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Free Minds & Free Markets

Stossel: Free-Market Social Security

How to reform social security so that it won't bankrupt us.

Today is the 83rd anniversary of Social Security, and this year it went into the red. In the long run, it has a shortfall of $32 trillion.

John Stossel says that the program is unsustainable. Young people shouldn't expect it to cover their retirement.

Romina Boccia explains the Heritage Foundation's plan to allow young people to contribute to their Social Security payments via private investment accounts.

Those private accounts would likely grow faster than people's contributions to Social Security, and young people could invest in "whatever floats your boat," Boccia tells Stossel.

Private investment accounts have been tried in other parts of the world. When Chile started them in 1981, it was poorer than most Latin American countries. Now it's the very richest.

Yet mass demonstrations denounce it for being run privately, and for companies taking some of the profit. They miss the fact that Chileans have more money for retirement than most Latin Americans only because of their private accounts.

Privatization is also unpopular in America, and so are Boccia's other proposals. She and Heritage would raise the retirement age to 70 to account for rising lifespans.

"When Social Security was actually founded, life expectancy was below 65," Boccia tells Stossel. Now it's 78.

Stossel tells Boccia: "What you guys are pushing is the right thing to do, but it's not popular." She replies: "It is not popular, but I think people don't fully understand how these programs work."

The good news is that this was the first time that when Stossel went to talk with people on the street, most people understood the problem.

One man called it a "Ponzi scheme" and asked, "why not take it and invest it in the stock market and let it grow that way?"

A woman summed it up well: "The country's in a deficit; there's a point where you can't pay out and go in the negative forever."

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The views expressed in this video are solely those of John Stossel; his independent production company, Stossel Productions; and the people he interviews. The claims and opinions set forth in the video and accompanying text are not necessarily those of Reason.

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  • Fist of Etiquette||

    ***SPOILER ALERT***

    Don't watch this video if you haven't seen Titanic yet!!! Or if you haven't heard about means testing Social Security.

  • chemjeff radical individualist||

    Wait, there's an apt metaphor between the voyage of the Titanic and the trajectory of the Social Security system? Who knew!

  • Leo Kovalensky II||

    But what if I really want to throw Grandma off the cliff?

  • LeaveTrumpAloneLiberal-tarian||

    I agree with JohnStossel. If there's one thing we know, we know this... Social Security has been an abject failure in providing economic security for old people as evidenced by the massive wave of protests against it by America's retiring population.

  • Last of the Shitlords||

    *yawn*...........

    Did you say something?

  • LeaveTrumpAloneLiberal-tarian||

    I know that liberal and socialist critics of President Trump like to resort to ad hominem and name-calling when a Trump supporter like me resorts to presentations of fact. But I prefer to let reality present my arguments for me and would have you only look to the performance of the S since January 2018 as evidence of The Trump administration's mastery of economic matters. Thank you for your comment.

  • LeaveTrumpAloneLiberal-tarian||

    S that is. Sorry for the typo and thank you again for your comment.

  • loveconstitution1789||

    LotS, These trolls just keep changing up their strategy to get web traffic.

  • loveconstitution1789||

    People collecting social security are some of the most selfish people in the USA today.

    They know full well that Social Security is a huge part of the federal budget, they refuse to allow any cuts and demand Cola increases, and that younger people are saddled with the financial burden.

    They dont care because they will be dead before any of the financial meltdown happens.

    They got suckered into paying into a Ponzi scheme their whole life and by God they are not going to be caught without a chair to sit in when the music stops.

    Pay all retirees a lump sum based on benefits they would receive and lets end Social Security today. We would accumulate debt but have a 10 year plan to pay all that debt off and be done with this mess. Just end Medicare and Medicaid programs immediately.

    We would cut our federal budget by almost 50% overnight. State budgets would be slashed too since Medicaid would be cut.

  • Scarecrow Repair & Chippering||

    I'd go for that. I'll probably start collecting in 3 years or so. I'd much rather have a (tax-free, dammit) lump-sum 10 year payout right now.

  • Longtobefree||

    "They got suckered into paying into a Ponzi scheme"

    If you can find and read a book that gives the facts behind social security, you will find we did not get suckered into a Ponzi scheme. There were/are guys with guns behind the scheme. Not having had a choice where 10 to 12 % of our income went for retirement, can you really expect us not to want it back as "agreed"?

  • Restoras||

    You can want it back all you like, but you may not get it back - courtesy of the guys with guns.

  • loveconstitution1789||

    Generation Boomer and Greatest continued to vote for politicians that added more and more to social security and refused to repeal it.

    Some responsibility needs to be taken and just end it.

    You were not paying into a 401k. You were paying for Generation WWI and 19th century retirees to collect social security.

    I am not saying that everyone who paid into SS should just get nothing but a lump sum would be fair and end SS. All Americans need to sacrifice now before our debt reaper comes to collect.

    We are paying the minimum on our national credit card while withdrawing cash to buy our elderly parents stuff above their means.

  • EscherEnigma||

    Tried to find the "Heritage Foundation's plan to allow young people to contribute to their Social Security payments via private investment accounts", and couldn't. Did find a doom & gloom article from Heritage that have a synopsis... From back in 2001.

    Which isn't too say that they haven't talked about it more recently, but if your message, and your "solution", haven't changed in at least 17 years, you might have a problem with your argument.

    In either case, it would be nice if the article had provided a link to the "plan" so folks could actually see it. I don't really trust salesmen to be honest, ya know?

  • NotAnotherSkippy||

    "Doom and Gloom" = reality. Funny how you trust in the government though.

  • EscherEnigma||

    How did you get "trust the government" from "where can a read this proposal"?

  • NotAnotherSkippy||

    I don't really trust salesmen to be honest, ya know?

    Funny, I've never seen you express such skepticism when it comes to the status quo. In fact you claimed that getting rid of entitlements would be positively unamerican.

  • EscherEnigma||

    Citation needed.

    I have said that cutting off all entitlements would cause massive problems. That is not the same as supporting the status quo, it is recognizing that they are thoroughly entrenched.

    Skepticism is now then just screaming "get the woodchipper".

  • NotAnotherSkippy||

    You claimed it would destroy america.

  • EscherEnigma||

    "your plan to fix X sucks" is not synonymous with "X doesn't need to be fixed".

  • Jim Logajan||

    "Tried to find the "Heritage Foundation's plan to allow young people to contribute to their Social Security payments via private investment accounts", and couldn't.
    ...
    In either case, it would be nice if the article had provided a link to the "plan" so folks could actually see it."
    -
    I agree that they should have included links to the foundation's proposal. This is what I could find that seemed most relevant (the 50 character word limit really is a big pain that serves no useful purpose; I've used shortened URLs):
    -
    "Structuring and Regulating Individual Social Security Accounts" https://herit.ag/2OElnor
    "Creating a Better Social Security System for America" https://herit.ag/2OBAVci
    "The Cost of Managing Individual Social Security" https://herit.ag/2nD8Hm3
    "Is Social Security Worth Its Cost?" https://herit.ag/2P3bEsN

  • EscherEnigma||

    The three policy articles were from 97, 98 and 2000. The one article from this decade (last month actually) talks about how shitty SS is compared to individual investing, but doesn't really talk about how to fix SS, just saying "this is why it needs to be fixed".

    So I appreciate your effort, but I'm skeptical that Heritage is putting much effort in getting their plan out there.

  • David Nolan||

    It's like Reason, Cato and Mercatus, screaming how bad it is will do for fund-raising. They have no clue.

  • David Nolan||

    Heritage's plan is as fucking stupid as Cato's. Easy to sucker the anti-government mentality.
    Elementary school math. Every privatization scheme has some (or all) workers investing part of their FICA tax.
    Looks good. If you're stupid. As Stossel admits, FICA taxes are not sufficient to cover today's benefits.
    So what happens if the taxes are cut -- say in half -- to allow the investment? DUH.

