Writer's Social Security analysis flawed

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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.

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scgator
1042
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scgator 09/22/11 - 03:25 pm
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0
I, for one, accept my social

I, for one, accept my social security disability check unashamedly every month; I paid into the system over 40 consecutive years, and now due to health cannot work; I am sure there is a lot of fraud in anything that any large group or government administers; but, you cannot "throw the baby out with the bath water". Social Security is a viable plan for us as seniors, and for those of less than retirement age, who really need it. As bad as it is, it is still much better than not having it. Almost all of the people that I have seen complaining about issues like this, drastically change their opinions when they are the recipients. To those still working and below retirement age complaining about the high costs of taxes.....help us out, YOU pay ALL of your parents healthcare and retirement expenses directly out of your pocket so that they can "unburden" the social security roles.

This country has a lot of problems and issues; but, NOTHING WILL CHANGE, as long as we concentrate on what is wrong instead of what is right. If the truth be known, most who complain the loudest only do so because they are scared that they won't get what they believe is rightfully theirs.

Carleton Duvall
6305
Points
Carleton Duvall 09/22/11 - 03:32 pm
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0
My fire insurance analogy was

My fire insurance analogy was not intended for you as you are very knowledgeable. It was a simple explanation for those who are not knowledgeable . The social security program has many provisions as you well know and one of them would be for spouses under certain conditions.

harley_52
23621
Points
harley_52 09/22/11 - 03:54 pm
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0
scgator said..."This country

scgator said..."This country has a lot of problems and issues; but, NOTHING WILL CHANGE, as long as we concentrate on what is wrong instead of what is right."

I have to disagree.

I think it's important citizens recognize and understand what's wrong and, to the extent possible, why it's wrong. If too many citizens are lulled into believing everything is "okay" and it's just a bunch of "rich," "right wing," "Tea Party," "extremists" talking about too much government spending, too big government, and too much taxation they may vote for the same man who brought them "hope" and "change" in the last election.

I'm not sure we can survive one term with Obama as president and I'm certain we can't survive two of them.

Voters must understand the issues, not follow like sheep what they're told to believe by the left-wing, mainstream media.

Carleton Duvall
6305
Points
Carleton Duvall 09/22/11 - 04:08 pm
0
0
We will survive. I am

We will survive. I am confident of that. We survived WWII when many thought we would not. However, our people must develop the same survival attitude that I saw during the early forties. So far, I do not see that determination but I am confident that I will. The first step is to replace Mr. Obama in the White House. The second step will follow with voters demanding of the new POTUS and the Congress to work at the country's interest, not their own. That will require constant pressure. It will happen, I am sure.

Carleton Duvall
6305
Points
Carleton Duvall 09/22/11 - 04:09 pm
0
0
Oh! I agree. We must focus

Oh! I agree. We must focus with what is wrong. The right things will take care of themselves.

burninater
9627
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burninater 09/22/11 - 04:12 pm
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0
LL wrote: Slightly edited,

LL wrote: Slightly edited, but Burninator posted:

If the rich are truly taxed at onerous levels, why is it that, after all those taxes are paid, they are still rich?
Here we have the heart of the redistributionist ideology. They are envious of wealthy people. They want to tax the rich not for a fairer government, but rather to make the rich become poor through excessive taxation.
----------------
Or alternatively, you could read my statement as it was intended, that changing the tax code to produce a fairer government would not make the rich not-rich.

This is not redistributionism, and it is not envy of the wealthy. It is looking at the simple fact that economic problems in our country have occurred in lockstep with trickle-down economic policy.

It is not envy to say "look at what is slapping you in the face -- trickle-down economics has NEVER worked!" The fact that "onerous" tax codes do not make one not-wealthy demonstrates that the "wealth envy" argument is pure nonsense. The entire point of a progressive tax system is to increase marginal rates at specific income thresholds. You CAN'T tax a rich person into a non-rich person with our progressive tax code, and anyone that makes the claim that that is what people are trying to do is taking advantage of your gullibility.

bjphysics
36
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bjphysics 09/22/11 - 05:44 pm
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harley_52: “I'm not sure we

harley_52: “I'm not sure we can survive one term with Obama as president and I'm certain we can't survive two of them.”

With Obama at the helm there is high probability the nation will collapse by before Jan 20, 2013 and if Obama is re-elected there is a 127.8% chance of total world destruction. We are talking dogs and cats living together, Sol super nova, Chi Com nuclear attack, Canadian invasion, lions, tigers, and bears – oh my.

Source: Fox [sorta] News

Vito45
-2
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Vito45 09/22/11 - 04:35 pm
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Gator, please correct me if I

Gator, please correct me if I am mistaken; but I do not know of one single serious political figure that has suggested you be deprived of your Social Security benefits. Nor do I recall anyone on these comments forums suggesting those who are close to SS age or already collecting benefits have those benefits diminished or removed.

What some HAVE said however; is that as structured, it is the equivalent of a Ponzi scheme because there will come a time when those entitled to benefits won't have any because the bank is broke. You have more people drawing out than putting in; surely even the most math challenged among us can understand that is not sustainable.

eagle
94
Points
eagle 09/22/11 - 04:42 pm
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0
Hmmm...entitlements would be
Unpublished

Hmmm...entitlements would be giving welfare, disability, soc.sec, etc to illegals. I've paid into social security for over 45 years and I want my money back--plain and simple!!

Techfan
6461
Points
Techfan 09/22/11 - 06:03 pm
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0
Blue collar vs white collar,

Blue collar vs white collar, plus whether or not you have health insurance also plays a big part in life expectancy. I'd also like to remind Mr Goss that most high earners (especially those who are self employed) are loaded with opportunities for deductions that significantly lower their tax rate.

Techfan
6461
Points
Techfan 09/22/11 - 06:10 pm
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Vito: Exactly, the

Vito: Exactly, the Republicans made sure their changes didn't effect one of the major voting blocks they're courting. They just want to stick it to the rest of us. Lift the cap, count all compensation as income (thus subject to payroll taxes), and SS and Medicare will be solvent forever.

Steve62351
66
Points
Steve62351 09/23/11 - 11:58 pm
0
0
The Social Security Trust

The Social Security Trust fund exists in name only. It is merely a bookkeeping tool. There are no Treasury Bills or other financial assets in the fund. The Congressional Research Service stated the following in a report on May 5, 1998, "When the government issues a bond to one of its own accounts, it hasn't purchased anything or established a claim against another entity or person. It is simply creating a form of IOU from one of its accounts to another." And according to the Office of Management and Budget under the Clinton Administration in 1999, "Trust fund balances, such as Social Security, are available to finance future benefit payments and other trust fund expenditures--but only in a bookkeeping sense. These funds are not set up to be pension funds, like the funds of private pension plans. They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury, that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits." The Social Security trust fund is an accounting mechanism. The trust fund shows the government has borrowed all the Social Security money, but it does not provide any way to finance future social security benefits. The money to repay the IOUs will have to come from taxes that are being used today to pay for other government programs. For that reason, the most important date for Social Security is 2018, when taxpayers must begin to repay the IOUs, not 2042, when the so called trust fund is exhausted. The bottom line: There is no Social Security Fund, instead money is taken from working peoples paychecks in the name of social security and spent on whatever Congress desires, just like regular income tax. The money taken in the name of social security is recorded in a computer database. That is the trust fund: a computer database. The Social Security Trust Fund consists of not even one physical item; the fund has no physical assets, just columns of numbers recorded in a computer. All the talk about the social security trust fund is just that: talk. There is no trust fund because there are no assets, just an accounting database with the name Social Security Trust Fund.

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