Since the birth rates are declining how much longer can the Social Security Ponzi scheme be maintained before it collapses?

[Adaeva]

As the births decline the percent of retires increases

[Levin]

Don't worry about that man. It won't collapse until the codgers have raped it for every last cent, and died off.

And then don't worry about the low birth rate. The void will be filled by opening up the flood gates to the third world.

Don't worry about the underlying reasons for the low birth rates. Such as life being so unpleasant, housing, food, all the basics being so unaffordable that one can barely afford to look after oneself.

[PatriceONeal]

Boomers be like : I paid into it all my life, I deserve it"

A child can do the math and see it isn't sustainable.

[abc3643]

As I've attempted to teach you before (but, apparently, you like being left behind), Social Security is not a Ponzi scheme.

Instead of spending an hour retyping all of that, I will simply recall what I wrote when you wrote this question when you were @KelleyNice:

Since Ponzi schemes are illegal should congressmen and senators that vote to retain social security be indicted and prosecuted?

However, I will simply say this:

Any problems with Social Security are human-made problems and all human-made problems can be solved... all it takes is willpower to solve them...

Remember: Life on this planet is about 4 billion years old. Money is less than 12,000 years old. So, in the 2+ million year history of the human genus, there has never been a death certificate on which was written that the cause of death was lack of money. Money is irrelevant to life - as it has been for the past 3,999,988,000 years.

[Adaeva]

Certainly, if laws were applicable to everyone, members of congress that vote to retain social security should be indited and prosecuted and the president that signs should be impeached. However, politically that is not possible because as Gerald Celente says, "Justist is just us." Not only that, most Americans want Social Security and until if fails, they don't care if it is a Ponzi scheme.

Whether or not the death certificates say starvation or lack of money is immaterial. People have starved when they couldn't purchase food.

[abc3643]

Ok, let's work with that and practice some due diligence.

You wrote: "if laws were applicable to everyone, members of congress that vote to retain social security should be indited and prosecuted and the president that signs should be impeached."

Well, laws are applicable to everyone because 1) that's how they are written and 2) the Equal Protection and Due Process Clauses ensure that...

But, that's a minor issue.

What I want to ask you is this:

You said members of Congress "should be indi[c]ted and prosecuted" and that "the president that signs should be impeached".

Well, first, the President who signed the law for Social Security was FDR, the only President elected 4 times. He died 78 years ago, so he's not eligible. And all those Congressmen are dead too. But we'll let that slide too.

OK, my question:
Assuming Social Security was created today - passed by Congress and signed by the President - what laws should these Congresspersons be charged with violating? And why should the President be impeached; to be impeached is an accusation of a "high crime" or "misdemeanor", so what "high crime" or "misdemeanor" would the President be accused of violating?

I am not trying to make a point. I am giving you the opportunity to learn for yourself and to teach me - to persuade me...

I will help you get started though.
1. All Federal statutes are in "The United States Code". So, if someone is accused of breaking Federal law, then they are accused of violating 1 or more statutes of the USC.
2. The USC does change over time, but see if you can find where in the USC Social Security is codified.
3. Social Security was created by "The Social Security Act" (of 1935).
https://www.ssa.gov/history/35act.html
4. You can find the United States Code here:
https://www.law.cornell.edu/uscode/text

[Adaeva]

Laws are not applied equally. Rank has it's privilege. Therefore, the laws never have been applied equally and probably never will be. Regardless, I am aware that no politician will be punished for voting for social security and no court would dare rule against social security. I am also aware that, regardless of whether they believe social security is a Ponzi scheme, a large majority of Americans want social security and will continue to unless and until if fails. And, since the money they pay into social security is not in their personal account but is used to pay those disabled or already retired, fail it may if birth rates keep declining. That is, unless congress lowers the benefits, increased the retirement age, increase the percentage people pay in, or else, pay from the general fund.

[WindAtMyBack]

1) It's not a Ponzi Scheme. It works like any other type of insurance. For that matter it works like any government agency, business, or household. Pay-as-you-go does not make it a Ponzi Scheme.

2) It's not going to collapse in the foreseeable future. It will just be funded out of the general budget, like most government agencies.