    Just as crazy as privatizing Medicare with vouchers, to increase competition in the wrong market! It's not just proggies who confuse insurance with health care.

    Right - Left = Zero
    Both eagerly hustled by the political elites.

  • aajax||

    A couple of ways to offset the lost of FICA revenues are to eliminate the cap on taxed earnings and to freeze accrued benefits of each person at current level by not counting any of their future earnings toward benefits accrual. In the short term there may be a hit to federal deficits, but reform is aimed at overcoming the 35% shortfall in the longer term.

  • David Nolan||

    MOAR subsidies for the middle class, paid for by the rich. Proggies would increase investment, SO THEY CAN TAX IT MORE!!!

    Your proggie fantasy evaporates once we see that Medicare is already subsidized by over $300 billion per year, over 20% of the entire personal income tax, for which the rich also subsidize over half the entire share for the core middle class, $40,000-99,999.

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano back with his sockpuppets.

  • David Nolan||

    "Fuck capitalism," says the sock puppet of Last of the Shitlords and Hello.

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano projects his neuroses.

  • CE||

    Here's my free market solution: let people decide whether they want to keep contributing or not. If they stop, cap their future benefits based on what they've paid in so far. Let Social Security compete with free market alternatives.

    Then abolish income taxes on interest and dividends and capital gains, so people can save more money on their own.

  • Overt||

    I would even give a sop to the left. Abolish income taxes on Dividends and Interest, but not capital gains. To be clear, I would like there to be no taxes. However, interest and dividends were already directly taxed. Capital Gains is just sitting on an asset hoping it will appreciate in value. In the case of corporate equity, it has a tenuous connection to actual investment in wealth creation, but unless a company is issuing new stock, a bunch of people trading around stock on a secondary market are just speculating.

    Again, I would prefer no taxes. But if I had to pick which of the supposed "investment income" items ought to be taxed, I would allow capital gains.

  • loveconstitution1789||

    Money sitting in banks and on the stock market are used to fund new capital projects. Banks loan the money out and companies use the investments in stock to grow their company.

    The only way your retirement money sits there doing nothing is if you stuff it under a mattress.

    End the social engineering and either tax all 'income' at a low rate or dont tax income. Its important to have people invest and its important for people work without too much taken out in taxes.

  • Qsl||

    I think you'd be better off having mandatory fentanyl and heroin prescriptions for the AARP crowd. Worse case scenario grandma sells a little on the side to supplement her income. Best case scenario, the young having a reason to keep grandma around without going Logan's Run.

    The problem with any SS "solutions" is that the recipients have already paid the costs upfront. They have no interest or concern with reductions unless you can give them back the 40+ years they've paid into the system. Even at a base salary of $40,000 and a modest return of 6%, that's over a million a head. SS is infinitely cheaper by comparison.

    So short of offering a reason to accept a reduction in benefits (like maybe offering one killing every year, scott-free), they have no reason to bargain, and can maintain benefits through their political clout until long after it continues to be a problem anymore.

  • NotAnotherSkippy||

    And why do they get a 6% rate of return? Their money was stolen, yes, but there's no way to retrieve it. And there's no way to keep paying it without the Tonys of the world finally paying their fair share.

  • EscherEnigma||

    Because retirees and those near retirement age are a huge voting bloc. No plan that leaves them high and dry is getting out of Congress.

  • mulp||

    The return, after fees, in the great fantastic Chile scheme is 3%. The workers are forced by government to save 10% oof income and input it in an investment fund of their choice which are private for profit investment funds competing to generate the highest returns for their managers, not the future retirees.

    After 35 years, many are beginning to retire in Chile and get such low benefits that a welfare system had to be created to use general revenue to boost retirement income so the elderly on this fantastic free market pension system aren't homeless and hungry.

    The just elected conservative president's minister of the system:

    "Nicolás Monckeberg, who will assume the role of Labor and Social Security minister when Pinera and his cabinet take office on March 11, told newspaper La Tercera that low pension payments and an aging population meant the private system, which has served as a model for many countries, requires urgent changes.

    "It is an obligation and a moral duty to present a pension reform," Monckeberg said. "We expect to do it in the first half of this year."

    "During last year's campaign, Pinera - a billionaire who served as president from 2010-2014 - promised to strengthen the system through a $700 million boost to the state's annual contributions, along with increases in employer contributions and incentives for workers to delay retirement."

  • aajax||

    There have been problems with the Chilean system with high administrative costs, and for some particular participants who evaded participation, but the overall experience shows it would be a workable system in a more highly developed country. Even with the administrative cost problem, returns on payments have been two or three times those of the parallel public PAYGO system. And the higher investment from the pension funds has boosted Chile's economy to be the best in Latin America.

  • David Nolan||

    Here's my free market solution:

    Another fail!

    they stop, cap their future benefits based on what they've paid in so far.

    How does that pay current benefits?

    Let Social Security compete with free market alternatives.

    Catchy slogans are not enough.

    Then abolish income taxes on interest and dividends and capital gains, so people can save more money on their own.

    How do you pay for that?

  • Last of the Shitlords||

    Hihn, you were not only banned from Reason, you were purged. Now you slither back in with a fake handle. Which is even sadder considering you were booted pretend ding to be Hihn and. Now you're pretending to be Hihn pretending to be someone else in a bizarre internet version of Victor/Victoria.

    No won should respond to you in any manner other than this.

    Now begone bitch.

  • David Nolan||

    How do you pay for that?

  • Red Rocks White Privilege||

    With Dumbfuck Hihnsano' Social Security check.

  • David Nolan||

    Does he get $350 billion per year?

  • Red Rocks White Privilege||

    You should know.

  • Elilis Wyatt||

    NOBODY gets $350 billion a year in Social Security benefits.
    Seriously.

  • Overt||

    What I find so hilarious is that 20 years ago the left was adamantly against means testing Social Security. The fact that EVERYONE was in the same boat was (wisely) considered a feature instead of a bug. When Social Security becomes means tested, then it essentially becomes welfare. And the more and more people who become payers of that welfare instead of a beneficiary of that welfare, the more skeptical they become of its existence.

    It will be interesting to see where they implement the means testing at. The big lie that 401k pushers tell young people is that they will be ok at retirement if they just max their contributions. For many people in high cost of living places, that simply isn't true because the caps on retirement savings are just too low. You need to supplement your savings outside of the tax shelters with additional savings vehicles like brokerage accounts, HSAs, real estate or whole life policies. So what happens when people near retirement and find that their fully funded 401k account means they don't get Social Security? They are going to be rightfully pissed off.

    No doubt, at first they will just tax/cut SS for the people like me who wised up and saved in addition to SS/401ks, but eventually they are going to have to lean on the upper middle class and those people are going to see their retirement income cut substantially.

  • I'm Not Sure||

    "No doubt, at first they will just tax/cut SS for the people like me who wised up and saved in addition to SS/401ks..."

    Anyone wanting to get support for changing how SS pays out is going to have to deal with the issue where people who paid in comparably end up not being in comparable financial positions when they reach retirement. How do you tell Bob that he's getting less than what he was led to expect because he was prudent and saved while Dan will get the expected amount because he spent all his money as he earned it and needs it more than Bob does now? Because fairness? Or what?

  • Overt||

    Well that is the problem with all welfare. Bob works two jobs all day to put food on the table, and Dan works a part time job, and collects a welfare check.

