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Stop the Social Security blather

By Jennie L. Phipps · Bankrate.com
Monday, August 29, 2011
Posted: 4 pm ET

My husband was listening to some presidential campaign rhetoric this weekend and after hearing an especially unsettling speech, said maybe we should put our retirement planning on hold until after the 2012 election. I don't think that's necessary, but I do think that irresponsible political blather doesn't bode well for anybody's retirement.

Texas Gov. Rick Perry, who has emerged as the leading Republican candidate in the 2012 presidential race, said during a campaign stop at a coffee house in Iowa this weekend that Social Security "is a Ponzi scheme for these young people.

"The idea that they're working and paying into Social Security today, that the current program is going to be there for them, is a lie. ... It is a monstrous lie on this generation, and we can't do that to them."

In his recent book, "Fed Up!" Perry says, Social Security is "by far the best example" of a program "violently tossing aside any respect for our founding principles," and as having been put in place "at the expense of respect for the Constitution and limited government."

If it violates the constitution, does he intend to get rid of it? And how does he propose going about it? I don't hear him offering any constructive suggestions for replacing or re-tooling.

This month, magazine publisher and multimillionaire Steve Forbes interviewed Olivia Mitchell, a professor of finance and an insurance and pension expert at The Wharton School at the University of Pennsylvania, about Social Security. Mitchell said she believes in altering the way Social Security's cost of living adjustment is calculated so the payments don't increase as quickly. She thinks that alone is enough to reign in the system enough to get it past the huge baby boomer bubble.

I doubt there are many of us who want to burden our children with a system that will bankrupt them. On the other hand, Social Security has been a godsend for at least the last two generations of retirees, reducing the level of poverty significantly. And there are millions of baby boomers counting on it for their own survival over the next 20 or 30 years. Finding a reasonable solution to this challenge makes perfect sense, but saber-rattling in service of winning votes doesn't.

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20 Comments
mark
August 30, 2011 at 10:56 am

I'm sorry, but the writer and all commenters so far have it all wrong. The current system is in fact bankrupt. Social Security started as a fine idea with 15 workers paying in to support each retiree. However, the system has grown (like all government programs do) to include so many things that it is now unsustainable. And with the baby boomers now entering the system, there are only 2 workers for each retiree. Social Security contributions were supposed to be put into a lock box, but our insatiable Congress has spent it all and then some. As for ideas, changes to COLA are fine, but ideas that means test or increase the payroll tax cap are simply more of the same old redistributionist ploys. The fix we really need is the ability to OPT OUT and invest our retirement money for real, and Jennie, as a financial writer, you should know this....

John
August 30, 2011 at 10:23 am

SS could be saved with some big tweaks. Raise the retirement age, means test (the wealthy hardly need SS), maybe increase the SS tax just a small amount. I am a big time no tax guy, but SS is a fairly good program and could do with saving, unlike so many other government programs.

Darlene B.
August 30, 2011 at 9:55 am

Having been one of the baby boomers who was raised with the work ethic, I worked part time during high school and always saved for college. I didn't have funds other than scholarships or school loans available. Free grants were unheard of. After working as a profssional RN for decades I came up with breast cancer, due to a prior biopsy it was labeled pre-existing and my insurance with full coverage denied me coverage. I was forced to cash in my retirement, my savings and pay for my masctomies, chemo and all other treatments, leaving me medical bills which I make payments on. Unable to work I was denied social security for anothr 10 years, selling off family heirlooms. I paifd off my school loans, purchased and financed my car by myself, and cared for the elders along with my treatment. I have always been forced to be a rentr due to my cancer and losing my finances and more to pay them. I have fought to get the preexisting clause removed so others won't be left in finalncial devastation I have. I also am told there is no cost of living and as such are in the boat as others living on a limited income below the poverty level, and only qualify for 53 dollars infood assistance. I workd my entire life and ar worse off than illegal imigrants or others who have nvr worked and get full medical, food and financial income far more than mine. Let's get fair people!

LFord
August 30, 2011 at 9:39 am

"Dinah Friday" is correct; the Baby Boom generation has paid in more Social Security, Medicare, and other payroll taxes over the past 40 than any generation in history.

