Social Security is "unfunded" pretty much 100% because people are living longer.

People like to criticize me when I "make problems appear unsolvable," what about this? You're basically claiming the US isn't allowed to cut its spending/debt down.

I feel like a standing ovation is in order. I'm going to get some funny looks from my colleagues in the office.

Social Security is unfunded because is it, was, and always has been fraud on a massive scale. It is the world's largest Ponzi scheme. It was never funded. No real investments were ever made. Indeed, no money has ever gone into the social security system. It was used from the very beginning to build tanks and bombs and bridges to nowhere, to hand out welfare checks and billion dollar bailouts, etc. It isn't failing because people are living longer. It has always been failing. It just hasn't always been blatantly obvious that the whole system was a fraud because, like all Ponzi schemes, as long as the size of the sucker pool keeps getting bigger, you can hide the truth. Now that population growth is approaching zero, the Ponzi scheme is inevitably collapsing.

Not at all. If you want to say that we're all **** and the problem is unsolvable, I'll be the first to concur. More precisely, there are no longer any practical, ethical solutions to the problem. They've **** us over so severely that there is no real solution to the problem. They only way through this is going to necessarily involve defrauding a whole lot of people out of a whole lot of money and it's going to hurt like hell. It doesn't much matter whether they do this by reneging on social security liabilities or by cranking up the printing press federal reserve, paying out out on the liabilities with worthless currency. We're **** either way. Sandpaper condom. No lube. Bus fare if you smile.

What really pisses people off is when (general) you act like there's nothing really wrong with defaulting on its promises. No, that's not okay. This is not okay. This is what happens when you stop demanding that your government behaves ethically and:

1) Keeps the promises it makes
2) Only makes the promises that it can keep

You get out what you paid in plus interest.

It takes the taxes you pay in and invests them in US government bonds, then when you turn 65 you get what you invested plus interest back in monthly installments.

There is no fraud, at least not with SS. You get out what you paid in plus interest. If you live long enough that this amount does not cover the X amount per month that people get now, then you get less.

SS is a government welfare program, it's not a "liability." You have no right to collect SS money. They could abolish it tomorrow and not pay anything. SS is only "screwing" you in the sense that the people collecting SS right *now* are getting too much and depleting the trust fund.

The only "promise" that the government can be considered to be defaulting on with regards to SS is the "promise" that you will be paid X amount per month adjusted for inflation until you die. I have my doubts that the SSA ever actually made such a promise in the first place, but even if they did, SS is not screwing anyone out of their money.

SS is not a Ponzi scheme; that's an exaggeration, but it certainly does lead people to believe they've been promised a lot more than they're actually getting.

What is a Ponzi scheme?

A Ponzi scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.

SS is a classic Ponzi Scheme.

That's the entirity of the definition?

Ponzi scheme organizers often solicit new investors by promising to invest funds in opportunities claimed to generate high returns with little or no risk. In many Ponzi schemes, the fraudsters focus on attracting new money to make promised payments to earlier-stage investors and to use for personal expenses, instead of engaging in any legitimate investment activity

SS is A) not fraudulent

B) actually does pay returns.

The consequences of the way it does so may eventually come home to roost...

... but it is not a Ponzi Scheme. Period.

Why people can't just discuss the problems without making it all about slapping some label on it that implies someone was being intentionally dishonest to enrich themselves rather than it just being a matter of poor policy is beyond me.

What "trust fund"? If there were a "trust fund", you'd be able to answer the questions I initially posed. There is no "trust fund" any more. The money people are getting now is being paid by people putting money in... now.

Yes, the remainder of the paragraph uses terms like "many" and "often".

The only absolute is what I quoted above.


The fact that it's paying old money off with new money makes it a Ponzi Scheme, which, to quote the SEC, "is an investment fraud", not to mention the violations of TITLE 42; CHAPTER 7; SUBCHAPTER II; § 401 of the USC.

So do other Ponzi Schemes, and just like SS, those "returns" are actually just new money.

Just like in any Ponzi Scheme.

Fiat declarations are worthless. Period.

Just calling it like I see it.

So, assuming we take your understanding of the system as valid -- who's paying the interest? If the SS funds are "invested" in T-bills, then really, taxpayers are paying the interest to fund the Treasury, no?

That's even worse.

X:
Please provide some evidence of this "trust fund". Please at least make an effort to show what treasuries are in the "trust fund", and what their value is. Please stop making fiat declarations as if they are absolute proof.
Please explain how my logic leads to you stating, "ANY investment operation that pays out more than it takes in, for whatever reason, automatically qualifies as a Ponzi scheme." I've been very clear as to what defines a Ponzi Scheme - here's a hint: I posted the definition above.
No, under my logic a Ponzi Scheme is a Ponzi Scheme.

Then any and all investments are Ponzi schemes. Money to pay the investor has to come from somewhere.

Again, if it were simply a question of "new money", all investment would be a Ponzi scheme. A Ponzi scheme implies that an ever-increasing supply of new money is needed to fuel an ever-increasing supply of money investors because no other meaningful source of income to the scheme exists. Aside from the fact that the interest on Treasuries precludes this, the important difference is that the ratio of investors to those receiving payments is entirely a product of national demographics and lifespan changes - not fraudulent behavior on anyone's part.

So? Any poorly-thought-out polciy is automatically a Ponzi scheme now? It's interesting to see you make no distiction between ineptitude and malice.

Since I'm not making a fiat declaration at all, that's a relatively pointless reply. The entire assertion that it's a Ponzi scheme is a fiat declaration and based entirely on ignoring the difference between a scheme set up to be a pyramid on purpose and one that ends up appearing similar only because of population demographics.

If an investment operation is paying out more than they take in, then they must be paying off old money with new money. Where else is the money going to come from?

As for evidence of the trust fund, this qualifies. Note that it's listed as "assets" and not claiming they have actual dollars available.

The $49 billion deficit last year (excluding interest income) and $46 billion projected deficit in 2011 are in large part due to the weakened economy and to downward income adjustments that correct for excess payroll tax revenue credited to the trust funds in earlier years.

After 2014, cash deficits are expected to grow rapidly as the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers.

After 2022, trust fund assets will be redeemed in amounts that exceed interest earnings until trust fund reserves are exhausted in 2036, one year earlier than was projected last year. Thereafter, tax income would be sufficient to pay only about three-quarters of scheduled benefits through 2085.

Why people can't just discuss the problems without making it all about slapping some label on it that implies someone was being intentionally dishonest to enrich themselves rather than it just being a matter of poor policy is beyond me.

As for the notion that SS revenues are invested: I don't know whether to laugh or to cry. It hardly qualifies as an "investment" for the government to immediately turn around and spend the money. That's all that buying a T-Bill really means -- that the government immediately raids every dollar put into SS. Do I need to remind you people that the federal government has never generated a profit in all of the time that SS has been around? Whatever benefits it pays out can come from only one of two sources: money forcibly extracted by taxation from the very people who are supposed to be "investors" in SS, or money borrowed from new investors buying treasury bills. Again, this is the definition of a Ponzi scheme.