I received this email from a self-professed fan. But in his note, he felt obliged to add this:
I do take one strong exception to your statement that Social Security is the largest Ponzi scheme ever. Social Security is an insurance policy. We pay real money to receive real benefits. It currently has over 2 trillion dollar surplus. And, if we simply remove the cap so that the wealthy continue to pay in at the same rate as everyone else, it will be solvent for all time.So, instead of painting yourself as one of the few intellectual right-wing extremists out there, why don’t you use your obvious intellect and be honest about Social Security instead of parroting Fox News talking points?
It never ceases to amaze me that there is anyone out there who still believes any of this. At the age of 17, in 1959, I was taught the truth in a high school civics class. The program is not funded in terms of any insurance program.
First, the Supreme Court of the United States in 1960 declared that the Social Security program is not an insurance program. The case was Fleming v. Nestor. On the Social Security website, we read this.
There has been a temptation throughout the program’s history for some people to suppose that their FICA payroll taxes entitle them to a benefit in a legal, contractual sense. That is to say, if a person makes FICA contributions over a number of years, Congress cannot, according to this reasoning, change the rules in such a way that deprives a contributor of a promised future benefit. Under this reasoning, benefits under Social Security could probably only be increased, never decreased, if the Act could be amended at all. Congress clearly had no such limitation in mind when crafting the law. Section 1104 of the 1935 Act, entitled “RESERVATION OF POWER,” specifically said: “The right to alter, amend, or repeal any provision of this Act is hereby reserved to the Congress.” Even so, some have thought that this reservation was in some way unconstitutional. This is the issue finally settled by Flemming v. Nestor.
In this 1960 Supreme Court decision Nestor’s denial of benefits was upheld even though he had contributed to the program for 19 years and was already receiving benefits. Under a 1954 law, Social Security benefits were denied to persons deported for, among other things, having been a member of the Communist party. Accordingly, Mr. Nestor’s benefits were terminated. He appealed the termination arguing, among other claims, that promised Social Security benefits were a contract and that Congress could not renege on that contract. In its ruling, the Court rejected this argument and established the principle that entitlement to Social Security benefits is not contractual right.
By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are “special issues” of the United States Treasury. Such securities are available only to the trust funds.
There is no money in this fund. The government has spent every dime.
Tax income is deposited on a daily basis and is invested in “special-issue” securities. The cash exchanged for the securities goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.
(For the rest of my article, click the link.)
First of all the problem is the word trust. People put the money in there and trusted the government(politicians) to hold it for them, there was the first mistake. Giving money to a bunch of lawyers and their clients to hold until they needed it(never trust a lawyer or a politician). The trust fund(it says trust fund in the name at the top of the act) was established so people would have a minimum amount of money so they wouldn't be destitute when their working life was over. Establishing a pile of money and allowing politicians(lawyers) access to it was really stupid. Now you bastards are saying it is an entitlement as though it was welfare. Never give a politician money they can make a case for anything with obfuscation and lies. Remember Bill Clinton " it depends on what the meaning of is is" . I haven't believed a word a lawyer of politician said since. Time to get a shovel and clean out the barn.
John….my sentiments completely!!!!
When I hear the term "Fox News talking points" I slam on the brakes. This is a person who is parroting what someone else is telling him to say. I guess they repeat the same thing over and over, like Marketing 101 classes teach (like repeating the 800 number three times). The problem here is that we are trying to have a discussion, not a sales pitch. So (to them) take your "Fox News talking points", your "common-sense gun control", and your other canonized logobellum, stuff it into a tea bag and steep it somewhere.
I would also point out that the wordplay people (you know who you are) have corrupted yet another ald-fashioned word: Insurance. It used to mean one thing, but now apparently it means that "[w]e pay real money to receive real benefits" (according to the letter-writer above). No, that means you purchased a product or service. Insurance means something else. But thanks for playing.
We can add this word to the list, containing "marriage", "right", "teaparty", and of course, "is".
(Thanks Gary et al for allowing me the soapbox for a sec.)