3) For the last 40+ years, at least three generations of politicians have given it lip service. They've made proposal after proposal to keep it self-funded. The reason nothing has been done is because WE THE PEOPLE won't let them fix it. No matter what they propose, it would be political suicide. They know it will be funded through the general fund, so they do nothing rather than endure the wrath of the populace.

The SS fund collects premiums like any other insurance. They invest that money like any other insurance. They pay it out like any other insurance. The difference is that insurance companies get a better rate of return. They invest in government securities like the SS fund, but they also invest some portion in stocks which is illegal for the SS fund.

When the SS fund loans to the government, they get a very low interest rate. If they got a better rate, it might continue to be self funded. I don't know what it would take, but I'm sure just 1% more interest over the decades would make a big difference.

But here's the thing. What if they DID get a higher interest rate to keep it self funded? That means the government pays more interest. Who pays that? The people. The people pay that money either way. It costs exactly the same either way.

[Adaeva]

Paying current people with money from new people that join is the very definition of a Ponzi scheme.

[abc3643]

@adaeva You wrote: "Paying current people with money from new people that join is the very definition of a Ponzi scheme."

Don't be an idiot. It's very unbecoming.

[Adaeva]

@abc3643 That is the definition because it is named after Charles Ponzi and that is what he did.

[abc3643]

I know what the definition is. You do not.

Let me ask you:
Suppose John Smith wilfully kills Bill Jones?
That's murder, right?

[Adaeva]

@abc3643 You probably know the definition of a Ponzi scheme. However, even though you know social security is a Ponzi scheme, due to your extreme political bias, you claim it is not.

The definition of murder is not relevant to to topic, just as the definition of a planet is not relevant to the topic.

[abc3643]

Young lady, you wrote this:

"However, even though you know social security is a Ponzi scheme, due to your extreme political bias, you claim it is not."

You are much smarter than this - and better than this, I hope. If not, then I'd consider you an idiot savant.

Furthermore, what I asked is not irrelevant, but we can ignore that.

So, let's do our "due diligence" and see what a definition of a Ponzi scheme is...

When it comes to definitions, the first play to go is The Oxford English Dictionary which is considered "The Guardian of the English Language". When a word is added to the OED, it makes the news.

This is the OED's definition of a Ponzi Scheme, but, unfortunately, it's behind a paywall so I cannot share it via URL. Here it is as echoed in another article:

cei.org/.../
The Oxford English Dictionary defines a “Ponzi scheme” as “a form of fraud in which belief in the success of a fictive enterprise is fostered by payment of quick returns to first investors from money invested by others.”

OK, so there are a few operative words in that definition:
"Fraud"
"Fictive enterprise"
"payment of quick returns"

Social Security is not associated with any of those things.

However, in the act of doing due diligence, never rely on a single source unless there is only one source.

So, let's go see how other reputable organizations define Ponzi scheme...

Investopedia
www.investopedia.com/terms/p/ponzischeme.asp
What Is a Ponzi Scheme?
A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. A Ponzi scheme is a fraudulent investing scam which generates returns for earlier investors with money taken from later investors.

(more)

[abc3643]

From the WSJ (this may be behind a paywall for you but I have a subscription):
www.wsj.com/.../the-original-ponzi-schemer-11602778470
The Original Ponzi Schemer
...
In a classic Ponzi scheme, a con artist offers investors outsize returns based on an intriguing but somewhat mysterious moneymaking venture. Earnings are hard to verify, but nobody much cares because the business seems to produce such big payouts. Rather than using investments to produce profits, however, the con artist simply pays off earlier investors with money from later ones enticed by the promise of lavish returns. These earlier investors find the returns so compelling that they often let their earnings ride, and for a while at least their duplicitous maestro compounds them.

Again, Social Security is not associated with any of those things.

(more)

[abc3643]

And here is how the US Securities and Exchange Commission describes it:
www.investor.gov/.../ponzi-scheme

Ponzi Scheme
A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. Ponzi scheme organizers often promise to invest your money and generate high returns with little or no risk. But in many Ponzi schemes, the fraudsters do not invest the money. Instead, they use it to pay those who invested earlier and may keep some for themselves.

