggest change that needs to occur is stopping inflation. Stop indexing Social Security, pensions, medical benefits, and any other payments the government makes. Government fiscal spending is the cause of inflation and needs to be cut back severely. The massive inflation we have experienced the past 5 years is due to fiscal dominance. If that does not stop,this fiasco continues, and the middle class continues to suffer.
The only thing that “might” make SS a ponzi scheme is that the tax is capped so low.
The $176,100 tax limit for 2025 is grotesquely too low.
Obviously, this is done to protect the rich. Granted, $176K ain’t peanuts, but there’s a whole lotta peeps making more than $176K a year.
The bend curve is already setup to give you less money as you make more in monthly income.
Someone run the numbers on increasing the cap up to $500K and then add a fourth bend curve that drops that last 15% down to say 5%. Then, add a 1% SSTF tax on all forms of income past $500K that you don’t get back. It’s just a tax because you’re doing so damn well. I’d be fine with taking 1% less from the income tax to cover this cost, thereby shifting funds from the general fund to the SSTF.
But, the absolutely worst thing they can do over the near-term is follow Rand Paul’s advice. Sidebar, I generally like Rand Paul, but he’s an idiot to recommend going ahead and raising the SS full retirement age to 70 immediately. Hell, the last rise to 67 was done over 22 years and isn’t scheduled to be wrapped up until next spring. Grab some extra cash first and push the full retirement bump to 70 out at least 7-10 years. And, he wants to do that extra 3 years over 12 years which is almost half the time the last one is taking to burn in. Just stupid.
Musk says “Social Security (Pentagon & State Department Warmonger$$$) is the Biggest Ponzi Scheme of all Time.”
USAID – About Propaganda – Coups – Color Revolutions – Regime Change – BioWeapons- War Profit$$$
Yes.
Social Security is not the Ponzi scheme. The only Ponzi scheme is the spending of the SS Trust Fund surplus that was paid in by us Baby Boomers. (Note: The pig in the Python analogy fits here.) Us boomers were shown how our parents were well taken care of by SS and Medicare and because we believed that the extra $ our vast members were paying in, would be there for us too, so we went along with it. (The first of the items that makes a swindle a Ponzi scheme.)
Here is what happened: 1. The Dems in congress and Pres. Johnson enacted a law to fund the War on Poverty by barrowing any Surplus Government cash. We lost that war but once the door was opened money from every fund was transferred and spent buying votes.
2. To keep this process out of the daylight, the real issues were hidden by the Dems and their partners the Majority Media This meant that the 1.875% that these loans were earning was suppressed. Therefore, funds were losing the inflation battle. 3. The SS tax rates should have been bumped up yearly to adjust for longer life expectancy. This didn’t happen because it might have drawn attention to this rip off and now the well is dry, and the boomers are living on borrowed time & money.
I first learned this when 40 years ago when I was at a meeting where the fuel purchasing people at TWA were livid about how the Airport Construction Trust fund was only funding projects with part of the $ the airlines agreed to pay in fuel taxes. The rest of the money disappeared.
PS Bill /Clinton’s budget surplus never happened, but now you know where that money came from.
A list of /the major places this money went is attached below.
https://www.crfb.org/sites/default/files/styles/media_image_default/public/images/Gross%20Debt%20v%20Public%20Debt%20Figure%203_1.JPG.webp?itok=F69ZAWzV
Here’s two interesting questions: Would the Middle Class even exist today without the SS act (coming out of the Depression?) Are the Babylonian Banksters working to create a techno feudalist world economy?
My Rebuttal >
No. 1: Social Security is not fraudulent. > Correct by definition. There is Massive Fraud within the SS System.
No. 2: Social Security’s operators do not take a cut. > Correct, it’s called a “Paycheck” Are Kickbacks, Payoffs, Bribes and the like included in that scenario?
No. 3: Social Security is operated in the open. Correct by definition, they must report. > Are they reporting everything? About Everyone? Transparency is what’s occurring now, is this the same Transparency that you speak off?
No. 4: Social Security has built-in oversight. Correct, but are they actually doing a complete Oversight? > Is this Complete, If so, is the oversight being shared with the Public? I know what we Now have is “Oversight “, but that’s not what we had before, now is it? I know that’s being shared, but before now, not sure at all.