As stated in the article, taxes for FICA benefits are just that: taxes. And as such must follow the rules for tax as recorded in 26 Title US Code. In there, it documents that taxes are assessed against privileged activities where the federal govt. has an ownership interest..and nothing else. Therefore, activities performed in the private sector that generate earnings are outside the taxing scope of the federal govt. This is clearly demonstrated by the fact that between 1913 and 1940, on average, only about 9.5% of working Americans filed tax returns while the average earnings of these Americans exceeded the required filing minimum! Dr. North has pointed out the US Constitution was a scam (not authorized by the states); well, the current income tax paradigm is also a scam and is causing the looting of our wealth. Get educated, learn the facts, see the evidence and then act. Go to LostHorizons. com and free yourself of this outrage!
Social Security from its inception has had every element of a government run Ponzi scheme. To deney this one must be ignorant of the concept. the government takes in money from people "investing" in the suystem and pays folks a "return on investment" from the money taken in. As long as more money is taken in the schem continues. When less money is taken in, the program fails. We have folks severing prision time for working similar investment schemes. The fact that the government runs this program is the only reason no one is serving prision time. That and the intellectual wisords that developed this schem have generally passed on.
It is insurance — insured to go broke.
I have never heard the Fox News talking points. Do they exist only in the heads of people that feel threatened by truth? By the way, where did you get your talking points?
and to pay the IOUs being redeemed the Treasury has to go and sell 'regular' notes/bills/bonds.
so a $1 billion shortfall in SS expenses vs. receipts means another $1 billion has to be borrowed for the current year.
I'm retired and SS is part of my income. An income I paid into all my life to receive as part of an agreement. It is not my fault politicians are power-hungry fools. Keep your high-handed hands off my cash flow.
Gary's quite good at spinning the truth, and spinning lies into whatever his simpleton readers want to hear, I'll give him that. This is the biggest load of crap I've heard all week, and "conservative" mouthpieces will stop at nothing to destroy a program that for over 7 decades, since its inception, has never run out of money and has lifted the elderly and poor out of poverty and homelessness. Claiming it needs reform or dismantlement is complete and utter BS.
What ever Social Security is, it is broken now by this corrupt government! Where there is $$$$ there are thieves! Where there is government there are more thieves!
And it's not my fault the government robbed you to pay for somebody else's 'social security'. What right do you have to steal from me? You are owed NOTHING just because you got taxed in the past.
It's a wealth transfer scheme from the beginning. More proof that America is the modern Roman Empire, and has followed directly in the footsteps of the ancient Roman 'republic' where they too started 'entitlement' programs that EXACTLY mirror what we have now. Any questions Rome?
Social Security is / was an earned benefit….. I paid FICA (SS and Medicare) tax my whole working life, over 40 years. I had no choice. My employers also contributed on my behalf, a so-called payroll tax. The trust fund was robbed over the years by the federal government to "fund" pet programs. Close to a half-a-trillion dollars has been taken from the trust fund and not paid back.
SSI is an ins. just like obamacare look at what justice roberts just did. Its just that the gov. wants out of the deal because they stole the money. The gov. just wants to change the law.
Here's your lollipop, honey. Obama gave me a bunch so I could give them out to all of you SUCKERS. It's not a cell phone, but then even liberals someday run out of OPM — other people's money.
The Social Security money mas taken by LBJ and Dem and put into the general fund for its great society, and the money is also used to pay welfare with. That is were all the money is going. Why work when you can get money that easy.
good grief shane, i hope you're just trolling and not really as stupid as you appear to be.
"Claiming it needs reform or dismantlement is complete and utter BS."
You heard it from the man himself. We can just leave it as is until it collapses and then Shane can sit there in a daze wondering what happened.
Add to your list of perverted words the Affordable Care Act "marketplace."
Well, they say one is born every minute. I read that the Supreme Court ruled SSA a tax and not a trust fund when it was challenged during its first years of existence. As I recall from what I read FDR said in private that getting it named a trust fund in the law was a guarantee that no future politician would be able to rescind the program. Looks like it's working, people are still falling for the the lie of the evil genius president whose policies caused and prolonged the great depression.
It's been said that an expert is one who studies more and more about less and less until he knows everything about nothing. A lawyer is one who studies less and less about more and more until he knows nothing about everything. Our problem is that we elect lawyers to govern us and they hire experts to tell them what to do.