With little or no legitimate earnings, Ponzi schemes require a constant flow of new money to survive. When it becomes hard to recruit new investors, or when large numbers of existing investors cash out, these schemes tend to collapse.

Ponzi schemes are named after Charles Ponzi, who duped investors in the 1920s with a postage stamp speculation scheme.

(more)

[abc3643]

Ponzi scheme “red flags”
Many Ponzi schemes share common characteristics. Look for these warning signs:

>>> High returns with little or no risk.
Every investment carries some degree of risk, and investments yielding higher returns typically involve more risk. Be highly suspicious of any “guaranteed” investment opportunity.
>>> Overly consistent returns.
Investments tend to go up and down over time. Be skeptical about an investment that regularly generates positive returns regardless of overall market conditions.
>>> Unregistered investments.
Ponzi schemes typically involve investments that are not registered with the SEC or with state regulators. Registration is important because it provides investors with access to information about the company’s management, products, services, and finances.
>>> Unlicensed sellers.
Federal and state securities laws require investment professionals and firms to be licensed or registered. Most Ponzi schemes involve unlicensed individuals or unregistered firms.
>>> Secretive, complex strategies.
Avoid investments if you don’t understand them or can’t get complete information about them.
>>> Issues with paperwork.
Account statement errors may be a sign that funds are not being invested as promised.
>>> Difficulty receiving payments.
Be suspicious if you don’t receive a payment or have difficulty cashing out. Ponzi scheme promoters sometimes try to prevent participants from cashing out by offering even higher returns for staying put.

[abc3643]

So, again, Social Security is not a Ponzi scheme. Your trite definition misses the nuances of what is involved in a Ponzi scheme. Thus, what you are really telling us is that you don't understand what one is.

================

Young lady, you have sooooo much potential. This is why I enjoy your questions - especially when they are thought out and not just echoing dogmatic horseshit.

Be better than echoing horseshit. Think things through. There's an old carpenter's adage: "Measure twice. Cut once." So, please think things through and think twice before blurting out crap. Instead, with any subject. do not start with a conclusion and try to defend it. Start with the facts - the real facts discovered by science and due diligence - and then use your (hopefully logical and disciplined) intellect to determine what the truths are. It's actually exciting and rewarding work and will give you the well-earned confidence to discuss anything.

Good luck... and I will be happy to help you on the quest to enlightenment if you wish.

[Adaeva]

@abc3643 Per the U. S. Securities and Exchange Commission: A Ponzi scheme is an investment fraud that pays existing investors with funds collected from new investors. www.investor.gov/.../ponzi-scheme
That is what Social Security does. The money you pay is not money in your account. Instead, the money you pay in is used to pay retirees, etc. You are just hoping that enough workers will pay so that when you retire, you can collect. If an investment firm did that, they would go to prison.

Certainly, Ponzi scheme organizers may promise to invest your money and generate high returns with little or no risk. However, that is not required to be a Ponzi scheme. Even when it is not a Ponzi scheme an investment firm can falsely promise high returns at little or no risk.

[abc3643]

No, you are somewhat failing to understand something: An important aspect of a Ponzi scheme it is fraudulent.

By the way...

Keep in mind that Carlo "Charles" Ponzi's efforts were in 1920. Social Security was in 1935 with Ponzi still being in the public consciousness. So, of course, some people would have challenged Social Security thinking it was a Ponzi scheme as well. Two cases made it to the US Supreme Court. One had to do with unemployment insurance which was also created as part of the Social Security Act, but the other was.

That case was Helvering v. Davis and, in that case, a shareholder of Edison Electric challenged the constitutionality of Social Security. The Supreme Court ruled 7-2 that the Social Security Act is constitutional under Congress's authority to provide for the general welfare as specified in Article I, Section 8, Clause 1 otherwise known as "The General Welfare Clause":

Clause 1 General Welfare
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

====================
(more)

[abc3643]

So, the bottom line is that Social Security is lawful as stated by the US Supreme Court and they have the last word on the matter.

