Liberal Forum

Vegas » Yesterday, 3:52 pm » wrote: ↑

Yesterday, 3:52 pm

 Ponzi SchemeVs Social Security
Ponzi Scheme  

• Money from new investors is used to pay returns to earlier investors
• Eventually collapses when there aren’t enough new investors
• Not backed by actual investments

Social Security

• Taxes from current workers are used to pay benefits to current retirees
• Faces financial strain when there aren’t enough workers to support retirees
• Trust fund is invested in government bonds, but there are no private investments

Yes, it would appear to meet the criteria of a Ponzi scheme. The biggest difference is that when the government does it, it is legal. So, what is the solution? 
Well, some say to raise the retirement age, increase payroll taxes, left the payroll tax cap, reduce benefits for higher earners, and index benefits more slowly. 

These solutions suck ^^^. 

My idea: 

1. Privatizing SS is an option. In fact, it may be the only viable option. It has a lot of problems that go along with it, but I think the benefits of privatization ultimately outweigh the current and future option. 

Or

2. Cap off who can take it out. I doubt Bill Gates needs a social security check. Yes, he paid into it, thus he has a right to it, but seriously? We already do a form of this anyway with welfare. We pay money into the state for welfare benefits. However, we can't collect on it unless we qualify for it. Why not the same idea for the ultra-rich?

The maximum SS payout is about $5k per month. How many people getting $60k per year just absolutely wouldn't even notice that being stopped? Certainly Gates is one.
I'm just trying to figure out if your option #2 would work with the right payout scale (or something). A guy worth $10M could be getting a conservative 5% per year. So, that $500,000/year guy may still notice the $60K gone missing... 
Seems like finding the right income level would be difficult to sell (although I like the idea because it's going to be BROKE otherwise and nobody gets ****.) Devil's in the details. Who are you going to say "Go get ****" to?