I am SO tired of hearing how the Social Security "Trust Fund" has been "looted". Sorry people, but the whole concept of Social Security has been a big lie for over 70 years! This lie was a giant Ponzi pyramid scheme based upon the concept that there would always be more people paying into the system than taking out. In a historical context, one also needs to remember that in the 1930s, most people did not did to "old age" to receive this "old age supplemental pension". To see how the problem would unfold, one only needs to look at the first recipient of Social Security, starting first at the Social Security.gov website:
From there, read a bit more:
Old Miss Fuller never married, paid less than $25.00 into the sytem in total, and received Social Security benefits until the age of 100 in 1975. The total she received was over $22,000. While she paid in for 3 years, by her 2nd check in 1940 Miss Fuller had already received more than she EVER paid in.
In reality, our nation has been FULL of people just like Miss Fuller. What was initially only 1% of part of her income, was promised initially to never exceed 3% of the first $3,000 in anyone's wages... though this amount is now 6,2% of the first $102,000 of our wages. While it is true that historically the total amount being paid in was more than being paid out, in reality there have always been huge commitments of future payments. This is the problem today!
In July 2008 the Chief Actuary of the SSA calculated that the unfunded Social Security liability was $13,600,000,000,000. This is the DIFFERENCE between the value of the US Treasuries that this so called "Social Security Trust" owns and the guaranteed values to be paid out. One needs not even to consider the real post-inflationary-binge future value of potentially worthless US Treasuries to know that this is a huge problem! But, to put this in perspective, this unfunded liability amount is 6.8 times more than the estimated 2,000,000,000,000 US debt that is owned by the Chinese. (And if the Chinese are obviously nervous about owning 2 Trillion of our debt, we should all be INCREDIBLY scared about our unfunded liability being over 8 times that amount! Especially since, LET ME REPEAT, this is just the difference between the US Treasuries owned in the Trust, and the amount guaranteed to be paid out! Social Security owns FAR more than this amount in US Treasuries... and as our dollar devalues daily, we are ALL getting more and more into debt!)
How Did We Get Here?
Over the years, the Social Security program has become a giant entitlement that was consistently expanded and enhanced to buy votes of the older citizens who vote. What began as old age supplemental pension has been expanded to include disability, widow's benefits, spouses benefits, children's benefits.... in some case even to illegal aliens ("PRUCOL" aliens, and others). Further, while initially only certain workers were covered (NOPE, originally it did not cover all of us), it has been expanded to cover all sorts of people not originally intended.
This debate can go on forever, but Thomas Sowell said it best when he wrote of the giant Ponzi pyramid scheme in "Social Security: The Enron That Politicians Have In the Closet":
Social Security has been a pyramid scheme from the beginning. Those who paid in first received money from those who paid in second — and so on, generation after generation. This was great so long as the small generation when Social Security began was being supported by larger generations resulting from the baby boom.
But, like all pyramid schemes, the whole thing is in big trouble once the pyramid stops growing. When the baby boomers retire, that will be the moment of truth — or of more artful lies. Just like Enron.
In reality, our chickens are indeed coming home to roost! Bernie Madoff was sent to jail for life for doing much less than the great myth that our government has been selling for over 70 years. The big problem is that far too many older citizens were naive and believed this lie and did not save for themselves! (They also now refuse to accept that they have been swindled... just like Mr . Madoff's friends.) Sadly, this Ponzi scheme is hitting home the same time that similar corporate pension Ponzi schemes are also hitting, and just after the real estate myth also crashed down to reality. Social Security is now a huge chunk of our federal budget, and it is projected to get much larger.
With the above in mind, is is a great surprise that the Obama Administration would like to assume control of the national health care budget too? This would add trillions more to their purse... yet another deep source for potential funding to misuse, and countless votes to buy. We all need to stop the insanity NOW! We should all vote NO on anyone (Democrat or Republican) in Congress who votes to nationalize our health care system. We should also begin the process of stopping the Social Security insanity. For this to happen, we need to start reducing the social security payouts... the sooner the better. So while those collecting social security will likely be in shock when the COLA increases stop, sadly we all need to pay some of the price of blindly accepting 70 years of socialist dogma disguised in this giant Ponzi scheme called Social Security!