But, keep in mind one other thing:

Social Security can always be undone by law. A willing Congress and President is all that is needed. However, even the GOP knows that would be a very bad thing. In fact, around the time you were born, The Great Recession started and that led to a lot of people losing money in investments. This was a wake-up call regarding Social Security; previously during the Bush 43 Administration, there were suggestions to privatize Social Security (that is have private investing instead of investing with the US government). But, with the Great Recession, that was a reminder that that was a bad idea. And this happens a lot - the GOP will want less constraints and then greed gets in the way, causes things to go to shit, and then bail-outs are needed. That's what happened in The Great Recession and what happened with SVB and in crypto because crypto never had adequate regulation.

[Berethor]

I believe that it more the fault of Feminism than Capitalism, Hungary is trying to stop that.

https://www.washingtonpost.com/world/2022/06/03/japan-low-births-population-decline-2021/

https://www.cnbc.com/2019/02/11/have-four-or-more-babies-in-hungary-and-youll-pay-no-income-tax-for-life.html

[NostalgiaSenpi]

It's only superficially a Ponzi scheme. Unlike an actual ponzi scheme, Social Security releases an insanely detailed report on the system’s finances, its balance of payments, the potential problems it could face, and so on. In a Ponzi scheme, the finances are a secret, in Social Security, they are, as a matter of law, public.

According to the 2022 annual report of the Social Security Board of Trustees, the surplus in the trust funds that disburse retirement, disability and other Social Security benefits will be depleted by 2035, not the actual benefits.

[FeelingGroovy]

Newt Gingrich said that if the government stopped robbing the social security funds, and invested the money in the private sector, we'd all retire as millionaires.

So the Dems will just keep putting illegals up in 5 star hotels, and let Americans eat rats.

[Anonymous]

That’s why we need to legalize more immigrants to make up for it. Get them out of the shadows and paying taxes. Social security will never go away. It’s too popular and too many seniors rely on it. They’ll raise the ceiling on the amount of income that is subject to FICA tax to keep it solvent. They can also freeze it or slow future increases. It would be political suicide to let the program fail.

[FeelingGroovy]

Immigration is legal. lol What are you talking about?

[Opinion Owner]

@FeelingGroovy We have millions here undocumented who work under the table and aren’t contributing payroll taxes. We need to fix that by allowing them to apply for citizenship while they’re working and living here.

[FeelingGroovy]

Rewarding people for jumping the line isn't how I would do it.

[Opinion Owner]

@FeelingGroovy No you put them at the back of the line but you let them in the line. We have worker shortages all over the country and nowhere near the resources to find and deport them all. Might as well take a common sense approach that benefits us in some way instead of spinning our wheels and sticking with the status quo. A first time charge of crossing the border illegally is a misdemeanor. Is that what people are really upset over or is it something else? You can’t help but wonder.

[WindAtMyBack]

Making illegals legit might make matters worse. Remember, if they are paying in, then they will also collect. With SS, higher wages supplement lower wages. I don't think many illegals are making more than six figures, so it might be a net loss.

Also, there are way more legal, native-born Americans working under the table than there are illegals. But the same thing applies to them. If they pay in, then they will also collect.

[Opinion Owner]

@WindAtMyBack Of course they’ll collect someday. SS requires new workers to replace the old to function. If we have a shortage, and we do, we can import them. The average benefit is only $1600/month, much less than a living wage. We can afford that if we have enough workers paying in. Illegals are exploited by business owners and typically paid less than minimum wage. Who are they going to complain to? Legalizing them moves them into the legit job market, paying into the system and stimulating the economy. It only makes economic sense. Part of the supply chain issues right now are due to worker shortages as well. The resistance to it is because they have an accent and brown skin. I have no illusions that if white Canadians were sneaking across to pick fruit and landscape, no one would bat an eye.

[FeelingGroovy]

Trump made them wait in Mexico, and Biden screwed that up. Why aren't they applying for work visas?

[WindAtMyBack]

You are entirely missing the points.

The problem is not lack of people paying in. The problem is that the fund is mismanaged. Among other things, it gets a really crapping rate of return on it's investment. Look at how state and other pensions do it. Look at how other types of insurance do it. They invest the money. They get a good rate of return on that investment. The SS fund currently gets a little over 2%. That's horrible. At that rate, the money would double in about 35 years. If they got 7%, which is reasonable, it would double in 10 years, quadruple in 20 years, and octuple in 40 years.