Rebuttal #1: When the Population Grows No More > He is an Idiot, as we are paying Dead People, Babies, Ghost etc. I think population growth is the least of our worries. Especially the last decade or more, as we just illegally added another 10 Million or so…
Rebuttal #2: Social Security Chimeras > Please, Whatever…
Balderdash. Taxes paid by today’s workers are used to pay today’s retirees. > Proof, or just faking it. Yes the people on SS today, are getting paid by the workers of today, and yesterday, and many, many days before and after that. It’s the system. We can change it, or not, but it will always be paid by other people, as designed.
When Will the Social Security Trust Fund Be Depleted? > Depends if it gets any injections along the way?
There Is No Trust Fund > No Shit!
What Are You Entitled To? > Whatever the SS Office has as the current rate of pay per rules?
When will the SS trust fund be depleted? Just asking this question is absurd.
SS ran out of cash to pay benefits in 2009. i.e. Depleted. Starting then the government had to borrow Cash to pay 100% of the promised benefits. That month’s SS debt then becomes part of the Public Debt.
PS When you have to barrow money to pay the interest on your debts, it is called being Bankrupt.
“No. 1: Social Security is not fraudulent. > Correct by definition. There is Massive Fraud within the SS System.”
people defrauding SS is obviously NOT the same as SS system itself being a fraud. when someone says something is. Ponzi sheme they mean the enterprise itself is committing fraud on people aying into it. SS is a victim of fraud.
it’s a massive system, obviusly all fraud cannot be eliminated. this is true at private enterprises also, indeed more so.
Social Security was established as a trust. Trust laws require the trustees to: pay only to those who meet the criteria established by the trust and do whatever is necessary to maintain the trust. Several legislative changes removed trustees from control over the funds, which meant the USG had access to the funds, and directed the trust to pay people not entitled.
Social Security is a pension plan, of sorts hampered by the government. All pension plans use current contributors to pay for current retirees as a matter of cash flow. You don’t buy a 20 year bond and expect it to pay for someone retiring in 5 years. Actuaries, are required to report their assessment of the SS sustainability and risks. If it is still a trust, the trustees, by law, must save the trust. If they do not, they can be sued personally. Returning SS to its original form would go a long way to securing the fund.
Not technically a Ponzi scheme but has some elements. No intent to deceive and the “perpetrators” have no intent to enrich themselves. Nevertheless not a perfect system. But I don’t have an alternative to protect the working poor from themselves either.
First and most important, A Ponzi scheme does not have to have an intent to deceive! Many investment businesses have started off with legitimate investment plans. When they got in trouble the managers convince themselves that things will turn around soon so rather than admitting they are losing money they paper over the losses and waited for the comeback that never came. Months or years later things get so bad they can no longer hide the losses and it collapses and investors lost it all, rather than just some of their money. How they end is more important than how thay started.
As for enriching themselves, being reelected as Senators or Presidents is more than enough to prove their intent to enrich themselves
A Ponzi scheme is generally hidden, otherwise it wouldn’t work.
SSI’s funding structure is public knowledge. Everyone knows it’s not in good shape.
With that said, to me SSI is more akin to a mafia shakedown for protection money than an actual Ponzi scheme.
Regardless, it doesn’t matter if SSI is or isn’t a Ponzi scheme, legit, or a mafia like shakedown. It has widespread popularity among voters. Messing with it would be met with immediate backlash. SSI isn’t going anywhere.
I believe politicians should fight for their constituents, literally.
all politicians should have to have a daily bout gladiator style – to the death of one of the combatants. the combatants maybe drawn at random or from a pool of volunteers,
The social security benefits of the deceased combatant should go to a randomly selected constituent in their district, should the politician fall at the hand of the sword, his social security and other retirement benefits should accrue to a lucky winner in his district.
Many will be the benefits of such a program, including increased physical vigor, mental prowess and a sense of real inclusion in the political process.
TV and broadcast rights proceeds could enhance retirement programs such as social security as well.
I for one, think Social Security is a perfect system, envisioned by one of the greatest minds of the 20th century Franklin Delano Roosevelt. A man named for 2 great presidents Benjamin Franklin and Teddy Roosevelt, and a long favoured pickle, the “dangerous Delano” – so called because the pickling spices sometimes caused the jars to explode.
Could Social Security, be more perfect, a cynic might ask? Could a sunset be yet more sublime? Could the ocean be wetter? Hypotheticals meant to run the mind on an endless treadmill never reaching a conclusion and requiring copious amounts of Gatorade and cigarettes to once again acheive equilabrium after abandoning this futile effort.
The American Pysche is being abused by this endless questioning of the efforts of our forefathers, when our mental and fiscal facilities should be pushing into the future and developing more and better large screen televisions, zero calorie salad dressings and ways to isolate each other into communities of electronic bots feeding us more of whatever we clicked on last.