    Dems think they can keep this in check by making sure there are only a few Bobs. They will start by removing the cap on SS payments. So now, some 10% of earners will have a 6% tax increase on the remaining income. That will be easy- raise the tax on 10% of earners? The other 90% will get on board for that. This actually will go quite a ways towards reducing the SS shortfall, because those earners will pay billions in additional taxes, with no increase in benefits. But it still only puts off the problem a little bit. Many of those top earners will take salary cuts and get their earnings through non-ss (unearned) income. So you will see this funding source dry up.

    Next they will tell those 10% of earners that they don't get any SS benefits. That won't save much money though- just 10% of outlays. So they will need to move the line "progressively" further down the line. At 30% many people will start asking pointed questions about SS.

    The real end game is for the government to grab all our 401ks by "protecting" us with laws that require all retirement accounts to be invested in Muni Bonds and treasuries.

  • I'm Not Sure||

    "Well that is the problem with all welfare."

    Exactly. Which is why it's a wonder anybody would think making SS even more like welfare would be a viable solution.

    "The real end game is for the government to grab all our 401ks..."

    No doubt they'd love that.

  • Cynical Asshole||

    The real end game is for the government to grab all our 401ks by "protecting" us with laws that require all retirement accounts to be invested in Muni Bonds and treasuries.

    And when almost everyone pulls their money out of their 401K's before they can pass the legislation to do that, leading to a massive stock market crash, it'll be interesting to see how future history books treat that. Probably something about "hoarders and wreckers."

  • Restoras||

    Precisely - which is also conveniently the impetus for the confiscation.

  • Gilbert Martin||

    "When Social Security becomes means tested, then it essentially becomes welfare"

    Legally it always was welfare.

    The Supreme Court has already ruled that no one has any standing to sue the federal government for changing or eliminating benefits based on paying FICA taxes. The Social Security legislation got past the Supreme Court by the government claiming it was two separate things: a tax under it's general power to levy taxes and welfare payments "general welfare" (of course that part isn't actually Constitutional "general welfare" per James Madison).

    Economically it's also welfare and always was. The benefit formula contains "bend points" that acts just like a steeply progressive income tax so that lower income people get back more in benefits compared to what they pay in taxes than higher income people do. Also higher income people have part of their benefit clawed back by making up to 85% of it taxable. Even further, Medicare premiums are deducted from Social Security payments and higher income people are charged higher Medicare premiums and therefore get lower net Social Security benefit payments. And you cannot opt of of Medicare without forfeiting your entire social security benefit.

  • mpercy||

    Keep in mind the fact some some 20-25% of households have "negative or zero sum of income and payroll taxes". Meaning that they have received enough EITC or other credits to have exactly offset or more than offset their payroll taxes. Thus they are effectively being rebated for their SS/Medicare taxes, For them, SS is already welfare.

  • sarcasmic||

    I know government workers who don't have to pay into social security. They pay into a pension system instead. So instead of a paltry social security check when they reach their 60s, they get something like half their final salary from the first day of their 21st year of employment and they keep getting it until they die. Most of them them then immediately get another government job, and paycheck to go with it. If they start early enough they can retire after their second 20 years and get a third job. So by their 60s they've got two pension checks and a paycheck. It's all a game, and it's the taxpayers who always lose.

  • EscherEnigma||

    You're taking about CSRS, only something like 5% of current government workers are in that system, and those that are have well more then twenty years under their belt. The vast majority of current government workers are in FERS, which has a pension yes, but it's smaller than the CSRS, but they also pay into social security and TSP (basically their 401k).

  • sarcasmic||

    Ten years ago when my job took me into a federal building, I saw people greeting each other by holding up fingers. Took me a while to figure out what they were doing. The number of fingers represented how many years until they got their fat pension. Some planned to double dip, others planned to retire in their 40s.

  • EscherEnigma||

    Under CSRS, you can't voluntarily retire in your forties. That'd require an early retirement, which generally requires Congress telling an agency to reorg or downsize. Not something a person can generally plan for.

    What *can* be done is, after reaching 20 years of service, quitting and working elsewhere, and then once they reach 60 start collecting their pension. But collecting a CSRS or FERS pension in your forties requires exceptional circumstances.

    Are you sure you're not taking about *uniformed* government? Military folks can retire and collect pensions after 20 years of service regardless of age (meaning min age of 37), but that's not what most folks are going to think of when you say "Federal building".

  • sarcasmic||

    Are you sure you're not taking about *uniformed* government?

    They worked for the military, but they didn't wear uniforms.

  • EscherEnigma||

    Then yeah. Either you misread the situation, you're bad at guessing ages, or the place was offering early retirement due to Congress. The scenario as presented is not realistic.

  • NotAnotherSkippy||

    FERS:

    If you have 10 or more years of service and retire at the Minimum Retirement Age (MRA), your benefit will be reduced by 5/12 of 1% for each full month (5% per year) that you were under age 62 on the date your annuity began. However, your annuity will not be reduced if you complete at least 30 years of service, or if you complete at least 20 years of service and your annuity begins when you reach age 60.

    And that applies to voluntary retirement.

    So late 40s are certainly possible and early 50s should be easily possible for a broad range. 20 years on the job starting at age 40 gets you full bennies. Pretty sweet.

  • EscherEnigma||

    That isn't saying that you can retire before MRA if you have 30 years of service, it's saying that if you retire at MRA, rather then waiting for your full retirement age, that you won't see a reduction in benefits.

    For reference, MRA ranges from 55 to 57 based on when you were born.

    Full retirement age is 62.

  • Darr247||

    > 20 years on the job starting at age 40 gets you full bennies.

    That statement's a gross misinterpretation, and wrong on its face.

    If you have completed 20 years of service by age 60, you can retire with full benefits.

    Note the age 40 isn't mentioned anywhere... nor does it say 20 consecutive service years. So if you start at age 25, work 10 years, freeze your benefits to take off 15 years to raise kids while your spouse works, go back to work at 50 and work 10 more years, that gives you 20 service years at age 60.

  • David Nolan||

    The social security exemption for federal workers was repealed under Reagan, with an exemption for anyone in the current pension plan. Part of the Greenspan Commission. That was over 30 years ago. Very few of those workers remain.

  • sarcasmic||

    This right here is why politicians talk a good game about cutting spending, but no one will actually do it. Everyone knows someone who is dependent upon SS checks, and that's the biggest single piece of fat to trim from the budget. To cut one penny from it is political suicide, so no politician will do it. Because winning the next election is more important than the financial solvency of the government.

  • aajax||

    No, you can't cut anyone's accrued benefits, but that doesn't mean we can't convert to a private system that will benefit all in the long run, even if it costs a bit more in the short run.

  • David Nolan||

    "A bit more" = $350 billion per year, for the eagerly brainwashed.

  • Scarecrow Repair & Chippering||

    I once got a copy of the Forbes 400 or something, richest folks in America. Added up all their wealth. Don't remember what it was now, but somewhere in the order of a single year's deficit. Kinda surprised me it was so low, but only for a few seconds.

    Soak the rich my ass. Even if you were to confiscate all their wealth, it's not cash you can redistribute. It's not a Scrooge McDuck swimming pool. It's investments -- stocks, bonds, jewelry, art. I'm sure there are some yachts and Rolls-Royces in there.

    But there's the rub -- to turn those investments into spending cash, you'd have to sell them. And all the people who could buy those shares and paintings and jewels and yachts are the very people you've just stolen it from!

    I've tripped up a couple of soak-the-rich fanatics that way, but they just splutter about being a trick.

  • sarcasmic||

    Soak-the-rich fanatics don't understand the difference between money and wealth. If someone is a millionaire, then they've got a million dollars to steal. That's as far as their thinking goes.

  • mpercy||

    I've done the same exercise. You can go to that well only once and it really doesn't cover all that much.