Thank you JC. I am glad you pointed out that it was Democrats that robbed the SSfunds.
Democrats first enacted this scheme back in the early 30's (1935 the man says) It has been Democxrats
EACH TIME that have found some way to alter the program so they can take money out of it and so recently
it was DEMS who "converted it" to an entitlement.
The real irony is that back in the day when SocSec was "instituted" the Democrats had just prosecutied and
incarcerated a private citizen for having formed that exact same scheme to pay his employees as they retired. Basically the charges were "robbing Peter to pat Paul"
And they found a way to take all of my SocSec investment when I went with DOD – Ok I accepted that. BUT THEN
I WAS REQUIRED TO PAY THE SAME AMOUNT INTO THE FED RETIREMENT PROGRAM (CALLED CATCH 62).
Rather than any insurance program I know of – it Sounds Like Ponzi To Me!!!!!
The internet has taught me a LOT about what is going on in this world. I myself will NEVER shake hands with a politician. I now realize I don’t know where that hand has been.
Maybe shaking Raul Castro’s hand, maybe in the public treasury, or maybe just down ones pants like Anthony Weiner.
This person is most probably one of those who depend on eternal "Entitlements", the so-called "don't work – get paid" scheme. Then blames those who really contribute to the about to get bankrupt program. What a parasite Liberal!
The Supreme Court case that settled the issue was Steward Machine Co. v. Davis (1937), where they held that Social Security is not insurance, it's a tax. The "insurance" angle was just a way to sell it to the American people. The lawyers arguing for the act even admitted that Social Security was just a means to raise more money for the government.
several very good replies in here. If one knows how to follow the money & process the big problems & solutions are obvious. One has to freeze the process at a point in time and run an annuity program to see what should be there over the average cycle – 46 years (18/65) input & 13.5 payback (65/78.5), plot the CPI index, look at the process as is, and see who's fingers are in the pot. A given is "CYA & denial" commonly to a point of major felony the higher it gets. There is an FDR adamant & firm statement that SSI was a citizen paid for right that "no damn politician could deny or take" – not exact, but the expletive was there – his record should still be on the net. I wrote a program to do the number stuff as what if's & maybe's – It's unbelievable – run your own annuity if you doubt it.
An average $42, 537 wage (2012) depositing 14.2% of monthly wages 46 years earning 5% compounded returns $1,296,880 based on 13.5 years of $8,005.43/mo payback. The $941,686 future 46/yr balance would pay $47,084/yr @5% FOREVERMORE!!! SSI’s $1235 mo. average payback with all other beneficiaries (+41.8%) was $1,751.44/mo for $283,733 total. $1,013,147 disappears! That’s factual annuity calculations. Follow the money trail! It gets worse!
A 46 year (18 to 65) fixed 5% monthly annuity and paying 13.5 years (65 to 78.5) return $5.345 per dollar invested! Zero interest pays $1. Zero interest and 5% inflation yields -5%, or $0.2732 for every $1.00 deposited! The missing $0.7268 disappears! SSI securities are “consumption bonds” backed by government’s power to tax more and borrow more to consume more, forever more! CPI Index data yields extreme negative returns. Inflation indexed benefits destroy such funds.
SSI is a legitimate trust fund run amuck by corrupt officials who, like Bernie Madoff, made off with the money in a Ponzi scam! Deposits are “specific SSI taxes. SSI is named a “trust fund” (fiduciary) run by a “trustee” that reported $2.4 TRILLION bonds yielding 5%. SSI reports and feigns actuarial integrity, etc! Without SSI actuarial data, a SWAG guess of 316 million people funded at ¼ of their $1,296,880 “paid for” benefits, yields a $102.5 trillion fund Using SSI composite benefits of 21.878% to annuity yield, the fund would be $22.4 trillion, and roughly $80 trillion “disappeared! Similarly, the other $23 trillion might off the books in “unfunded liabilities”… also “gone” If GAO reported a 2012 “unfunded liability”, it’s ratio to $20 trillion might reveal their actuarial factors!