We question ourselves, when we question our pasts.
Politifact is a discredited propaganda outlet funded by the CIA via USiD, just like NewsGuard is.
Yes indeed, Social Securityn is a tax.
Social Security is the Grand Daddy of suffocating debt for future generations.
Fortunately the Democrats will be in power when the Social Security scheme goes bankrupt.
It will be interesting to see how willing younger people will be willing to pay into a bankrupt system that will never benefit them.
Oh yeah, that proves Social Securitynis a tax.
It’s always been a debt for future generations. That’s the social security system. An obligation going forward. We have all paid into it, through the years. We live in a country, not a bunch of one man islanders. There’s a fair amount of Americans that believe it’s a serious moral obligation. So many folks in this country can barely keep their heads above water. Taking care of their sick and elderly family members is more than most folks can handle on their own. It’s not just money, it’s medical care. 70% of nursing home residents rely on Medicaid (not Medicare) to keep their parents safe and cared for. 70%. Just a bunch of takers right???
The overwhelming SS recipients in 2035 will be baby boomers. Our children, grandchildren, great-grandchildren are not going to look favorably on us for not saving for retirement. Especially when we expect the SS tax to go up and the retirement age to rise, while they can’t afford a decent home or more than 1 or 2 kids.
sun goes nova in 2034, no one will even notice social security when the survivors are living in caves harvesting animal carcass from the destroyed biome.
This is an easily solved problem, we extend social security benefits to 5 years after death. the monies accrue in a trust, that collects compound interest and future retirees are paid from the interest on this PostDeath Trust.
Well said.
In many families, grandparents are supporting grandchildren – for better or for worse, Social Security is part of that.
The formidable Musk is rarely wrong. The later you enter SS, the less you will receive in proportion to what you paid in. Not only is it a Ponzi scheme, it is a coercive Ponzi scheme. Furthermore, SS/Medicare will be the critical thing that triggers the bankruptcy of the US govt.
no the earlier you die, the less you receive in proportion to what you paid in.
try to live a long healthy lie and don’t worry about what you can’t control.
Ha ha ha. Sorry, but even his own AI doesn’t agree with this blatant brown tonguing statement!
“Taxes paid by today’s workers are used to pay today’s retirees. “
That’s definitely the Ponzi part.
The non-Ponzi part is that the rules are fully disclosed and you can do the math yourself.
As far as we know there is no Madoff clone behind the scenes skimming off his 2 and 20.
So it’s a hybrid system.
Call it what you want.
My employers and I have paid in about $370k over the last 45 years. I’d like my principal back. I haven’t been jailed or drawn unemployment…haven’t claimed a disability (generally not a burden).
Go ahead and cash me out. I’d be doing you all a favor, what with getting me off the books.
I’d prefer you give me a reasonable compound interest…2% isn’t too greedy?
Alternatively massage the bend points. Doing so could be bipartisan. Most of the general populace doesn’t understand math anyway.
MikeB, if you’re at the high end of SS recipients, you’re getting 40k a year back. So, 10 years and the principal is paid off. Getting only 10 years of retirement nowadays is sad.
But SS isnt retirement, its a supplemental safety net meant to help out to some extent, not to provide everything for a person to live comfortably.
too many words, strip away “math anyway”. should read most of the general populace doesn’t understand – period, full stop.
part of they myth of normalicy requires unyielding stupidity and a lack of questioning, as well as a desire for social status. Understanding is a hindrance in these matters.
The model doesn’t work that way. Same as people complaining as to why they should pay school taxes if they don’t have kids and so forth.
I understand the model and agree we need a system to help our less fortunate countrymen. However, I wish we would teach ourselves (and our kids) the SS math. We all might make better, more informed decisions.
~50% of population stop Math when order-of-operations begins…forget understanding SS Math when the Marxists scream “tax the rich” to solve everything.
Rather than Math, can we teach personal responsibility or is that a road too far also?
SS will simply run out of funds in the 2030s with auto benefit cuts; some compromise will extend ~10 years at reduced benefits or cutting out younger people.
Thanks for the post Mish.
Please add that in 1980 95% of wages paid payroll taxes and today only 80% do because inequality outran CPI. If we move back to 95% we are fine. It we remove the threshold and tax 100% of wages, then we can lower the payroll tax… my desire.
Cutting benefits will slow the economy down 3x the cuts. Not a good idea…but that is what is being purposed.