  • mpercy||

    Based on Forbes 2017 top 10, if we confiscated all of Bill Gate, Jeff Bezos, Warren Buffett, Mark Zuckerberg, Larry Ellison, Charles Koch, David Koch, Michael Bloomberg, Larry Page, and Sergey Brin's money we would collect $571.24B.

    The deficit for 2017 was a devilish $666B.

    The next ten would garner $306.3B.

    The next ten would produce $180.7B.

    Everyone between 118 and 171 has between $4B and $5B, or about $238B if we took it all from them.
    Everyone between 172 and 263 has between $3B and $4B, or about $318B if we took it all from them.
    Everyone between 264 and 400 has between $2B and $3B, or about $340B if we took it all from them.

  • mulp||

    Who do the rich sell their stock to to pay taxes equal to their wealth? The workers?

    Consider, Apple shareholders hold wealth equal to a trillion dollars. Apple's gross revenue, ie total sales, is roughly a quarter trillion, so Apple employee total take home is much less than a quarter trillion.

    So, if the richest Apple investors were forced to liquidate their "wealth" by selling to Apple employees forced to buy shares, the maximum cash raised from selling a trillion in Apple stock is a quarter trillion.

  • aajax||

    Why should purchases be restricted to Apple employees?

  • David Nolan||

    Umm, because the wealth is restricted to Apple stock, in his example???
    But ... if we all close our eyes and click our heels, we can ALL be transported to Oz ... on the yellow brick road!
    Proggies aint the only ones so eagerly brainwashed!

  • Let freedom ring||

    You already have the ability to restore the Republic. All you have to do is follow the Constitution, and the laws as they are written.
    Brian Doherty used to understand this. Now he refuses to cover this story.
    Unless you earn "wages", defined in the tax code as earnings from federal employment, you do not receive taxable income from your job in the private sector. All you have to do is file an educated return and you will receive a full refund of state and federal taxes, including the above discussed payroll taxes.
    It is now such a regular practice by tens of thousands of Americans the procedure is regular. After you file your educated return you may get your complete refund without a hitch. Or, you may get a perfunctory letter saying your return may be frivolous. You will need to show them you understand what you are doing with a sharply worded reply explaining why it is not frivolous. Then you may have to call the IRS and confirm the amounts and signature and other questions under their identity theft program.
    That's it. Under their rules for filing an alternative return, you will receive your full refund check (not direct deposit) in about 9 more weeks. It will likely include interest for the delay. Then you, after asserting your rights as a free person, can invest the refund in gold, bitcoin, stocks, or spend it to make ends meet. That is entitlement reform, reasonoids!

  • David Nolan||

    Unless you earn "wages", defined in the tax code as earnings from federal employment, you do not receive taxable income from your job in the private sector

    Obama is a Kenyan Muslim and space aliens are in Roswell, NM/

  • Cynical Asshole||

    One man called it a "Ponzi scheme"

    Personally I always preferred my college Econ professors description of SS and Medicare:

    "Imagine you're sitting in your home and there's a knock on the door. You answer it and there's an old man standing there and he starts yelling at you 'Hey! I fought and nearly died for you in WW2, so gimme some money you little ingrate! And don't you dare hold on me! Oh, and here, pay these medical bills for too, peckerwood!' as he tosses some medical bills at you."

  • Brandybuck||

    It's not a Ponzi scheme because it's not based on getting ever more people paying in so the payments out to the early investor can continue.There's no investments, no time shifts, nothing. It's current workers being taxed to fund the handouts to current retirees.

  • NotAnotherSkippy||

    That is a ponzi scheme. And yes it was always predicated on infinite growth of the base.

  • Brandybuck||

    No it's not. Not even FDR was such an idiot that he thought the number of workers would grow faster than the number of retirees.

    Please go look up "ponzi scheme" in your nearest encylopedia.

  • EscherEnigma||

    Um, in the 1930s workers *were* growing faster then retirees. Today's problem is largely a result of declining fertility rates and lengthening life spans.

  • loveconstitution1789||

    Guys at the top (retirees) get suckers (young workers) in the middle to pay for their social security retirement. Taxpayers which are the largest suckers make up the big base of the ponzi scheme.

  • Darr247||

    It became a ponzi scheme in the 1950s when the eligibility age didn't start rising with the steep rise in average lifespan. They fixed it only PARTIALLY in the 1980s by creating the window where the longer you waited, the more you could draw (essentially raising the 100% benefit age by 3 years). The full-benefit age needs to go up 15 years to reach the same age relative to lifespan as it was in 1940 when SS was created.

  • aajax||

    It's hard enough now for people over 55 to hold onto employment or find a job if they need one. Raising the eligibility age retroactively would be pretty cruel.

  • David Nolan||

    Which is wny the whole thing is a scam for the more eagerly brainwashed right.

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano's happy to be getting his SS checks.

  • Francisco d'Anconia||

    STOSS!

  • LeaveTrumpAloneLiberal-tarian||

    When I think of private savings accounts I think of the massive returns i've Seen in my 401k in 2018 under the red-hot Trump economy. That kind of performance should overcome even the most hard-nosed Krugian cynic.

  • Overt||

    My Betterment account is up 2% since January, 10% since Aug 2017. Works for me.

  • aajax||

    If you think you are likely to earn more than a 3% real rate of return over the long haul, you are foolish. On the other hand, even that is enough to make a private system work quite well.

  • David Nolan||

    How do you offset the $350 billion annual cost to taxpayers ... slowly shrinking over 35 years?
    Proggies aren't the only ones so eagerly brainwashed. They both have fantasies of magical trillions to pay for their delusions.

  • loveconstitution1789||

    2017 was a 20% return and 2018 is a 8% return so far.

  • Let freedom ring||

    Oh, if any of you want to shed your cynicism, accept what you already know is true (voting doesn't work), and stand up for the rule of law, visit www.losthorizons.com. Stossel and other libertarian pundits who make a living bemoaning the obvious, but who want to change their ways, visit my blog, www.nontaxpayersforronpaul.blogspot.com.

  • Overt||

    Didn't the author of that book, Pete Hendrickson go to jail? Um, no thank you.

  • Last of the Shitlords||

    He did. I remember this asshole. He resurfaced once or twice a year with his tax protester bullshit from the convict author.

  • Brandybuck||

    While I agree with the sentiment that Social Security is not sustainable, I have been hearing this refrain for the past forty years. Yet it's still here with no signs of going away. Boomers are starting to retire and the largest voting bloc in history will soon all be collecting Social Security. It ain't going away. Might have to sacrifice babies to Moloch to keep it going, but going it will keep.

    There are some ways to keep it going a bit smother, however:

    * Means testing. Everyone still pays but you don't collect unless you actually need it. To many progressives this is the most evil thing ever, but I don't see how. Stop taxing the poor to give to the rich.

    * No taxation cap. Currently you don't pay for income over a certain amount, which I recall is somewhere in the neighborhood of 200k. Why do the rich get off the hook?

    * Bump the retirement age up to 70. But do it slowly so as to not let people out in the cold. Our life expectency is longer, and we are overall healthier longer. So no big deal bumping that age up.

    In the meantime we need a serious look at getting out from under this system. Despite what I said up top, we can't keep kicking the can down the street indefinitely.

  • Gilbert Martin||

    * No taxation cap. Currently you don't pay for income over a certain amount, which I recall is somewhere in the neighborhood of 200k. Why do the rich get off the hook?"

    They don't get "off the hook" There is a cap on income because there is a cap on the amount of income used to calculate benefits.

  • Brandybuck||

    One does NOT pay into one's own account. Current workers pay for current retirees. The current system is a regressive tax.

  • Gilbert Martin||

    "One does NOT pay into one's own account"

    That's true - but it has nothing to do with what I said and doesn't refute it.

