Originally published at: https://boingboing.net/2019/05/22/no-chained-cpi.html
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But we still have GoFundMe, right?
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Does he still get his Presidential Pension in prison?
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I worry about the phrase “benefit that Americans have paid for all their working lives”.
None of my social security taxes have paid for any kind of personal benefit for me later. Social security isn’t a savings account that I pay into now and draw from later.
All of the social security taxes I have paid have gone to pay the people already drawing on it. The idea is that when I retire, the people working then will pay enough for me to draw my money.
It is, depending on your point of view, either a gov’t run Ponzi scheme or it is a great example of paying it forward. I also do not think those they are mutually exclusive beliefs.
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It’s a subset of the idea that we are “taxpayers” rather than “citizens”, and that power in democracy comes from number of dollars not number of votes.
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Social Security’s insolvency is due primarily to US president[s] / politician[s] using it as their War / Slush Fund piggy bank. If Congress paid back all the money it stole from SS, with interest, the entire SS system would be fine for the foreseeable future.
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Since 1935? That’s one long time to wait for a payout from a Ponzi scheme. Perhaps there’s a better analogy? I mean - who’s getting the payoff? Who’s lost their investment? The most worrisome projections still say that 85% of your benefit will be there through the lean times. And those lean times hit older benificiaries - not the younger ones who won’t receive until after that demographic bubble has long since burst.
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A Ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.
(wikipedia)
Pensions and social security investments aren’t analogous to ponzi schemes, they are ponzi schemes (the difference being whether they are deemed to illegal). Ponzi schemes don’t become insolvent if you always have new investors.
But if the population stops rising at the right rate (or the plan is attacked by politicians) then there will come a day when people who paid into these things for their whole working lives will go to retire and find there is nothing there, exactly the way that victims of a criminal ponzi scheme do. I genuinely don’t think my pension will be there when I retire. Not that I blame people who came with up the idea of pensions. Maybe the pendulum will swing back, but we just seem to be headed in such an individualistic direction that I really think that letting more and more old people die in poverty is going to be a facet of the endgame of our society.
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Wondering if he still gets Secret Service protection while in the slammer? They might just be a bit pissed that he trashed their benefits…
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No - that’s not a Ponzi scheme - it’s social insurance. Just like single payer health care.
Calling something that has provided benefits for what - six generations now - calling that a Ponzi scheme is disingenuous. Ponzi schemes last a year or two before it comes crashing down. If that. And someone gets most of the money and walks away - there’s no person getting those trillions.
But they’re also not based upon a huge fund being there - it’s based upon current contributions - except of course in the case of the trust fund extra contributions set up for the demographic bubble with additional contributions being paid in since 1982 for retirees expected starting about now - workers have been paying that additional amount that will be drawn down for almost 40 years. It will be drawn down when they’re dead - or pretty close to it. After that - if nothing is done - everyone still gets almost all of their benefits. Just like it worked before 1982.
Of course - if we just raise the cap where taxes stop after $128,000 - no reductions for anyone needs to be a worry.
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Il Douche’s regime is the vehicle, but one way or another the GOP was always going to pull a shoddy trick like this. I was expecting them to start chipping away at the benefits about a decade from now, but apparently they couldn’t wait and have decided to risk angering Boomer voters.
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No, those are entirely different. Single payer healthcare is something where everyone pays in and everyone who gets sick gets taken care of. Pensions and social security are billed as being investments in your own future.
There’s no rule that ponzi schemes have to die quickly or that the people running them have to walk away rich. People were raising red flags about Madoff’s scheme as early as 1991 and investigations took place in 1999 but it didn’t collapse until 2008. We don’t declare fraud to not be fraud if the fraudster managed their finances badly and walked away with nothing. They also have nothing to do with one person taking the profits. If my pension dies before I collect it then I won’t be able to point to one person who got the money, but it will still be the case that I paid into something for a long time and got nothing (except the benefits of living in a society where we don’t needlessly allow old people to die in poverty, more on this in a second).
The underlying structure of the investment is the same. That structure is stable as long as you have a continuous stream of new investors. Large pensions and government programs have that covered because of new employees / new citizens who are required to pay in.
Sectioning off social security like it is some kind of bona fide investment creates the myth that people who are collecting it are able to collect it because they paid in, just as if they’d saved for their own retirement. But that’s false. If working people banded together and voted for the end of paying in to social security, the money would last about 2.5 years and then it would all be gone, assuming the $2.6T trust fund is really there and hasn’t been drained.
We ought to have social programs where we just say, “We shouldn’t let people die in poverty when there is enough to go around,” rather than “You paid into this your whole life and there is enough money now to take care of you.” The latter is a lie based on a myth of individualism.
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The stock market traditionally increases at ~7%, inflation at ~3%, and minimum wage at ~1.5%. Its true that poor people’s spending increases at less than inflation, but that is primarily because they have no choice due to wages increasing at below inflation.
At its core, the switch to chained CPI says that since people can increase they’re spending at below inflation, than their income should be increased at below inflation. Its a sick way to codify ever increasing wealth disparities
p.s. Obama proposed the same change in 2013.
https://abcnews.go.com/blogs/politics/2013/04/obamas-chained-cpi-throws-off-pols-and-heres-how-it-works/
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SSI is, as the last initial says, insurance and not an investment or a pension. It’s an “in the worst case you’re covered on the bare basics” fund that many people pay into, like any other term insurance pool except it’s mandatory in order to achieve the required economy of scale that would avoid a scenario similar to the aftermath of 1929. The expectation was that most people would still live in retirement off of a company or union pension and/or personal savings, with SSI acting as a supplement if the worst didn’t happen.
Also, a key distinguishing characteristic of Ponzi schemes is the deception involved: the grifter is taking money from investor Peter to pay investor Paul, but he’s telling Paul that his return on investment is the result of his accumen. In the case of SSI, there’s no deception about the fact that the contributions of younger working people are funding the benefits of older retired ones on a rolling basis.
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Simple word substitution:
Single payer healthcare Social Security is something where everyone pays in and everyone who gets sick old gets taken care of.
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If it’s a Ponzi scheme, the people who got the end payoff would already have been the first original people to get social security whom did not have to pay in in the first place, and only got payed out. They were payed off by the younger generation without having to pay in, and then those people were payed off by the next, on and on, right? I mean what where they supposed to do, say “ok you guys just die off without any money in retirement and we’ll save the money for the next generation of workers.”
Nobody knows when something bad will happen and they won’t be able to work anymore, I don’t see a problem with safety nets and this one seems to work? There will always be another generation to pay in one would hope. The first generation that doesn’t pay in most likely won’t have a safety net themselves is one way to look at it?
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Gotta pay for massive tax breaks for the rich, so how.
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