If we remove the threshold and tax 100% of wages we should also in all fairness remove the cap on on what is paid out,,,
In truth SS is not only a ponzi scheme it is a welfare program….
This does not address the issue. What is going to happen when people get old and have nothing? Homeless, living on the streets begging?
I don’t know how America will ever become great again. Invoke “Soylent Green” euthanasia center.
Burdens to extended family if you have one. Suicide and or great suffering without adequate food medical care and shelter. Crime. Fraud. Theft. Grifting.
Of course it’s a Ponzi Scheme. The actuarial value of participants’ contributions inevitably eventually falls short of the benefits paid out if national fertility rates are stable or falling. At some point the current working generation can’t possibly pay the benefits of the current retired generation. Respectable economists since SS’s origin have pointed this out in popular opinion pieces and in scholarly articles. We paid down the WW2 indebtedness by running a steady inflation rate for decades. But that ended at the end of the Clinton administration – now it’s up up and away for both parties. And I note that the Social Security benefit is (more than) indexed to inflation, so that mechanism is not available to the government. All the best known Ponzi schemes did not start out as frauds, but became frauds when the managers of the scheme finally became aware that the promises they had made could only be fulfilled by raiding the investments of newcomers. That’s SS in a nutshell.
One simple way to begin to fix SS would be to reduce the annual inflation adjustment to two percent below the rate of inflation (with no offsetting payments allowed from Congress). After all, non-government pensions usually provide no inflation adjustment at all. But even such a mild change to the system would be anathema to the economic illiterates who inhabit the zoo that is the US Capitol.
They may be economically illiterate, but POLITICAL numeracy is certainly exceptional.
For Social Security to be unwound, tax money has to come from those who will be the least impacted. An estate tax would be the solution. Sorry, Baron, you will have to earn the rest of your way through life. Family businesses can be bought out by surviving family members or sold to investors. There is a market for stocks and bonds. Homes can be sold.
Estates where there are surviving children younger than 21 will have a standard deduction so the children can have life’s necessities and 4 years worth of state college / trade school until the age of 22. The standard deduction cannot be used to buy a car or go on a vacation.
I side with PolitiFact: it’s a government program. Therefore, it’s worse than a Ponzi scheme, because the latter is voluntary, unlike the former and recalcitrants are swatted.
Years ago, I had a job with a multinational property and casualty insurance and benefit consulting company headquartered in NY. I worked in the benefits department of a regional office. Of course, we were expected to have a gold-plated benefits package, and we did. We had a defined benefit pension plan that paid 2% of final 5 years salary x years of service, plus a profit sharing plan that contributed 15% of pay to a defined contribution account, plus SS of course. That combination is pretty unbeatable and will rarely be found today. Alas, the company was merged with another in the same industry.
So, what happened? I started my own company, which was reasonably successful and now I am retired and living well on my own investments and savings. I do get SS, but it’s not a major portion of my retirement income. From a career perspective, I am infinitely more happy with the way things worked out than having to spend 30 years in that former environment. Others may desire to work for big companies for what they might assume is “job security”. I can assure them that the only security you will have in life is that which you create yourself.
“the only security you will have in life is that which you create yourself.”
And somebody down voted that!? Sad.
This is a country. Not a business. Inside it, are all sorts of people with different advantages and disadvantages. A peaceful country tries to tend to those who have the least. Christians were instructed to adhere to this belief for a fair amount of time, until Jesus became too woke for the conservative Christian’s. Now they believe in the prosperity gospel. Rich people are everything Jesus really loved. I am no longer religious, but I am shocked how hateful Christians are. I literally read that Conservative Christians believe Jesus would not be popular today. He’s just too woke. Who are these people?
the real question is why don’t you question your sources when you receive such information.
“i read that….” is not a conclusive proof of anything other than an author’s opinion.
People who work toward following the Scripture are sinners, as is everyone on the planet, so yes, being sinners, some are hateful occasionally, but if they do whats right and pray daily and read scripture regularly, they quickly see that they have sinned and feel remorse and ask for forgiveness and adjust their behavior. Point is, the truly humble and appreciative are not hateful the majority of the time, so people shouldnt be confused and discouraged by those who claim to be religious but dont believe it in their heart.
Not everyone can create a great life for themselves. Most just want to keep a roof over their heads and the lights on. I read earlier today that 70% of Americans can’t scramble $500 in an emergency. Underpaid while billionaires get more bloated. Seriously, how are conservatives content with this level of bootstrapping? You just keep noticing the lazy, bootstrapless Americans and point at them, as if they are just idiots who can’t find their bootstraps. 70% of Americans. I guess it’s just big government helping them out, that’s causing all the problems.