    The "rich" aren't "getting off the hook" by the cap on wages that are subject to FICA taxes because that same cap is on the benefit calculation formula.

    "The current system is a regressive tax."

    The "current system" contains a benefit formula with "bend points" that act just like a steeply progressive income tax so that those lower on the income scale get back more in relation to what they paid in than do those higher on the income scale.

    And the fact that one does not pay into ones' own account and current workers pay for current retirees is exactly why it IS a Ponzi scheme.

  • aajax||

    Not quite a Ponzi scheme. When a Ponzi scheme runs low on cash, it can't go back to investors and demand more money. The government can.

  • mpercy||

    A very large percentage of people receive more in EITC credits than they paid in payroll taxes. That removes virtually all of the "regressive" nature of the system and instead creates a large chunk of people who never made any effective payments into SS but will expect benefits.

    They pay in on their paycheck, but get a rebate in the EITC, so really everyone else paid their SS taxes for them, but they'll have their hand out at the end and point to their paystub showing that they dutifully paid in.

  • loveconstitution1789||

    The Boomers are one group out of all voters. A similar pro-SS voting bloc, The Greatest Gen, are dying off like flies.

    The Boomers can be out voted by Gen X, Millennials, and new Gen Z.

    It would be fun to fuck over the Boomers by taking away Social Security and Medicare. They have fucked the younger generations for decades.

  • EscherEnigma||

    The oldest Gen Xers are mid-fifties now. You can bet they're taking a good look at their retirement planning. And based on all the reports on how they haven't adequately saved for retirement and are planning on Social Security being a major party of their retirement income, in but sure you can count on their support here.

  • NotAnotherSkippy||

    More of that millennial insight.

  • EscherEnigma||

    Pointing out what Gen Xers have self-reported is now "Millennial insight"?

  • John Cuyle||

    Actually, you can. The return on Social Security is bad enough that even at age 55 there are pretty good odds that, if you can keep working until 64, you still have more that you'll yet pay in than you'll ever get in benefits. You're STILL cutting your losses at 55. You've got to go a few more years before the remainder you have to pay is clearly less than the benefits you can expect. And that's assuming there'll even be benefits indefinitely.

  • John Cuyle||

    Actually, you can. The return on Social Security is bad enough that even at age 55 there are pretty good odds that, if you can keep working until 64, you still have more that you'll yet pay in than you'll ever get in benefits. You're STILL cutting your losses at 55. You've got to go a few more years before the remainder you have to pay is clearly less than the benefits you can expect. And that's assuming there'll even be benefits indefinitely.

  • EscherEnigma||

    That's a bold claim. Let's check the math.

    Assumptions/simplifications: Worker, age 55, has an annual income of $100,000, and their 30-year (inflation-adjusted) average at age 65 will also be $100,000.
    Investment account will have a 5% growth rate.
    SS will drop to 70% pay-outs in 2028.
    Ignoring inflation and COLA increases.
    Assuming the worker lives to 100.

    Now, our hypothetical worker, at age 55, is paying in $6,200/year, with their employer kicking in an addition $6,200/year. Over the next ten years they will pay in $62,000 with their employer paying in another $62,000. At age 65, they would normally expect to begin collection $2,248/month in Social Security, but due to the trust fund running out that will be reduced to $1573/month. Over their 35 years of retirement, they'll collect $1573/month * 12 months/year * 35 years = $660,660 in Social Security.

    If they instead invested their SS tax (and their employer kicked-in the employer-side contribution), they would be putting $12,400/year into an account, or $124,000 over 10 years. At age 65, that will have grown to $155,965.87. If they withdraw at the same rate ($1573/month) they'll run out half-way through year eight.

  • EscherEnigma||

    In order to make these even equal, you have to either jack up the investment growth, cut the 70% to something like 20%, or have the retiree die within eight years.

    The turning point for when SS (even with the expected reductions) has worse personal returns then investing for yourself is not 55, or even 45. It's around 35. The youngest Gen Xer is already past that point.

    To put it simply, it's very very difficult for investments to give better returns then Ponzi schemes. That's why they're so lucrative for the people at the top. And in this case, Gen Xers are close enough to being "at the top" that they're incentivized to stay the course because it's too late for compounding interest to save them.

  • NotAnotherSkippy||

    So:

    *Explicit welfare. This also punishes savers and rewards people for being irresponsible. What could go wrong?
    *Benefits are capped and fall off progressively (and aggressively). So again, why subsidize a lifetime of bad choices?
    *Bump up to 70 quickly, certainly within 10 years if not 5. AND index to life expectancy.

    Real solution: privatize as the article says. A phaseout should occur over a ~20 year period to allow ppl to adjust.

  • David Nolan||

    How will you pay the cost of $350 billion per year?

  • perlchpr||

    * Bump the retirement age up to 70.

    Insufficient. Make it 75, at least.

  • Brandybuck||

    Personally I'm not planning to retire until then. Unless I competely lose my shit and move to Guatemala where things are sane.

  • Restoras||

    Oh, it may not ever go away, but the dollars people receive can become worthless. So yes, we'll get what we've been promised but if that doesn't buy anything, well, that's going to be just too bad.

  • aajax||

    That would work if benefits weren't indexed to inflation, yes.

  • mpercy||

    * Means testing. Everyone still pays but you don't collect unless you actually need it. To many progressives this is the most evil thing ever, but I don't see how. Stop taxing the poor to give to the rich.

    * No taxation cap. Currently you don't pay for income over a certain amount, which I recall is somewhere in the neighborhood of 200k. Why do the rich get off the hook?

    The system is not means tested, because it is a "universal" system. Everyone pays in, everyone gets something on the back end. Supposedly.

    The cap in taxes is balanced by the cap on benefits. There's an upper limit on the payout, so there should be a cap on the cost.

    Remove either of these two things turn SS into a welfare system (more than it already is). Richer people will pay far more in than anyone else, and will not be eligible to receive any benefits. Do this and you will erode a huge chunk of support.

  • loveconstitution1789||

    Not everyone pays into the social security system.

  • EscherEnigma||

    And those people either don't collect, or had spouses that did pay in.

  • David Nolan||

    Brandybuck ... yet another proggie sucking middle-class subsidies from the rich!
    Left - Right = Zero

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano criticizes others for taking middle class subsidies while taking middle class subsidies.

    Dumbfuck Hihnsano's IQ = Zero

  • Elilis Wyatt||

    Did Hihn and Nolan really do that, or do they -- like me -- ridicule right-wing goobers like you who oppose borrowing trillions for spending (on others), but defend borrowing trillions for one's self.

    Progtards borrow trillions for free stuff.
    Conservatards borrow trillions for free tax cuts.
    NEITHER reduces government or expands individual liberty.
    Only libertarians know that FIRST we must cut SPENDING -- NEVER borrow trillioms to enrich ourselves, like goobers do, left and right.

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano manically uses another sockpuppet. The cancer is getting him again.

  • JFree||

    People are spending way too much time on the near-irrelevant (financial) problems re Social Security and nowhere near enough on redefining 'retirement' or 'paid time off' (the two are the same thing).

    It's the latter that is economically (ie dealing with scarcity) important because it directly encompasses time when people are consuming but not producing. When they are in economic terms dissaving.

    The financial stuff is pointless. There is no scarcity issue re finance or our current monetary system. It's all BS accounting designed to show the viability of or to prop up our financial system.

    Talking about that retirement or paid time off 'right' can get at issues like the nature of work (and by that I mean work done by HUMANS - not robots/capital) at different ages and with different conditions of disability (which is a key driver of the whole 'retirement' notion). That is where the solution to SS and most other parts of the 'safety net' lies. How can one produce more - for themselves and their family - over their lifetime? What happens when one can't?