Because SSI pays benefits with worker deposits, the fund is at a state of collapse. $1,751.44 composite benefits are 3.98 times the $439.55 average SSI 12.4% monthly deposit. A 39% SSI beneficiaries to employed ratio would mean 1.6 workers worker deposits pay one benefit instead of investing it at 5%! Their 2.8 ratio is 1 to 1, ignores more workers than beneficiaries currently. Whatever, upside down and drowning by trillions, demands immediate truth and justice!
SSI reality is a mere 2.713% tax on average citizen wages will fund total composite average retirement SSI benefits. The FED, Treasury, and the monopolist global banking empire web funneling zero interest US investment capital into communist and other countries is logically our national cancer. Everyone in this country was free to invest in capital productivity that provided jobs and wealth enough to be self sufficient and free of debt bondage! Shariah and Communist compliant near zero interest with massive counterfeiting of currency and bonds is the opposite! Capital monopolists and communists agree bigger is better enough to agree to sack the US economy…
note: "…the other $23 trillion might off the books: should read "…the other "missing $20 trillion that is missing might be off the books in "unfunded liabilities… also "gone"! I illustrated whole rounded numbers – the actual fund balance as notes was $2.4 trillion, not 3 – $600 billion not worth complicating a rough cut assessment – Can't believe I said that – I'm sure Obama & his progressives would agree
It's IOUs? So? Some people are constantly amazed that a bank statement is an IOU because when people deposit money in a bank, the bank then takes all the deposits and lends it out again. Or, it's a transfer from the young to the old? So? That's why a lot of people have children – as insurance against extreme old age.
and bankers, at least private bankers, go to jail for doing what your government did…
This kind of talk really frightens me because SS is essentially all I've got. The marketable skills I learned in my early life are all obsolete now, and my newly acquired skills are not very marketable under Obammunomics.
Don't we deserve at least to have the money that was already confiscated from us, returned to us?
This author must be a liberal. The program was set up like an annuity. You pit in a % of your wages then you receive payments at retirement age based on your earnings. It was to be kept as a separate fund and invested to earn interest. I calculated mine since I was working and looked up the FICA % for those years. With just working the next 8 years at my current salary and if each year my account earned just 4% interest then when I start drawing from it and the balance to continues earning 4% I could draw out $30,000 a year for 30 years. That is more than SS is going to pay me. With the amount of the fund invested it would earn many years more than 4% to make more money over the 4% given to each account. All these A@@hole government did is steal it from us. It is not an entitlement. Look up the description of entitlement. Entitlement is something received with giving no payment. We gave payment.
John, you got this right…..TRUST!!!! Government!!!!! Trust and Government do not go together…they are a laugh. Only, I'm not laughing. The government is laughing all the way to the bank…the workers, the politicians…all of them take our hard earned money and squander it on themselves. I am sick of all of them.
you are another confused uninformed brainwashed liberal democrat coming from the very deep left and telling the truth is not good for you . Stay in your cave and inform yourself , maybe come out later when you are 65 and see what you are going to collect . I worked all my life and paid into it but because of your kind ,there is nothing there , it is all gone . stolen by the ones thinking like you. You are not doing me a Favor , you have stolen my savings .
Rome lasted 2000 years ; America around 230 years .
another brainwashed here , confused and uninformed ; maybe you never paid a penny into it .
SS IS INDEED A TAX THAT GIVES VERY POOR RETURNS TO MOST WHO PAY IN. CASE IN POINT I PAID IN THE MAXIMUM AMOUNT OF FICA EVERY YEAR FOR 36 YEARS (ONLY THE TOP 33 COUNT, NO REFUND ON THE 3). THAT WAS A 12% FICA PAY IN, BUT I ALSO HAD THE DISCIPLINE TO PAY IN 14% ON ANOTHER PENSION. THAT PENSION STARTED PAYING ME $8K/MO AT AGE 59. SS WILL PAY ME $1875 WHEN I REACH 62–SUCH A DEAL!!!
THOSE WHO PAY IN THE MINIMUMS ACTUALLY GET A DECENT RETURN ON WHAT THEY CONTRIBUTED, OTHERS NOT SO.