50% are dumber than average, said George Carlin.
WHY shouldn’t they be sent to the Soylent Green tanks?
a bit cruel, and a waste of good cannon fodder. in a society built as a pyramid, many foundation blocks are needed to support the tiny pinnacle in its rarified atmosphere above all the riff raff.
Dumb and ignorant are different. One can be corrected.
Well the fiat currency, a central bank that manipulates interest rates to benefit the establishment and steal the value of labor, and crappy public education are all certainly helping with the bootstrapping.
Yes, but please stop using the term “conservatives”. If we had real conservatives in charge like we should or even a moderate amount in Congress, we wouldnt have this enormous debt burden. You can count the number of conservatives in congress with the fingers on one hand.
i was self employed, til my boss fired me…
SS was accessible to people five years older than the average survivability age of 60 in 1935, right? These days, it would put the start of SS availability at, oh, age 82.
I worked full-time until 70 – I could have waited until 75 or so, to start drawing SS.
why? why wait? your benefits don’t increase past 70 and your life certainly decreases year by year. 70 is the absolute latest to draw benefits.
What I meant was – they could have waited to start paying me at 75.
Almost. Life expectancy was 62 in 1935, and 77 now.
don’t worry soon, it will be 62 again. Thank big Ag, big Pharma and big screen tvs..
Early SS collection should be prohibited. Require people to work until their full SS retirement age.
and babies should be required to pay social security tax. Jojo is right we need to crack the whip on these “softies”. Also a Running Man style weekly TV show for double or nothing benefits could cut down on a lot of retirees not getting enough exercize, and reduce the pool of beneficiaries..
Agreed!
Any life insurance actuaries in the house?
like vampires, they rarely self indentify, as it leads to persecution.
No. 1: Social Security is not fraudulent. Politicians misled voters..
No. 2: Social Security’s operators do not take a cut. Politicians win elections promising enormous incomes.
No. 3: Social Security is operated in the open. False. Social Security rules change. People pay expecting some promises that are not fulfilled. For example, changing retirement age from 65 to 67 or 70 years.
No. 4: Social Security has built-in oversight. False. Nobody has accurate numbers. Like in a Ponzi scheme, first comers paid little and received much, a 800% earning (It depends each case, I know) Next generation will pay much for a small return.
Is not a Ponzi scheme if people die young, in that case, is only an usual scam like many insurances.
A Ponzi scheme is a fraudulent action where new investors believe that their income is being invested when in reality it is being given to earlier investors. SS isn’t a Ponzi scheme because people know that their taxes are going to support their parents and grandparents. A better analogy is health insurance where people know their contributions are going to support sick people while expecting to be sick one day themselves. But the Ponzi scheme trope is popular among sociopaths who have no ability to empathize with the elderly.
It’s a tax (Supreme Court) and the tax surplus is taken, spent and replaced with IOUs in a filing cabinet so there is no surplus set aside or accrued from decades of past surplus.
Increasing numbers of aging recipients funded by a dwindling number of workers supporting each beneficiary. It’s a Ponzi scheme fraud compounded over decades.
Waaaay back when a company I worked for changed from a defined benefit plan To a defined contribution plan. Younger employees received a small contribution into their new defined contribution plan during the transition. Older employees received a large contribution as they were near retirement. Think Social security as a DB plan and the the DC plan as the privatization of Social security. That is the only solution. Those near retirement will get a larger lump sum from Uncle Sam and the rest will get a smaller amount they may invest. You may or may not outlive this. It could be a combo plan with some percentage of DB DC. Lots of options but now is the time to fix it. Waiting will only make it worse.
Ask your favorite AI LLM some questions about the pros and cons of social security privitization and learn if you must.
Not doing something will lead to a lot of unwelcome social unrest
AI spins lies just as happily as that drunk at the end of the bar.
Some are better than others. But yes. If you don’t have good idea of the answer it can lie or just be wrong because it’s training data is biased. Dated. Incomplete. Has been poisoned. Etc. Soon it will have a better understanding of most phase space and be able to lie to those with knowledge. This is in the works. I’m the future humans will be on UBI and not know a lie from the truth.
Like a variable annuity.
Ponzi scheme?
I guess its all relative, US social security is definitely administered as a ponzi scheme and it remains to be seen but I would hazard a guess that the next president will be presiding over a SS that has become insolvent.