  • Elilis Wyatt||

    People are spending way too much time on the near-irrelevant (financial) problems re Social Security and nowhere near enough on redefining 'retirement' or 'paid time off' (the two are the same thing).

    They are NOT the same.

    Nothing here. Moving on.

  • Red Rocks White Privilege||

    Nothing here

    Dumbfuck Hihnsano describes the content of his skull.

  • JFree||

    They ARE the same thing. Worse - the SS retirement form of paid time off IS financially unsustainable and doesn't reflect changing lifespans; it is based on a industrial-era structure of both job security and population growth that will never return; it is increasingly unfair to those at either the lower-income or physical-labor type of folks; and it eliminates any discussion about what retirees can (and often still do) want to contribute.

    The only way any of this will actually be reformed - in a self-governing society - is if we can actually mentally start from scratch and all be in the same boat. Because as long as we just keep the existing mindset of the entitled sucking at the teat of everyone else - while the young become increasingly enslaved to a debt - and FYTW; then we will just swirl down the toilet toward the only possible end-game of intergenerational warfare and/or stagnation.

  • David Nolan||

    They ARE the same thing.

    Which you immediately retract!

    Worse - the SS retirement form of paid time off IS financially unsustainable and doesn't reflect changing lifespans; it is based on a industrial-era structure of both job security and population growth that will never return; it is increasingly unfair to those at either the lower-income or physical-labor type of folks; and it eliminates any discussion about what retirees can (and often still do) want to contribute.

    Which has nothing to do with vacation time and paid holidays.
    I appreciate your retraction.

  • Gilbert Martin||

    Another historical tidbit about Social Security:

    The only reason it got through Congress was the route of the Blue Ridge Parkway.

    When FDR was trying to get Social Security through Congress, the Chairman of the powerful House Ways and Means committee was a North Carolina congressman named Robert Doughton. He was opposed to Social Security and FDR knew he would have to have his support to get it passed.

    At that time the Blue Ridge Parkway was one of FDRs' "New Deal" projects in the planning stage. The original route was planned to go through Tennessee and up into Virginia. In order to get Doughton to change his position on Social Security, FDR bribed him by changing the route so that it would go through North Carolina instead of Tennessee.

    And that's why Social Security got enacted into law.

  • David Nolan||

    (laughing hysterically) The vote was 372 to 33.
    Doughton was a strong supporter of the bill.
    Democrats had a massive majority.

  • NotAnotherSkippy||

    Leave it to stossel to talk about what really matters.

  • David Nolan||

    Bullshit that he has no idea how to pay for! Do you?

  • Tony||

    "SS is going to go bust any day now!"

    —Lying, disingenuous ideologues, every year since the invention of SS.

    Don't you people have something useful to do with your lives other than desperately trying to find moral self-righteousness in making old people destitute?

    If Ayn Rand couldn't resist the temptation, neither will any of you.

  • NotAnotherSkippy||

    Sure thing, goebbels.

  • ace_m82||

    32 trillion? What's that?

    You act like printing money will have no negative ramifications!

    I wonder, do you hate Bitcoin too, Tony?

  • Tony||

    Old sick people cost money regardless of where it comes from.

  • loveconstitution1789||

    It can come from them and their families.

    Lower taxes to let people save more to cover medical bills for old people.

  • Tony||

    Or it can come from the most successful, efficient, and conservative old-age safety net program ever devised so their family can have a little financial security themselves as well. You're gonna take your payout if you aren't already, and you're gonna make up some lame excuse why that's OK, so stop selling terrible ideas justified by an ethical norm you have no intention of following.

  • retiredfire||

    You show the extent of your delusion if you think SS is "the most successful, efficient, and conservative old-age safety net program ever devised".
    If the same amount, that is "contributed" to SS, was privately invested over the 40+ years of the average workers' toil, at even a conservative rate of return, one would be able to collect about four times as much as SS pays, for as long as they lived.
    SS is a tax, disguised as a retirement plan, that gives Congress a slush fund to spend and pay it back, falsely calling it "spending on SS".
    If they were actually paying out benefits, beyond that which has been collected, over its lifetime, it would be bankrupt - something we are told will not happen until 2033.
    On many occasions, Jonathan Gruber was absolutely correct.

  • Tony||

    Perhaps libertarianism is the result of ignorance of how social safety net programs work. If we all won the lottery, we'd all be millionaires. That is true but completely irrelevant.

  • Elilis Wyatt||

    Don't confuse the goobers here with libertarianism. Libertarians KNOW that the delusions of Heritage and Cato cost $350 billion a year

    And that you liberals refuse to accept $300 billion per year in Medicare subsidies paid mostly by the rich -- without which Medicare would have been bankrupt several years ago.-- without the con job launched under Bush2

    Left = Right = mindless puppets on a string, eager to be brainwashed by slogans and soundbites that are impossible to work. Because tribal.

  • DrZ||

    And while we are at it, how about privatizing medical payments? There are all kinds of things we could privatize and need less and less government in the process.

    Ahhh....I think I understand why we are dependent on government. I am learning..

  • John B. Egan||

    RWers like Stossel keep harping on Social Security, which is actually funded by a special deduction on everyone's paystubs: FICA.. It has always been a pay as you go system.... And yet, when it comes to say the Dept of Homeland Security (which costs $51 Billion a year.. More than the FBI, CIA, NSA, Marshal's Service, and the ATF combined.. with about $10 Billion to spare, NADA! ... and it comes out of the general fund... and our outrageously high Military budget, which is really more like $1.5 Trillion each year... or as large as the next ten developed nations combined.... NADA... and it to comes out of the general fund...

    Why is it so hard to increase Social Security to benefit the lives of everyone who has paid into it all their working careers, when it seems to be a simple snap of the fingers to increase the military budget by $200 Billion a year, or establish a new bureaucracy that simply supplements 5 pre-existing organizations?

    What is the point of a nation if it is more focused on blowing holes in foreign countries than improving the lives of its citizens? More importantly, why does anyone even read Stossel's ignorant weekly BS anyway?

  • Fred G. Sanford||

    What exactly is he wrong about? Chile's success with privatizing its pension program? The fact Social Security is heading towards bankruptcy? Please enlighten us.

  • Elilis Wyatt||

    Umm, our math is different! Diverting $350 billion per year away from benefits makes it bankrupt FASTER!!
    Where does the $350 billion per year come from?

    Anything else?

  • Darr247||

    > It has always been a pay as you go system

    LIE. If the politicians hadn't spent it on wars ($6 trillion on afghanistan alone), FICA-SS and FICA-HI should have a combined surplus of more than $5.5 trillion dollars right now.

  • R. K. Phillips||

    Yep, SS has been used as a "slush fund" for decades. What happened to Al Gore's "lock box"?

  • retiredfire||

    The lock box is there, it is just that everyone in Congress has a key.
    And they get to call repayment "spending on Social Security".
    Who can complain about that?

  • aajax||

    You can't justify overspending by pointing to other overspending. And anyway I don't think you see much defense of overspending on security and military programs on reason.com.

  • Elilis Wyatt||

    I see defense of Stossel's crazy bullshit, which ignores $350 billion per year costs.
    Because right-wing puppets are are eagerly brainwashed as proggies. Ignore the costs and apply the right slogans and buzzwords. It is SO easy.

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano screeches like an ignorant bitch again.

  • Elilis Wyatt||

    Only "ignorant bitches" know that "privatizing Social Security" requires borrowing an additional $350 billion, per year!

    For the mentally retarded conservatards. If 100% of SS revenues pay benefits, what happens if those revenues are cut by 50%, with no cut in benefits?

