| | | Why? Why must we permit the government to claim a portion of our pay only to redistribute it back to us at a loss? Individuals would receive far greater returns if permitted to independently invest those funds. Similar to tax refunds where the government steals a portion of our pay only to hand it back to us at the end of the fiscal year, Social Security is another interest-free loan for the government that does not benefit the people. Over the years, I've mentioned from time-to-time an article I read around 1980-81 in the New York [state] CPA Journal, which was an interview with the former long-term chief actuary of the SSA. He understood the crisis both as it was then and as it would be today.
In this excellent article he described the coming collapse of SS, and the efforts that would be used to prevent it, all to no avail. Essentially, he didn't use the term, but described what we all know today as a Ponzi Scheme. Which is what SS is by any reasonable definition.
He predicted it would be out of money by 2040, which it will (actually before then due to a number of adjustments beyond the scope -- it is just a fact). Now, we're looking at 7-8 years earlier, around 2032-2034.
When it runs out, government either has to print a lot of money (which will kill the economy) or to cut these beneficiaries who have been promised covered, off and allow them to move into the streets. The solution will end in tax revolt if government tries to collect enough taxes to pay this shortfall. This is within the next ten years.
Last year government spent 1.5 Trillion on SS, or 22% of the federal budget. If we agree that no SS will be put back for future generations, we can continue taxing at the same rate we're at and pay SS benefits of around 75% of what is promised. The wealthy don't need it so they'll be okay. But the lower-middle class 80 year olds are in trouble.
And this is how tax revolts happen, according to the SS Chief in his article. It will be the young vs. old. |
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