Meanwhile Canadian Social Security is projected solvent for the next 75 years. Canada and the US had nearly identical demographics 30ish ago and it was known both SS and Canada CPP were both projected to become insolvent in the future due to demographics. Canada enacted changes 30ish years ago to make the plan solvent. US social security is a much more generous plan than CPP and as I have stated before if I were an American, my pension payout would be easily double.
One advantage that Canada has over most other countries in the world is that laws were enacted so that all pension plans would remain solvent. So much so that there is even now questions as what to be done with pension surpluses.
Federal Government Will Pocket Billions In Pension Funds
“The federal government plans to pocket billions of dollars from the pension plan of unionized public servants. As expected, federal public sector unions are incensed.
On November 25, president of the Treasury Board Anita Anand tabled a special actuarial report in Parliament detailing the financial position of the Public Service Pension Fund. This $186.4 billion fund covers 700,000 federal public servants and territorial government employees. According to the statement released by Anand, the fund had a “non-permitted surplus” of $1.9 billion as of March 31.
In general, a pension fund surplus is a good thing. A well-performing pension fund helps to secure the retirement benefits of plan members and future beneficiaries. Given how frequently workers’ defined-benefit pensions are in the crosshairs of employers, a healthy plan is welcomed news.
However, legislation governing pension funds restricts the size of accumulated surpluses to no more than 125 per cent of the plan’s liabilities. At present, the Public Service Pension Fund’s surplus exceeds this “allowable limit.”
Just know that CPP is *heavily* invested in the US stock market. In other words Canadian retirement relies on US stocks ‘remaining at a permanently high plateau’. All this is especially ironic given the current tariff beefs between the 2 countries threatening that very market and so many Canadians who are angry and trying to actively crash that market by not buying US…
If the stock market dropped 30 or 40% how solvent would those pension plans be? Pray you never have to find out.
few realize, everything appears solid, until you examine the details. the whole world is dust made solid for a few moments. the whirlwind will reveals its true aspects.
“If the stock market dropped 30 or 40% how solvent would those pension plans be? Pray you never have to find out.” Most American pensions are insolvent in the present not even including any market
Yes, I pray that I never have to find out. But Canadian pensions can generally take a 20% slide and still be solvent. Most American pensions are already insolvent in the present not even including any market drop never mind a 30-40% drop.
The average Canadian pension was 116,117 % fully funded in 2023. The average American pension was 78% fully funded in 2023.
The CPP is fully funded for 75 years and SS likely becomes insolvent during the next presidents term.
Fully Funded, Many Canadian Pension Plans Push into Private Debt and Other Alts | Coalition Greenwich
“Just a decade ago, with interest rates near historic lows, the average funding ratio for Canadian corporate pension funds was 89%, according to data from the annual Coalition Greenwich Voice of Client Canadian Institutional Investors Study. For public pensions it was 84%. In 2023—the most recently reported data—Canadian corporate funds reported an average funding ratio of 117%, and public funds were funded at an average 116%. “
Pension Plan Funded Ratio Rankings 2023
“At the end of fiscal year 2023, the average funded ratio for American public pension plans was 78.1%. While this is a modest improvement over the losses of 2022, it is also a continuation of the fragile funded status that has persisted for more than a decade and a half after the financial crisis.
Once all public pension plans release their 2023 data, we estimate that unfunded liabilities will be $1.44 trillion. The combined funded status for the top state and local retirement systems will be 78.1%, based on available data through December 31, 2023. This is up from the 74.9% funded ratio during fiscal year 2022.”
SS went broke in 2009. They ran out of cash.
They have been insolvent for years before that.
I like the Dutch system. Investment ROI is capped at AA Bond rates and if you are less than 95% funded you must cut benefits.
Waaaay back when a company I worked for changed from a defined benefit plan To a defined contribution plan. Younger employees received a small contribution into their new defined contribution plan during the transition. Older employees received a large contribution as they were near retirement. Think Social security as a DB plan and the the DC plan as the privatization of Social security. That is the only solution. Those near retirement will get a larger lump sum from Uncle Sam and the rest will get a smaller amount they may invest. You may or may not outlive this. It could be a combo plan with some percentage of DB DC. Lots of options but now is the time to fix it. Waiting will only make it worse.
Ask your favorite AI LLM some questions about the pros and cons of social security privitization and learn if you must.
Not doing something will lead to a lot of unwelcome social unrest in a second amendment world.
Does it have to be voluntary to be a Ponzi scheme?
mandatory volunteer is best.