That's a tremendous difference. But that's not what they are doing.

Most of those illegals are low wage people. Making them legal won't change that. They will still be low wage, they will still pay little into the system, but collect a high amount from the system. You need HIGH wage people, who pay a lot more into the system, but collect proportionally less. Increasing the number of low wage people will probably make it worse.

There are several ways to deal with the problem. Many ways have been proposed. All have been rejected, usually for political reasons. Increasing the number of low wage people is NOT the right way to do it. It's the worst way to do it.

" The average benefit is only $1600/month, much less than a living wage."
$1600 is way more than a person needs to live.

[Opinion Owner]

@FeelingGroovy Those were asylum seekers using the legal process, that’s not what we’re talking about here. People who are here after crossing illegally and are not refugees cannot apply for any kind of legal status until they return to their country of origin for 10 years. No one is going to voluntarily do that and it’s why they don’t come forward and it’s why we can’t might a dent in the size of the problem year after year. Changing that one simple rule would go a long way and be a boost to the US economically.

[Opinion Owner]

@WindAtMyBack I don’t disagree that the program needs reform. Not only the investment return but Congress needs to stop spending the surplus in the general budget. Beyond that, you’re talking nonsense. You assume that immigrants will always remain low wage workers, which history shows is is incorrect. They initially take jobs that Americans don’t want but the wage gap closes over time as they assimilate. Christ, you might as well just come out and say they’re inferior people. That’s what your comments imply. Social Security is based on lifetime earnings, so where are you getting that low wage workers will draw high benefits? That’s an outright lie. Benefits are adjusted to earnings. $1600 a month is just barely over the poverty line. That’s way more than someone needs? That, of course, is a ridiculous statement. Our seniors don’t deserve better than poverty?

[WindAtMyBack]

OK, I'll start at the bottom. $1600 is DOUBLE what I live on, and have been living on for several years. I live quite well. No it's not a ridiculous statement. it's absolute fact. To be honest, I don't even think I could spend 1600 a month unless I was spending it just to be spending it. I don't even know what I'd spend it on.

Second, you were talking about making illegals legal. That is NOT the same as immigrants in general. The large majority of illegals DO work low wage jobs, and most would probably continue working lower income jobs if they became legal. On top of that, as I think I already mentioned, there are a LOT more legal citizens working under the table than there are illegals working. The types of jobs illegals tend to work, and will likely continue to work, happen to be the type of jobs with large numbers of people working under the table.

The government has been trying to crack down on this for decades, but have barely made a dent in it. The US has a huge underground economy. The government would love to have all those taxes, but it's very difficult to track down millions of individuals working under the table.

[Opinion Owner]

@WindAtMyBack You live on $800 a month? $9600 a year? Sorry but no one living in the real world is going to buy that fairy tale. That’s a flat out lie and you and everyone else reading this knows it. Moving on, you’re repeating points that I already rebutted. Yes, they work low wage jobs to start but they close the wage gap as the years go on. The same is true of young workers. Statistics just don’t bear out your claims. Most people don’t remain static. US citizens working off the books are either trying to avoid taxes or child support/alimony. That’s a whole different matter and you’re using it as a distraction. There are millions already here who would gladly take vacant job positions, contribute taxes and move out of the shadow job market if there was a path for them to do so. There’s no logical reason to not adopt a simple reform that would push them towards legalization. It benefits us economically and reduces the strain in the immigration system.

[WindAtMyBack]

Just because you are extremely ignorant of the county and costs, doesn't make me a liar. And yes people DO believe it. Everyone who knows me would believe it. Not everyone lives in ridiculously expensive places like LA, SF, NYC or Boston. The vast majority of the country is not like that. You also probably have no idea how to save money and live frugally.

But I'm not going to continue this. You are young and naive and obviously have no idea what you are talking about.

[Opinion Owner]

@WindAtMyBack I’m young but I’m also a homeowner and I know what things cost. You counted on my ignorance to peddle your bullshit and you didn’t get away with it. You were caught in a lie. Even in a smaller town, you’d struggle to pay for groceries and utilities on that, let alone insurance premiums, property taxes, car payments, home and auto repairs, medical co-pays, etc. You do not live on $800. Just stop lying please.