    (It's almost as crazy as Ron Paul's, "Repeal the income tax and run the entire federal government on FICA taxes." Gruel for goobers)

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano desperately wants to save his dying entitlement programs.

  • David Nolan||

    Only "ignorant bitches" know that "privatizing Social Security" requires borrowing an additional $350 billion, per year!

    For the mentally retarded conservatards. If 100% of SS revenues pay benefits, what happens if those revenues are cut by 50%, with no cut in benefits?

    (It's almost as crazy as Ron Paul's, "Repeal the income tax and run the entire federal government on FICA taxes." Gruel for goobers)

  • Fred G. Sanford||

    For some reason I'm in the mood to watch Titanic. But just the part where the boat hits the iceberg and sinks...the rest of it is unwatchable.

  • Darr247||

    I have been saying for more than 10 years:
    To fix SS, the eligibility age needs to go up 1 year every-other-year for the next 30 years.

    The earliest link to an example of my posts about it is:
    https://reflectionsofarationalrepublican.com/2012/ [remove this and spaces] 02/03/bush-vs-obama-unemployment-january-2012-jobs [remove this and spaces] -data/#comment-7280
    Please copy/paste that to your address bar, fix both spots [as instructed], then read that comment for my reasoning behind it, and call your congressman/senators and tell them to get off their axes and fix it.

    If we had started raising it 10 years ago, the minimum age to start drawing SS retirement benefits would already be up to 67, with the sliding window for maximum benefits now ending at 72, and we could be paying down the national debt again (if Bush43 hadn't done tax-cuts-for-the-rich 2.0 in 2001, the national debt was scheduled to be paid down to 0 in 2013, including the $5.5 trillion of the total the politicians have stolen from FICA-SS and FICA-HI surpluses).

  • David Nolan||

    To fix SS, the eligibility age needs to go up 1 year every-other-year for the next 30 years.

    How will you get elected on that?

    85% of the Bush tax cuts went to earners below $250,000, who were paying only 45% of the tax. Income redistribution GOP style. Plus the greater theft of Medicare Prescriptions. Republicans spent/borrowed trillions to buy middle-class votes, and Democrats wound up with the White House and both houses of Congress.

    You're also snookered on the debt, since there was NEVER any surplus under Clinton. Proof,

    But the Easter Bunny is real!

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano going manic with the sockpuppets.

  • AD-RtR/OS!||

    Is Pinochet available to be SocSec Commissioner?

  • aajax||

    Freeze the benefits of people who did not have children. The children would have contributed to the system. By not having children, they are free-riding on the children of those who did.

  • loveconstitution1789||

    End social security and medicare.

  • Elilis Wyatt||

    How to get elected on that?

    Complaining about a problem, without posing a solution, is whining.
    -Theodore Roosevelt
    Nobody ever went broke underestimating the intelligence of the American public.
    - H. L. Mencken, US editor (1880 - 1956)
  • Red Rocks White Privilege||

    Dumbfuck Hihnsano stands up for his treasured entitlement programs, forgetting that he knows nothing about getting elected.

  • vek||

    Other than just phasing it out completely, private accounts, or at least the stupid government directly investing it in something that actually makes a real return (instead of IOUs from themselves) are the only ways out.

    Australia transitioned their version of SS to a more market based one, and it has actually worked wonders at building net worth there. The reason SS is so worthless is because they're just buying FedGov bonds that don't pay out shit. People like my grandma would literally be millionaires if all the money they paid in SS had been invested in a mutual fund instead of the no return government bonds. So if we're going to force everybody to save/invest, at least do it in a way that isn't retarded!

    Even if the FedGov took a blended approach and invested saaay 50% of the money into the entire stock market, with no picking of stocks, just THE WHOLE FUCKING THING, it would be enough to make it solvent with minimal other tweaks. It's the low returns that make it so completely worthless.

  • retiredfire||

    "Low returns"?
    How about NO returns.
    Does the government make a profit on anything?
    Any return paid on government bonds is just from raised taxes, somewhere else.
    There is no comparison between investing in a company, for it to make a profit, and paying money into the treasury.
    Any claims that there is, are nothing but lies.

  • vek||

    All true. But as it is set up, the FedGov is paying "returns" to the trust fund. So it's splitting hairs, and you can look at it either way I suppose...

  • aajax||

    Worst aspect of Social Security: Poor people who die younger will not get their money back, it goes to the well off, who will live longer and collect more. A transfer of wealth from poor to rich. We know it happens, but has anyone done a thorough analysis?

  • Tony||

    Social Security means fewer poor people though.

  • aajax||

    Fewer poor old people, perhaps, though that's not a given, either. But it certainly means more poor younger people, since the economy is deprived of savings that could be invested and create jobs.

  • Tony||

    Name one young person who has been put into poverty because of social security taxes.

  • vek||

    Me? When I was just starting my business, most of the taxes I paid were SS/Medicare bullshit. My actual income taxes were next to nothing. And it HURT. Especially since I will probably never see a dime of it. I could have lived more comfortably, OR invested a LOT more money into expanding my business over the years without being forced to pay into that nonsense.

  • Elilis Wyatt||

    All your taxes were paid on the identical Net Profit. Plus non-responsive, since it did not put you into poverty.

    Why does Tony keep beating you folks???

  • vek||

    "All your taxes were paid on the identical Net Profit. "

    WTF does that even mean? Do you mean my income tax and FICA taxes were both based off of what I made? No shit Sherlock. My point was that when my income was lower MOST of the money I actually had to send into the IRS went towards SS and NOT my actual income tax. In other words my effective rate for income taxes was lower than FICA taxes.

    In other other words, if the government didn't take money from my pocket, to invest in the worst way possible, the checks I had to send to the IRS would have been something like 2/3rds smaller.

    Poverty is relative. Back then I sure as hell wasn't living high on the hog... And frankly I'm still not. I would be a lot better off if I had been able to keep all that money and invest it into something that actually made me a good return.

    SS helps complete retards who are too dumb to save a penny... But it screws the other 90% of the population.

  • Elilis Wyatt||

    1) That's true for all low-income individuals
    2) Starting a business is irrelevant noise.

    You FAIL to show how SS taxes PUT you into poverty. Get called out for your failure. So change the subject.

    Typical conservatard says low-income people are complete retards.

    SS helps complete retards who are too dumb to save a penny..

    Why does Tony keep beating crushing you people?

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano stands up for his SS checks.

  • vek||

    Ugh. Shut up Hihn.

    And most low income people are retards. There are these things called surveys and statistics... Do polls with low income people, and see how horribly wrong their opinions are on literally everything. Not 100% of course, but the vast majority. If it weren't for the blow it cases in society socialists would have nobody to preach to. The vast majority of people take care of their own shit, but some people are just too damn dumb. This is the ammo the progs use to fuck everybody.

  • JFDeplorable||

    I guess that depends on your definition of "poor." Too many people depend solely on social security for their income during old age. I've known a few who chose to retire at 62 and begin drawing at 63, and their monthly income runs around $700.00. They still work, for obvious reasons, and will have to until they die.

    FDR stated that social security was supposed to SUPPLEMENT savings, not replace it. But frankly, with the democratization of investing via mutual funds, money market accounts, government obligations that can be purchased online, etc. there is little need for a government-run pension system. Even the lowest-wage earner would be better off contributing 15.2 percent of his or her income into a money market fund paying 1.85 percent interest rather than into social security. The additional benefit of doing so is that the contributor actually owns that money; he or she can will it to heirs or to a favorite charity upon death. Social security that has accrued reverts back to the government upon death if the recipient is single.

  • David Nolan||

    How is that relevant? To anything?

  • vek||

    WTF are you talking about? It's not relevant that SS taking all that money makes everybody, including low income people, poorer???