Social benefits of this nature are by no means generous. If one has no vices and lives a very frugal lifestyle one could get by ten years ago. Not likely today. Cut the line between those lazy and those in need. More people will be kept off the street and from becoming homeless.
A lot more will be going homeless shortly. Apparently, there are still many slackers claiming Covid impact and collecting related rental vouchers each month!
Another Trump era policy bites the dust.
Ponzi scheme is a little broad for me. However, the absence of the $2.8 trillion reserve complicates the argument.
From an EU perspective the US is a failed state. Bear with me. My local McDonnalds employees in Denmark gets payed 21 USD/h and have free (high standard) healthcare on top of that. I pay for that and i gladly do. Not because i am a communist or an idiot, but because its is the right thing to do. Many of you americans need to step into your consiouness and moral integrity and ask YOUrself: What kind of person am I ?
We’re coming for Greenland pal.
Empire building are you? Nothing says here comes a war and the draft like empire building. What has happened to the conservative isolationist party? I’m sure it will all be just fine.
Who decides what’s ‘right’ and ‘moral’? There has never been any accepted definition of those words since 2 people / countries etc can widely disagree on what’s right and what’s moral.
The right and moral thing to do in my opinion is to pull yourself up by your bootstraps and not be a drag on society. If everyone was doing that, we wouldn’t need ‘right’ and ‘moral’ arguments to look after people (minus the truly sick or disabled). We know this because society functioned just fine from the dawn of civilization until the 20th century without any of this nonsense.
Well said. To answer the Dane’s question, I am the kind of person that thinks people are responsible for their own decisions for better or for worse and that I did not work hard to provide for myself so that I could overpay for a hamburger and thereby subsidize someone else’s poor decisions or otherwise deliberate decision to aspire to burger flipping, which a machine can do anyways, and more reliably. $21 an hour to flip burgers and free high standard healthcare? If I want to live in that society, I know where to move to. I have been to Denmark and have worked with Danes. Nice people, a little on the cuck side. The men have been effectively “civilized” and have become somewhat effeminate. The social model will not last. Not having enough babies, and importing too many turd world types. Maybe they’ll re-discover their Viking roots before it is too late. Doubtful, though.
Prove to me society survived just fine with your viewpoint. Precisely, because it wasn’t doing just fine, these government programs came into existence. The reason we survived the economic crisis of the 2008 was because certain strengths were built in to the system to keep us from collapsing. Social security and Medicare for the elderly have helped so many Americans for decades. It was snap benefits for food that kept us from seeing long soup lines. Quite literally because these benefits were put in place by FDR, we as a nation, survived better than if they weren’t available. Every time Wall Street destroys the economy, these safety nets have kept the stores operating…and businesses alive. It’s wall street and it’s casinos and the billionaires we need protection from.
There is no free healthcare. You are paying for it somehow.
Doesn’t Denmark have a 23% tariff on imports? You call it a VAT.
that why the EU are referred to as Vat Heads.
I guess you don’t know the difference between a VAT and a tariff either. Denmark’s VAT applies to imports and locally produced goods (and services).
SS as run in the US is a scheme mainly to avoid old-age poverty. Sure, by now, if you are an upper-income contributor, you get (and will get) a lousy (and even lousier future) rate of return on your contributions. But the poorer parts of our population, it’s a god-sent scheme. And without mandatory SS, the US trade deficit would probably be double its present size. We are people who are just extremely bad at saving for retirement.
Don’t worry, they will figure something out, he is there for life.
They will make his corpse into an audio-animatronic meat robot, will Weekend at Bernie’s him for 30 years, and his simps will defend the lie to their deaths.
That process has already been patented 4 years ago.
SS was a ponzi from the first recipient who paid in $25.75 and received $22,888.92 or nearly 1000 times what she paid in. As in any ponzi, those who get their money out earlier are in better shape than those down the line which is why i applied at 62 and have received for 9 years. There were other considerations besides the (in)solvency of SS. One is the present value of money, which if received earlier can be invested and grow which offsets the loss incurred by filing early. Two, is living abroad i fear an inevitable crash in the dollar so the money received earlier is worth more in foreign currency and a third reason which i never see in articles discussing when to file for SS. My daughter was able to receive a lower amount than i do for 2 years till 18yo. If i had waited she would not have qualified for SS.
Do you consider stocks and bonds to be ponzi schemes? You can invest there and make 1000x on your money too.
You are familiar with time value of money from your post, well what do you think was done with that money that was put in for 40 year? It was growing since SS pays interest on the money (paid for in the future via inflation).
