Shakespeare wrote that “a rose by any other name would smell as sweet.” But a Ponzi scheme, when offered by the federal government, is called Social Security.
Any program outside of Washington, D.C., that takes money from people at the bottom and gives it to the people at the top is a pyramid, or Ponzi, scheme. Social Security was started in 1935 as a way to collect additional tax revenue allegedly to pay benefits at age 65 – when the average American life expectancy was lower than that. The problem is that the government didn’t plan on us living so long. The taxes collected are put into the general treasury and spent by politicians to buy votes as needed.
As to the Rev. Paul Cook’s suggestions on how to make the program stronger (“Fix Social Security; it’s no Ponzi scheme,” Sept. 20), he suggested taking the cap off wages and making everyone pay the Federal Insurance Contributions Act tax on all earnings without limit. When I started my career, the cap was more than $40,000: it is now $106,000.
Cook probably doesn’t realize that most of the higher earners are self-employed. Self-employed earners pay double – once as the employee and again as the employer. That works out to be about 14 percent; add 3 percent for Medicare and we “rich” people get to pay 17 percent of our income before we get to pay federal or state taxes.
At a 36 percent marginal rate, that means someone such as Cook’s doctor will be paying 60 percent of his income on his top earnings (14 percent Social Security plus 3 percent Medicare plus 36 percent federal plus 7 percent state equals 60 percent).
I hope I haven’t lost Cook in the weeds with all these numbers. God only asks for 10 percent. You can’t fix it when you don’t even understand it.
I am not wishing Cook would lower our costs anytime soon. But I hope he doesn’t try what the federal government does in the real world, or the minister’s friends in D.C. will have him preaching from a jail cell. But then again, he then won’t need Social Security at all.
Let’s hope Cook’s biblical exegesis is better than his Social Security analysis.