[WindAtMyBack]

You are naive.

Almost 800 a month on groceries and utilities? Come on now, that's absurd. Maybe around 300-350 for groceries, and all utilities including gas, electric, internet and phone.

Insurance? I pay $22 a month
Car payments? None
Auto repairs? I do it myself for a fraction of a mechanic. Plus I don't drive much so it's negligible.
Property tax? My biggest single expense at a little under 300/month.
Medical? Zero most years. $100-150 once every 2-3 years for eye exam and glasses.

That's the large majority of my expenses. Add them up and stop calling me a liar.

[Opinion Owner]

@WindAtMyBack I’ll give you credit. You’re working hard to sell your lie but it’s not fooling anyone. You’re not paying $22 a month for home and auto insurance anywhere in the United States, nor are you getting a months worth of groceries plus gas, electric, internet and phone for $350. Not only is that a lie, it’s an outlandish lie. Lol You can keep the stupidity up but just know that no one who has ever lived on their own believes you.

[WindAtMyBack]

I pay $130 for six months of auto insurance = 22 / month. I don't pay any other insurance.
(Actually it just went up to 24 a month, but I haven't paid that yet.)

Electricity = 498 for the past 12 months = 41.50 / month
Gas = 659 per year = 55 / month
Internet and phone = 72 / month

That leaves about $180 a month for groceries. I'm not going to add it up, but that actually sounds high for groceries, which means the 350 is also high.

No I'm not trying hard to prove a lie. I'm trying to show that just because you think something can't be done doesn't mean it can't be done. These numbers are all very reasonable.

Keep in mind the topic is Social Security. Almost 70% of SS recipients have a fully paid for house. Also keep in mind that $1600 SS is tax free. SS recipients are also automatically enrolled in Medicare. Part A is free. Part B is something like 170 a month. If they have Part B, then they can get an Advantage plan for free which makes the insurance a lot better.

I look at things in the opposite way. I can't figure out what people spend so much money on.

[Soteris]

Social Security literally pays for itself and even if it did not, it provides a vital service to society that you would have to pay regardless one way or another. Never understood the American right wings silly belief that they could defund social security, especially when it means taking all the money from social security which was paid into the system which I guess is the primary motivation for Republicans since they dearly want a slice of that pie.

[genericname85]

If you pay attention to history, another war starts every time before the ponzi scheme collapses

[Adaeva]

Would that make it worse since it is the young, not the old that die in wars.

[genericname85]

Elderly, women and children all die in wars. Maybe younger people more. But you know who doesn't die? The top 10%. Of the wealthiest people.

[genericname85]

So those who don't benefit from welfare anyway.

[notwoke]

we're hoping that letting low IQ immigrants in will help but they don't have the same productivity and earning potential of higher iQ races so I guess it's anybody's guess if this is going to work

[John_Doesnt]

Social Security is paid for by everyone who pays taxes, unless everyone in America becomes retirement age at the same time it Social Security will always work. You also clearly don't know what a Ponzi Scheme is.

[exitseven]

President Trump wants to implement policies to encourage Americans to have children. Maybe that will start to turn things around.

[FeelingGroovy]

I seriously doubt it, because he won't get support from either side. Trump was impeached for a phone call, and impeached again for a CIA insurrection. Why hasn't Biden been impeached? His crimes are off the chart.

[exitseven]

@FeelingGroovy The only side he needs support from is the voters. So far he is ahead in the polls. He had also said his organization is planning on leveraging the new voting protocols. He said they will use mail in ballots, ballot harvesting , early and late voting and same day registration. Hopefully this levels the playing field.

[FeelingGroovy]

That makes sense. Fight fire with fire.

[Avicenna]

It's Medicare that's really in danger, but latest guess for SS is 2037 or thereabouts

[Anonymous]

This is why congress passed the secure 2.0 act. To eventually try to phase out social security.

[Avgbrisbaneguy]

why don't you do your part and help bring a kid or 2 into the world

[Adaeva]

I will in my early twenties after I marry.

[Avgbrisbaneguy]

Why wait a beautiful young lady like yourself

[slatyb]

Immigration to the rescue.