I don’t understand the comment about your daughter. How can she collect SS when she isn’t of age yet to collect (unless you had kids when you were like 9 years old). Can you explain that in more detail.
Stocks share one thing with a Ponzi scheme: When enough people try and get their money out, it’s quickly revealed that the value they thought market cap represented was really hollow in the middle, like a basketball.
It’s a sad day indeed when the basketball goes flat.
sadder still when the basketball player goes flat.
when i filed i was asked if i had children and their age. My daughter received about 2/3 of my benefit amount as she was in school until she was 18 (for 2 years). How it works and why i have no idea. Best to research the subject.
I thought that was only possible if you actually died because your child would need the money till age 18 in order to be taken care of.
So your saying you got X amount of dollars and your daughter got 2/3X amount per month? That doesn’t make sense because what if you had 5 kids under 18 would they pay all 5 2/3 of your money? Something seems amiss. Are you sure they didn’t *reduce* your payments for 2 years in order to pay her some money and then increase your payments once she reached 18?
So your daughter was receiving Survivor Benefits? She would be entitled to that, no matter what your Social Security status.
Survivor benefits are only paid when the person collecting is dead and our poster is alive.
I was thinking of the benefits the daughter would get, if her other parent had died. She would get that until age 18.
Just checked the SS website – apparently, if a retiree has a child (or a dependent grandchild), the child will also receive an SS benefit, until age 18.
The benefit amount is calculated, based on several factors.
I did not know that.
how do I adopt several sub 18 year old illegal immigrants? I think I see a business opportunity.
When (so many of us) use that reference (Ponzi) clearly we are making reference to the fact that there are fewer contributors than are are required to balance the outflows via the inflows. It’s not meant literally. This is all a show about nothing.
you are ruining the distraction, please leave common sense out of the forum.
This is a smaller issue than many want to make of it.
With the huge advances in automation/robotics and AI occurring almost monthly, it will not be long before the labor participation rate enters a steep downturn. Every .1 decline in the LPR means less people will be paying taxes for SS but also Medicare and towards general revenues.
It is inevitable that most human work will be automated away and the remaining workers will not be enough to meet revue requirements.
At this point, it will be up to the AI Overlord to provide everything free to everyone. Money will not longer be needed. Gold as an asset will be meaningless. Crypto will all be worthless.
Don’t worry. Be happy.
Gold will never be meaningless.
Gold becomes meaningless in any number of scenarios, such as famine, disease (especially bio-weapons and chemical warfare), biome collapse, Asteroid impact, solar micronova, etc.
Gold is a buffer for small to somewhat larger, economic disruptions, it isn’t a panacea for everything always forever.
Good thought. A big gunsafe full of guns and amo works for the bigger scenarious.
Your gun safe doesn’t work against a band of soldiers, a militia or a government.
By then. I think most of us will be deceased. AI will be treated like corporations and able to earn money. Sue and be sued. Will develop it’s own agenda. May even think of us the way we think of most of nature. Nice to have. But if it gets in the way of our needs. It’s drill baby drill. We will be placed on human reservations.
I’m talking 10-20 years out here. I hope to still be alive.
AI as corporations makes no sense. When there are no human workers, there isn’t any need to continue economic constructs built around keeping humans occupied and making profits.
Further out, once we successfully expand into space and reach the stars, all resource constraints disappear and we become a post-scarcity civilization. All the resources we could ever want will be available on planets, moons and asteroids and therefore, everything we want or need can easily be manufactured for humans by the machines that will run everything.
This is the premise of the Culture SF books by Iain M. Banks. See:
https://en.wikipedia.org/wiki/Culture_series
Enjoy!
“Balderdash. Taxes paid by today’s workers are used to pay today’s retirees.”
That’s what a Ponzi scheme is to me.
Taxes paid by workers today should be used and only used to pay them when they retire. Period.
Its is a scheme, and lots of people are getting paid far more than they ever paid in.
The difference is made up in debt. That has to stop.
What can’t go on won’t – its just a question of how it ends
What do you want to do with the money then? Make a Scrooge McDuck moneybin?
At least SS pays 3% on that money taken in to the trust fund. Other than a moneybin (which would be inflated to nothing by the time you retired in 40+ years) the other choice is bonds or stocks. Bonds are no different than what SS is now (it’s a special government bond) and stocks means wall street skims from your retirement and you are subject to downturns in the market so are you sure you want that?
Say what you will, but my Scrooge McDuck bathtub affords me undreamt of luxury.
More of a pyramid scheme. But more or less yes.