Master CraftsMon - Aired Monday, February 13, 2006 at about 11pm CST - Segment 5
Master CraftsMon - Aired Monday, February 13, 2006 at about 11pm CST
Segment 5
Transforming Social Security into personal savings accounts is one of the projects I have been working on. Social Security is a really bad deal for anyone who is not on social security right now. Every once in a while they do a survey where they ask whether someone believes in space aliens or actually getting full social security benefits. The space aliens always have a bigger percentage of respondents that getting full social security benefits.
People who do not realize that Social Security starts going under in 2018. In 2042, we will have run out of all the funds earmarked for Social Security. Anyone who does not acknowledge this reality has got to pull their head out.
There is one other thing. Social Security is a bad investment. I mean, you put away 12 or so percentage of your income for about 50 years and you get a rate of return of between one and two percent. Those are just numbers. People's eyes glaze over when you start throwing numbers at them.
The central thing you have to remember about Social Security is that it should not be a part of the government. Think about this a minute. Government should be doing things that the private sector cannot or will not do. Why should the federal government be involved with a pension fund system. Back in the 1930's there were very few private pension funds. Now there are thousands. Why is the government still involved with a pension system that has been superceded by the private sector? If you come back with the belief that the government has to hold the cash, because people will not hurt themselves by doing something silly with their pension money, then you are going to have to convince me that the government can take care of me better than I can take care of me. For some reason that DOES makes sense to many people in this country. I mean, the government does not do many things well.
Oh, there is one other thing that most people do not know. Social Security is not a pension fund. There IS not lockbox with money squirreled away for every person on Social Security. About 1960, there was a Supreme Court ruling that said the Social Security is a tax which means that the Congress can do just about anything it wishes with the money. As it is, the Congress issues debt on Social Security and uses the money elsewhere to run the government.
The IOU's in the so-called trust fund can be looked at this way. Suppose you put $10 in your mattress. You charge yourself 10% interest on any money you take money out of the mattress. What if you exhaust all the $10 in the mattress? I mean, what if you have put IOU's in the mattress, plus IOU's for the interest? Where does the money come from to pay off the IOU's plus interest? You can't borrow money from yourself. That's stupid. What are you going to do with that IOU? You can't spend that IOU. You could sell the IOU by borrowing the $10 plus interest from someone, but that just puts off when you have to pay the so-called debt. The Social Security trust find does not exist. It is just a set of entries in the computer that says that people will get paid from general revenues when the time comes. Every dollar spent renewing the paper in the trust fund cannot be used elsewhere in the government.
I know, you don't want to believe that. It doesn't change anything. Social Security is a Ponzi scheme. People who get in early make out like bandits, but people born after about 1968 are just SOL unless something is done to privatize the system. If that frightens you that we need to privatize the Social Security System, then I cannot help you. The government shouldn't be in the business of paying for upkeep of the elderly, because it can't do a very good job of it. Inevitably the government screws up and people get screwed.
Segment 5
Transforming Social Security into personal savings accounts is one of the projects I have been working on. Social Security is a really bad deal for anyone who is not on social security right now. Every once in a while they do a survey where they ask whether someone believes in space aliens or actually getting full social security benefits. The space aliens always have a bigger percentage of respondents that getting full social security benefits.
People who do not realize that Social Security starts going under in 2018. In 2042, we will have run out of all the funds earmarked for Social Security. Anyone who does not acknowledge this reality has got to pull their head out.
There is one other thing. Social Security is a bad investment. I mean, you put away 12 or so percentage of your income for about 50 years and you get a rate of return of between one and two percent. Those are just numbers. People's eyes glaze over when you start throwing numbers at them.
The central thing you have to remember about Social Security is that it should not be a part of the government. Think about this a minute. Government should be doing things that the private sector cannot or will not do. Why should the federal government be involved with a pension fund system. Back in the 1930's there were very few private pension funds. Now there are thousands. Why is the government still involved with a pension system that has been superceded by the private sector? If you come back with the belief that the government has to hold the cash, because people will not hurt themselves by doing something silly with their pension money, then you are going to have to convince me that the government can take care of me better than I can take care of me. For some reason that DOES makes sense to many people in this country. I mean, the government does not do many things well.
Oh, there is one other thing that most people do not know. Social Security is not a pension fund. There IS not lockbox with money squirreled away for every person on Social Security. About 1960, there was a Supreme Court ruling that said the Social Security is a tax which means that the Congress can do just about anything it wishes with the money. As it is, the Congress issues debt on Social Security and uses the money elsewhere to run the government.
The IOU's in the so-called trust fund can be looked at this way. Suppose you put $10 in your mattress. You charge yourself 10% interest on any money you take money out of the mattress. What if you exhaust all the $10 in the mattress? I mean, what if you have put IOU's in the mattress, plus IOU's for the interest? Where does the money come from to pay off the IOU's plus interest? You can't borrow money from yourself. That's stupid. What are you going to do with that IOU? You can't spend that IOU. You could sell the IOU by borrowing the $10 plus interest from someone, but that just puts off when you have to pay the so-called debt. The Social Security trust find does not exist. It is just a set of entries in the computer that says that people will get paid from general revenues when the time comes. Every dollar spent renewing the paper in the trust fund cannot be used elsewhere in the government.
I know, you don't want to believe that. It doesn't change anything. Social Security is a Ponzi scheme. People who get in early make out like bandits, but people born after about 1968 are just SOL unless something is done to privatize the system. If that frightens you that we need to privatize the Social Security System, then I cannot help you. The government shouldn't be in the business of paying for upkeep of the elderly, because it can't do a very good job of it. Inevitably the government screws up and people get screwed.
posted by aRandomTexan at
12:35 PM
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