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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: kumar who wrote (22342)	12/31/2003 6:57:41 PM
From: Lane3	Read Replies (1) \| Respond to of 793622

I do not understand why it "can't" be changed to give an individual control over money he/she is paying out. There are several reasons. First of all, it's unfeasible. Are you familiar with a Ponzi Scheme? That's an investment scam where you get some investors to put in some money. They you get some more investors to put up the money that is used to provide a return to the first investors. Then you get a third set to pay the second. And so on. There is no actual product or service being developed that makes money. All the returns come from new investors. Until they run out of investors and the last few batches of investors loose all their money because there's no one left to put money in. Social Security was part of the New Deal. That's how it was set up, like a Ponzi scheme. Ponzi schemes weren't yet illegal then. The first batch of retirees was paid from the FICA tax moneys collected from those who were working. The current batch of retirees is being paid by those who are working now. There is no money in the bank. There is no way to give people control over what money they put in because there is no money, it has all been paid out to those collecting pensions. Out of the pocket of the worker and right into the pocket of the pensioner. The only two ways to shift gears would be to abandon Social Security and start over with something else or do nothing at all, stiffing everyone who has already already paid in. Or finding the money somewhere else like general revenues to fund the payouts. I don't have the figures handy for the latter, but the sum is monumental. It would throw us into a recession we'd never come out of. The second reason is that we'd have once again the problem we started with, which is a lot of old, poverty stricken people. What are we going to do, let them starve? No, we wouldn't do that, so we'd end up supporting them somehow anyway. The money would just come from a tax other than FICA. And it, too, would be crippling. The third reason is it would destroy any remaining faith in government to pull the rug out from under people that way. We can't just reneg. We got ourselves into a real mess with Social Security. Classic example of politicians doing things that are popular but don't make sense long term. There is no way out of it, I don't think. Social Security has become sacrosanct. No one that proposes changing it can get elected. There have been suggestions to pay for it out of general funds rather than the FICA tax. That isn't popular because it's even less "fair" than what we have now when you make people pay for it who have no hope of ever collecting, people who don't earn wages, and because then we would have to drop the facade that this is a retirement program rather than a welfare program and that offends the dignity of the recipients, who vote. Proposals come up now and again to make it solvent by raising the retirement age but they are unpopular. The 401K program was instituted a couple of decades ago to try to help people save for retirement in the hopes of eventually phasing out Social Security. Same with the advent of Individual Retirement Accounts. Maybe a phase out will actually come to pass when Social Security finally goes bankrupt, but what a cataclysm that will be.