THE RICH PAY ALL THE TAXES–THAT IS A MYTH BASED ON THE TRICK OF APPLYING THE TAX TABLES TO THE GROSS INCOME OF THE WEALTHY. NET INCOME IS WHAT COUNTS. LET US TAKE FRANK MCCOURT FORMER OWNER OF THE LOS ANGELES DODGERS. POOR FELLOW GOT DIVORCED AND HIS TAXES GOT PUBLISHED. ON AN INCOME OF $106 MILLION FOR 2010 HE PAID ZERO INCOME TAXES. DO YOU REALLY BELIEVE FRANK HAS THE ONLY TAX ATTORNEYS IN TOWN THAT CAN WORK THIS MAGIC? I'M NOT IN HIS LEAQUE BUT I HAVE NOT PAID MUCH TAXES MYSELF.
You miss the point. THERE IS NO CASH FLOW. The agreement you THINK you had was ALWAYS a lie. The government NEVER agreed to their end. You didn't pay INTO anything. You paid taxes, that were in turn used to pay others. This is the essence of a ponzi scheme.
NO. It was SOLD as an annuity. It was set up as a PONZI scheme. There was NEVER any intent, or attempt, to operate it separately from the general fund of the US Treasury.
The big difference between a Ponzi and SS is, Ponzi's are voluntary, SS takes money from me at gun point. I would not 'give' 1 cent to SS !
Ponzi's victims fell for the scam and turned over their money voluntarily with intent to get rich quick. Social Security tax, or FICA, was simply taken out of our paychecks without our consent. That's theft. Don't we victims of said theft deserve restitution?
And, just FYI, all taxation is theft.
thought I put something in but don't see it – again, slightly different:
An average $42, 537 wage (2012) depositing 14.2% of monthly wages 46 years earning 5% compounded returns $1,296,880 based on 13.5 years of $8,005.43/mo payback. The $941,686 future 46/yr balance would pay $47,084/yr @5% FOREVERMORE!!! SSI’s $1235 mo. average payback with all other beneficiaries (+41.8%) was $1,751.44/mo for $283,733 total. $1,013,147 disappears! That’s factual annuity calculations. Follow the money trail! It gets worse!
A 46 year (18 to 65) fixed 5% monthly annuity and paying 13.5 years (65 to 78.5) returns $5.345 per dollar invested! Zero interest pays $1. Zero interest and 5% inflation yields -5%, or $0.2732 for every $1.00 deposited! The missing $0.7268 disappears! SSI securities are “consumption bonds” backed by government’s power to tax more and borrow more to consume more, forever more! CPI Index data yields extreme negative returns. Inflation indexed benefits destroy such funds. Riddle… When consumed, food turns into _ _ _ _?
SSI is a legitimate trust fund run amuck by corrupt officials who, like Bernie Madoff, made off with the money! It’s a Ponzi scam! Deposits are “specific SSI taxes. SSI is named a “trust fund” (fiduciary) run by a “trustee” that reported $2.4 TRILLION bonds yielding 5% (prior years average). SSI reports and feigns actuarial integrity, etc! Without SSI actuarial data, a SWAG guess of 316 million people funded at ¼ of their $1,296,880 “paid for” benefits, yields a $102.5 trillion fund Using SSI composite benefits of 21.878% to annuity yield, the fund would be $22.4 trillion, and roughly $80 trillion “disappeared! Similarly, the other missing$20 trillion might off the books in “unfunded liabilities”… “Either way it’s gone” If GAO reported a 2012 “unfunded liability”, it’s ratio to $20 trillion might reveal their actuarial factors!
Because SSI pays benefits with worker deposits, the fund is beyond collapse. $1,751.44 composite benefits are 3.98 times the $439.55 average SSI 12.4% monthly deposit. A 39% SSI beneficiary to employed ratio @ 3.98 means 1.6 workers worker deposits pay one benefit instead of investing it at 5%! The fox got their $1.3 nest egg & the fund will be $2 million upside-down for every benefit paid. Whatever, upside down and drowning by trillions, demands immediate truth and justice!
A mere 2.713% tax on average citizen wages will fund total composite average retirement SSI benefits. The FED, Treasury, and the monopolist global banking empire web funneling zero interest US investment capital into communist and other countries is logically our national cancer. Everyone in this country was free to invest in capital productivity that provided jobs and wealth enough to be self sufficient and free of debt bondage! Shariah and Communist compliant near zero interest with massive counterfeiting of currency and bonds is the opposite! Capital monopolists and communists agree bigger is better enough to agree to sack the US economy.