    As I said above, at least in Australia the whole population is forced to invest in real assets, not useless no return government bonds. This is why Australia has built a ton of net worth from their forced retirement scheme, whereas the US is going to go BK over ours.

  • Elilis Wyatt||

    It's not relevant that SS taking all that money makes everybody, including low income people, poorer???

    All that other babble is likely what he meant. I ask the same question.

    Any fool can criticize, condemn and complain,
    and most fools do. -- Benjamin Franklin
    Complaining about a problem, without posing a solution, is whining.
    -Theodore Roosevelt
    Nobody ever went broke underestimating the intelligence of the American public.
    - H. L. Mencken, US editor (1880 - 1956)


    .

  • vek||

    As I said in multiple places, if we're going to force people to save, it should at least be invested in a decent way. Chile, Australia, and other places show that it works FAR better.

  • Elilis Wyatt||

    As I said in multiple places, in THIS country, how will YOU pay the costs of $350 billion per YEAR?

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano shows what a dumbfuck he is.

  • Elilis Wyatt||

    Most 12--year-olds can handle the simple math here. Why can't you?

    1) 100% of SS revenues are required to pay benefits
    2) "Forgiving" 50% of that revenue, with no cut in benefits, will cost $350 billion per year, declining slowly, over 35 years = $6125 TRILLION.
    3) Cut the bullshit How will you pay for it?,

    I don't know who "Hinsano" is, but it's obvious who's the blowhard dumbfuck!
    6,125,000.000.000 times!

  • Red Rocks White Privilege||

    Dumbfuck Hihnsano shrieks "simple math," makes up a bunch of numbers.

  • Elilis Wyatt||

    It's true! 100% of Social Security revenues go toward paying benefits.
    "Forgiving" half that revenue will cost ... half the benefits! --- $350 billion per year.
    Why is the math too complex for you?

  • vek||

    If we were to convert to a system that invests in something useful, like stocks, it would require a transition period. The government would need to sell off the bonds it owes to itself, then invest the "trust fund" into something useful. Then the increased growth, and dividends, would be able to eventually cover payout increases over time. All the current incoming taxes could be used to cover current payouts for now.

    This only works smoothly while there still is ostensibly a trust fund to invest. Once it is down to zero it is harder to get it done.

  • EscherEnigma||

    Monthly income of $700? Working backwards, their 35-year average monthly wage was $829.94.

    Assuming 5% growth and investint $1500/year (~15%), here's what their nest-egg would be age retirement age based on when they started, and how long that can pay out $700/month
    Start at 55: $12,213, ~2 years
    Start at 45: $38,760, ~5 years
    Start at 35: $82,004, ~15 years
    Start at 25: $152,442, ~47 years

    So again, all these "if people would just invest instead!" claims are predicated on people having started investing when they were in their 20s, or 30s at the latest assuming they won't live too long in retirement. For anyone older then Millennials, it's too late.

    So sure. Millennials aren't counting on Social Security. And by all the reporting, we're doing better on saving for our retirements then older cohorts did. Because we're the most skeptical about SS being there when we retire (first Millennials will start hitting 65 in 2045 or so, well after the latest estimates for when the trust fund will run dry). But to actually "fix" the system you have to convince Gen X and Boomers, who are the ones currently entering retirement and filling political positions.

  • Chad Brick||

    Conservatives make three more mistakes with "calculating" SS

    1: They ignore the fact that SS contains life, disability, and unemployment insurance elements

    2: They clearly do not understand how much an inflation-adjusted, spousal-benefit annuity costs (or is worth)

    3: They do not understand supply and demand. If SS were fully or partially privatized, TRILLIONS of extra dollars would flood the markets. This would push returns down, as everyone would be chasing yield in a pool of investments that would not expand to match

  • David Nolan||

    You were doing well on conservatards ... until #3, which is bad enough to offset #1 and #2 combined.

    Adding trillions to the pool of investments would not increase the pool of investments??

  • vek||

    Obviously there would need to be some massive transition stuff going on. It would need to be phased out over time, the investment into the market would need to be done over time so as not to shock stuff too crazy, etc.

    There is zero reason we couldn't transition a few trillion extra into various investments that make decent returns. Keep in mind ANYTHING is better than how it is invested now. Even 3-4% would be an improvement, and there's no way the stock market is going to be pushed that low over the long term.

    So all bullshit nothing arguments against. It just needs to be done low and slow and it would be a great improvement.

  • JFree||

    That's been done mostly on Medicare - which is a huge transfer from the working poor to everyone higher up the ladder.

    Die early (before 65) - you pay the prices that are driven by Medicare patients

    Die normal for working poor (early/mid 70's) - Medicare (ie someone else) pays for a much shorter time - and conditions are usually advanced which means cheaper in the final couple of years

    Die average for upper income (mid/late 80's) - Medicare pays for a long long time - and once people head into their 'talk about their health all the time cuz nothing else to talk about' phase then going to the doctor becomes almost a subsidized hobby

  • David Nolan||

    Wrong again. Medicare is subsidized by over $300 billion per year from .... wait for it ...
    Income taxes ... which the working poor doesn't and the middle-class barely pays.

  • Chad Brick||

    I'd love to have a free market for one day. I'd buy the roads around Stossel's property in the middle of the night, including air rights and mineral rights. Then I'd force him to either sell himself and his family into indentured servitude, or starve them out. Of course they'd be shot immediately if they set foot (or wing or shovel) on my property. Wouldn't that be funny? Ain't libertopia great?

    And we won't even get into how you'd have to read every EULA you came across in full, just in case it included a clause about the transfer of your mortgage or firstborn. And of course, it would include an arbitration clause and an NDA as well, so you couldn't even fight it.

    And you want electricity or sewer service? Well then, not only would you be signing an arbitration clause and NDA with them, but all their "partners", which would include all sorts of corporations that would then be free to screw you.

    Great stuff. Can't figure out why people aren't voting for it.

  • Elilis Wyatt||

    Libertopia is bullshit. For the faux libertarian cult. Even Ayn Rand said it was NOT a free society (for libertarians only, thus a cult)

    In a free society, Galt's Gulch exists right next to a Marxist commune … lesbians up the street from a community of Christian Fundies …. retired Catholic priests across the field from Wiccans. Each community would be voluntarily, some quite small. And Liberty would be a Voltaire staue. inscribed: "I disagree with what you say, but I will fight to the death for your right to say it."

    Liberty is a mutual benefit society.
    Not a members only Country Club.

  • vek||

    Liberty should be able to be BOTH those things, depending on what different people choose!

    But I am not a fan of libertopia. I think some things are too impractical. I'd be fine with just rolling things back to how it was in the 1700s or 1800s.

  • MizM||

    Stossel is a neoliberal tool,and he's going to get people killed.
    America is a monetarily sovereign nation with a unconstrained free-floating Fiat currency and can never go broke! Congress can easily fund and pay for programs already in existence,there is no scarcity of resources,and therefore no scarcity of currency. The problem is our corrupt leadership and their lying false scarcity and austerity propaganda to force people into private borrowing and into the greedy hands of wall street.

  • vek||

    You're an idiot.

    If you print too much money, it becomes devalued. How did that work out for Germany in the 20s/30s? Or Venezuela now?

    Yeah, so STFU.

  • Franklin Hoffman||

    I currently receive Social Security. I am not very smart, and there are so many thieves and charlatans out there that there is a likelihood that had Social Security not existed, some small print on some contract would have separated me from my money. Not all of us can afford lawyers and accountants, but the federal government is big enough to crush the low-lifes who would take advantage of people like me. I know that some of you would like to leave the weak ones to the wolves, but that is not how civilized people are supposed to act.

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