Rather than "invest" the tax money so it would be there for the BBers in retirement, the Feds took that money out of the SS Trust Fund "lock-box" and loaned it to the general fund of the Federal Government in exchange for Treasury Bonds which now look increasingly worthless. The Federal Government used that SS Trust Fund to fund things like, oh, college loan programs that the younger generations now complaining about the BBers took full advantage of, much of which will not be paid back.

So who's the real "drain" on the government?

Scott IL
August 30, 2011 at 9:33 am

First and foremost for this discussion let not leave out the most important thing the FACTS.

Social Security is not and never was intended to be a retirement program. It was designed and implemented as a supplemental retirement income. The intent was to provide a income for 4-5 years of the finial years of a citizens life. Everything the Government said this system would do and provide has been lies. Social Security is a "ponzi scheme" proof of this statement is that if the program is that it requires increasing percentages and limitations of future recipients. The program was designed but require forcing citizens by gun point to participate in the program to give the illusion it would be solvent.

Americans need to vote out the "Establishment Politicians" and allow the citizens of our Country to restructure our government and the role it plays. The Government's role must change for the future of our children who will be burdened with the bills that the previous ponzi recipients and supporters have forced us to participate in.

Many citizens believe that they should have the right to opt out of this corrupt "pozni scheme". For the first time in 2011 the Program has a deficit, a 50 Billion dollar deficit. Most economic forecasts, by the government and private sector, proves that this number will increase for the next 5 years. This failed Kansan Economic Philosophy (that has never worked here or any other Country) will continue limit the citizens from economic success.

Let me opt out and give me my 12.5% Social Security payment to add to my own retirement. I can make voluntary contributions to Non Profits that provide help to the helpless.

Bill
August 30, 2011 at 9:30 am

I have paid into the system since I was 16 years old and I am 55 now with probably 10 more years of paying in to look forward to.When my time comes to draw I will not allow anyone to make me feel like a burden on society or that I somehow dont deserve it.As far as I am concerned I have contributed and continue to contribute my fair share.

End the Ponzi Scheme
August 30, 2011 at 8:05 am

That irresponsible political blather is exactly what is necessary to properly plan for retirement. Why are you so willing to turn something as important as how to finance your retirement over to the government? At least some of the younger people in this country have figured out that we will each be carrying at least half of a retiree through our working years, and there are even fewer working after us, and paying taxes that would support our own retirement. So in essence, we have to fund our own retirements, expecting that the Ponzi Scheme will not be there, while simultaneously paying out the last round of payments to those that expect payments from the Ponzi Scheme, and raided the funds for their generations benefit, putting worthless paper back in its place. So, yes the boomer generation did bankrupt the next generation.

Nothing in the Constitution guarantees a retirement paycheck. I would certainly vote for anyone that would end the Ponzi Scheme. Food, shelter, clothing should be provided for those less fortunate, but that is not a role of government, that is a role for charity. How did we survive before FDR destroyed the country, and LBJ took another swing at us? Communities took care of their own, and it was the generosity of neighbors that made sure that no one who was truly needy went without. That simple local concept has been perverted into big central government knows best how to take care of you, cradle to grave, depend on the government. That's not how this country was founded, and we need to get back to our founders intent to get out of this mess.

Deadpool
August 30, 2011 at 7:51 am

Social Security will make a comeback once all of the Baby Boomers have gone gently into the good night for the last time.

Right now they are going to start weighing down the system.

But please don't pretend that you care about the future generations and them having Social Security. The last two generations have been of entitlement. You'd be angry to hear that you might not have it but future generations would, wouldn't you?

pat
August 30, 2011 at 6:37 am

what a bunch of non-sense espoused by Perry and others. Just look at them they enjoy the best in life ( large salaries, great health insurance, pension etc) while on our $$ and then give us this kind of blather. We are the fools who vote for these people. Beat wisjes.

Dinah Friday
August 29, 2011 at 5:59 pm

Please stop talking about Baby Boomers as though we were a huge problem about to eat the nation for breakfast. Boomer dollars have financed the system for decades of advantage to the so-called "greatest generation," most of whom benefited spectacularly (that would be the $$ of Boomers and to a far lesser extent because of the timeframe, Gens X, Y and Millennials) beyond what they actually paid into the system themselves. Now, when it's our turn, you want to make us into the bad guys! Fairness, please.