I think everybody should pay 30% income taxes
Hilarious. I love the play on words. Well done!
How will the affordable care act??? and the IRS's role affect the possibility of tax reform in the future?
i.e. flat tax, fair tax etc. Seems to me the hope of tax reform is all but eliminated with the IRS in control.
AND, this is how the OBAMACARE HEALTH PLAN will be handled – you can bet your money on that!!! They will use that money as they see fit and when it comes to getting your claims paid – they will not pay them with some new excuse. I say everyone band together to STOP this monstrosity it will only turn out to be another Social Security SCAM. We should be complaining about the $760 BILLION that obama took from us also to redistribute. Also we should DEMAND and in some way make ALL OF GOVERNMENT EMPLOYEES – Starting with obama take this debacle of a healthplan.
I've been retired for 11+ months. In 1976, I read a very informative book entitled, "The Greatest Con-How The US Government is Fleecing You". From that point on I knew that SS is the greatest Ponzi scheme of all time. At my age, I also now realize that nothing is going to change. I cannot balance the weight of the world on my back and I refuse to worry anymore about the course of our country. The American people have swallowed the lie for so long that they've become permanently changed. Politicians seeking to represent the best interests of our country, in the long term, are now too few in number. I see no long term hope for believing that a course change will occur. What I do see is future economic disaster but it appears that disaster will have to occur to awaken the American people. I've done all I can to provide for myself in old age and to create a hedge against that disaster. Hopefully, if I'm alive when it comes, I'll have some means to provide for my own survival and to offer some help to my friends and family. This attitude doesn't mean I don't care about our country's future. I will continue to attempt to discern which politicians deserve a vote and to do so along with communicating with my representatives. I will not however, worry about a future that is beyond my control. Scripture reflects that there are none so blind as those who will not see, nor none so deaf as those who will not hear. Our country is now controlled by large numbers of these types, including the American people. Our fate will be deserved.
When I'm elected president on the Radical Libertarian Loon® write-in ticket, There will be ZERO federal tax. I will slash the bureaucracy down to Constitutional levels, (i.e., appx. 746 people) and get federal money from voluntary donations and the $10.00 admission at the border entry points, which is, possibly surprisingly, Constitutional!
The Illusions are many, and this one is certainly one of the grandest. Unfortunately our entire legal/judicial system is nothing but a similar illusion with its own language to make sure the commoner cannot defend himself and must of course acquire one who speaks the language of legal-ees? The laws (like social security and fed reserve act) are of course created by the legal professionals? who happen to be politicians many times? What a con job all of it is , but a grand and glorius one ! It is all just a way for the elites to control YOU and your tax dollars in a never ending government that only grows ever larger and more regressive. There is little difference in Dems and Reps. All explained in great detail at http://www.downtoearthprepper.com for all to see ! Nothing will change until we all demand accountability from these criminals .
You are so right! When I was in college more than 50 years ago I was required to prepare a retirement plan for a Course in Consumer Economics. I included Social Security. My Professor returned my paper with a big Red X through that portion. When questioned he replied, "Boys, Never in the history of mankind has a bunch of politicians been able to resist a Trust Fund." "They will buy votes with it". "It won't be there when you retire." He was a bit off on his timing, but not by much.
The first individual to retire under Social Security was a legal secretary(can't remember her name) who had put in a grand total of $26.43. She died at the age of 101 having received a grand total of $26,848. No a bad return on $26.43. Those who retired shortly after Social Security was begun required very few quarters to qualify and contribution rates were less than 1%. Self Employed were added later and they required very few quarters to qualify due to their age. Most drew out in the first year of retirement more than they had contributed over their working life. It never was an Insurance scheme.
Well, at my first real job (other than paperboy) in about 1965, nobody told me that. SS was just another damn deduction, which they called FICA, which everybody had to just STFU and put up with. If anyone AT ALL had told me and how many millions of other people back then what was really going on and offered any other options, I'd have opted out in a hot new york nanosecond and set up something sane.
But now, I guess I'm just plain fucked, right? Thank you sir, may I have another?